Document:

exh10_4.htm

     

    Exhibit
10.4

     

    
      THIS
WARRANT AND THE SHARES OF PREFERRED STOCK WHICH MAY BE PURCHASED PURSUANT TO THE
EXERCISE OF THIS WARRANT (AND THE SHARES OF COMMON STOCK WHICH MAY BE ISSUED
UPON CONVERSION OF SUCH SHARES OF PREFERRED STOCK) HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND SUCH SECURITIES
MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE ACT AND THE RULES AND
REGULATIONS THEREUNDER.

       

      THE
SECURITIES REPRESENTED HEREBY MAY BE SUBJECT TO THE TERMS AND CONDITIONS OF AN
AMENDED AND RESTATED SHAREHOLDERS AGREEMENT WHICH MAY PLACE CERTAIN RESTRICTIONS
ON THE VOTING OF SUCH SECURITIES (INCLUDING THE GRANT OF AN IRREVOCABLE PROXY
RELATIVE TO VOTING MATTERS).  A COPY OF SUCH AGREEMENT WILL BE
FURNISHED TO THE RECORD HOLDER OF THIS SECURITY WITHOUT CHARGE UPON WRITTEN
REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                No.
      W-P2

              	
                Void
      After Expiration Date

                (as
      defined below)

              

      

      

      WARRANT

      

      TO
PURCHASE PREFERRED STOCK OF

      

      MTM
TECHNOLOGIES, INC.

      

      Dated
February 28, 2008

      

      

      THIS
WARRANT CERTIFIES THAT, for value received, PEQUOT OFFSHORE PRIVATE EQUITY
PARTNERS III, L.P. or its permitted transferees (the “Holder”) is entitled
to purchase from MTM TECHNOLOGIES, INC., a New York corporation (the “Company”), up to the
number of fully paid and nonassessable shares (the “Shares”) of the next
series of preferred stock, $.001 par value, per share of the Company, to be
designated by the Company after the date hereof, (“Preferred Stock”), as
further described and defined below.

       

      Section  1.  Number of
Shares.  The maximum number of Preferred Stock which may be
purchased upon the exercise of this Warrant is 48,452. This Warrant shall not be
exercised prior to the date upon which the Company designates the next series of
preferred stock.

      

      Section  2.  Exercise
Price.  The price per share at which the Holder may purchase
the Preferred Stock shall be $.6375 per share (the “Exercise
Price”).

      

      Section  3.  Expiration
Date.  This Warrant shall expire at 5:00 p.m. New York Time on
March 29, 2012 (the “Expiration
Date”).  On the Expiration Date, all rights of the Holder to
purchase Preferred Stock pursuant to this Warrant shall immediately
terminate.

      

      Section  4.  Exercise and
Payment.

       

      Section  4.1  Exercise. The
purchase rights represented by this Warrant may be exercised by the Holder, in
whole or in part at any time, by the surrender of this Warrant (together with a
duly executed notice of exercise in the form attached hereto as Exhibit A-1) at the
principal office of the Company, and by the payment to the Company, by wire
transfer of immediately available funds, of an amount equal to the aggregate
Exercise Price of the Shares being purchased.

      

      Section  4.2  Net Issue
Election.  The Holder may elect to receive, without the payment
by the Holder of any additional consideration, shares equal to the value of this
Warrant or any portion hereof by the surrender of this Warrant or such portion
(together with a duly executed notice of exercise in the form attached hereto as
Exhibit A-2) at
the principal office of the Company.  Thereupon, the Company shall
issue to the Holder such number of shares of Preferred Stock as is computed
using the following formula:

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      X = Y (A-B)

      A

      
        	
                 
      

              	
                Where

              

      

      

      
        	
                 
      

              	
                X
      =

              	
                the
      number of shares of Preferred Stock to be issued to the Holder pursuant to
      this Section  4.2.

              

      

       

      
        	
                 
      

              	
                Y
      =

              	
                the
      number of shares of Preferred Stock covered by this Warrant in respect of
      which the net issue election is made pursuant to this Section  4.2.

              

      

      

      
        	
                 
      

              	
                A
      =

              	
                the
      Fair Market Value of one share of Preferred Stock, as determined in
      accordance with Section  6
      herein, as at the time the net issue election is made pursuant to this
      Section  4.2.

