FIFTH AMENDMENT TO CREDIT FACILITIES AGREEMENT
Exhibit
10.13
FIFTH
AMENDMENT TO
This
FIFTH AMENDMENT TO CREDIT FACILITIES AGREEMENT (this “Agreement”) is entered
into and effective as of June 11, 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, as amended by the Second Amendment to Credit Facilities
Agreement entered into and effective as of February 4, 2008, as amended by
the Third Amendment to Credit Facilities Agreement entered into and
effective as of February 28, 2008, and as amended by the
Fourth Amendment to Credit Facilities Agreement entered into as
of May 16, 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 as of the
date first written above, but only if this Agreement has been executed by
Borrower, Administrative Agent and the Lender, each of the other documents
listed on Exhibit A have been duly executed and delivered to Administrative
Agent in form and substance satisfactory to Lender, and if the Fifth Amendment
Fee has been paid in same day funds. On the date hereof, Borrower
hereby irrevocably authorizes and directs Administrative Agent to make a
Revolving Loan Advance to pay the Fifth Amendment Fee.
3. Default Interest
Rate. The parties agree that the Default Rate shall be in
effect beginning on July 1, 2008 and shall continue in effect for all periods
thereafter until the Borrower presents a quarterly Compliance Certificate
showing compliance with all covenants in Section 15 of the Loan Agreement and
certifying that no Default or Event of Default has occurred and is continuing
and, upon delivery of such a Compliance Certificate showing compliance with all
such covenants and certifying that no Default or
Event of
Default has occurred and is continuing, the Default Rate shall no longer be in
effect beginning on the first day of the month in which such Compliance
Certificate is delivered to Administrative Agent.
4. Required Fundings and
Deliveries. The amendments and waivers contained in this
Agreement shall be void and of no force and effect and shall be revoked if any
of the following shall not have occurred and been delivered, as the case may be,
on or before June 27, 2008: (i) Administrative Agent shall have received
evidence of $3,500,000 in the aggregate in cash of additional Pequot
Indebtedness being funded to Borrower together with executed copies of all
amendment documents to the Pequot Indebtedness Documents to evidence such
additional Pequot Indebtedness, such documents to be in form and substance
reasonably satisfactory to Administrative Agent, and (ii) Administrative Agent
shall have received evidence of $3,000,000 in the aggregate in cash of
additional Subordinated Indebtedness being funded to Borrower together with
executed copies of all amendment documents to the Subordinated Indebtedness
Documents to evidence such additional Subordinated Indebtedness, such documents
to be in form and substance reasonably satisfactory to Administrative
Agent.
5. Amendment. The Loan
Agreement is hereby amended as follows:
5.1. Subordinated
Indebtedness.
Section
14.2.4 of the Loan Agreement is deleted in its entirety and replaced with the
following:
“14.2.4. The Subordinated
Indebtedness up to an aggregate of $35,000,000 outstanding in principal at any
time if a Subordination Agreement remains in effect with respect thereto and the
Subordinated Indebtedness contains terms and provisions acceptable to
Administrative Agent.”
5.2. Pequot
Indebtedness.
Section
14.2.12 of the Loan Agreement is deleted in its entirety and replaced with the
following:
“14.2.12. Unsecured
subordinated Indebtedness owing to Pequot Private Equity Fund III, L.P,. Pequot
Offshore Private Equity Partners III, L.P., Constellation Venture Capital II,
L.P., CVC II Partners, LLC, The BSC Employee Fund VI, L.P. and/or Constellation
Venture Capital Offshore II, L.P., up to $6,000,000 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 15, 2009 or later, then the Pequot Indebtedness may be repaid without
the consent of the Required Lenders by Borrower paying the principal balance and
all accrued interest thereon at any time from and after December 15, 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.”
5.3. Minimum
EBITDA.
For all
reporting periods after June 1, 2008, Section 15.3 of the Loan Agreement is
deleted in its entirety and replaced with the following:
“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:
0
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Xxx
Xxxxxx Xxxxxxx Xxxxxx Xx:
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Minimum
EBITDA
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June
30, 2008
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$0.00
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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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5.4. Excess
Cash/Marketable Securities plus Availability.
For all
reporting periods after June 1, 2008, Section 15.5 of the loan Agreement is
deleted in its entirety and replaced with the following:
“15.5 Excess Cash/Marketable
Securities plus Availability. Each Borrower covenants that on
the last day of each calendar month that the sum of (A) the amount of cash or
marketable securities permitted by Section 14.1.4 hereof, plus (B) the
difference between (i) the Borrowing Base on such date, minus (ii) the sum of
(a) the Swingline Loan, (b) the Floorplan Shortfall, (c) the Letter of Credit
Exposure on such date (except to the extent that a Revolving Loan Advance will
be used immediately to reimburse Letter of Credit Issuer for unreimbursed draws
on a Letter of Credit), (d) without duplication, the outstanding Aggregate
Revolving Loans, (e) the amount of the Other Creditor Indebtedness (unless an
Intercreditor Agreement in form and substance satisfactory to Administrative
Agent has been executed between Administrative Agent and the holder of such
Other Creditor Indebtedness), and (f) the amount of Bid Bonds, shall be greater
than or equal to $1,500,000; provided, however, for the June 30, 2008, July 31,
2008 and August 31, 2008 calculation dates, the foregoing amount shall be
$750,000.”
6. 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, 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.
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7. 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.
8. Payments. Each
Borrower reaffirms, covenants and agrees to direct all Account Debtors to remit
payments on their Accounts to a Lockbox, including, without limitation, the
Account owing from Defense Finance and Accounting Services.
9. 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 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.
10. 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.
11. 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.
12. 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.
13. 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.
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14. 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.
15. 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.
16. 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.
17. 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.
18. 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/ Xxxxx Xxxxxxx | |
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Name:
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Xxxxx Xxxxxxx | |
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Title:
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Vice President Operations | |
MTM TECHNOLOGIES, INC., as a
Borrower
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By:
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/s/ X.X. Xxxxxxxx, III |
Name:
X.X. Xxxxxxxx, III
Title:
Senior Vice President and Chief Financial Officer
MTM TECHNOLOGIES (US), INC.,
as a Borrower
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By:
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/s/ X.X. Xxxxxxxx, III |
Name:
X.X. Xxxxxxxx, III
Title: Senior
Vice President and Chief Financial Officer
MTM TECHNOLOGIES (MASSACHUSETTS),
LLC, as a Borrower
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By:
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/s/ X.X. Xxxxxxxx, III |
Name:
X.X. Xxxxxxxx, III
Title:
Senior Vice President and Chief Financial Officer
INFO SYSTEMS, INC., as a
Borrower
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By:
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/s/ X.X. Xxxxxxxx, III |
Name:
X.X. Xxxxxxxx, III
Title:
Senior Vice President and Chief Financial Officer
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