Contract
EXHIBIT
10.4
TERMINATION,
RELEASE AND INDEMNIFICATION AGREEMENT, dated as of August 21, 2007
(this “Termination Agreement”), executed in connection with that certain
FINANCING
AGREEMENT, dated as of June 8, 2005 (as
amended, supplemented, restated or otherwise modified from time to time, the
“Financing Agreement”), by and among MTM TECHNOLOGIES,
INC., a New York corporation (“MTM”), all of MTM’s subsidiaries
from time to time party thereto (all such subsidiaries together with MTM,
collectively, the “Borrowers”), the financial institutions from time to
time party thereto as lenders (collectively, the “Lenders”) and
THE CIT GROUP/BUSINESS CREDIT, INC. as agent for the Lenders
(in such capacity, “Agent”). Terms which are capitalized in
this Termination Agreement and not otherwise defined herein shall have the
meanings ascribed to such terms in the Financing Agreement.
WHEREAS,
the Borrowers have notified Agent of their intention to terminate the Financing
Agreement and all other Loan Documents, and to pay and satisfy in full in
immediately available funds all outstanding Revolving Loans and all other
Obligations, including without limitation, all interest accrued thereon, and
all
costs, fees and expenses payable in connection therewith, on or about the date
hereof; and
WHEREAS,
concurrently with such termination and payment, GE
COMMERCIAL DISTRIBUTION FINANCE CORPORATION, as agent for itself
and certain other lenders (“New Lender”), shall enter into one or more
financing agreements with the Borrowers (collectively, the “New Credit
Agreement”); and
WHEREAS,
the parties hereto wish to set forth their understanding with respect to (i)
the
payment and satisfaction in full of the Obligations, the calculation thereof,
and the method of payment thereof, (ii) the termination of the Financing
Agreement and the other Loan Documents and the termination and release by Agent
of all liens and security interests in the assets and properties of the
Borrowers, (iii) the delivery by Agent to New Lender’s legal counsel, various
original instruments and documents, (iv) the exchange of mutual releases by
and
among the Borrowers and Agent, and (v) the indemnification of Agent by the
Borrowers with respect to certain contingent Obligations, and the establishment
of the Reserve (as defined on Exhibit A annexed hereto);
NOW,
THEREFORE, in connection with the mutual promises contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Payment
of Obligations. The Borrowers have advised Agent that the date of
repayment of the Obligations shall be August 21, 2007 (the “Payout
Date”). Assuming that payment is received by Agent by 2:00 p.m.
New York City time on the Payout Date, the total amount of all Obligations
and
other amounts to be paid shall equal the total amount set forth at the end
of
Schedule A annexed hereto, adjacent to the words “Payout Amount” (the
“Payout Amount”). Payment of the Payout Amount, including the
portion thereof which constitutes the estimated fees and disbursements of
Agent’s legal counsel, shall be effectuated by the wire-transfer of same day
funds in U.S. dollars directly to Agent at its bank account, as
follows:
Name
of
Bank: JPMorgan
Chase Bank
Bank
Account: CIT
Business Credit Inc.
Bank
Account
No.: 000-0-00000
ABA
Routing
No.: 021000021
Reference:
MTM Technologies, Inc.
2. Termination
of Financing Agreement and other Loan Documents; Release and Reassignment of
Liens. Effective upon Agent’s timely receipt on the Payout Date
of (a) the Payout Amount and (b) a fully executed counterpart of this
Termination Agreement (collectively, the “Release Conditions”): (i) the
Financing Agreement, all commitments thereunder, and all other Loan Documents,
are each automatically terminated and cancelled by mutual consent, (ii) all
indebtedness, liabilities and other Obligations of the Borrowers to Agent are
satisfied in full (other than those obligations which shall continue after
the
Payout Date in accordance with Paragraphs 4 and 5 of this Termination
Agreement), (iii) Agent reassigns to the Borrowers, with respect to each item
of
property in which any of the Borrowers has previously granted to Agent a lien
upon or security interest in as collateral security for the Obligations arising
under or relating to the Loan Documents (collectively the “Collateral”),
without recourse, representation or warranty, all such liens and security
interests so granted, (iv) all liens upon and security interests in the
Collateral are automatically terminated, and (v) without limiting the generality
of the termination provisions contained in clause (i) hereof, automatically
upon
the satisfaction of the Release Conditions, Agent terminates all right, title
and interest it has in and to all lockboxes, deposit accounts and blocked
accounts that any of the Borrowers maintain with JPMorgan Chase Bank, N.A.