              

      

      

      
        	
                 
      

              	
                B
      =

              	
                the
      Exercise Price in effect under this Warrant at the time the net issue
      election is made pursuant to this Section  4.2.

              

      

      

      Section  4.3  Stock
Certificates.  In the event of the exercise of all or any
portion of this Warrant, certificates for the shares of Preferred Stock so
purchased shall be delivered to the Holder by the Company at the Company's own
expense (including the payment by the Company of any applicable issue taxes or
governmental charges imposed in connection with the issuance or delivery of the
Preferred Stock) within a reasonable time, which shall in no event be later than
ten (10) days thereafter and, unless this Warrant has been fully exercised or
has expired, a new Warrant representing the Shares with respect to which this
Warrant shall not have been exercised shall also be issued to the Holder within
such time.

       

      If this
Warrant shall be surrendered for exercise within any period during which the
transfer books for shares of the Preferred Stock or other securities purchasable
upon the exercise of this Warrant are closed for any purpose, the Company shall
not be required to make delivery of certificates for the securities purchasable
upon such exercise until the date of the reopening of said transfer
books.

      

      Section  5.  Stock Fully Paid;
Reservation of Shares.  All of the Shares issuable upon the
exercise of this Warrant will, upon issuance and receipt of the Exercise Price
therefor, be duly authorized, validly issued, fully paid and nonassessable with
no personal liability attaching to the ownership thereof, and free and clear of
all taxes, liens, encumbrances and charges with respect to the issue
thereof.  During the period within which this Warrant may be
exercised, the Company shall at all times have authorized and reserved for
issuance sufficient shares of its Preferred Stock to provide for the exercise of
this Warrant.

      

      Section  6.  Adjustment of Exercise Price
and Number of Shares.  The number and kind of securities
purchasable upon the exercise of this Warrant and the Exercise Price therefor
shall be subject to adjustment from time to time upon the occurrence of certain
events, as follows:

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      Section  6.1  Adjustments for Subdivisions
of Preferred Stock.  If the number of shares of Preferred Stock
outstanding at any time is increased by a stock dividend payable in shares of
Preferred Stock or by a subdivision or split up of stock, then the Exercise
Price then in effect shall, concurrently with the effectiveness of such
dividend, subdivision or split up, be proportionately decreased and the number
of shares of Preferred Stock issuable upon exercise of this Warrant shall be
increased in proportion to such increase of outstanding shares of Preferred
Stock.

      

      Section  6.2  Adjustments for Combinations
Preferred Stock.  If the number of shares of Preferred Stock
outstanding at any time is decreased by a combination of the outstanding shares
of Preferred Stock, then the Exercise Price then in effect shall, concurrently
with the effectiveness of such combination, be proportionately increased and the
number of shares of Preferred Stock issuable upon exercise of this Warrant shall
be decreased in proportion to such decrease in outstanding shares of Preferred
Stock.

      

      Section  6.3  Adjustments for
Reclassification, Exchange and Substitution.  Upon a Notice
Event (as defined below), if the Preferred Stock issuable upon exercise of this
Warrant shall be changed into the same or a different number of shares of any
other class or classes of stock, whether by capital reorganization, merger,
reclassification or otherwise (other than a subdivision or combination of shares
provided for above) this Warrant shall thereafter be exercisable into, in lieu
of the number of shares of Preferred Stock which the Holder would otherwise have
been entitled to receive, a number of shares of such other class or classes of
stock equivalent to the number of shares of Preferred Stock that would have been
subject to receipt by the Holder upon exercise of this Warrant immediately
before that change.

      

      Section  6.4  Notice of Certain
Events. In
the event (each, a “Notice
Event”):  (a) the Company authorizes the issuance to all
holders of Common Stock and/or Preferred Stock rights or warrants to subscribe
for or purchase shares of its capital stock, or any other subscription rights or
warrants; (b) the Company authorizes the distribution to all holders of
Common Stock and/or Preferred Stock evidences of indebtedness or assets or other
securities; (c) of any capital reorganization or reclassification of Common
Stock and/or Preferred Stock, other than a subdivision or combination of the
outstanding Common Stock and/or Preferred Stock and other than a change in par
value of the Common Stock and/or Preferred Stock; (d) of any liquidation or
merger to which the Company is a party and for which approval of any of the
Company's holders of Common Stock and/or Preferred Stock is required, other than
a consolidation or merger in which the Company is the continuing corporation and
that does not result in any reclassification or change of the shares of
Preferred Stock issuable upon the exercise of this Warrant; (e) of the
conveyance or transfer of the Company's properties and assets, substantially as
an entirety; or (f) of the Company's voluntary or involuntary dissolution,
liquidation or winding-up; then, in each case, the Company shall cause to be
mailed by certified mail to the Holder, at least 10 days prior to the
applicable record or effective date hereinafter

