EXHIBIT 10.1
WAIVER and AMENDMENT
, dated as
of February 14, 2007 (this “ Waiver ”), executed
in connection with the FINANCING AGREEMENT ,
dated as of June 8, 2005 (as the same has
heretofore been amended and may hereafter be amended, restated,
modified or supplemented from time to time, the “
Financing Agreement ”), among MTM
TECHNOLOGIES, INC. , a New York corporation (“
Parent ”), each of its subsidiaries that is a party
thereto (each of Parent and each such subsidiary, a “
Company ” and collectively the “
Companies ”), and any other entity that becomes a
party thereto as a borrower and THE CIT GROUP/BUSINESS
CREDIT, INC. , a New York corporation (“ CIT
”), and any other entity becoming a Lender (collectively, the
“ Lenders ” and each individually as a “
Lender ”), and CIT, as Agent for the Lenders (the
“ Agent ”). Terms which are capitalized in this
Waiver and not otherwise defined shall have the meanings ascribed
to such terms in the Financing Agreement.
WHEREAS , the Companies have requested that the Lenders
(i) waive as Events of Default the violation by the Companies of
the Consolidated Fixed Charge Coverage Ratio and the Consolidated
Senior Leverage Ratio requirements for the period of four
consecutive fiscal quarters ending on or about December 31, 2006,
and (ii) waive the breach by the Companies of any representations
and warranties set forth in the Financing Agreement or any other
Loan Documents to which they are a party solely as a result of the
foregoing, and the Lenders have agreed to the foregoing requests,
on the terms and subject to satisfaction of the conditions
contained in this Waiver;
WHEREAS , the Lenders have requested that the Companies
agree to modify certain terms of the Financing Agreement, and the
Companies have agreed to the foregoing request, on the terms and
subject to the satisfaction of the conditions contained in this
Waiver;
NOW, THEREFORE , in consideration of 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:
Section One.
Amendment . Effective as of the date hereof, upon the
satisfaction of the conditions precedent set forth in Section Four
hereof, the Financing Agreement is hereby amended as
follows:
(a) Section 1.1 . Defined Terms .
Section 1.1 of the Financing Agreement is amended by adding the new
defined term Consolidated Liquidity, in the appropriate
alphabetical order, and the definition thereof, as
follows:
“ Consolidated Liquidity shall
mean, as of any date of determination, the sum of (x) all cash and
cash equivalents on the Consolidated Balance Sheet, calculated
after giving effect to all checks, drafts and other negotiable
instruments issued by and drawn on a bank account of any Company,
which checks, drafts and other negotiable instruments have not been
presented for payment as of the opening of business on such date of
determination, but not including cash reserved for accrued payroll
obligations, plus (y) the amount of Net
Availability.”
(b) Section 7.2(h) . Financial
Reporting . Section 7.2(h) of the Financing Agreement is
amended by adding new clause (v) thereto, as follows:
“(v) on a weekly basis, a financial
report, in form and substance reasonably satisfactory to the Agent,
which report shall indicate the amount of Consolidated Liquidity as
of the last day of the previous week, together with a calculation
thereof, in reasonable detail.”
(c) Section 7.3 . Financial
Covenants . Section 7.3 of the Financing Agreement is amended
by adding new subsection (d) thereto, as follows:
“(d) Consolidated Liquidity . To
cause the Parent to have Consolidated Liquidity of not less than
$2,500,000 at all times through and including March 31, 2007, and
Consolidated Liquidity of not less than $3,000,000 at all times
thereafter.”
Section Two.
Waivers .
The Companies have advised the Lenders that Parent has (i) failed
to maintain a Consolidated Senior Leverage Ratio for the period of
four consecutive fiscal quarters ending on or about December 31,
2006 of not greater than 4.00 to 1.00, in violation of Section
7.3(a) of the Financing Agreement, and (ii) failed to maintain a
Consolidated Fixed Charge Coverage Ratio for the period of four
consecutive fiscal quarters ending on or about December 31, 2006 of
not less than 1.00 to 1.00, in violation of Section 7.3(b) of the
Financing Agreement. Each such violation constitutes an Event of
Default under Section 10.1(e) of the Financing Agreement (such
Events of Default, collectively, the “ Financial Covenant
Defaults ”). Effective as of the date hereof, upon the
satisfaction of the conditions precedent set forth in Section Four
hereof, and subject to the satisfaction of the conditions
subsequent set forth in Section Five hereof, the Lenders hereby
waive the Financial Covenant Defaults and any breach by the
Companies of any represent
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