(the
“Blocked Account Bank”) or any affiliate thereof, and Agent terminates
all blocked account arrangements or agreements it has with the Blocked Account
Bank or such affiliates with respect to such lockboxes, deposit accounts and
blocked accounts. In addition, automatically upon the satisfaction of
the Release Conditions, Agent terminates all right, title and interest it may
have in and to all third-party documents, such as landlord waivers and consents,
executed or delivered from time to time to Agent with respect to any of the
Borrowers.
3. Authorization
to Record Termination Statements; Delivery of Certain Investment Property and
Certain Other Release Instruments. Effective upon the
satisfaction of the Release Conditions, Agent hereby authorizes the Borrowers
and New Lender, or their respective attorneys, agents or designees, to record
or
file, as applicable, with the appropriate filing or recording offices any and
all financing statements necessary to terminate all UCC-1 financing statements
of record, covering any Collateral, in which Agent is named as secured party
and
any of the Borrowers is named as debtor. In addition, no later than
the business day immediately following the day on which the Release Conditions
are satisfied, Agent shall send by a nationally-recognized overnight courier
service to Xxxxxx X. Xxxxxxxx, Esq., Xxxxx, Rice & Xxxxxxxx, X.X., 000 Xxxxx
Xxxxxxxx, Xxxxx 0000, Xx. Xxxxx, Xxxxxxxx 00000 (i) all certificates in Agent’s
possession evidencing securities and other similar investment property in which
any of the Borrowers shall have previously granted to Agent a lien upon or
security interest in (copies of all such certificates are annexed hereto as
Exhibit B) and (ii) an instrument in the form of Exhibit A annexed
hereto, pursuant to which the collateral assignment to Agent of certain
trademarks in which any of the Borrowers has any right, title or interest shall
be cancelled and terminated of record (and Agent hereby authorizes the Borrowers
and New Lender, or their respective attorneys, agents or designees, to record
or
file, as applicable, such instrument).
-2-
4. Mutual
Release. Effective upon the satisfaction of the Release
Conditions, Agent and each of the Lenders hereby releases and discharges the
Borrowers and the successors and assigns of each, and the Borrowers hereby
release and discharge Agent and each of the Lenders, and their respective
successors and assigns, of and from all claims, demands, debts, accounts,
contracts, obligations, Obligations, actions and causes of action, whether
in
law or in equity, which any party ever had, now has, or hereafter may have
against the other, directly or indirectly arising out of or in any way relating
to the Financing Agreement, the Loan Documents, any amendments thereto, any
instrument, document or agreement executed or delivered in connection therewith,
and any transaction relating thereto, except (i) to the extent that any
provision contained in the Financing Agreement or in any other Loan Document,
by
its terms, specifically provides that a referenced Obligation survives the
payment of monetary obligations owing by the Borrowers to Agent or any of the
Lenders, as to which the Borrowers shall continue to be liable after the date
of
this Termination Agreement, in accordance with the terms of such provision
and
(ii) with respect to the indemnity obligations of the Borrowers described in
paragraph 5 hereof, as to which the Borrowers shall continue to be liable after
the date of this Termination Agreement, in accordance with the terms of
paragraph 5.
5. Reserve;
Indemnity. (a) As collateral security for all obligations,
indebtedness, and liabilities owing to Agent or any of the Lenders with respect
to (i) any Returned Items (as defined below) and (ii) all amounts owing by
the
Borrowers to Agent or any of the Lenders which by virtue of clerical or similar
error are not reflected in the calculation of the Payoff Amount or which, in
the
case of estimated out-of-pocket expenses of Agent, are determined after the
date
of this Termination Agreement to have been inadequately reflected in such
calculation (collectively, the “Reimbursement Obligations”), the
Borrowers hereby pledge and assign to Agent, and grant to Agent a continuing
security interest in and lien upon, all of their right, title and interest
in
and to the Reserve. The Reserve shall (x) at all times be held by
Agent or its designee, (y) at all times be under Agent’s dominion and control
and (z) be non-interest bearing. Agent may at any time and from time
to time, and without notice to the Borrowers or to any other party (any such
notice being hereby expressly waived) set-off, charge and/or apply all of the
Reserve against and on account of the Reimbursement Obligations as they come
due. Any balance of the Reserve (less Agent’s standard wire transfer
charges pursuant to Section 8.8 of the Financing Agreement) remaining after
one
hundred and twenty (120) days have elapsed from the date of this Termination
Agreement shall be delivered to New Lender, in accordance with the Borrowers’
instructions, by wire transfer of funds, as follows:
|
Name
of Bank:
Credit
Account:
ABA
Routing No.:
Payee:
|
Northern
Trust
Xxxxxxx,
Xxxxxxxx
00000
000000000
GE
Commercial Distribution Finance / MTM Technologies
|
Should
the Reimbursement Obligations exceed the Reserve (the “Excess”), the
Borrowers shall remain liable to Agent for such Excess and shall immediately
pay
any such Excess to Agent upon demand.
