Exhibit 10.2
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.
SUBORDINATED PROMISSORY NOTE
|
$123,551.00
|
January 29, 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.
The principal of and interest on this Note shall
be due and payable in full on the later of (a) February 13, 2009,
or (b) the date that the Borrower has obtained all necessary
consents from its Senior Lenders (as hereinafter defined) to such
payment (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 Subordinated
Promissory Note issued to FirstMark III L.P. on the date hereof, in
2008 the Borrower, issued to this lender and to Pequot Private
Equity Fund (n/ka FirstMark III, L.P.), Pequot Offshore Private
Equity Partners III, L.P. (n/k/a FirstMark III Offshore Partners,
L.P.), 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., other notes in the aggregate amount of
$6,000,000. All such notes issued by the Borrower in 2008 and on
this date 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)
ten and one-half percent (10.5%) 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
”):
(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,
2
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
(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
3
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. Pro-Rata
Payment . If the Borrower is not able to pay to the holders of
the 7,000,000 Notes the full amounts due at any time when payments
under the 7,000,000 Notes become due and payable by the Borrower,
either on the Maturity Date or upon the occurrence of an Event of
Default, the holders of the 7,000,000 Notes shall share ratably in
any distribution of the Borrower pro rata in proportion to the
respective amounts of each such holder’s 7,000,000
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, validly existing and in good
standing under the laws of its respective jurisdiction of
incorporation or organization and has the requisite power and
authority to own, lease and operate its assets, properties and
business and to carry on its business as it is now being conducted
or proposed to be conducted. Each of the Borrower and its
subsidiaries is duly qualified as a foreign corporation to transact
business, and is in good standing, in each jurisdiction where it
owns or leases real property or maintains employees or where the
nature of its activities make such qualification