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      specified,
a notice stating the material terms relating to the exercise of the Warrants,
the name, title and telephone number of a Company representative who shall be
available to answer any questions relating to such exercise and the dates as of
which (i) the holders of Common Stock and/or Preferred Stock of record will be
entitled to receive any such rights, warrants or distributions are to be
determined, (ii) such Notice Event is expected to become effective and
(iii) that Holders of record of Warrants shall be entitled to exchange or
sell their shares of Preferred Stock issuable upon the exercise of this Warrant
for securities or other property, if any, deliverable upon such Notice
Event.  In addition, if the Company receives written notice that a
purchase, tender or exchange offer has been made to the holders of more than 50%
of the outstanding Common Stock and/or Preferred Stock, the Company shall give
the Holder reasonable notice (but will not be required to give not more than 10
days notice) thereof.

      

      Section  7.  Fractional
Shares.  No fractional shares of Preferred Stock will be issued
in connection with any exercise hereunder.  In lieu of such fractional
shares the Company shall make a cash payment therefor based upon the fair market
value of the Preferred Stock on such date as determined by the board of
directors of the Company (the “Board of
Directors”).

      

      Section  8.  Preemptive
Rights.

      

      (a)   Each Holder shall
be entitled to purchase its pro rata share (calculated by multiplying the number
of securities to be issued in such equity offering including those issued
pursuant to this Section 8 by a fraction, the numerator of which is the number
of shares of Common Stock held by such holder on a Fully Diluted Basis and the
denominator of which is the number of shares of Common Stock held by all such
holders of securities of the Corporation on a Fully Diluted Basis) of any future
private equity offering by the Corporation.  "Fully Diluted Basis"
means when used in reference to the number of shares of Common Stock held by a
Person at any time, a number of shares of Common Stock equal to the sum of (x)
the number of issued and outstanding shares of Common Stock then held by or such
Person, plus (y) the total number of shares of Common Stock issuable upon the
exercise, conversion or exchange of all warrants or other rights to subscribe
for or to purchase, or any options for the purchase of, Common Stock or any
stock or security convertible into or exchangeable for Common Stock (such
warrants, rights or options being called “Options” and such
convertible or exchangeable stock or securities being called “Convertible
Securities”) issued and outstanding at such time that are then held by
such Person.

      

      (b)   Notwithstanding
anything contained in Section 8(a) to the contrary, the preemptive rights of the
Holder shall not apply to (a) shares of Common Stock sold to, or options to
purchase Common Stock granted by the Company to, employees, consultants,
officers, or directors of the Company pursuant to any option plan, agreement or
other arrangement duly adopted by the Company and approved by a majority of the
Board of Directors; (b) any shares of Common Stock upon the conversion of shares
of Series A Preferred Stock; (c) any shares of Common Stock pursuant to which
the Series A Conversion Price (as such term is defined in the Company’s
Certificate of Incorporation)

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      is
adjusted under Section 6; (d) any shares of Common Stock issued pursuant to the
exchange, conversion or exercise of any Options or Convertible Securities that
have previously been incorporated into computations hereunder on the date when
such Options or Convertible Securities were issued; (e) the issuance and sale of
securities in connection with a strategic investment or similar transaction
approved by a majority of the Board of Directors; (f) securities issued for
consideration other than cash pursuant to a merger, consolidation or similar
business combination or acquisition of assets as approved by a majority of the
Board of Directors; (g) the issuance of shares in connection with a firm
commitment underwritten public offering of Common Stock with a nationally
recognized investment banking firm at a price per share offered to the public of
at least $5.00 per share of Common Stock which results in gross cash proceeds to
the Company of at least $25,000,000; (h) any shares of Series A Preferred Stock
issued in the form of a dividend to any holder of Series A Preferred Stock; and
(i) any shares of Common Stock issued on exercise of any warrants issued by the
Company, on or prior to the date of issuance of this Warrant and warrants issued
in connection with subordinated debt of the Company outstanding on the date of
issuance of this Warrant.

