THIS NOTE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND
THIS NOTE MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER THE ACT AND THE RULES AND REGULATIONS
THEREUNDER.
EACH HOLDER OF THIS INSTRUMENT, BY ITS ACCEPTANCE HEREOF,
IRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS OF THIS NOTE. THIS
NOTE AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE
SUBORDINATE TO CERTAIN INDEBTEDNESS AS SET FORTH HEREIN.
THIS NOTE MAY NOT BE ASSIGNED, NEGOTIATED OR TRANSFERRED EXCEPT
AS SET FORTH HEREIN.
AMENDED AND RESTATED
SUBORDINATED PROMISSORY NOTE
|
$123,551.00
|
February
11, 2009
|
FOR
VALUE RECEIVED, the undersigned, MTM TECHNOLOGIES, INC., a New York
corporation (the “ Borrower ”), promises to pay
to FIRSTMARK III OFFSHORE PARTNERS, L.P. (the “ Holder
”), the principal sum of one hundred twenty three thousand
five hundred fifty one dollars ($123,551.00) with interest on
the unpaid balance from the date hereof, at the rate of fifteen
percent (15%) per annum in lawful money of the United States of
America, at c/o FirstMark Capital, L.L.C. 1221 Avenue of the
Americas, 26 th Floor, New York, New York 10020, or at
such other place as the Holder may designate in writing.
This Amended and Restated
Promissory Note (this “ Note ”) amends and
restates in its entirety that certain Promissory Note dated as of
January 29, 2009 and made by the Borrower in favor of the Holder to
evidence the principal sum of $123,551.00 (the “ Existing
Note ”). This Note evidences the same indebtedness
evidenced by the Existing Note and does not create or evidence any
new or additional indebtedness. This Note and the terms, covenants,
agreements, rights, obligations and conditions contained in this
Note supersede, replace and control the Existing Note and the
terms, covenants, agreements, rights, obligations and conditions
contained in the Existing Note.
The principal of and interest on
this Note shall be due and payable in full on December 15, 2009,
(the “ Maturity Date ”). Interest on this Note
shall be due and payable in cash or, at the option of the Borrower,
in shares of the series of preferred stock of the Borrower next
designated by the Borrower after the date hereof, at a price per
share of $0.638.
In addition to the issuance of
this Note and the Amended and Restated Subordinated Promissory Note
issued to FirstMark III L.P. on the date hereof, in 2008 the
Borrower, issued to the Holder (formerly Pequot Offshore Private
Equity Partners III, L.P.) and to Pequot Private Equity Fund (n/k/a
FirstMark III, L.P.), other notes in the
aggregate amount of $5,500,000
(collectively this Note, the Amended and Restated Subordinated
Promissory Note issued to FirstMark III L.P. and all other notes
issued to the Holder and to FirstMark III, L.P., as amended by the
Amendment to Subordinated Promissory Notes, dated as of February
11, 2009, are referred to herein as the “FirstMark
Notes”). In 2008 the Borrower, issued to Constellation
Venture Capital II, L.P., Constellation Venture Capital Offshore
II, L.P., The BSC Employee Fund VI, L.P., and CVC II Partners, LLC
(collectively, “Constellation”), other notes in the
aggregate amount of $500,000 (as amended by the Amendment to
Subordinated Promissory Notes, dated as of February 11, 2009, the
“Constellation Notes”). The FirstMark Notes and the
Constellation Notes are referred to herein as the “
7,000,000 Notes ”.
All computations of interest
payable hereunder shall be made on the basis of the actual number
of days in the period for which such interest is payable and a year
of 365 or 366 days, as applicable. Notwithstanding any other
provision of this Note, to the extent permitted by applicable law,
interest shall be due and payable on any overdue unpaid installment
of principal or interest on this Note (including amounts due and
unpaid upon any acceleration of this Note) within five (5) days of
its due date at a rate equal to the lesser of (i) sixteen and
one-half percent (16.5%) and (ii) the maximum rate permitted by
applicable law.
1. Payment and Prepayment of
the Note . The principal of this Note and the interest accrued
hereon may be prepaid in whole at any time.
2. Event of Default;
Remedies. (a) Upon the occurrence and during the continuance of
an Event of Default, this Note may be accelerated upon the written
consent and direction of the holders holding a majority of the then
outstanding aggregate principal balance of the 7,000,000 Notes and
as provided in this Section 2 and the Holder shall have all of the
rights and remedies provided herein. An Event of Default shall mean
the occurrence or existence of one or more of the following events
or conditions (for any reason, whether voluntary, involuntary or
effected or required by law):
(i) The
Borrower shall fail to pay when due the principal of this Note or
any of the 7,000,000 Notes.
(ii) The
Borrower shall fail to pay when due the interest on this Note or
any of the $7,000,000 Notes and such failure shall have continued
for a period of three Business Days; provided, however, that for
the avoidance of doubt, any accrual of interest permitted under
this Note or any of the 7,000,000 Notes (in lieu of payment
thereof) shall not constitute an Event of Default. For the purposes
of this Note a “ Business Day ” shall mean any
day other than a Saturday, Sunday, public holiday under the laws of
the State of New York or any other day on which banking
institutions are authorized to close in New York City.
