Document:

Unassociated Document

    

    Exhibit
      10.1

     

     

    WAIVER
      and SECOND AMENDMENT, dated as of June 21, 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 March 31, 2007, (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, (iii) re-establish their Commitment to make
      Revolving Loans, pursuant to the Financing Agreement, and (iv) agree to modify
      certain terms of the Financing Agreement, and the Lenders have agreed to the
      foregoing requests, on the terms and subject to 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 term Consulting Charges, and the definition thereof, in the
      appropriate alphabetical order, and by deleting the definitions of the terms
      Consolidated EBITDA and Consolidated Fixed Charges, and substituting the
      following in lieu thereof:

     

    “Consolidated
      EBITDA shall mean, for any period, with respect to the  Parent and
      its consolidated Subsidiaries, other than the Excluded Subsidiaries, all
      earnings before all interest, tax obligations and depreciation and amortization
      expense for such period, all determined in conformity with GAAP on a basis
      consistent with the latest audited financial statements of the Parent, but
      excluding the effect of extraordinary and/or nonrecurring gains or losses for
      such period and,

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     to
      the extent included in the calculation of earnings for such period, excluding
      any Consulting Charges paid during such period.”

     

    “Consolidated
      Fixed Charges shall mean, for any period, with respect to the Parent and its
      consolidated Subsidiaries, other than the Excluded Subsidiaries, the sum of
      (a) all cash interest obligations (including, without limitation, cash
      interest obligations in respect of any Investor Obligations, Textron Obligations
      and/or Subordinated Debt) paid or due during such period, (b) the amount of
      all scheduled fees paid to the Agent and the Lenders during such period,
      (c) the amount of principal repaid in cash or scheduled to be repaid but
      not paid on Indebtedness (other than the Revolving Loans and any loans made
      pursuant to the Textron Loan Agreement) during such period (including, without
      limitation, principal repayments in respect of any Investor Obligations and/or
      Subordinated Debt, but not including principal repayments in respect of any
      Indebtedness that is, by its terms, payable only in stock) provided, that,
      cash
      payments made in respect of Indebtedness incurred in connection with any
      Permitted Acquisition will be excluded from Consolidated Fixed Charges to the
      extent that they were made with the proceeds of capital contributions (either
      in
      the form of equity or Subordinated Debt) and not with the proceeds of Revolving
      Loans or other working capital, (d) unfinanced Capital Expenditures
      incurred during such period, (e) all cash payments made or due in respect
      of any earnout or similar contingent obligations during such period, provided,
      that, such cash payments will be excluded from Consolidated Fixed Charges to
      the
      extent that they were made with the proceeds of capital contributions (either
      in
      the form of equity or Subordinated Debt) and not with the proceeds of Revolving
      Loans or other working capital, (f) all payments made or due in respect of
      Capital Leases during such period, and (g) all cash charges incurred during
      such
      period relating to severance, restructuring and other similar kinds of
      expenses.  For avoidance of doubt, the calculation of Consolidated
      Fixed Charges for any period of determination shall not include any Consulting
      Charges due or payable during such period.”

     

    ”Consulting
      Charges shall mean, for any period, the fees and
      disbursements due or payable in cash during such period by the Parent to Carl
      Marks Associates for the consulting services provided to the Companies by such
      consultant.”

     

     (b)
      Section
      7.2(h).  Financial
      Reporting.  Section 7.2(h) of the Financing Agreement is
      amended by (i) deleting clause (v) in its entirety, and by substituting the
      following in lieu thereof, and (ii) adding  new clauses (vi) and (vii)
      thereto, as follows:

     

    “(v)
      on
      each Business Day, a financial report, in form and substance reasonably
      satisfactory to the Agent, which report shall indicate the

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    amount
      of
      Consolidated Liquidity as of the close of business on the preceding Business
      Day, together with a calculation thereof, in reasonable detail.”

     

    “(vi)
      on
      Friday of each week (or on the following Business Day, if such Friday is not
      a
      Business Day), a rolling 13 week cash forecast and report, in form and substance
      reasonably satisfactory to the Agent, which report shall be updated each week,
      through the close of business on the Business Day preceding the date on which
      such report is so delivered to the Agent, and which report shall include an
      analysis, in reasonable scope and detail, of the preceding week’s variations to
      budget.”

     

    “(vii)  deliver
      to the Agent a copy of each periodic report prepared for the Companies by Carl
      Marks Associates, no later than the Business Day following the Parent’s receipt
      of each such report, which report shall include, without limitation, (I)
      initially, an analysis of the methodology employed by the Companies in the
      development of their rolling 13 week cash forecast and a discussion of the
      recommendations made by Carl Marks Associates for the improvement of such
      methodology and forecasting, and (II) on an ongoing bi-weekly basis (that is,
      every other week), an analysis of the actual performance and results of the
      Companies for each month and each rolling 13 week period, a summary of the
      variations, if any, between such results and the EBITDA and cash budgets
      forecasted for such month and period, and the reasons for such
      variations.”