      

      Section  9.  Restrictions on
Transfer.

       

      Section  9.1  Transfer.  The
Holder may transfer this Warrant and the shares of Preferred Stock issuable upon
exercise of this Warrant, and the rights and obligations attached thereto, so
long as any such transfer(s) comply with applicable securities laws

      

      Section  9.2  Restrictive
Legend.  Unless a registration statement is in effect with
respect thereto, each certificate representing (i) the Shares and (ii) any other
securities issued in respect of the Shares upon any stock split, stock dividend
or recapitalization (collectively, the “Restricted
Securities”), shall be endorsed as follows:

      

      THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”), AND SUCH SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED
OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM
UNDER THE ACT AND THE RULES AND REGULATIONS THEREUNDER.

       

      THIS
SECURITY MAY BE SUBJECT TO THE TERMS AND CONDITIONS OF AN AMENDED AND RESTATED
SHAREHOLDERS AGREEMENT WHICH MAY PLACE CERTAIN RESTRICTIONS ON THE VOTING OF
SUCH SECURITIES (INCLUDING THE GRANT OF AN IRREVOCABLE PROXY RELATIVE TO VOTING
MATTERS).  A COPY OF SUCH AGREEMENT WILL BE FURNISHED TO THE RECORD
HOLDER OF THIS SECURITY WITHOUT CHARGE UPON WRITTEN REQUEST TO THE COMPANY AT
ITS PRINCIPAL PLACE OF BUSINESS.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      Section  10.  No Rights of
Stockholders.  This Warrant does not entitle the Holder to any
voting rights as a stockholder of the Company prior to the exercise of the
Warrant.  Nothing in this Warrant shall obligate the Holder to
exercise this Warrant, it being understood that the decision as to whether to
exercise the Warrant shall be made exclusively by the Holder.

      

      Section  11.  No
Impairment.  The Company will not, by amendment of its
Certificate of Incorporation, as amended and restated, or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but it will at all times in good faith assist in the
carrying out of all of the provisions of this Warrant and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the holder of this Warrant against impairment.

      

      Section  12.  Loss, Theft, Destruction or
Mutilation of Warrant.  Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it, and upon surrender and cancellation of
this Warrant, if mutilated, the Company will make and deliver a new Warrant of
like tenor and dated as of such cancellation, in lieu of this
Warrant.

      

      Section  13.  Saturdays, Sundays,
Holidays, etc.  If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall be a
Saturday or a Sunday or shall be a legal holiday, then such action may be taken
or such right may be exercised on the next succeeding day not a Saturday or a
Sunday or a legal holiday.

      

      Section  14.  Miscellaneous.

       

      Section  14.1  Governing
Law.  This Warrant shall be governed by and construed in all
respects in accordance with the laws of the State of New York, without giving
effect to the conflicts of laws provisions thereof.

      

      Section  14.2  Entire Agreement;
Amendment.  Each party hereby acknowledges that no other party
or any other person or entity has made any promises, warranties, understandings
or representations whatsoever, express or implied, not contained in this Warrant
and acknowledges that it has not executed this Warrant in reliance upon any such
promises, representations, understandings or warranties not contained herein and
that this Warrant supersede all prior agreements and understandings between the
parties with respect thereto.  There are no promises, covenants or
undertakings other than those expressly set forth or provided for in this
Warrant.  Neither this Warrant nor any term hereof may be amended,
waived, discharged, or terminated other than by a written instrument signed by
the parties hereto.

       

      Section  14.3  Successors and
Assigns.  Except as otherwise provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the permitted
successors and assigns, heirs, executors, and administrators of the Company and
the Holder.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      Section  14.4  Severability.  Whenever
possible, each provision of this Warrant will be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Warrant is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or any other jurisdiction,
but this Warrant will be reformed, construed and enforced in such jurisdiction
to the greatest extent possible to carry out the intentions of the parties
hereto.

