exh10_3.htm


    EXHIBIT
      10.3

     

    MTM
      TECHNOLOGIES, INC.


     

    AMENDMENT
      NO. 5

    TO

    AMENDED
      AND RESTATED REGISTRATION RIGHTS AGREEMENT

     

    This
      Amendment No. 5 (this "Amendment No.5") to the Amended and Restated
      Registration Rights Agreement dated December 10, 2004, as amended by Amendment
      No. 1 on November 23, 2005, Amendment No. 2 on March 29, 2007, Amendment No.
      3
      on April 9, 2007, and Amendment No, 4 on May 24, 2007 (the “Registration
      Rights Agreement”), among (a) MTM Technologies, Inc., a New York corporation
      (the "Company"), (b) Steven Rothman, a natural person, (c) Howard Pavony, a
      natural person (Messrs. Rothman and Pavony collectively, the
“Executives”), (d) Pequot Private Equity Fund III, L.P. and Pequot
      Offshore Private Equity Partners III, L.P., (collectively, the “Pequot
      Stockholders”), (e) 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 (collectively, the “Constellation Stockholders” and
      together with the Pequot Stockholders, the “Investor Stockholders,”) is
      entered into as of July 25, 2007.  Capitalized terms used herein and
      not otherwise defined shall have the meanings ascribed to such terms in the
      Registration Rights Agreement.

     

    Background

     

    WHEREAS,
      the Company has entered into a Securities Purchase Agreement (the “Series A-8
      Purchase Agreement”) among the Company, and the Pequot Stockholders dated as
      of even date whereby provisions were made for the purchase, sale and issuance
      of
      up to 743,415 shares of Series A-8 Preferred Stock (the “Series A-8 Preferred
      Stock”) and detachable warrants to purchase up to 892,098 shares (as such
      amount may be adjusted in accordance with the terms thereof) of the Company’s
      common stock ( the “Series A-8 Warrants”);

     

    WHEREAS,
      simultaneously with, and as a condition to, entering into the Purchase
      Agreement, the Investor Stockholders are entering into this Amendment No. 5
      in
      order to amend the Registration Rights Agreement and to provide certain
      registration and other rights with respect to the Series A-8 Preferred Stock
      and
      Series A-8 Warrants to be issued in connection with the Purchase Agreement;
      and

     

    WHEREAS,
      pursuant to Section 13(b) of
      the Registration Rights Agreement, this Amendment No. 5 requires the consent
      of
      the Company, a Pequot Majority in Interest and a Constellation Majority in
      Interest.

     

    NOW,
      THEREFORE, in consideration of the mutual premises and agreements contained
      herein, and intending to be legally bound hereby, the parties hereto agree
      as
      follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              1.

            	
              Amendments.

            


    

     

    (a)           The
      eighth recital to the Registration Rights Agreement shall be amended in its
      entirety and replaced with the following:

     

    WHEREAS,
      pursuant to a Purchase Agreement, dated as of even date herewith (as the same
      may be amended or supplemented, the “Series A-8 Purchase Agreement”),
      among the Company and the Pequot Stockholders, the Company (i) issued and sold,
      and the Pequot Stockholders purchased 743,415 shares of Series A-8 convertible
      preferred stock, par value $0.001 per share, and (ii) issued and sold, and
      the
      Pequot Stockholders purchased detachable warrants to purchase up to 892,098
      shares (as such amount may be adjusted in accordance with the terms thereof)
      of
      the Company’s common stock (collectively, the “Series A-8
      Warrants”);

     

    (b)           A
      new tenth recital to the Registration Rights Agreement shall be added after
      the
      ninth recital as follows:

     

    WHEREAS,
      simultaneously with, and as a condition to, the closing of the transactions
      contemplated by the A-8 Purchase Agreement, the Company and the Investor
      Stockholders are entering into this Amendment No. 5, in order to amend the
      Registration Rights Agreement and to provide certain registration and other
      rights with respect to the Common Stock held by or issuable to the Pequot
      Stockholders pursuant to the A-8 Purchase Agreement;

     

    (c)           The
      following definitions in Section 1 of the Registration Rights Agreement shall
      be
      amended in their entirety and replaced with the following:

     

    
      	
               

            	
              (i)

            	
              “Investor
                Stockholders” As defined in the initial paragraph
                hereof.

            


    

     

    
      	
               

            	
              (ii)

            	
              “Pequot
                Majority in Interest.” The Pequot Stockholders holding at least a majority
                of the shares of Common Stock issued or issuable, directly or indirectly,
                upon conversion or exercise of the Shares and Warrants purchased
                by such
                Pequot Stockholders in accordance with the Initial Series A Purchase
                Agreement, the Purchase Agreement, the Series A-6 Purchase Agreement,
                the
                Series A-7 Purchase Agreement and the Series A-8 Purchase
                Agreement.

            


    

     

    
      	
               

            	
              (iii)

            	
              “Series
                A Preferred Stock.” The Series A-1 Preferred Stock, Series A-2 Preferred
                Stock, Series A-3 Preferred Stock, Series A-4 Preferred Stock, Series
                A-5
                Preferred Stock, Series A-6 Preferred Stock, Series A-7 Preferred
                Stock,
                and Series A-8 Preferred Stock
                collectively.