     

    (c)  Section
      7.3.  Financial
      Covenants.  Section 7.3 of the Financing Agreement is
      deleted in its entirety, and the following is substituted in lieu
      thereof:

     

    “7.3
      Financial Covenants.  Until termination of this Financing
      Agreement and the full and final payment and satisfaction of all Obligations,
      each Company agrees:

     

    (a)  Consolidated
      EBITDA.  To cause the Parent to have Consolidated EBITDA for each
      measuring period set forth below of not less than the amount set forth below
      opposite such measuring period:

     

    
      
        	 	
                measuring
                  period

              	
                minimum
                  Consolidated EBITDA

                 

              
	
                (i)

              	
                fiscal
                  quarter ending on or about June 30, 2007

                 

              	
                $   424,000

              
	
                (ii)

              	
                two
                  fiscal quarters ending on or about September 30, 2007

                 

              	
                  1,358,000

              

      

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      
        	
                (iii)

              	
                three
                  fiscal quarters ending on or about December 31, 2007

                 

              	
                 3,227,000

              
	
                (iv)

              	
                four
                  fiscal quarters ending on or about March 31, 2008

              	
                 5,096,000

              

      

    

     

    
      	
              (b)   

            	
              Consolidated
                Fixed Charge Coverage Ratio.  To cause the Parent to
                maintain a Consolidated Fixed Charge Coverage Ratio for each measuring
                period set forth below of not less than the ratio set forth below
                opposite
                such measuring period:

            

    

     

    
      
        	 	
                measuring
                  period

              	
                minimum
                  Consolidated Fixed Charge Coverage Ratio

                 

              
	
                (i)

              	
                fiscal
                  quarter ending on or about June 30, 2007

                 

              	
                .17
                  to 1.00

              
	
                (ii)

              	
                two
                  fiscal quarters ending on or about September 30, 2007

                 

              	
                .34
                  to 1.00

              
	
                (iii)

              	
                three
                  fiscal quarters ending on or about December 31, 2007

                 

              	
                .57
                  to 1.00

              
	
                (iv)

              	
                four
                  fiscal quarters ending on or about March 31, 2008

              	
                .68
                  to 1.00

              

      

    

     

    
      	
              (c)   

            	
              Consolidated
                Fixed Charges.  To cause Parent to incur Consolidated Fixed
                Charges for each fiscal quarter set forth below in an aggregate amount
                not
                greater than the amount set forth below opposite such fiscal
                quarter:

            

    

     

    
      
        	 	
                fiscal
                  quarter ending on or about

              	
                maximum
                  Consolidated Fixed Charges

                 

              
	
                (i)

              	
                June
                  30, 2007

                 

              	
                $2,455,000

              
	
                (ii)

              	
                September
                  30, 2007

                 

              	
                 1,539,000

              
	
                (iii)

              	
                December
                  31, 2007

                 

              	
                 1,682,000

              
	
                (iv)

              	
                March
                  31, 2008

              	
                 1,808,000

              

      

    

     

    
      	
               

            	
              (d)  

            	
              Consolidated
                Liquidity.  To cause the Parent to have
                Consolidated Liquidity
                at all times of not less than
                $3,000,000.”

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    Section
      Two.     Waivers;
      Reinstatement of Commitment.  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 ended on or about March 31, 2007 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 ended on or about March 31, 2007 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, (x) the Lenders hereby waive the Financial Covenant
      Defaults and any breach by the Companies of any representations and warranties
      set forth in the Financing Agreement or any other Loan Document to which they
      are a party solely as a result of the foregoing (each such breach, together
      with
      the Financial Covenant Defaults, the “Designated Defaults”) as Events of
      Default and (y) the Lenders hereby reestablish the Commitment to the Companies
      pursuant to, and in accordance with the terms and conditions of, the Financing
      Agreement.  Nothing contained herein shall constitute a waiver by the
      Lenders of any Events of Default other than the Designated Defaults, whether
      or
      not they have any knowledge thereof, nor shall anything contained herein
      constitute a waiver of any future Event of Default
      whatsoever.  Henceforth, the Lenders shall require strict compliance
      by the Companies with all of the terms and provisions contained in the Financing
      Agreement.

