Exhibit 10.35


 


FIFTH AMENDMENT TO


AMENDED AND RESTATED


REFINANCING AGREEMENT


 


THIS FIFTH AMENDMENT TO AMENDED AND RESTATED REFINANCING
AGREEMENT (the “Amendment”),
dated the 11th day of July, 2008, is made by and between


 


STRATEGIC TECHNOLOGIES, INC., a North Carolina corporation (“Strategic”);
and


 


AVNET, INC. (successor by assignment to MRA Systems, Inc. d/b/a Access
Distribution), a Delaware corporation (“Avnet”),


 


to
the Amended and Restated Refinancing Agreement, dated as of May 20, 2005
(as previously amended by First Amendment thereto, dated June 22, 2006, by
Second Amendment thereto, dated May 1, 2007, by Third Amendment thereto, dated September 10, 2007
and by Fourth Amendment thereto, dated October 8, 2007, and as may be
further amended, modified, restated or supplemented from time to time, the “Agreement”),
between Strategic and Avnet. All capitalized terms used herein without
definition shall have the meanings ascribed to such terms in the Agreement.


 


RECITALS


 


A.                                   The Agreement contains various agreements
between Strategic and Avnet regarding indebtedness owing by Strategic to Avnet.


 


B.                                     Strategic and Avnet have agreed to amend the
Agreement as set forth in this Amendment.


 


STATEMENT OF AGREEMENT


 


NOW,
THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby expressly
acknowledged, Strategic and Avnet hereby agree as follows:


 


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ARTICLE I


 


AMENDMENTS TO AGREEMENT


 


The
Agreement is hereby amended as follows:


 


1.1                                Definitions. Section 1 of the Agreement is amended as follows:


 


1.1.1  The defined term “Positive Excess Cash
Flow Quarter” is deleted; and


 


1.1.2  The defined term “Excess Cash Flow” is
amended in its entirety to read as follows:


 


“Excess
Cash Flow” shall mean:


 


(a)                                  on the last day of the first three fiscal
quarters in each fiscal year of Strategic, the amount of cash and cash
equivalents on such day in excess of $500,000 shown on Strategic’s balance
sheet as of such date that is required to be delivered to Access pursuant to Section 9.c.
of this Agreement, and


 


(b)                                 on the last day of the fourth fiscal quarter
in each fiscal year of Strategic, the amount of cash and cash equivalents on
such day in excess of $500,000 shown on Strategic’s balance sheet as of such
date that is required to be delivered to Access pursuant to with Section 9.d.
of this Agreement.


 


1.2                                Interest. Section 5.a. of the Agreement is amended by deleting therefrom
the date “September 30, 2008” and by substituting in lieu thereof the date
“September 30, 2009.”


 


1.3                                 Excess Cash Flow Recapture. Section 6.d. of the Agreement is
amended in its entirety to read as follows:


 


“d.                                Excess Cash Flow Recapture. On each date that Access receives Strategic’s
balance sheets described in the definition of Excess Cash Flow, provided that
the most recent cash projection delivered to Access pursuant to Section 9.k.
of this Agreement for the fiscal quarter immediately following the date of such
balance sheet shows a projected net change in cash and cash equivalents of $0
or greater in such fiscal quarter, Strategic shall pay Access the Excess Cash
Flow shown on such balance sheet.”


 


1.4                                 Covenants Concerning Cary Real Property. Section 8.m.(iv) of the Agreement
is amended by deleting therefrom the date “September 30, 2008” and by
substituting in lieu thereof the date “September 30, 2009.”


 


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1.5                                      Additional Warrant. Section 8.o. of the Agreement is
amended in its entirety to read as follows:


 


“o.                                Additional Warrant. In the event the principal of and accrued interest
on the Consolidated 2007 Note have not been repaid in full by September 30,
2009, Strategic shall cause Consonus to execute an additional warrant providing
for the right of Avnet to purchase 231,813 additional shares of common stock of
Consonus at a price of $0.000173 per share and otherwise containing
substantially the same terms as are contained in the Warrant. Until the
execution of such additional warrant, the foregoing number of additional shares
and the price at which such additional shares may be purchased shall be
adjusted in the same manner as the Underlying Shares and the Warrant Price (as
defined in the Warrant) are adjusted pursuant to the terms of the Warrant.


