Contract
EXHIBIT
10.1
WAIVER
and AMENDMENT, dated
as
of February 14, 2007 (this “Waiver”),
executed in connection with the FINANCING
AGREEMENT, dated
as
of June 8, 2005 (as the same has heretofore been amended and may hereafter
be
amended, restated, modified or supplemented from time to time, the “Financing
Agreement”),
among
MTM
TECHNOLOGIES, INC.,
a New
York corporation (“Parent”),
each
of
its subsidiaries that is a party thereto (each of Parent and each such
subsidiary, a “Company”
and
collectively the “Companies”),
and
any other entity that becomes a party thereto as a borrower and THE
CIT GROUP/BUSINESS CREDIT, INC.,
a New
York corporation (“CIT”),
and
any other entity becoming a Lender (collectively, the “Lenders”
and
each individually as a “Lender”),
and
CIT, as Agent for the Lenders (the “Agent”).
Terms
which are capitalized in this Waiver and not otherwise defined shall have the
meanings ascribed to such terms in the Financing Agreement.
WHEREAS,
the
Companies have requested that the Lenders (i) waive as Events of Default the
violation by the Companies of the Consolidated Fixed Charge Coverage Ratio
and
the Consolidated Senior Leverage Ratio requirements for the period of four
consecutive fiscal quarters ending on or about December 31, 2006, and
(ii)
waive
the breach by the Companies of any representations and warranties set forth
in
the Financing Agreement or any other Loan Documents to which they are a party
solely as a result of the foregoing, and
the
Lenders have agreed to the foregoing requests, on the terms and subject to
satisfaction of the conditions contained in this Waiver;
WHEREAS,
the
Lenders have requested that the Companies agree to modify certain
terms of the Financing Agreement, and the Companies have agreed to the foregoing
request, on the terms and subject to the satisfaction of the conditions
contained in this Waiver;
NOW,
THEREFORE,
in
consideration of 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:
Section
One. Amendment. Effective
as of the date hereof, upon the satisfaction of the conditions precedent set
forth in Section Four hereof, the Financing Agreement is hereby amended as
follows:
(a)
Section
1.1.
Defined
Terms.
Section
1.1 of the Financing Agreement is amended by adding the new defined term
Consolidated Liquidity, in the appropriate alphabetical order, and the
definition thereof, as follows:
“Consolidated
Liquidity
shall
mean, as of any date of determination, the sum of (x) all cash and cash
equivalents on the Consolidated Balance Sheet, calculated after giving effect
to
all checks, drafts and other negotiable instruments issued by and drawn on
a
bank account of any Company, which checks, drafts and other negotiable
instruments have not been presented for payment as of the opening of business
on
such date of determination, but not including cash reserved for accrued payroll
obligations, plus (y) the amount of Net Availability.”
(b)
Section
7.2(h).
Financial
Reporting.
Section
7.2(h) of the Financing Agreement is amended by adding new clause (v) thereto,
as follows:
“(v)
on a
weekly basis, a financial report, in form and substance reasonably satisfactory
to the Agent, which report shall indicate the amount of Consolidated Liquidity
as of the last day of the previous week, together with a calculation thereof,
in
reasonable detail.”
(c)
Section
7.3.
Financial
Covenants.
Section
7.3 of the Financing Agreement is amended by adding new subsection (d) thereto,
as follows:
“(d)
Consolidated
Liquidity.
To
cause the Parent to have Consolidated Liquidity of not less than $2,500,000
at
all times through and including March 31, 2007, and Consolidated Liquidity
of
not less than $3,000,000 at all times thereafter.”
Section
Two. Waivers.
