Exhibit 10.5
NINTH AMENDMENT TO
CREDIT FACILITIES AGREEMENT
This
NINTH AMENDMENT TO CREDIT FACILITIES AGREEMENT (this
“Agreement”) is entered into as of June 11, 2009 and is
effective on such date unless other otherwise expressly provided
herein, and is by and among MTM TECHNOLOGIES, INC., a New York
corporation (“Parent”), 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 further amended by the Second Amendment
to Credit Facilities Agreement entered into and effective as of
February 4, 2008, as further amended by the Third Amendment to
Credit Facilities Agreement entered into and effective as of
February 28, 2008, as further amended by the Fourth Amendment to
Credit Facilities Agreement entered into as of May 16, 2008, as
further amended by the Fifth Amendment to Credit Facilities
Agreement entered into as of June 11, 2008 (the “Fifth
Amendment”), as further amended by the Sixth Amendment to
Credit Facilities Agreement entered into as of November 13, 2008,
as further amended by the Seventh Amendment to Credit Facilities
Agreement entered into as of February 3, 2009, and as further
amended by the Eighth Amendment to Credit Facilities Agreement
entered into as of June 2, 2009 (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 and all references to the
“Loan Agreement” in the other Loan Documents 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 (or such
other date as may be expressly stated herein), but only if (a) this
Agreement has been executed by Borrower, Administrative Agent and
the Lender, and (b) each of the other documents listed on Exhibit A
have been duly executed and delivered to Administrative Agent in
form and substance satisfactory to the Lender.
3. ILOCS.
If the original ILOCs are not
delivered as required hereby, but Lender receives faxes or PDF
copies of the signed ILOCs as of the date first written above,
Lender will, subject to the
other terms and conditions
hereof, make Advances solely to fund the June 12, 2009 payroll and
it shall make no other Advances unless and until the original ILOCs
are delivered to Administrative Agent.
4. Consent to Sale.
Parent desires to sell its DataVox
business in one asset sale transaction (“Sale
Transaction”) because the DataVox business is not a core
competency of the Parent, and the Parent desires to focus its
resources on its core competencies. Parent anticipates that (i) the
aggregate purchase price for the Sale Transaction would be between
$60,000 and $100,000 and (ii) the aggregate liabilities that would
be assumed by purchasers in connection with the sale of the DataVox
business would be between $55,000 and $70,000.
In
the Sale Transaction, Parent anticipates that (a) approximately
eleven full time employees of Parent resident in New York, who are
currently dedicated to the DataVox Business, would be offered
employment by a purchaser (“Transferred Employees”),
(b) Parent would convey only those assets associated with the
DataVox Business, including the DataVox name and associated
trademarks, one printer, fewer than eight laptop computers, and
related IT hardware but no accounts receivable or inventory (the
“Sales Transactions Assets”), and (c) that it would
assign to the purchaser those liabilities associated with the
Transferred Employees. Each Borrower hereby represents and warrants
that the Sale Transactions will not affect Borrowing
Base.
Borrowers
hereby request that the Lender waive the application of Section
14.9 of the Loan Agreement to the Sale Transaction.
If
(i) the Sale Transaction will not affect Borrowing Base, (ii) 100%
of the net proceeds of the Sale Transaction are delivered to the
Administrative Agent, and (iii) any agreement governing the Sale
Transaction provides that the buyer of the DataVox business will
immediately turn over to Borrowers for deposit into the Lockboxes
any payments on accounts receivable and other amounts that are
owing to Borrowers, then Lender hereby consents to the Sale
Transaction. Promptly following delivery to Administrative Agent of
a detailed listing of all assets being sold in the Sale Transaction
and receipt by Administrative Agent of 100% of the net proceeds of
the Sale Transaction, the Administrative Agent shall, at the
Borrower’s sole cost and expenses, file or record, as
appropriate, any partial releases or terminations necessary to
effectuate its Security Interests in the Sale Transaction
Assets.
5. Special
Guaranty. Upon the
effectiveness of this Amendment, (i) the Special Guaranty is and
shall be terminated and (ii) Lender waives any right to make a
claim thereunder.
6. Amendments.
The Loan Agreement is hereby amended
as follows:
6.1. Existing Defined Terms in Exhibit 2.1.
The defined term “Special
Guaranty” is hereby deleted from Exhibit 2.1.
The definition of Material
Agreement is deleted in its entirety and replaced with the
following:
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“M ATERIAL A GREEMENT — 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 Reimbursement Indebtedness Documents, all FirstMark
Indebtedness Documents, all documents referenced in any
Intercreditor Agreement, including, without limitation, the Other
Creditor Indebtedness Documents.”