       

      Section  14.5  Notices,
etc.  All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by registered or
certified mail, postage prepaid, by overnight courier, or otherwise delivered by
hand or by messenger or sent by facsimile and confirmed by mail,
addressed:

       

      (i)         if
to the Company, at to MTM Technologies, Inc., 1200 High Ridge Road, Stamford,
Connecticut 06905, Attention: Chief Executive Officer; and

      

      (ii)        if
to the Holder, c/o Pequot Capital Management, Inc., 500 Nyala Farm Road,
Westport, Connecticut 06880.

      

      All
notices shall be effective upon receipt.

       

      Section  14.6  Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

      

      Section  14.7  Titles and
Subtitles.  The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

    

     

    IN
WITNESS WHEREOF, the undersigned have executed this Warrant as of the date first
above written.

    
      

      
        	 
      	
                MTM
      TECHNOLOGIES, INC.

                 

                 

              
	 
      	
                By:

              	/s/
      Steve Stringer
	 
      	 
      	
                Name:
      Steve Stringer

                Title:   President
      and Chief Operating Officer

              

      

      

      
        
          
          

        

        
          Signature
Page to Pequot Offshore Private Equity Partners III, L.P. Warrant

          
            

          

        

        
          
          

        

      

      

      
        	
                WARRANT
      HOLDER:

                 

                PEQUOT
      OFFSHORE PRIVATE EQUITY

                PARTNERS
      III, L.P.

                 

              	 
      
	
                By:

              	
                Pequot
      Capital Management, Inc.,

                its
      Investment Manager

                 

                 

              	 
      
	 
      	
                By:

              	/s/
      Carlos Rodrigues  	 
      
	 
      	 
      	
                Name: 
      Carlos Rodrigues

                Title:   
      Chief Financial Officer

              	 
      

      

      

      
        
          
          

        

        
          Signature
Page to Pequot Offshore Private Equity Partners III, L.P. Warrant

          
            

          

        

        
          
          

        

      

       

      THE
EXERCISE OF THIS WARRANT IS SUBJECT TO THE APPLICABLE

      PROVISIONS
OF THE HART-SCOTT-RODINO ANTITRUST

      IMPROVEMENTS
ACT OF 1976, AS AMENDED

      

      EXHIBIT
A-1

      

      NOTICE OF
EXERCISE

      

       

      
        	
                 
      

              	
                TO:

              	
                MTM
      Technologies, Inc.

              

      

      
        	
                 
      

              	
                1200
      High Ridge Road

              

      

      
        	
                 
      

              	
                Stamford,
      Connecticut 06905

              

      

      
        	
                 
      

              	
                Attention:
      Chief Executive Officer

              

      

      

      

      1.  The
undersigned hereby elects to purchase _________ shares of Preferred Stock, par
value $.001 per share, of MTM TECHNOLOGIES, INC. pursuant to the terms of this
Warrant, and tenders herewith payment of the purchase price of such shares in
full.

      

      2.  Please
issue a certificate or certificates representing said shares of Preferred Stock
in the name of the undersigned or in such other name as is specified
below:

      

      ______________________________

      (Name)

      ______________________________

      

      ______________________________

      (Address)

      

       

      ___________________________________

      (Signature)          

      Title:_______________________________

      

      __________________________

      (Date)

      

      
        
          
          

        

        
          A-1

          
            

          

        

        
          
          

        

      

       

      THE
EXERCISE OF THIS WARRANT IS SUBJECT TO THE APPLICABLE

      PROVISIONS
OF THE HART-SCOTT-RODINO ANTITRUST

      IMPROVEMENTS
ACT OF 1976, AS AMENDED

      

      EXHIBIT
A-2

      

      NET ISSUE NOTICE OF
EXERCISE

      

      
         

        
          	
                   
      

                	
                  TO:

                	
                  MTM
      Technologies, Inc.

                

        

        
          	
                   
      

                	
                  1200
      High Ridge Road

                

        

        
          	
                   
      

                	
                  Stamford,
      Connecticut 06905

                

        

        
          	
                   
      

                	
                  Attention:
      Chief Executive Officer

                

        

        
 

      

      1.   The undersigned
hereby elects to purchase _________ shares of Preferred Stock, par value $.001
per share, of MTM TECHNOLOGIES, INC. pursuant to the terms of this Warrant, and
hereby elects under Section 4.2 of this Warrant to surrender the right to
purchase _______ shares of Preferred Stock pursuant to this Warrant for a net
issue exercise with respect to ________ shares of Preferred Stock.