     

    Section
      Three.    Representations
      and Warranties.  To induce the Lenders
      to enter into this Waiver, each Company hereby warrants and represents to the
      Lenders as follows:

     

    (a)  all
      of
      the representations and warranties contained in the Financing Agreement and
      each
      other Loan Document to which such Company is a party continue to be true and
      correct in all material respects as of the date hereof, as if repeated as of
      the
      date hereof, except (i) with respect to the absence of the occurrence and
      continuation of any Event of Default, as to which the Lenders acknowledge the
      occurrence of the Designated Defaults, and (ii) to the extent of changes
      resulting from transactions expressly permitted by the Financing Agreement,
      this
      Waiver or any of the other Loan Documents, or to the extent that such
      representations and warranties are expressly made only as of an earlier
      date;

     

    (b)  the
      execution, delivery and performance of this Waiver by such Company is within
      its
      corporate powers, has been duly authorized by all necessary corporate action,
      and such Company has received all necessary consents and approvals, if any
      are
      required, for the execution and delivery of this Waiver;

     

    (c)  upon
      the
      execution of this Waiver, this Waiver shall constitute the legal, valid and
      binding obligation of such Company, enforceable against such Company in
      accordance with its terms, except as such enforceability may be limited by
      (i)
      bankruptcy, insolvency or similar laws affecting creditors’ rights generally and
      (ii) general principles of equity;

     

    (d)  neither
      the execution and delivery of this Waiver, nor the consummation of the
      transactions herein contemplated, nor compliance with the provisions hereof
      will
      (i) violate any law or regulation applicable to any Company, (ii) cause a
      violation by any Company of any order or decree of any court or government
      instrumentality applicable to it, (iii) conflict with, or result

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    in
      the
      breach of, or constitute a default under, any indenture, mortgage, deed of
      trust, or other material agreement or material instrument to which any Company
      is a party or by which it may be bound, (iv) result in the creation or
      imposition of any lien, charge, or encumbrance upon any of the property of
      any
      Company, except in favor of the Lenders, to secure the Obligations, (v) violate
      any provision of the Certificate of Incorporation, By-Laws or any capital stock
      provisions of any Company, or (vi) be reasonably likely to have a Material
      Adverse Effect; and

     

    (e)  the
      Parent received by wire transfer of funds to its bank account on May 24, 2007
      proceeds of the cash equity infusion described in Section Four (d) below in
      the
      aggregate amount of $4,999,000.28, which proceeds were used by the Parent in
      payment of the obligations in the respective approximate amounts and owing
      to
      the respective obligees set forth on Annex I to this Waiver.

     

    Section
      Four.    Conditions
      Precedent.  This Waiver shall become
      effective upon the satisfaction of the following conditions
      precedent:

     

    (a)  the
      Agent
      shall have received an original of this Waiver, duly executed by all of the
      parties hereto other than CIT;

     

    (b)  the
      Agent
      shall have received and reviewed to its satisfaction a copy of the fully
      executed waiver of Textron of all events of default existing under the Textron
      Loan Agreement;

     

    (c)  the
      Agent
      shall have received and reviewed to its satisfaction a copy of the fully
      executed waiver of Columbia Partners, L.L.C. Investment Management and National
      Electrical Benefit Fund (collectively, the “Columbia Lenders”) of all
      events of default existing under that certain Credit Agreement dated as of
      November 23, 2005, by and among the Columbia Lenders, on the one hand, and
      Parent, together with each of its subsidiaries that is a party thereto, on
      the
      other hand;

     

    (d)  the
      Parent shall have received the proceeds of a cash equity infusion in the
      aggregate amount of not less than $4,999,000.28 from Constellation Venture
      Capital II, L.P. and/or Pequot Private Equity Fund III, L.P. (or from affiliated
      funds of either such entity), and, in conjunction therewith, the Agent and
      its
      counsel shall have received and reviewed to their reasonable satisfaction all
      documents, instruments and agreements executed or delivered in connection with
      such equity infusion;

     

    (e)  the
      Agent
      shall have received and reviewed to its satisfaction a draft version of the
      audited financial statements of the Parent and its consolidated subsidiaries
      for
      the fiscal year ended on or about March 31, 2007, together with all accompanying
      footnotes, prepared without qualification by the Parent’s independent public
      accountants;

     

    (f)  the
      Parent shall have engaged Carl Marks Associates (or shall have continued the
      existing engagement of Carl Marks Associates) for the sole purpose of assisting
      the Parent and the other Companies by providing the analysis described in
      Section 7.2(h)(vii) of the Financing Agreement, the Agent shall have received
      and reviewed to its satisfaction a copy of the agreement pursuant to which
      such
      engagement (or the continuation of such existing engagement, as the case may
      be)
      shall have been accepted, and Carl Marks Associates shall have commenced its
      work pursuant to such engagement no later than June 29, 2007;

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (g)  the
      Agent
      shall have received a non-refundable fee in the amount of $25,000 (the
“Fee”), for the pro rata benefit of the Lenders, which shall be fully
      earned on the date hereof.  The Companies authorize Agent to charge
      their loan account with the amount of the Fee; and

     

    (h)  except
      for the Designated Defaults, no Default or Event of Default, and no event or
      development which has had or is reasonably likely to have a Material Adverse
      Effect, shall have occurred or be continuing on the date hereof.

