ACKNOWLEDGMENT OF PAYMENT AND TERMINATION AGREEEMNT
EXHIBIT
10.5
ACKNOWLEDGMENT
OF PAYMENT AND TERMINATION AGREEEMNT
This
ACKNOWLEDGEMENT
OF PAYMENT
AND TERMINATION AGREEEMNT (this “Agreement”), dated
August 21, 2007, is by and between TEXTRON FINANCIAL
CORPORATION (“TFC”) and GE COMMERCIAL
DISTRIBUTION FINANCE (“GECDF”) and acknowledged by MTM
TECHNOLOIES, INC., MTM TECHNOLOGIES (MASSACHUSETTS) LLC, MTM TECHNOLOGIES
(US),
INC. and INFO SYSTEMS, INC. (collectively, the
“Customers”).
RECITALS:
WHEREAS,
TFC
has
extended inventory financing to the Customers;
WHEREAS,
GECDF will
provide financing to the Customers and the Customers have granted GECDF a
security interest in their (the “Assets”) to secure the
obligations of the Customers to GECDF;
WHEREAS,
GECDF desires
TFC to terminate its rights, title, security interests and liens in the Assets
under or otherwise in connection with its Loan and Security Agreement dated
as
June 8, 2005 between TFC and the Customers, as amended, and any other documents
executed in connection therewith, and to authorize the filing of the Uniform
Commercial Code (UCC) termination statements attached hereto as Exhibit A
to
evidence the termination of its rights in the Assets (the “Termination
Statements”); and
WHEREAS,
TFC
is
willing to terminate its rights, title, security interests and liens in the
Assets as set forth above and to authorize the filing of the Termination
Statements provided that TFC receives the “Payout Amount” (as defined
below).
NOW
THEREFORE, TFC and
GECDF hereby agree as follows:
TFC
represents and warrants to GECDF
that, to the best of TFC's knowledge, TFC has not assigned or subordinated
any
of TFC's right, title or interest in the Assets as set forth above to any
other
person or party other than in connection with that certain Amended and Restated
Intercreditor Agreement, dated as of November 3, 2006, between TFC and The
CIT
Group/Business Credit, Inc. and that certain Agreement Relating to Sun Service
Contracts dated as of December 12, 2005 among MRA Systems, Inc., the Customers,
TFC, and the other parties thereto.
Upon
receipt of payment in immediately
available funds in the sum of $12,228,140.63 (the “Payout
Amount”) on August 21, 2007, TFC agrees that (a) TFC’s rights, title,
security interests and liens in the Assets as set forth above shall be
terminated, and (b) the Customers and/or GECDF and/or their respective agents
or
attorneys are authorized to record or file the Termination Statements in
the
appropriate offices and/or jurisdictions (all at the cost and expense of
the
Customers or GECDF). The Payout Amount represents all of the
outstanding indebtedness owing to TFC by the Customers, inclusive of
$10,701,238.56 of principal and $49,332.65 of interest, fees and charges
as set
forth on Exhibt B attached hereto. The Payout Amount shall be
paid via Federal Funds wire transfer to TFC pursuant to wiring isntructions
set
forth on Exhibit B attached hereto.
Included
in the Payout Amount are
obligations of TFC in connection with TFC's open approvals (amounts
approved by TFC for Customers' inventory purchases, but which, for any reason
remain unfunded by TFC on the date hereof) in an amount equal to $1,483,904.42
(collectively the “Open Approvals”), as more particularly
detailed on Exhibit C attached hereto. Customers acknowledge that the amount
of
the Open Approvals shall be deemed an advance as set forth and defined in
the
credit agreement between Customers and GECDF. TFC agrees to fund the
“Open Approvals” in accordance with its standard operating procedures from the
$1,483,904.42 amount referred to above and to provide written notice of each
such funding to GECDF. TFC shall also furnish to the
Customers any manufacturer/vendor invoice received in respect of any
such Open Approval. If any Open Approvals have not been funded after
45 days from the date hereof, TFC shall return to GECDF the portion of the
aforesaid $1,483,904.42 amount attributable to such unfunded Open Approvals
and
TFC shall be relieved from funding such Open Approvals. During
such 45 day period, TFC shall use reasonable
administrative efforts to forward directly to GECDF any other
invoices received on Customers' behalf.
TFC
agrees to execute and deliver to
GECDF for filing in the appropriate offices, such other additional Termination
Statements or other releases and terminations as GECDF may reasonably request,
from time to time, to evidence the termination of TFC’s rights, title, security
interests and liens in the Assets as provided above.
Except
with respect to TFC’s
undertaking above regarding the return of the unused amount of the
Open Approval portion of the Payout Amount and TFC’s express
representations and warranties set forth above, this letter is issued without
any recourse, in any event, to TFC and without warranties or representations
by
TFC.
This
Agreement constitutes the entire
agreement between GECDF and TFC with respect to the subject matter
hereof.
This
Agreement may not be amended
except by written agreement between GECDF and TFC and shall be governed by
and
construed according to the laws of the state of New York.
This
Agreement is solely for the
benefit of GECDF and TFC and is not intended to benefit any other
person or entity, including without limitation, the Customers.
Nothing
herein shall be deemed a
release or termination of any Customer’s obligations to TFC to the extent that
such obligations survive the payment of the Payout Amount. Any such
obligations shall be unsecured.
This
Agreement may be executed in one
or more counterparts, each of which when so executed and delivered (whether
by
facsimile or otherwise) shall be an original but all of which together shall
constitute one and the same agreement.
IN
WITNESS WHEREOF,
the duly authorized representatives of TFC and GECDF have executed, and
Customers have acknowledged, this Acknowledgement of Payment and Termination
Agreement as of the date set forth above.
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TEXTRON
FINANCIAL CORPORATION
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GE
COMMERCIAL DISTRIBUTION FINANCE CORPORATION
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By:
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Name:
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Name:
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Title:
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ACKNOWLEDGED
BY:
MTM
TECHNOLOIES, INC.,
MTM
TECHNOLOGIES (MASSACHUSETTS) LLC,
MTM
TECHNOLOGIES (US), INC. and INFO SYSTEMS,
INC.
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By:
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Name:
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Title:
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