            


    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
               

            	
              (iv)

            	
              “Shares.”
                The shares of Series A Preferred Stock issued to the Investor Stockholders
                in accordance with the Initial Series A Purchase Agreement, the Purchase
                Agreement, the Series A-6 Purchase Agreement, the Series A-7 Purchase
                Agreement and the Series A-8 Purchase
                Agreement.

            


    

     

    
      	
               

            	
              (v)

            	
              “Warrants.”
                The Series A-1 Warrants, Series A-2 Warrants, Series A-3 Warrants,
                Series
                A-4 Warrants, the Series A-5 Warrants, the Series A-6 Warrants, the
                Series
                A-7 Warrants and the Series A-8 Warrants issued to the Investor
                Stockholders.

            


    

     

    (d)           The
      Following definition shall be added to Section 1 of the Registration Rights
      Agreement:

     

    
      	
               

            	
              (i)

            	
              “Series
                A-8 Preferred Stock” As defined in the eighth recital
                hereof.

            


    

     

    This
      definition shall be inserted after the definition of “Series A-7
      Warrants”

     

    
      	
               

            	
              (ii)

            	
              “Series
                A-8 Warrants” as defined in the eighth recital
                hereof.

            


    

     

    This
      definition shall be inserted after the definition of “Series A-8 Preferred
      Stock.”

     

    
      	
              2.

            	
              Entire
                Agreement.  This Amendment No.5 and the Registration Rights
                Agreement are to be read together as one instrument.  The
                Registration Rights Agreement shall remain in full force and effect,
                except as modified hereby.

            


    

     

    
      	
              3.

            	
              Governing
                Law.  This Amendment No.5 is made pursuant to, and shall be
                governed by and construed in accordance with, the laws of the State
                of New
                York, other than provisions thereof relating to conflicts of
                law.

            


    

     

    
      	
              4.

            	
              Counterparts.  This
                Amendment No.5 may be executed in any number of counterparts, each
                of
                which shall be considered an original and which shall together constitute
                one instrument.

            


    

     

    
      	
              5.

            	
              Headings.  The
                titles and subtitles used in this Amendment No.4 are used for convenience
                only and are not to be considered in construing or interpreting this
                Amendment No.5.

            


    

     

    [Remainder
      of this page intentionally blank]

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties have executed this Amendment No. 5 as of the date
      first above written.

     

    
      	 	
              COMPANY:

               

              MTM
                TECHNOLOGIES, INC.

               

               

            
	 	
              By:

            	
              /s/
                J.W. Braukman III

            
	 	 	
              Name:

            	
              J.W.
                Braukman III

            
	 	 	
              Title:

            	
              SVP
                and Chief Financial Officer

            


    

    
      
         

         

      

    

    
      
        	 	
                PEQUOT
                  STOCKHOLDERS:

                 

                PEQUOT
                  PRIVATE EQUITY FUND III, L.P.

                 

              
	 	
                By:

              	
                Pequot
                  Capital Management, Inc.,

                as
                  Investment Manager

                 

              
	 	
                By:

              	
                /s/
                  Aryeh Davis

              
	 	 	
                Name:

              	
                Aryeh
                  Davis

              
	 	 	
                Title:

              	
                General
                  Counsel

              


      

      
 

    

    
      	 	
              PEQUOT
                OFFSHORE PRIVATE EQUITY PARTNERS III, L.P.

               

            
	 	
              By:

            	
              Pequot
                Capital Management, Inc.,

              as
                Investment Manager

               

            
	 	
              By:

            	
              /s/
                Aryeh Davis

            
	 	 	
              Name:

            	
              Aryeh
                Davis

            
	 	 	
              Title:

            	
              General
                Counsel

            


    

     

    
      
        Signature
          Page to Amendment No. 5 to Registration Rights Agreement

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	
              CONSTELLATION
                STOCKHOLDERS:

               

              CONSTELLATION
                VENTURE CAPITAL

                II,
                L.P.

               

            
	 	
              By:

            	
              Constellation
                Ventures Management

              II,
                LLC, Its General Partner

               

               

            
	 	
              By:

            	/s/
	 	 	
              Name:

            	 
	 	 	
              Title:

            	 


    

     

    
 

    
      	 	
              CONSTELLATION
                VENTURE CAPITAL OFFSHORE II, L.P.

               

            
	 	
              By:

            	
              Constellation
                Ventures Management

              II,
                LLC, Its General Partner

               

               

            
	 	
              By:

            	/s/
	 	 	
              Name:

            	 
	 	 	
              Title:

            	 


    

     

    
      	 	
              THE
                BSC EMPLOYEE FUND VI, L.P.

               

            
	 	
              By:

            	
              Constellation
                Ventures Management

              II,
                LLC, Its General Partner

               

               

            
	 	
              By:

            	/s/
	 	 	
              Name:

            	 
	 	 	
              Title:

            	 


    

    


    
      	 	
              CVC
                II PARTNERS, LLC

               

            
	 	
              By:

            	
              The
                Bear Stearns Companies Inc.,

              Its
                Managing Member

               

               

            
	 	
              By:

            	/s/
	 	 	
              Name:

            	 
	 	 	
              Title:

            	 


    

    


    
      
        Signature
          Page to Amendment No. 5 to Registration Rights Agreement