     

    Section
      Five.    General
      Provisions

     

    (a)  Except
      as
      herein expressly amended, the Financing Agreement and all other agreements,
      documents, instruments and certificates executed in connection therewith, are
      ratified and confirmed in all respects and shall remain in full force and effect
      in accordance with their respective terms.

     

    (b)  This
      Waiver embodies the entire agreement between the parties hereto with respect
      to
      the subject matter hereof and supercedes all prior agreements, commitments,
      arrangements, negotiations or understandings, whether written or oral, of the
      parties with respect thereto.

     

    (c)  This
      Waiver, and matters relating hereto and arising herefore, shall be governed
      by
      and construed in accordance with the internal laws of the State of New York,
      without regard to the conflicts of law principals thereof.

     

    (d)  This
      Waiver may be executed in any number of counterparts, each of which when so
      executed shall be deemed to be an original, and such counterparts together
      shall
      constitute one and the same respective agreement.

     

     

    (Signature
      Page Follows)

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, the parties to this Waiver have
      signed below to indicate their agreement with the foregoing and their intent
      to
      be bound thereby.

     

    
      
        	 	
                THE
                  CIT GROUP/BUSINESS CREDIT, INC., as a Lender and as the
                  Agent

              
	 	 
	 	 
	 	
                By:
                  _______________________________________

              
	 	
                Name:  Andrew
                  Hausspiegel

                Title:    Vice
                  President

              
	 	 
	 	
                MTM
                  TECHNOLOGIES, INC.,

                for
                  itself and as Borrowing Agent, and as successor by merger with
                  each
                  of
MTM Technologies (California), Inc., and MTM Technologies
                  (Texas),
                  Inc.

              
	 	 
	 	 
	 	
                By:________________________________________

              
	 	
                Name:

                Title:   
                  Senior Vice President and Chief
                  Financial Officer

              
	 	 
	 	
                MTM
                  TECHNOLOGIES (US), INC.

              
	 	 
	 	 
	 	
                By:
                  _______________________________________

              
	 	
                Name:

              
	 	
                Title:    Senior
                  Vice President and Chief
                  Financial Officer

              
	 	 
	 	
                INFO
                  SYSTEMS, INC.

              
	 	 
	 	 
	 	
                By:________________________________________

              
	 	
                Name:

              
	 	
                Title:    Senior
                  Vice President and Chief
                  Financial Officer

              
	 	 
	 	
                MTM
                  TECHNOLOGIES (MASSACHUSETTS), LLC

              
	 	 
	 	 
	 	
                By:
                  _______________________________________

              
	 	
                Name:

              
	 	
                Title:    Senior
                  Vice President and Chief
                  Financial Officer

              

      

    

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    ANNEX
      I

     

    Schedule
      of Payments Made From Proceeds of $5,000,000 Equity Infusion

     

    
      
        	
                Amount

                 

              	
                Payee

              
	
                $2.2
                  million

              	
                Textron

              
	
                $600,000

              	
                Westcon

              
	
                $500,000

              	
                Capatris

              
	
                $500,000

              	
                EMC

              
	
                $500,000

              	
                Cisco

              
	
                $200,000

              	
                Arrow

              
	
                 

                $4.5
                  million

              	
                 

                TOTALexh10_2.htm

     

    Exhibit
      10.2

     

     

    
      WAIVER
        and FIRST AMENDMENT, dated as of June 21, 2007
        (this “Waiver”), executed in connection with the LOAN AND
        SECURITY 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 “Loan and Security
        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 TEXTRON FINANCIAL CORPORATION, a Delaware
        corporation (“TFC”).  Terms which are capitalized in this
        Waiver and not otherwise defined shall have the meanings ascribed to such
        terms
        in the Loan and Security Agreement.

       

      WHEREAS,
        the Companies have requested that TFC (i) waive as Events of Default the
        violation by the Companies of the Consolidated Fixed Charge Coverage Ratio
        requirements of Section 1(b) of the Addendum to the Loan and Security Agreement
        and the Consolidated Senior Leverage ratio requirements of Section 1(a) of
        the
        Addendum to the Loan and Security Agreement for the period of four consecutive
        fiscal quarters ending on or about March 31, 2007, (ii) waive the breach
        by the
        Companies of any representations and warranties set forth in the Loan and
        Security Agreement or any other loan documents related thereto to which they
        are
        a party solely as a result of the foregoing, and (iii) agree to modify certain
        terms of the Loan and Security Agreement, and TFC has agreed to the foregoing
        requests, on the terms and subject to 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 Loan and Security Agreement is hereby amended
        as follows:

       

