Exhibit 10.8
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.
THIRD AMENDED AND RESTATED SUBORDINATED
PROMISSORY NOTE
FOR
VALUE RECEIVED, the undersigned, MTM TECHNOLOGIES, INC., a New York
corporation (the “ Borrower” ), promises to pay
to FirstMark III, L.P. (the “ Holder” ), the
principal sum of two million one hundred ninety one thousand one
hundred twenty three dollars ($2,191,123) with interest on the
unpaid balance from the date hereof, at the rate of eight and
one-half percent (8.5%) 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
Third Amended and Restated Promissory Note (this
“Note” ) amends and restates in its entirety
that certain Second Amended and Restated Promissory Note, dated as
of June 11, 2008 and made by the Borrower to the Holder to
evidence the principal sum of $2,191,123 (the “Second
Amended and Restated Note ”). This Note evidences the
same indebtedness evidenced by the Second Amended and Restated 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 Second Amended and Restated Note and the·terms,
covenants, agreements, rights, obligations and conditions contained
in the Second Amended and Restated Note. The Second Amended and
Restated Note evidences the same indebtedness evidenced by that
certain First Amended and Restated Promissory Note dated as of
March 28, 2008 and made by the Borrower to the Holder to evidence
the principal sum of $2,191,123; and that First Amended and
Restated Note did not create or evidence any new or additional
indebtedness.
The
principal of and interest on this Note shall be due and payable as
follows: the principal balance and all interest accrued hereon from
February 28, 2008 to the date of payment of the principal amount
hereof shall be due on November 30, 2010 (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 $0.561; provided
that, except as provided in paragraph 1 below, no interest or
principal may be paid on this Note by Borrower until after November
30, 2010.
In
addition to the issuance of this Note, in 2008 and 2009 Borrower
issued to FirstMark III, L.P. (formerly Pequot Private Equity Fund
III, L.P.) and to FirstMark III Offshore Partners, L.P.
(formerly
Pequot Offshore Private Equity
Partners III, L.P.) other notes in the aggregate amount of
$6,500,000 (collectively, this Note and all other notes issued to
FirstMark III, L.P. and FirstMark III Offshore Partners, L.P., as
amended by the Amendment to Subordinated Promissory Notes, dated as
of February 11, 2009, and the Second Amendment to Subordinated
Promissory Notes, dated as of the date hereof, 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, other notes in the aggregate amount of $500,000
(as amended by the Amendment to Subordinated Promissory Notes,
dated as of February 11, 2009, and the Second Amendment to
Subordinated Promissory Notes, dated as of the date hereof, 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) 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 paid upon the earlier
of November 30, 2010, or the date on which the Senior Lenders
(as defined below) consent to the prepayment hereof.
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):
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(i)
The Borrower shall fail to pay when due the principal of this Note
or any of the $7,000,000 Notes.
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(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 (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
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(iii)
A proceeding shall have been instituted in respect of the Borrower
or any of its material subsidiaries (each, a “ Material
Party” ):
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(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
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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
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(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.
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(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, funding 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.
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(b)
Exercise of Remedies. 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 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 to
FirstMark III L.P. (“FirstMark Fund”), FirstMark III
Offshore Partners, L.P. (“FirstMark Offshore” and,
together with FirstMark Fund, “FirstMark”),
Constellation Venture Capital II, L.P. (“Constellation
Ventures”),
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Constellation Venture Capital
Offshore II, L.P. (“Constellation Offshore”), The BSC
Employee Fund VI, L.P. (“BSC”) and CVC II Partners, LLC
(“CVC” and, together with Constellation Ventures,
Constellation Offshore and BSC, “Constellation”) the
full amounts due under the Subordinated Promissory Notes held by
FirstMark (the “FirstMark Notes”) and the Subordinated
Promissory Notes held by Constellation (the “Constellation
Notes”) at any time, either upon the occurrence of an Event
of Default or on the Maturity Date, payment shall be made first to
FirstMark 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; (ii) Columbia Partners,
L.L.C. Investment Management (“Columbia”), as
Investment Manager for the Letter of Credit Guarantors in
connection with the Letter of Credit Commitment and Reimbursement
Agreement dated June 11, 2009 (the “L/C Agreement”),
with Columbia, as Investment Manager for the L/C Guarantors
signatory thereto; and (iii) Columbia, 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, as
Investment Manager, and NEBF, as Lender (CDF, Columbia and NEBF
collectively, the “Senior Lenders&rdquo