 


1.6                                      Financial Statements. A new Section 9.k. of the Agreement is
added as follows:


 


“k.                                 Cash Projection. By no later than the 25th day of
every month, Strategic will deliver to Avnet a detailed cash projection for the
following three months in a form reasonably satisfactory to Avnet.


 


1.7                                      Fixed Charge Coverage
Ratio. Section 10.a. of the Agreement is
amended in its entirety to read as follows:


 


“a.                                 Fixed Charge Coverage
Ratio. Achieve a Fixed Charge Coverage Ratio of not
less than the ratio shown in Table I below for the period corresponding
thereto:


 


	
  TABLE I

  



 


	
  Ratio

  	
   

  	
  Period

  
	
  0.75:1.0

  	
   

  	
  Six
  months ended on the last day of each of the first and second fiscal quarters
  in the 2008 fiscal year

  
	
  0.85:1.0

  	
   

  	
  Six
  months ended on the last day of each of the third and fourth fiscal quarters
  in the 2008 fiscal year

  
	
  1.0:1.0

  	
   

  	
  Six
  months ended on the last day of each of the first fiscal quarter in the 2009
  fiscal year and each fiscal quarter thereafter

  



 


3

















 


In the event that Strategic fails to achieve the ratio shown in Table I
above for any period corresponding thereto (each a “Table I Noncompliance
Period”), such failure shall not result in an Event of Default if Strategic
achieves the ratio shown in Table II below for the period corresponding thereto
that ends on the same date as the corresponding Table I Noncompliance Period:


 


	
  TABLE II

  



 


	
  Ratio

  	
   

  	
  Period

  
	
  0.75:1.0

  	
   

  	
  Three
  months ended on the last day of each of the first and second fiscal quarters
  in the 2008 fiscal year

  
	
  0.85:1.0

  	
   

  	
  Three
  months ended on the last day of each of the third and fourth fiscal quarters
  in the 2008 fiscal year

  
	
  1.0:1.0

  	
   

  	
  Three
  months ended on the last day of each of the first fiscal quarter in the 2009
  fiscal year and each fiscal quarter thereafter

  



 


For
the avoidance of doubt, it is understood and agreed that if Strategic fails to
achieve the ratio shown in Table I above for any period corresponding thereto
and also fails to achieve the ratio shown in Table II above for the period
corresponding thereto that ends on the same date as the corresponding Table I
Noncompliance Period, then such failure shall result in an Event of Default
pursuant to Section 13.b. of this Agreement.”


 


1.8                                      Capital Expenditures. Section 10.b. of the Agreement is
amended in its entirety to read as follows:


 


“b.                                Capital Expenditures. Not make aggregate Capital Expenditures in any
fiscal year in excess of $550,000; provided,  however, the
following Capital Expenditures shall not be taken into account in applying the foregoing
limitation: building repairs up to $150,000 in the 2008 fiscal year and such
other exceptions as Strategic shall request to Avnet in writing and as Access
may agree to in writing in its sole and absolute discretion.”


 


1.9                                      Quarterly Revenue. Section 10.c. of the Agreement is
amended in its entirety to read as follows:


 


“c.                                 Achieve for each fiscal quarter of Strategic
gross revenue (as set forth on Strategic’s Financial Statements and schedules)
in such fiscal quarter at


 


4

















 


least
equal to 75% of the Approved Projections of gross revenue provided to Access
for such fiscal quarter.”


 


1.10                           Total Trade Debt to Accounts Receivable. Section 10.e. is amended in its
entirety to read as follows:


 


“e.                                 Net Trade Debt to Accounts Receivable. Not permit (a) Net Trade Debt at any
time to be more than (b) 125% of Strategic’s gross accounts receivable at
such time.”


 


ARTICLE II


 


REPRESENTATIONS AND WARRANTIES


 


Strategic
hereby represents and warrants to Avnet that:


 


2.1                                 Compliance with the Agreement. As of the date of this Amendment, Strategic
is in compliance with all of the terms and provisions set forth in the
Agreement and the other Loan Papers to be observed or performed by Strategic.