      (a)  Section
        4.   Defined
        Terms.  Section 4 of the Loan and Security Agreement is
        amended by adding thereto the terms “Consulting Charges,” “Consolidated
        Liquidity” and “Business Day” and the respective definitions thereof, and by
        deleting therefrom the definitions of the terms “Consolidated EBITDA” in
        subclause (m) thereof, “Consolidated Fixed Charges” in subclause (n) thereof and
“Consolidated Senior Leverage” in subclause (p) thereof, and substituting the
        following in lieu thereof:

       

      (m) 
        “Consolidated EBITDA shall mean, for any period, with respect to
        the  Parent and its consolidated Subsidiaries, other than the Excluded
        Subsidiaries, all earnings before all interest, tax obligations and depreciation
        and amortization expense for such period, all determined in conformity with
        GAAP
        on a basis consistent with the latest audited financial statements of the
        Parent, but excluding the

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      effect
        of
        extraordinary and/or nonrecurring gains or losses for such period and, to
        the
        extent included in the calculation of earnings for such period, excluding
        any
        Consulting Charges paid during such period.”

       

      (n) 
        “Consolidated Fixed Charges shall mean, for any period,
        with respect to the Parent and its consolidated Subsidiaries, other than
        the
        Excluded Subsidiaries, the sum of (i) all cash interest obligations
        (including, without limitation, cash interest obligations in respect of any
        Investor Obligations, loans under the CIT Financing Agreement and/or
        Subordinated Debt) paid or due during such period, (ii) the amount of all
        scheduled fees paid to CIT and the lenders under the CIT Financing Agreement
        during such period, (iii)  the amount of principal repaid in cash or
        scheduled to be repaid but not paid on Indebtedness (other than the loans
        under
        the CIT Financing Agreement and any loans made hereunder) during such period
        (including, without limitation, principal repayments in respect of any Investor
        Obligations and/or Subordinated Debt, but not including principal repayments
        in
        respect of any Indebtedness that is, by its terms, payable only in stock)
        provided, that, cash payments made in respect of Indebtedness incurred in
        connection with any Permitted Acquisition (as such term is defined in the
        CIT
        Financing Agreement) will be excluded from Consolidated Fixed Charges to
        the
        extent that they were made with the proceeds of capital contributions (either
        in
        the form of equity or Subordinated Debt) and not with the proceeds of “Revolving
        Loans” under, and as defined in, the CIT Financing Agreement or other working
        capital, (iv) unfinanced Capital Expenditures incurred during such period,
        (v) all cash payments made or due in respect of any earnout or similar
        contingent obligations during such period, provided, that, such cash payments
        will be excluded from Consolidated Fixed Charges to the extent that they
        were
        made with the proceeds of capital contributions (either in the form of equity
        or
        Subordinated Debt) and not with the proceeds of loans under the CIT Financing
        Agreement or other working capital, (vi) all payments made or due in
        respect of Capital Leases during such period, and (vii) all cash charges
        incurred during such period relating to severance, restructuring and other
        similar kinds of expenses.  For avoidance of doubt, the calculation of
        Consolidated Fixed Charges for any period of determination shall not include
        any
        Consulting Charges due or payable during such period.”

       

      (p)  Intentionally
        Omitted.

       

      (sss) 
        “Consulting Charges” shall mean,
        for any period, the fees and disbursements due or payable in cash during
        such
        period by the Parent to Carl Marks Associates for the consulting services
        provided to the Companies by such consultant.”

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      (ttt) 
        “Consolidated Liquidity” shall mean, as of any date of determination, the
        sum of (i) 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 (ii) the amount of Net
        Availability (as such term is defined in the CIT Financing
        Agreement).

       

      (uuu) 
        “Business Day”  shall mean any day on which you and JPMorgan
        Chase Bank, N.A. are open for business.

       

       (b)
        Section 3(b). 
 Financial
        Reporting.  Section
        3(b) of the Addendum to the Loan and Security Agreement is amended
        by  adding  new clauses (v), (vi) and (vii) thereto, as
        follows:

       

      “(v)
        on
        each Business Day, a financial report, in form and substance reasonably
        satisfactory to you, which report shall indicate the amount of Consolidated
        Liquidity as of the close of business on the preceding Business Day, together
        with a calculation thereof, in reasonable detail.”

       

      “(vi)
        on
        Friday of each week (or on the following Business Day, if such Friday is
        not a
        Business Day), a rolling 13 week cash forecast and report, in form and substance
        reasonably satisfactory to you, which report shall be updated each week,
        through
        the close of business on the Business Day preceding the date on which such
        report is so delivered to you, and which report shall include an analysis,
        in
        reasonable scope and detail, of the preceding week’s variations to
        budget.”