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The definition of
“Subordination Agreement” is deleted and replaced with
the following:
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“S UBORDINATION A GREEMENT — the Subordination Agreement by and
between Administrative Agent, on behalf of the Lenders, and the
Subordinated Lenders or the Reimbursement Lenders, as the case may
be, in form and substance satisfactory to Administrative
Agent.”
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6.2.
New Defined Terms. The
following defined terms “ILOC”, “Reimbursement
Indebtedness”, “Reimbursement Indebtedness
Documents” and “Reimbursement Lenders” are hereby
added to Exhibit 2.1 in alphabetical order as follows:
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“ILOC — means one or
more irrevocable standby letters of credit in the aggregate face
amount of no less than $8,500,000, each of which shall (a) be
issued by Bank of New York Mellon or another financial institution
acceptable to Administrative Agent in its sole discretion, (b) name
Administrative Agent as beneficiary, (c) be issued for the account
of one or more holders of the Reimbursement Indebtedness, (d) have
an expiry of at least 60 days beyond the Revolving Loan Maturity
Date, (e) provide, inter alia , that upon the occurrence of
an Event of Default described in Sections 16.1.1, 16.1.12 (other
than clause (i) thereof), or 16.1.15 of the Loan Agreement, the
Administrative Agent may fully draw on such letter of credit, and
(f) contain such other terms and provisions as may be acceptable to
Administrative Agent in it sole discretion.”
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“R EIMBURSEMENT I NDEBTEDNESS — means the Indebtedness incurred in
connection with that certain Letter of Credit Commitment and
Reimbursement Agreement, dated June ___, 2009, as amended,
modified, restated or replaced from time to time.”
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“R EIMBURSEMENT I NDEBTEDNESS D OCUMENTS — each document, instrument and agreement
evidencing all or any portion of the Reimbursement
Indebtedness.”
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“R EIMBURSEMENT L ENDERS — means each Person to whom the
Reimbursement Indebtedness is owed.”
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6.3.
Borrowing Base. Section
3.1.4 of the Loan Agreement is deleted in its entirety and replaced
with the following:
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“3.1.4.1.
85% of the total outstanding
principal balance of all of Borrowers’ Eligible Accounts as
of the close of business on such date, or as certified in the
Borrowing Base Certificate most recently furnished to
Administrative Agent as required in Section 13.14.1, whichever is
less, provided, however, from and after October 1, 2009, with
respect to Borrower’s Eligible Receivables arising from and
after October 1, 2009, the foregoing percentage shall be reduced to
80%, and provided further however, from and after January 1, 2010,
with respect to Borrower’s Eligible Receivables arising from
and after January 1, 2010, the foregoing percentage shall be
reduced to 75%; plus
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3.1.4.2.
while the ILOC remains issued and
outstanding, $7,000,000 less any amounts drawn by Administrative
Agent or Lender under the ILOC; minus
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3.1.4.3.
$1,750,000; minus
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3.1.4.4.
any other reserves or deductions
from the “Borrowing Base” which Administrative Agent or
the Required Lenders believe to be appropriate in their respective
commercially reasonable discretion.”
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6.4.
Maturity. Section 6.1.2.3
of the Loan Agreement is deleted in its entirety and replaced with
the following:
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“6.1.2.3.
Maturity. Borrower shall
repay the entire amount of the Aggregate Revolving Loan on March
31, 2010 and Borrower shall repay the entire amount of the
Swingline Loan on demand, or if no demand is made, on March 31,
2010, and plus at such time, payment of cash collateral
satisfactory to Administrative Agent as security for
Borrower’s obligation to reimburse the Letter of Credit
Issuer for 105% of all draws and expenses under all outstanding
Letters of Credit. Borrower shall repay the entire amount of the
Aggregate Floorplan Loan and the Interim Floorplan Loan on the date
as provided in Section 3.2.7 or specified elsewhere in this
Agreement or if no demand is made as set forth in Section 3.2.7 or
elsewhere in this Agreement, then on March 31, 2010 (such date
being, the “Floorplan Loan Maturity Date”), plus cash
collateral equal to 100% of any unfunded Approvals, in which case
such Approvals shall be otherwise paid in accordance with the
applicable Transaction Statements.”
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6.5. Solvency.
Section 11.14 of the Loan Agreement
is deleted in its entirety and replaced with the
following:
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“11.14
Intentionally
Omitted.”
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6.6. Projections.
Section 11.15 of the Loan Agreement
is deleted in its entirety and replaced with the
following:
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“11.15
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.”
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6.7. Representations and
Warranties re: other Indebtedness.
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Section 11.24 is deleted in its
entirety and replaced with the following:
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“11.24. Other Creditor
Indebtedness; Intercreditor Documents; Subordinated Indebtedness,
FirstMark Indebtedness; Reimbursement 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. T
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