The
Companies have advised the Lenders that Parent has (i) failed to maintain a
Consolidated Senior Leverage Ratio for the period of four consecutive fiscal
quarters ending on or about December 31, 2006 of not greater than 4.00 to 1.00,
in violation of Section 7.3(a) of the Financing Agreement, and (ii) failed
to
maintain a Consolidated Fixed Charge Coverage Ratio for the period of four
consecutive fiscal quarters ending on or about December 31, 2006 of not less
than 1.00 to 1.00, in violation of Section 7.3(b) of the Financing Agreement.
Each such violation constitutes an Event of Default under Section 10.1(e) of
the
Financing Agreement (such Events of Default, collectively, the “Financial
Covenant Defaults”).
Effective as of the date hereof, upon the satisfaction of the conditions
precedent set forth in Section Four hereof, and subject to the satisfaction
of
the conditions subsequent set forth in Section Five hereof, the Lenders hereby
waive the Financial Covenant Defaults
and any
breach by the Companies of any representations and warranties set forth in
the
Financing Agreement or any other Loan Document to which they are a party solely
as a result of the foregoing (each such breach, together with the Financial
Covenant Defaults, the “Designated
Defaults”)
as
Events
of Default; provided,
however,
nothing
contained herein shall constitute a waiver by the Lenders of any other Event
of
Default, whether or not they have any knowledge thereof, nor shall anything
contained herein constitute a waiver of any future Event of Default whatsoever.
Henceforth, the Lenders shall require strict compliance by the Companies with
all of the terms and provisions contained in the Financing
Agreement.
Section
Three. Representations
and Warranties.
To
induce the Lenders to enter into this Waiver, each Company hereby warrants
and
represents to the Lenders as follows:
(a) all
of
the representations and warranties contained in the Financing Agreement and
each
other Loan Document to which such Company is a party continue to be true and
correct in all material respects as of the date hereof, as if repeated as of
the
date hereof, except (i)
with
respect to the absence of the occurrence and continuation of any Event of
Default, as to which the Lenders acknowledge the occurrence of the Designated
Defaults, and (ii) to
the
extent of changes resulting from transactions expressly permitted by the
Financing Agreement, this Waiver or any of the other Loan Documents, or to
the
extent that
such
representations and warranties are expressly
made
only
as
of
an
earlier
date;
(b) the
execution, delivery and performance of this Waiver by such Company is within
its
corporate powers, has been duly authorized by all necessary corporate action,
and such Company has received all necessary consents and approvals, if any
are
required, for the execution and delivery of this Waiver;
(c) upon
the
execution of this Waiver, this Waiver shall constitute the legal, valid and
binding obligation of such Company, enforceable against such Company in
accordance with its terms, except as such enforceability may be limited by
(i)
bankruptcy, insolvency or similar laws affecting creditors’ rights generally and
(ii) general principles of equity; and
(d) neither
the execution and delivery of this Waiver, nor the consummation of the
transactions herein contemplated, nor compliance with the provisions hereof
will
(i) violate any law or regulation applicable to any Company, (ii) cause a
violation by any Company of any order or decree of any court or government
instrumentality applicable to it, (iii) conflict with, or result in the breach
of, or constitute a default under, any indenture, mortgage, deed of trust,
or
other material agreement or material instrument to which any Company is a party
or by which it may be bound, (iv) result in the creation or imposition of any
lien, charge, or encumbrance upon any of the property of any Company, except
in
favor of the Lenders, to secure the Obligations, (v) violate any provision
of
the Certificate of Incorporation, By-Laws or any capital stock provisions of
any
Company, or (vi) be reasonably likely to have a Material Adverse
Effect.
Section
Four. Conditions
Precedent.