      

      2.   Please issue a
certificate or certificates representing said shares of Preferred Stock in the
name of the undersigned or in such other name as is specified
below:

      

      ______________________________

      (Name)

      ______________________________

      

      ______________________________

      (Address)

      

      

      ___________________________________

      (Signature)          

      

      

      Title:_______________________________

      

      _______________________

                         (Date)

       

      
        
          
          

        

        
          A-2

          
            

          

        

        
          
          

        

      

       

      EXHIBIT
B

      

      ASSIGNMENT
FORM

      (To be
signed only upon transfer of Warrant)

      

      

      

      

      FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
______________________________, whose address is _____________________, the
right represented by the attached Warrant to purchase _________ shares of
Preferred Stock of MTM TECHNOLOGIES, INC., to which the attached Warrant
relates.

       

      Dated:____________________

       

      

      

      
        

        
          	 
      	
                  ____________________________________

                  (Signature
      must conform in all respects to

                  name
      of Holder as specified on the face of

                  the
      Warrant)

                   

                   

                
	 
      	
                  ____________________________________

                  (Address)

                

        

      

      

      

      Signed in
the presence of:

      

      

      _____________________________

       

      
        
          
          

        

        
          B-1exh10_5.htm

     

    Exhibit
10.5

     

    
      THIRD
AMENDMENT TO

      CREDIT
FACILITIES AGREEMENT

      

      

      This THIRD AMENDMENT TO CREDIT
FACILITIES AGREEMENT (this “Agreement”) is entered into and effective as of
February 28, 2008, by and among MTM TECHNOLOGIES, INC., a New York corporation,
MTM TECHNOLOGIES (US), INC., a Delaware corporation, MTM TECHNOLOGIES
(MASSACHUSETTS), LLC, a Delaware limited liability company, and INFO SYSTEMS,
INC., a Delaware corporation (collectively, and separately referred to as,
"Borrower" or "the Borrower"), and GE COMMERCIAL DISTRIBUTION FINANCE
CORPORATION ("CDF"), as Administrative Agent, and CDF, as the sole lender (the
“Lender”).

      

      Recitals:

      

      
        	
                A.

              	
                Borrower,
      Administrative Agent and the Lender are parties to that certain Credit
      Facilities Agreement dated as of August 21, 2007, as amended by the First
      Amendment to Credit Facilities Agreement entered into and effective as of
      August 21, 2007, and as amended by the Second Amendment to Credit
      Facilities Agreement entered into and effective as of February 4 , 2008
      (as amended, the “Loan Agreement”).

              

      

      

      
        	
                B.

              	
                Administrative
      Agent, Lender and Borrower have agreed to the provisions set forth herein
      on the terms and conditions contained
herein.

              

      

      

      Agreement

      

      Therefore, in consideration of the
mutual agreements herein and other sufficient consideration, the receipt of
which is acknowledged, Borrower, Administrative Agent and the Lender hereby
agree as follows:

      

      1.      Definitions.  All
references to the “Agreement” or the “Loan Agreement” in the Loan Agreement and
in this Agreement shall be deemed to be references to the Loan Agreement as it
may be amended, restated, extended, renewed, replaced, or otherwise modified
from time to time.  Capitalized terms used and not otherwise defined
herein have the meanings given them in the Loan Agreement.

      

      2.      Effectiveness of
Agreement. 
This Agreement shall become effective, unless otherwise noted, as of the
date first written above, but only if this Agreement has been executed by
Borrower, Administrative Agent and the Lender, and only if all of the documents
listed on Exhibit A to this Agreement have been delivered and, as applicable,
executed, sealed, attested, acknowledged, certified, or authenticated, each in
form and substance satisfactory to the Lender.  In addition, on or
before March 14, 2008, the Third Amendment Fee (as defined on Exhibit A) shall
be paid in same day funds to Administrative Agent for the sole account of the
Lender.  Upon payment of the Third Amendment Fee, such fee shall be
fully earned and nonrefundable.   If the Third Amendment Fee is
not paid on or before March 13, 2008, then the Administrative Agent is
irrevocably authorized, without any additional notice to Borrower or consent of
Borrower, to make a Revolving Loan Advance on March 14, 2008 to pay such Third
Amendment Fee.