       

      “(vii)  deliver
        to you a copy of each periodic report prepared for the Companies by Carl
        Marks
        Associates, no later than the Business Day following the Parent’s receipt of
        each such report, which report shall include, without limitation, (I) initially,
        an analysis of the methodology employed by the Companies in the development
        of
        their rolling 13 week cash forecast and a discussion of the recommendations
        made
        by Carl Marks Associates for the improvement of such methodology and
        forecasting, and (II) on an ongoing bi-weekly basis (that is, every other
        week),
        an analysis of the actual performance and results of the Companies for each
        month and each rolling 13 week period, a summary of the variations, if any,
        between such results and the EBITDA and cash budgets forecasted for such
        month
        and period, and the reasons for such variations.”

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      (c)  Section
        1. Financial
        Covenants.  Section 1 of the Addendum to the Loan and
        Security Agreement is amended as follows:

       

      (i)          Section
        1(a) of the Addendum to the Loan and Security Agreement is hereby amended
        and
        restated in its entirety as follows:

       

      a)
         Consolidated Liquidity.  To cause the Parent to have
        Consolidated  Liquidity at all times of not less than
        $3,000,000.

       

      (ii)          Section
        1(b) of the Addendum to the Loan and Security Agreement is hereby amended
        and
        restated in its entirety as follows:

       

      b) Consolidated
        Fixed Charge Coverage Ratio.  To cause the Parent to maintain a
        Consolidated Fixed Charge Coverage Ratio for each measuring period set forth
        below of not less than the ratio set forth below opposite such measuring
        period:

       

      
        	 	
                measuring
                  period

              	
                minimum
                  Consolidated Fixed Charge Coverage Ratio

                 

              
	
                (i)

              	
                fiscal
                  quarter ending on or about June 30, 2007

                 

              	
                .17
                  to 1.00

              
	
                (ii)

              	
                two
                  fiscal quarters ending on or about September 30, 2007

                 

              	
                .34
                  to 1.00

              
	
                (iii)

              	
                three
                  fiscal quarters ending on or about December 31, 2007

                 

              	
                .57
                  to 1.00

              
	
                (iv)

              	
                four
                  fiscal quarters ending on or about March 31, 2008

                 

              	
                .68
                  to 1.00

              

      

      

       

      (iii)                    Section
        1(c) of the Addendum to the Loan and Security Agreement is hereby amended
        and
        restated in its entirety as follows:

       

      c)  Consolidated
        EBITDA.  To cause the Parent to have Consolidated EBITDA for each
        measuring period set forth below of not less than the amount set forth below
        opposite such measuring period:

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      
        	 	
                measuring
                  period

              	
                minimum
                  Consolidated EBITDA

                 

              
	
                (i)

              	
                Fiscal
                  quarter ending on or about June 30, 2007

                 

              	
                $   424,000

              
	
                (ii)

              	
                two
                  fiscal quarters ending on or about September 30, 2007

                 

              	
                  1,358,000

              
	
                (iii)

              	
                Three
                  fiscal quarters ending on or about December 31, 2007

                 

              	
                 
                  3,227,000

              
	
                (iv)

              	
                four
                  fiscal quarters ending on or about March 31, 2008

                 

              	
                 
                  5,096,000

              

      

      

      (iv)          A
        new Section d) is hereby added to the Addendum to the Loan and Security
        Agreement are set forth below:

       

      d) 
        Consolidated Fixed Charges.  To cause Parent to incur
        Consolidated Fixed Charges for each fiscal quarter set forth below in an
        aggregate amount not greater than the amount set forth below opposite such
        fiscal quarter:

       

      
        	 	
                Fiscal
                  quarter ending on or about

              	
                maximum
                  Consolidated Fixed Charges

                 

              
	
                (i)

              	
                June
                  30, 2007

                 

              	
                $2,455,000

              
	
                (ii)

              	
                September
                  30, 2007

                 

              	
                 
                  1,539,000

              
	
                (iii)

              	
                December
                  31, 2007

                 

              	
                 
                  1,682,000

              
	
                (iv)

              	
                March
                  31, 2008

                 

              	
                 
                  1,808,000

              

      

      

       

      Section
        Two.    Waivers.  The
        Companies have advised TFC that Parent has (i) failed to maintain a Consolidated
        Senior Leverage ratio for the period of four consecutive fiscal quarters
        ended
        on or about March 31, 2007 of not greater than 4.00 to 1.00, in violation
        of
        Section 1(a) of the Addendum to the Loan and Security Agreement, and (ii)
        failed
        to maintain a Consolidated Fixed Charge Coverage Ratio for the period of
        four
        consecutive fiscal quarters ended on or about March 31, 2007 of not less
        than
        1.00 to 1.00, in violation of Section 1(b) of the Addendum to the Loan and
        Security Agreement.  Each such violation constitutes an Event of
        Default under Section 14(e) of the Loan and Security 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,
        TFC
        hereby waives the Financial Covenant Defaults, the Event of Default under
        Section 14(i) of the Loan and Security Agreement related to said Financial
        Covenant Defaults and any breach by the Companies of any representations
        and
        warranties set forth in the Loan and Security Agreement or any other loan
        documents related thereto to which they are a party solely as a result of
        the
        foregoing (each such breach, together with the Financial Covenant Defaults,
        the
“Designated Defaults”) as Events of Default.  Nothing contained
        herein shall constitute a waiver by TFC of any Events of Default other than
        the