This
Waiver shall become effective upon the satisfaction of the following conditions
precedent:
(a) the
Agent
shall have received an original of this Waiver, duly executed by all of the
parties hereto other than CIT;
(b) the
Agent
shall have received and reviewed to its satisfaction a
copy of
the fully executed waiver of Textron of all events of default existing under
the
Textron Loan Agreement;
(c) the
Agent
shall have received and reviewed to its satisfaction a copy of the fully
executed waiver of Columbia Partners, L.L.C. Investment Management and National
Electrical Benefit Fund (collectively, the “Columbia
Lenders”)
of all
events of default existing under that certain Credit Agreement dated as of
November 23, 2005, by and among the Columbia Lenders, on the one hand, and
Parent, together with each
of
its subsidiaries that is a party thereto, on the other hand;
(d) the
Agent
shall have received a duly executed original of that certain letter agreement,
dated as of the date hereof, among the Agent and the Companies (the
“Letter
Agreement”);
(e) the
Agent
shall have received a non-refundable fee in the amount of $20,000 (the
“Fee”),
for
the pro rata benefit of the Lenders, which shall be fully earned on the date
hereof. The Companies authorize Agent to charge their loan account with the
amount of the Fee; and
(f) except
for the Designated Defaults, no Default or Event of Default, and no event or
development which has had or is reasonably likely to have a Material Adverse
Effect, shall have occurred or be continuing on the date hereof.
Section
Five. Conditions
Subsequent.
The
waiver of the Designated Defaults contained in Section Two hereof shall remain
effective provided the Companies satisfy the conditions subsequent set forth
in
the Letter Agreement on or before the respective dates set forth therein. Upon
the Companies’ failure to satisfy on a timely basis any of the conditions
subsequent
set forth in the Letter Agreement, the waiver of the Designated Defaults
contained in Section Two hereof shall be null and void, and each Designated
Default shall immediately be deemed to constitute a continuing Event of Default,
notwithstanding anything to the contrary contained herein.
Section
Six. General
Provsions.
(a) Except
as
herein expressly amended, the Financing Agreement and all other agreements,
documents, instruments and certificates executed in connection therewith, are
ratified and confirmed in all respects and shall remain in full force and effect
in accordance with their respective terms.
(b) This
Waiver embodies the entire agreement between the parties hereto with respect
to
the subject matter hereof and supercedes all prior agreements, commitments,
arrangements, negotiations or understandings, whether written or oral, of the
parties with respect thereto.
(c) This
Waiver, and matters relating hereto and arising herefore, shall be governed
by
and construed in accordance with the internal laws of the State of New York,
without regard to the conflicts of law principals thereof.
(d) This
Waiver 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 respective agreement.
(Signature
Page Follows)
IN
WITNESS WHEREOF, the
parties to this Waiver have signed below to indicate their agreement with the
foregoing and their intent to be bound thereby.
THE
CIT GROUP/BUSINESS CREDIT, INC., as a Lender and as the
Agent
|
||
By:
|
/s/
Xxxxxx Xxxxxxxxxxx
|
|
Name:
Xxxxxx Xxxxxxxxxxx
Title:
Vice President
|
||
for
itself and as Borrowing Agent, and as successor by merger with
each of MTM
Technologies (California), Inc., and MTM Technologies (Texas),
Inc.
|
||
By:
|
/s/
X.X. Xxxxxxxx III
|
|
Name:
X.X. Xxxxxxxx III
Title:
Senior Vice President and Chief
Financial Officer
|
||
MTM
TECHNOLOGIES (US), INC.
|
||
By:
|
By:
/s/ X.X. Xxxxxxxx III
|
|
Name:
X.X. Xxxxxxxx III
|
||
Title:
Senior Vice President and Chief
Financial Officer
|
||
INFO
SYSTEMS, INC.
|
||
By:
|
/s/
X.X. Xxxxxxxx III
|
|
Name: X.X.
Xxxxxxxx III
|
||
Title:
Senior Vice President and Chief
Financial Officer
|
||
MTM
TECHNOLOGIES (MASSACHUSETTS), LLC
|
||
By:
|
/s/
X.X. Xxxxxxxx III
|
|
Name:
X.X. Xxxxxxxx III
|
||
Title:
Senior Vice President and Chief
Financial Officer
|
Signature
Page to Waiver and Amendment (February 2007)