      

      3.      Amendments.  The
Loan Agreement is hereby amended as follows:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      3.1.           Projections.  Section
11.15 is deleted in its entirety and replaced with the following:

      

      “11.15.  Projections.  The
projections of Borrower’s financial condition, results of operations, and cash
flow for the period through March 31, 2008, a copy of which have been delivered
to Administrative Agent, represent, as of the Effective Date, Borrower’s good
faith estimate of Borrower’s future financial performance for the periods set
forth therein.  Such projections have been prepared on the basis of
the assumptions set forth therein reasonably believed by Borrower in good faith
to be fair and reasonable.”

      

      3.2.           Representations and
Warranties.  Section 11.24 is deleted in its entirety and
replaced with the following:

      

      “11.24.  Other Creditor
Indebtedness; Intercreditor Documents; Subordinated Indebtedness, Pequot
Indebtedness.  There is no breach or default with respect to the
Other Creditor Indebtedness, and the Other Creditor Indebtedness has been
incurred in accordance with the terms of this Agreement.  There is no
breach or default by or attributable to a Covered Person of any obligation set
forth in any Intercreditor Agreement or any Other Creditor Indebtedness
Document.   There is no breach or default with respect to the
Subordinated Indebtedness, and the Subordinated Indebtedness has been incurred
in accordance with the terms of this Agreement.  There is no breach or
default by or attributable to any holder of the Subordinated Indebtedness under
the Subordination Agreement.  There is no breach or default with
respect to the Pequot Indebtedness, and the Pequot Indebtedness has been
incurred in accordance with the terms of this Agreement.”

      

      3.3.           Notices.  Section
13.10.7 is deleted in its entirety and replaced with the following:

      

      “13.10.7.  Borrower
shall promptly deliver notice to Administrative Agent of the assertion by the
holder of any Capital Securities in a Covered Person, the Pequot Indebtedness,
the Subordinated Indebtedness or any other Indebtedness of a Covered Person in
the outstanding principal amount in the aggregate in excess of $500,000 that a
default exists with respect thereto or that such Covered Person is not in
compliance with the terms thereof, or of the threat or commencement by such
holder of any enforcement action because of such asserted default or
noncompliance.”

      

      3.4.           Indebtedness.  A new
14.2.12 is hereby added to the Loan Agreement as follows:

      

      “14.2.12.  Unsecured
subordinated Indebtedness owing to Pequot Private Equity Fund III, L.P. and/or
Pequot Offshore Private Equity Partners III, L.P., up to $2,500,000 in the
aggregate principal amount with interest payable in preferred Capital Securities
of MTM Technologies, Inc. and which may be coupled with warrants for the Capital
Securities of MTM Technologies, Inc. (so long as the exercise thereof shall not
result in a Change of Control) (the “Pequot Indebtedness”) which such Pequot
Indebtedness may not be repaid without the prior written consent of the Required
Lenders, provided, however, if the Pequot Indebtedness has a stated maturity of
December 31, 2008 or later, then the Pequot Indebtedness may be repaid without
the consent of the Required Lenders by Borrower making a $750,000 principal
payment at any time from and including December 24, 2008 through and including
December 31, 2008, and a $1,750,000 principal payment at any time from and
including March 24, 2009 through and

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      including
March 31, 2009, if and only if no Default or Event of Default exists at the time
of such payment and no Default or Event of Default would reasonably like to
occur from making of any such payment, and provided further however, if a
payment of principal on the Pequot Indebtedness that is scheduled to be made
cannot be made pursuant to the terms of this Section 14.2.12, then, if and when
the conditions of this Section 14.2.12 permit, any such missed scheduled
principal payment may be made.”