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      Designated
        Defaults, whether or not they have any knowledge thereof, nor shall anything
        contained herein constitute a waiver of any future Event of Default
        whatsoever.  Parent and the Companies acknowledge that TFC shall not
        accept anything other than full compliance by the Companies with all of the
        terms and provisions contained in the Loan and Security Agreement.

       

      Section
        Three.    Representations
        and Warranties.  To induce TFC to enter
        into this Waiver, each Company hereby warrants and represents to TFC as
        follows:

       

      (a)  all
        of
        the representations and warranties contained in the Loan and Security Agreement
        and each other loan document related thereto to which such Company is a party
        continue to be true and correct in all material respects as of the date hereof,
        as if repeated as of the date hereof, except (i) with respect to the absence
        of
        the occurrence and continuation of any Event of Default, as to which TFC
        acknowledges the occurrence of the Designated Defaults, and (ii) to the extent
        of changes resulting from transactions expressly permitted by the Loan and
        Security Agreement, this Waiver or any of the other related loan documents,
        or
        to the extent that such representations and warranties are expressly made
        only
        as of an earlier date;

       

      (b)  the
        execution, delivery and performance of this Waiver by such Company are within
        its corporate powers and have been duly authorized by all necessary corporate
        action, and such Company has received all necessary consents and approvals,
        if
        any are required, for the execution and delivery of this Waiver;

       

      (c)  upon
        the
        execution of this Waiver, this Waiver shall constitute the legal, valid and
        binding obligation of such Company, enforceable against such Company in
        accordance with its terms, except as such enforceability may be limited by
        (i)
        bankruptcy, insolvency or similar laws affecting creditors’ rights generally and
        (ii) general principles of equity;

       

      (d)  neither
        the execution and delivery of this Waiver, nor the consummation of the
        transactions herein contemplated, nor compliance with the provisions hereof
        will
        (i) violate any law or regulation applicable to any Company, (ii) cause a
        violation by any Company of any order or decree of any court or government
        instrumentality applicable to it, (iii) conflict with, or result in the breach
        of, or constitute a default under, any indenture, mortgage, deed of trust,
        or
        other material agreement or material instrument to which any Company is a
        party
        or by which it may be bound, (iv) result in the creation or imposition of
        any
        lien, charge, or encumbrance upon any of the property of any Company, except
        in
        favor of TFC to secure the Obligations, (v) violate any provision of the
        Certificate of Incorporation, By-Laws or any capital stock provisions of
        any
        Company, or (vi) be reasonably likely to have a Material Adverse Effect;
        and

       

      (e)  the
        Parent received by wire transfer of funds to its bank account on May 24,
        2007
        proceeds of the cash equity infusion described in Section Four (d) below
        in the
        aggregate amount of $4,999,000.28, which proceeds were used by the Parent
        in
        payment of the obligations in the respective approximate amounts and owing
        to
        the respective obligees set forth on Annex I to this Waiver.

       

      Section
        Four.    Conditions
        Precedent.  This Waiver shall become
        effective upon the satisfaction of the following conditions
        precedent:

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      (a)  TFC
        shall
        have received an original of this Waiver, duly executed by all of the
        Comapnies;

       

      (b)  TFC
        shall
        have received and reviewed to its satisfaction a copy of the fully executed
        waiver of CIT of all events of default existing under the CIT Financing
        Agreement;

       

      (c)  TFC
        shall
        have received and reviewed to its satisfaction a copy of the fully executed
        waiver of Columbia Partners, L.L.C. Investment Management and National
        Electrical Benefit Fund (collectively, the “Columbia Lenders”) of all
        events of default existing under that certain Credit Agreement dated as of
        November 23, 2005, by and among the Columbia Lenders, on the one hand, and
        Parent, together with each of its subsidiaries that is a party thereto, on
        the
        other hand;

       

      (d)  the
        Parent shall have received the proceeds of a cash equity infusion in the
        aggregate amount of not less than $4,999,000.28 from Constellation Venture
        Capital II, L.P. and/or Pequot Private Equity Fund III, L.P. (or from affiliated
        funds of either such entity), and, in conjunction therewith, TFC and its
        counsel
        shall have received and reviewed to their reasonable satisfaction all documents,
        instruments and agreements executed or delivered in connection with such
        equity
        infusion;

       