 


2.2                                 Representations in the Agreement. The representations and warranties of Strategic
set forth in the Agreement and the other Loan Papers to which Strategic is a
party are true and correct in all material respects except to the extent that
such representations and warranties relate solely to or are specifically
expressed as of a particular date or period which is past or expired as of the
date hereof.


 


2.3                                 No Default. As of the date of this Amendment, no Default exists or is continuing.


 


ARTICLE III


 


GENERAL


 


3.1                                 Loan Papers. The Agreement and the Loan Papers are amended to provide that any
reference therein to the Agreement shall mean, unless otherwise specifically
provided, the Agreement as amended hereby, and as further amended, restated,
supplemented or modified from time to time.


 


3.2                                 Full Force and Effect. As expressly amended hereby, the Agreement
and the other Loan Papers shall continue in full force and effect in accordance
with the provisions thereof. As used in the Agreement and the other Loan
Papers, “hereinafter,” “hereto,” “hereof,” or words of similar import, shall,
unless the context otherwise requires, mean the Agreement or the other Loan
Papers, as the case may be, as amended by this Amendment.


 


3.3                                 Applicable Law. This Amendment shall be governed by and
construed in accordance with the internal laws and judicial decisions of the
State of North Carolina.


 


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3.4                                 Counterparts. This Amendment may be executed in one or
more counterparts, each of which shall constitute an original, but all of which
when taken together shall constitute but one and the same instrument.


 


3.5                                 Further Assurances. Strategic shall execute and deliver to
Avnet such documents, certificates and opinions as Avnet may reasonably request
to effect the amendments contemplated by this Amendment.


 


3.6                                 Headings. The headings of this Amendment are for the purpose of reference only and
shall not effect the construction of this Amendment.


 


3.7                                 Expenses. Strategic shall reimburse Avnet for Avnet’s legal fees and expenses incurred
in connection with the preparation, negotiation, execution and delivery of this
Amendment and all other agreements and documents contemplated hereby.


 


3.8                                 Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, STRATEGIC AND AVNET EACH WAIVES THE RIGHT TO TRIAL BY JURY IN
ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR
RELATED TO THIS AMENDMENT, THE AGREEMENT OR THE OTHER LOAN PAPERS OR THE
TRANSACTIONS RELATED HERETO OR THERETO.


 


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IN WITNESS WHEREOF, the parties hereto have
caused this Amendment to be executed and delivered by their duly authorized
officers to be effective on the day and year first above written.


 


	
   

  	
  STRATEGIC:

  
	
   

  	
   

  
	
   

  	
  STRATEGIC TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael Shook

  
	
   

  	
   

  	
  Name:

  	
  Michael Shook

  
	
   

  	
   

  	
  Title:

  	
  President

  
					



 


 


	
   

  	
  AVNET:

  
	
   

  	
   

  
	
   

  	
  AVNET, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W. R. Crowell

  
	
   

  	
   

  	
  Name:

  	
  W. R. Crowell

  
	
   

  	
   

  	
  Title:

  	
  SVP, CFO

  
						



 


 


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[Fifth Amendment to Amended and Restated
Refinancing Agreement]


 

















 


Consonus
hereby joins in the execution of this Amendment solely for the purpose of
reaffirming its agreement to be bound by the covenant contained in Section 8.q
of the Agreement.


 


	
   

  	
  CONSONUS TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael Shook

  
	
   

  	
   

  	
  Name:

  	
  Michael Shook

  
	
   

  	
   

  	
  Title:

  	
  President

  	 

						



 


[signatures continued on next page]


 


[Fifth Amendment to Amended and Restated Refinancing Agreement]


 

















 


The Guarantors hereby join in the execution of this
Amendment for the purposes of consenting thereto and reaffirming the continuing
validity and enforceability of the personal guaranty agreements executed by
each of them on or about April 9, 2002, as from time to time amended, in
accordance with their respective terms.


 


 


	
   

  	
  /s/
  Michael G. Shook

  
	
   

  	
  Michael G. Shook

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  William M. Shook

  
	
   

  	
  William
  M. Shook

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Ivrin Miglietta

  
	
   

  	
  Ivrin
  Miglietta

  



 


 


[Consent of Guarantors to Fifth Amendment


to Amended and Restated Refinancing
Agreement]