-3-
(b) The
Borrowers jointly and severally agree, irrevocably and unconditionally, to
indemnify Agent and each of the Lenders for, and hold Agent and each of the
Lenders harmless against, and to immediately pay to Agent upon its demand
therefor, the amount of all checks and other instruments for the payment of
money (plus ordinary and customary service, protest or other bank charges or
other ordinary and customary charges or fees relating thereto), which checks
and
instruments have been (i) received by Agent on or before the Payout Date and
(ii) credited to any account of the Borrowers with Agent for the purpose of
computing the Payout Amount and which Agent is unable for any reason to collect
or, solely with respect to the indemnity of the Borrowers, which Agent is for
any reason compelled to surrender to any person because such payment is
determined to be void or voidable as a preference, an impermissible setoff,
a
diversion of trust funds or for any other reason (collectively, the “Returned
Items”). The Borrowers shall pay interest thereon from the date
such check or other instrument was paid to the date of payment by the Borrowers
at the rate that would have been applicable under the Financing
Agreement.
6. General
Provisions. 1) Agent agrees promptly to do all things
which may be reasonably requested by the Borrowers or New Lender to further
effect and evidence of record the release and reassignment described in
paragraph 2 hereof, subject to the prior indefeasible payment in full by the
Borrowers to Agent of all of Agent’s out-of-pocket costs and expenses
(including, without limitation, all reasonable fees and expenses of counsel)
incurred in connection therewith.
(b) This
Termination Agreement may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original, and such counterparts
together shall constitute one and the same Termination Agreement.
(c) All
notices and demands given or made under this Termination Agreement shall be
in
writing, and shall be delivered by messenger, first class or overnight mail,
or
by facsimile transmission followed by delivery by messenger, first class or
overnight mail, as follows:
if
to
Agent, then to:
The
CIT
Group/Business Credit, Inc.
00
Xxxx
00xx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxx X. Xxxxxxxxxxx
Fax
No.: (000) 000-0000
if
to the
Borrowers, then to:
0000
Xxxx
Xxxxx Xxxx
Xxxxxxxx,
Xxxxxxxxxxx 00000
Attn:
X.X. Xxxxxxxx, III
Fax
No.:
(000) 000-0000
(d) THIS
TERMINATION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF
-4-
THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF.
(Signature
Page Follows)
-5-
IN
WITNESS WHEREOF, each of the parties hereto has executed this Termination
Agreement as of the day and year first set forth above. New Lender, although
not
a party to this Termination Agreement, is an intended third-party beneficiary
with respect to the provisions contained in paragraphs 1, 2, 3 and 4
hereof.
|
THE
CIT GROUP/BUSINESS CREDIT, INC.
|
||
| By: | /s/ | |
| Name: | Xxxxxx Xxxxxxxxxxx | |
| Title: | Vice President | |
|
MTM
TECHNOLOGIES (CALIFORNIA), INC.
MTM
TECHNOLOGIES (US), INC.
MTM
TECHNOLOGIES (TEXAS), INC.
MTM
TECHNOLOGIES (MASSACHUSETTS), LLC
INFO
SYSTEMS, INC.
|
||
| By: | /s/ | |
| Name: | X.X. Xxxxxxxx, III | |
| Title: |
Senior
Vice President and Chief
Financial Officer
|
|
Signature
Page to Termination, Release and Indemnification Agreement
SCHEDULE
A
Calculation
of Payout Amount
|
1.
|
Outstanding
principal balance of Revolving Loans
|
$ 4,964,926.87
|
|
2.
|
Accrued
interest on Revolving Loans
|
$ 36,286.11
|
|
3.
|
Wire
Transfer Fee
|
$ 330.00
|
|
4.
|
Early
termination fee pursuant to Section 8.11 of the Financing
Agreement
|
$ 62,500.00
|
|
5.
|
“Reserve”
|
$ 25,000.00
|
|
6.
|
Unused
Line Fee
|
$ 2,680.58
|
|
7.
|
Estimated
legal fees and disbursements
|
$ 30,000.00
|
|
PAYOUT
AMOUNT (which includes the Reserve)
|
$ 5,121,723.56
|
EXHIBIT
A
TERMINATION,
RELEASE AND REASSIGNMENT OF
SECURITY
INTEREST IN TRADEMARKS
This
Termination, Release and Reassignment Agreement (this “Agreement”) is
dated as of August __, 2007 and is executed in favor of MTM Technologies, Inc.
