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EXHIBIT 10.4
TERMINATION, RELEASE AND INDEMNIFICATION AGREEMENT , dated
as of August 21, 2007 (this “ Termination Agreement
”), executed in connection with that certain
FINANCING AGREEMENT , dated
as of June 8, 2005 (as amended, supplemented, restated or otherwise
modified from time to time, the “ Financing Agreement
”), by and among MTM TECHNOLOGIES, INC. , a
New York corporation (“ MTM ”), all of
MTM’s subsidiaries from time to time party thereto (all such
subsidiaries together with MTM, collectively, the “
Borrowers ”), the financial institutions from time to
time party thereto as lenders (collectively, the “
Lenders ”) and THE CIT GROUP/BUSINESS CREDIT,
INC. as agent for the Lenders (in such capacity, “
Agent ”). Terms which are capitalized in
this Termination Agreement and not otherwise defined herein shall
have the meanings ascribed to such terms in the Financing
Agreement.
WHEREAS , the Borrowers have notified Agent of their
intention to terminate the Financing Agreement and all other Loan
Documents, and to pay and satisfy in full in immediately available
funds all outstanding Revolving Loans and all other Obligations,
including without limitation, all interest accrued thereon, and all
costs, fees and expenses payable in connection therewith, on or
about the date hereof; and
WHEREAS , concurrently with such termination and payment,
GE COMMERCIAL DISTRIBUTION FINANCE CORPORATION , as
agent for itself and certain other lenders (“ New
Lender ”), shall enter into one or more financing
agreements with the Borrowers (collectively, the “ New
Credit Agreement ”); and
WHEREAS , the parties hereto wish to set forth their
understanding with respect to (i) the payment and satisfaction in
full of the Obligations, the calculation thereof, and the method of
payment thereof, (ii) the termination of the Financing Agreement
and the other Loan Documents and the termination and release by
Agent of all liens and security interests in the assets and
properties of the Borrowers, (iii) the delivery by Agent to New
Lender’s legal counsel, various original instruments and
documents, (iv) the exchange of mutual releases by and among the
Borrowers and Agent, and (v) the indemnification of Agent by the
Borrowers with respect to certain contingent Obligations, and the
establishment of the Reserve (as defined on Exhibit A
annexed hereto);
NOW, THEREFORE , in connection with 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:
1.
Payment of Obligations . The Borrowers have
advised Agent that the date of repayment of the Obligations
shall be August 21, 2007 (the “ Payout Date
”). Assuming that payment is received by
Agent by 2:00 p.m. New York City time on the Payout Date, the
total amount of all Obligations and other amounts to be paid
shall equal the total amount set forth at the end of
Schedule A annexed hereto, adjacent to the words
“Payout Amount” (the “ Payout Amount
”). Payment of the Payout Amount, including
the portion thereof which constitutes the estimated fees and
disbursements of Agent’s legal counsel, shall be
effectuated by the wire-transfer of same day funds in U.S.
dollars directly to Agent at its bank account, as
follows:
Name
of
Bank: JPMorgan
Chase Bank
Bank
Account: CIT
Business Credit Inc.
Bank
Account
No.: 144-0-64425
ABA
Routing
No.: 021000021
Reference:
MTM Technologies, Inc.
2.
Termination of Financing Agreement and other Loan
Documents; Release and Reassignment of Liens
. Effective upon Agent’s timely receipt on
the Payout Date of (a) the Payout Amount and (b) a fully
executed counterpart of this Termination Agreement
(collectively, the “ Release Conditions ”):
(i) the Financing Agreement, all commitments thereunder, and
all other Loan Documents, are each automatically terminated
and cancelled by mutual consent, (ii) all indebtedness,
liabilities and other Obligations of the Borrowers to Agent
are satisfied in full (other than those obligations which
shall continue after the Payout Date in accordance with
Paragraphs 4 and 5 of this Termination Agreement), (iii) Agent
reassigns to the Borrowers, with respect to each item of
property in which any of the Borrowers has previously granted
to Agent a lien upon or security interest in as collateral
security for the Obligations arising under or relating to the
Loan Documents (collectively the “ Collateral
”), without recourse, representation or warranty, all
such liens and security interests so granted, (iv) all liens
upon and security interests in the Collateral are
automatically terminated, and (v) without limiting the
generality of the termination provisions contained in clause
(i) hereof, automatically upon the satisfaction of the Release
Conditions, Agent terminates all right, title and interest it
has in and to all lockboxes, deposit accounts and blocked
accounts that any of the Borrowers maintain with JPMorgan
Chase Bank, N.A. (the “ Blocked Account Bank
”) or any affiliate thereof, and Agent terminates all
blocked account arrangements or agreements it has with the
Blocked Account Bank or such affiliates with respect to such
lockboxes, deposit accounts and blocked
accounts. In addition, automatically upon the
satisfaction of the Release Conditions, Agent terminates all
right, title and interest it may have in and to all
third-party documents, such as landlord waivers and consents,
executed or delivered from time to time to Agent with respect
to any of the Borrowers.
3.
Authorization to Record Termination Statements; Delivery of
Certain Investment Property and Certain Other Release
Instruments . Effective upon the satisfaction
of the Release Conditions, Agent hereby authorizes the
Borrowers and New Lender, or their respective attorneys,
agents or designees, to record or file, as applicable, with
the appropriate filing or recording offices any and all
financing statements necessary to terminate all UCC-1
financing statements of record, covering any Collateral, in
which Agent is named as secured party and any of the Borrowers
is named as debtor. In addition, no later than the
business day immediately following the day on which the
Release Conditions are satisfied, Agent shall send by a
nationally-recognized overnight courier service to Steven C.
Drapekin, Esq., Lewis, Rice & Fingersh, L.C., 500 North
Broadway, Suite 2000, St. Louis, Missouri 63102 (i) all
certificates in Agent’s possession evidencing securities
and other similar investment property in which any of the
Borrowers shall have previously granted to Agent a lien upon
or security interest in (copies of all such certificates are
annexed hereto as Exhibit B ) and (ii) an instrument in
the form of Exhibit A annexed hereto, pursuant to which
the collateral assignment to Agent of certain trademarks in
which any of the Borrowers has any right, title or interest
shall be cancelled and terminated of record (and Agent hereby
authorizes the Borrowers and New Lender, or their respective
attorneys, agents or designees, to record or file, as
applicable, such instrument).
4.
Mutual Release . Effective upon the
satisfaction of the Release Conditions, Agent and each of the
Lenders hereby releases and discharges the Borrowers and the
successors and assigns of each, and the Borrowers hereby
release and discharge Agent and each of the Lenders, and their
respective successors and assigns, of and from all claims,
demands, debts, accounts, contracts, obligations, Obligations,
actions and causes of action, whether in law or in equity,
which any party ever had, now has, or hereafter may have
against the other, directly or indirectly arising out of or in
any way relating to the Financing Agreement, the Loan
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