(iii) A
proceeding shall have been instituted in respect of the Borrower or
any of its material subsidiaries (each, a “ Material
Party ”):
2
(A) seeking to
have an order for relief entered in respect of such Material Party,
or seeking a declaration or entailing a finding that such Material
Party is insolvent or a similar declaration or finding, or seeking
dissolution, winding-up, charter revocation or forfeiture,
liquidation, reorganization, arrangement, adjustment, composition
or other similar relief with respect to such Material Party, its
assets or its debts under any law relating to bankruptcy,
insolvency, relief of debtors or protection of creditors,
termination of legal entities or any other similar law now or
hereafter in effect, or
(B) seeking appointment of a receiver,
trustee, liquidator, assignee, sequestrator or other custodian for
such Material Party or for all or any substantial part of its
property, and such proceeding shall result in the entry, making or
grant of any such order for relief, declaration, finding, relief or
appointment, or such proceeding shall remain undismissed and
unstayed for a period of 60 consecutive days.
(iv) Any
Material Party shall voluntarily suspend transaction of its
business; shall make a general assignment for the benefit of
creditors; shall institute (or fail to controvert in a timely and
appropriate manner) a proceeding described in Section 2(a)(iii)(A)
or (whether or not any such proceeding has been instituted) shall
consent to or acquiesce in any such order for relief, declaration,
finding or relief described therein; shall institute (or fail to
controvert in a timely and appropriate manner) a proceeding
described in Section 2(a)(iii)(B), or (whether or not any such
proceeding has been instituted) shall consent to or acquiesce in
any such appointment or to the taking of possession by any such
custodian of all or any substantial part of its property; shall
dissolve, wind-up, revoke or forfeit its charter or liquidate
itself or any substantial part of its property; or shall take any
action in furtherance of any of the foregoing.
(v) An
event or condition shall have occurred which the Holder reasonably
believes creates a Material Adverse Effect. For the purposes of
this Note, a “ Material Adverse Effect ” shall
mean an effect which is materially adverse to the business, assets,
properties, operations, results of operations or condition
(financial or otherwise) of the Borrower individually or of the
Borrower and its subsidiaries taken as a whole (excluding general
economic conditions or acts of war or terrorism).
(b) If an Event of Default
has occurred and is continuing hereunder:
(i) the
Holder may declare the entire unpaid principal and interest due on
this Note immediately due and payable without presentment, notice
or demand, all of which are hereby expressly waived by the
Borrower;
(ii) upon
the occurrence of any Event of Default specified in Section
2(a)(iii) above, the entire unpaid principal and interest shall
become automatically and immediately due and payable; and
3
(iii) the Holder may exercise any
remedy permitted by this Note or at law or in equity.
3. Waiver of Certain Rights
. Subject to any applicable notice periods, all parties to this
Note, including Borrower and any sureties, endorsers, or
guarantors, hereby waive protest, presentment, notice of dishonor,
and notice of acceleration of maturity and agree to continue to
remain bound for the payment of principal, interest and all other
sums due under this Note notwithstanding any change or changes by
way of release, surrender, exchange, modification or substitution
of any security for this Note or by way of any extension or
extensions of time for the payment of principal and interest; and
all such parties waive all and every kind of notice of such change
or changes and agree that the same may be without notice or consent
of any of them. No Event of Default shall be waived by the Holder
except in a writing signed by the Holder. No waiver of any Event of
Default shall extend to any other or further Event of Default.
4. Payment Priority . If
the Borrower is not able to pay the full amounts due under the
7,000,000 Notes at any time, either upon the occurrence of an Event
of Default or on the Maturity Date, payment shall be made first to
the Holder and FirstMark III, L.P. until the FirstMark Notes have
been paid in full and then to Constellation with respect to the
Constellation Notes.
5. Subordination . The
right of repayment of principal of and interest on this Note shall
be subordinated to the rights and security interest of (i) GE
Commercial Distribution Finance Corporation (“CDF”) in
connection with the August 21, 2007 secured Credit Facilities
Agreement (“Credit Facilities Agreement”) with CDF, as
Administrative Agent, GECC Capital Markets Group, Inc., as Sole
Lead Arranger and Sole Bookrunner, and CDF and the other lenders
listed in the Credit Facilities Agreement, and (ii) Columbia
Partners, L.L.C. Investment Management, as Investment Manager and
National Electric Benefit Fund (“NEBF”) in connection
with the November 23, 2005, secured credit agreement (the
“CP/NEBF Credit Agreement”) with Columbia Partners,
L.L.C. Investment Management, as Investment Manager, and NEBF, as
Lender (CDF and NEBF collectively, the “Senior Lenders”
and the Credit Facilities Agreement and the CP/NEBF Credit
Agreement collectively, the “Senior Debt”). The
issuance of this Note requires the consent of the Senior Lenders
pursuant to the Senior Debt. The Borrower is seeking or has
obtained such consent. While any default or event of default has
occurred and is continuing with respect to any Senior Debt, the
Borrower shall not make and the Holder shall not accept any
payments or distribution in respect of this Note of any kind. The
Holder agrees that this Note shall remain unsecured at all times
and the Holder shall not accept any collateral security in respect
hereof. For so long as any Senior Debt remains outstanding or any
Senior Lender shall have any obligation to lend to the Borrower,
the Holder shall not exercise any remedies or take any enforcement
action against the Borrower with respect to this Note.
6. Representations and
Warranties of the Borrower
(a)
Organization and Qualification . Each of the Borrower and
its subsidiaries is duly organized, vali