      (e)  TFC
        shall
        have received and reviewed and be satisfied with a draft version of the audited
        financial statements of the Parent and its consolidated subsidiaries for
        the
        fiscal year ended on or about March 31, 2007, together with all accompanying
        footnotes, prepared without qualification by the Parent’s independent public
        accountants; after giving effect to this Waiver and the waivers referred
        to in
        4(b) and (c) above, the certified public accountants auditing the aforesaid
        financial statements shall have confirmed to TFC, in writing, that their
        opinion
        thereon will not be qualified;

       

      (f)  the
        Parent shall have engaged Carl Marks Associates (or shall have continued
        the
        existing engagement of Carl Marks Associates) for the sole purpose of assisting
        the Parent and the other Companies by providing the analysis described in
        Section 3(b) of the Addendum to the Loan and Security Agreement, and TFC
        shall
        have received and reviewed to its satisfaction a copy of the agreement pursuant
        to which such engagement (or the continuation of such existing engagement,
        as
        the case may be) shall have been accepted, and Carl Marks Associates shall
        have
        commenced its work pursuant to such engagement no later than June 29,
        2007;

       

      (g)  TFC
        shall
        have received a non-refundable fee in the amount of $22,500 (the “Fee”),
        which shall be fully earned on the date hereof;

       

      (h)  except
        for the Designated Defaults, no Default or Event of Default, and no event
        or
        development which has had or is reasonably likely to have a Material Adverse
        Effect, shall have occurred or be continuing on the date hereof;
        and

       

      (i)  TFC
        shall
        have received and reviewed and be satisfied with a field audit report (done
        by
        auditors engaged by CIT) dated May 25, 2007 for the period referred to in
        said
        report ending on April 30, 2007 with respect to the Inventory and Accounts
        of
        the Companies.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      
        Section
          Five.    General
          Provisions.

      

       

      (a)  Except
        as
        herein expressly amended, the Loan and Security Agreement and all other
        agreements, documents, instruments and certificates executed in connection
        therewith, are ratified and confirmed in all respects and shall remain in
        full
        force and effect in accordance with their respective terms.

       

      (b)  This
        Waiver embodies the entire agreement between the parties hereto with respect
        to
        the subject matter hereof and supercedes all prior agreements, commitments,
        arrangements, negotiations or understandings, whether written or oral, of
        the
        parties with respect thereto.

       

      (c)  This
        Waiver, and matters relating hereto and arising herefore, shall be governed
        by
        and construed in accordance with the internal laws of the State of Rhode
        Island,
        without regard to the conflicts of law principals thereof.

       

      (d)  This
        Waiver may be executed in any number of counterparts, each of which when
        so
        executed shall be deemed to be an original, and such counterparts together
        shall
        constitute one and the same respective agreement.

       

       

       (Signature
        Page Follows)

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      

      IN
        WITNESS WHEREOF, the parties to this Waiver have
        signed below to indicate their agreement with the foregoing and their intent
        to
        be bound thereby.

       

      
        	 	TEXTRON
                FINANCIAL CORPORATION
	 	 	 
	 	 	 
	 	
                By:

              	 
	 	
                Name:

                Title:

              
	 	 	 
	 	
                MTM
                  TECHNOLOGIES, INC.,

                for
                  itself and as Borrowing Agent, and as successor by merger with
                  each of MTM
                  Technologies (California), Inc., and MTM Technologies (Texas),
                  Inc.

              
	 	 	 
	 	 	 
	 	
                By:

              	 
	 	
                Name:

                Title:     Senior
                  Vice President and Chief
                  Financial Officer

              
	 	 	 
	 	MTM
                TECHNOLOGIES (US), INC.
	 	 	 
	 	 	 
	 	
                By:

              	 
	 	Name:
	 	Title:    Senior
                Vice President and
                Chief Financial Officer
	 	 	 
	 	INFO
                SYSTEMS, INC.
	 	 	 
	 	 	 
	 	
                By:

              	 
	 	Name:
	 	Title:    Senior
                Vice President and Chief
                Financial Officer
	 	 	 
	 	MTM
                TECHNOLOGIES (MASSACHUSETTS), LLC
	 	 	 
	 	 	 
	 	
                By:

              	 
	 	Name:
	 	Title:    Senior
                Vice President and
                Chief Financial Officer

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      ANNEX
        I

      

      

      Schedule
        of Payments Made From Proceeds of $5,000,000 Equity Infusion

      

      
        	
                Amount

                 

              	
                Payee

              
	
                $2.2
                  million

              	
                Textron
                  Financial Corporation

              
	
                $600,000

              	
                Westcon

              
	
                $500,000

              	
                Capatris

              
	
                $500,000

              	
                EMC

              
	
                $500,000

              	
                Cisco

              
	
                $200,000

              	
                Arrow

              
	
                 

                $4.5
                  million

              	
                 

                TOTAL

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