(“MTM”), by The CIT Group/Business Credit, Inc. (“Secured
Party”).
WHEREAS,
MTM, all of MTM’s subsidiaries from time to time party thereto (all such
subsidiaries together with MTM, collectively, the “Borrowers”), the
financial institutions from time to time party thereto as lenders (collectively,
the “Lenders”) and Secured Party as agent for the Lenders entered into
that certain Financing Agreement, dated as of June 8, 2005 (as amended,
supplemented, restated or otherwise modified from time to time, the
“Financing Agreement”), pursuant to which Secured Party and certain of
the Lenders extended credit to MTM;
WHEREAS,
in connection with the Financing Agreement, MTM and Secured Party entered into
(i) that certain Trademark Security Agreement, dated as of June 8, 2005,
recorded with the United States Patent and Trademark Office on July 12, 2005
at
Reel/Frame 3155/0815 (the “Trademark Security Agreement”), pursuant to
which MTM granted a security interest in the Trademark Collateral (as defined
in
the Trademark Security Agreement) to Secured Party, and (ii) that certain
Assignment for Security of Trademarks by MTM to Agent, dated as of June 8,
2005
(the “Assignment for Security of Trademarks”); and
WHEREAS,
MTM has requested that Secured Party terminate, release and reassign its
security interest in the Trademark Collateral in connection with the termination
of the Financing Agreement and the related agreements, documents and
instruments, and the payment and satisfaction in full of all obligations
thereunder, pursuant to that certain Termination, Release and Indemnification
Agreement, dated as of the date hereof, by and among the Borrowers and Secured
Party (the “Payoff Agreement”);
NOW,
THEREFORE, upon Secured Party’s receipt of the Payoff Amount (as defined in the
Payoff Agreement), Secured Party hereby terminates, releases and reassigns
to
MTM its lien on and security interest in the Trademark Collateral, (ii) the
goodwill of MTM’s business connected with and symbolized by the Trademark
Collateral, and (iii) all cash and non-cash proceeds of the foregoing, whether
such lien and security interest is granted pursuant to the Financing Agreement,
the Trademark Security Agreement, the Assignment for Security of Trademarks,
or
any other agreement, document or instrument; and
Secured
Party further agrees to execute and deliver to MTM or to MTM’s new lender, GE
Commercial Distribution Finance Corporation, as MTM may so direct Secured Party
in writing, any and all further documents or instruments and do any and all
further acts, in each case at MTM’s cost and expense, which MTM (or its agent or
any of its designees) may reasonably request, in order to confirm this Agreement
and the release by Secured Party of its lien on and security interest in the
Trademark Collateral, and the reassignment by Secured Party to MTM of all of
Secured Party’s right, title and interest in and to the Trademark
Collateral.
(Signature
Page Follows)
IN
WITNESS WHEREOF, Secured Party has executed this Agreement as of the day and
year first above written.
|
THE
CIT GROUP/BUSINESS CREDIT, INC.,
as
Secured Party
|
||
| By: | ||
| Name: | ||
| Title: | ||
| STATE OF NEW YORK | ) |
| ) ss: | |
| COUNTY OF NEW YORK | ) |
On
the
____ day of August, 2007, before me, a duly authorized notary in and for the
above county and state, appeared ______________, on behalf of The CIT
Group/Business Credit, Inc., known to me to be the individual who executed
the
above Agreement.
| Notary Public | ||
Signature
Page to Termination, Release and Reassignment Agreement
ANNEX
TO TERMINATION, RELEASE AND REASSIGNMENT OF
SECURITY
INTEREST IN TRADEMARKS
|
Title
|
Trademark
Registration
|
Date
Filed
|
Country
|
|
Pivot
Technologies
|
2,479,202
|
10/23/99
|
USA
|
|
Pivot
Technologies and Design
|
2,444,052
|
10/23/99
|
USA
|
|
Pivot
Technologies (Eye Logo)
|
2,756,707
|
8/30/00
|
USA
|
|
Systems
Managing Systems
|
2,434,901
|
10/23/99
|
USA
|
|
DNA
Net Sensor Datavox Network Assurance
|
2,721,382
|
12/14/01
|
USA
|
|
Enterprise
Services Partner
|
2,763,391
|
10/30/01
|
USA
|
|
Vector
ESP
|
2,924,616
|
10/30/01
|
USA
|