      

      3.5.           Payment on other
Indebtedness.  Section 14.3 is deleted in its entirety and
replaced with the following:

      

      “14.3.  Payments on Other Creditor
Indebtedness; Subordinated Indebtedness; Pequot
Indebtedness.  Make any nonscheduled prepayment of principal or
interest on any Other Credit Indebtedness unless both immediately before and
after giving effect to any such prepayment, there shall be no Default or Event
of Default; make any payment of principal on the Subordinated Indebtedness; make
any payment of interest on the Subordinated Indebtedness unless such payment of
interest is scheduled to be made under the Subordinated Indebtedness Documents
and such payment is expressly permitted by the terms of the applicable
Subordination Agreement and Section 6.3.3.2 hereof; make any payment of
principal on the Pequot Indebtedness unless such payment of principal is
schedule to be made under the Pequot Indebtedness Documents and such payment is
expressly permitted by the terms of Section 14.2.12 hereof or make any cash
interest payment on the Pequot Indebtedness; or modify, amend, supplement,
compromise, satisfy, release or discharge any of the Subordinated Indebtedness
Documents, any collateral securing the same, the Pequot Indebtedness Documents,
or any Person liable directly or indirectly with respect thereto.”

      

      3.6.           Prepayments.  Section
14.4 is deleted in its entirety and replaced with the following:

      

      “14.4.  Prepayments.  Prepay,
whether voluntarily or otherwise, any Indebtedness, including without
limitation, the Subordinated Indebtedness and the Pequot Indebtedness, other
than (a) the Loan Obligations in accordance with the terms of the Loan
Documents, (b) trade payables in the ordinary course of business consistent with
past practices, (c) as permitted by Section 14.3.”

      

      3.7.           Total Funded
Indebtedness.  The definition of Total Funded Indebtedness is
deleted in its entirety and replaced with the following:

      

      “"Total
Funded Indebtedness" means the sum of the following, without duplication (i)
outstanding principal and interest of the Loans (including any fees paid to
Administrative Agent or any Lender in connection with the execution and delivery
of this Agreement) excluding the principal outstanding under the Aggregate
Floorplan Loan Facility and, without duplication, the Interim Floorplan Loan
Facility and unfunded Approvals, (ii) the face amount of any letters of credit
issued on the account of any Borrower, (iii) the aggregate outstanding principal
balance of all other Indebtedness for borrowed money, including, without
limitation, the Capital Expenditure Equivalent, and (iv) the maximum amount
payable under any guaranty executed by a Borrower, but, excluding,
the Subordinated Indebtedness if a Subordination Agreement is in effect and
excluding
the Pequot Indebtedness.”

      

      3.8.           Minimum
EBITDA.  Section 15.3 is deleted in its entirety and replaced
with the following:

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      “15.3  Minimum
EBITDA.  Each Borrower covenants that as of the last day of
each fiscal quarter, for the fiscal quarter then ended, Borrower’s EBITDA shall
not be less than the amounts set forth in the table below:

       

      
        
          	
                  The
      Fiscal Quarter Ending On:

                	
                  Minimum
      EBITDA

                
	
                  September
      30, 2007

                	
                  $800,000

                
	
                  December
      31, 2007

                	
                  $1,760,000

                
	
                  March
      31, 2008

                	
                  $440,000

                
	
                  June
      30, 2008

                	
                  $1,365,000

                
	
                  September
      30, 2008

                	
                  $2,000,000

                
	
                  December
      31, 2008

                	
                  $2,000,000

                
	
                  March
      31, 2009

                	
                  $2,000,000

                
	
                  June
      30,2009

                	
                  $2,000,000”

                

        

      

      

      3.9.           Defaults.  Section
16.1.11 is deleted in its entirety and replaced with the following:

      

      “16.1.11.  Other Creditor
Indebtedness; Subordinated Indebtedness; Pequot
Indebtedness.  The occurrence of (a) any breach, default or
event of default with respect to any of the Other Creditor Indebtedness in
excess of $250,000 in the aggregate which is not cured or waived within any
applicable grace period or any acceleration thereof or right to accelerate, or
(b) the termination of any Intercreditor Agreement by any party thereto, other
than Administrative Agent, prior to the payment in full of all of the Other
Creditor Indebtedness covered thereby.  The occurrence of (a) any
breach or default with respect to the Subordinated Indebtedness that is not
cured within any applicable grace period or any acceleration thereof or right to
accelerate, or (b) any breach or default of the Subordination Agreement by the
holder of any of the Subordinated Indebtedness.  The occurrence of any
breach or default with respect to the Pequot Indebtedness that is not cured
within any applicable grace period or any acceleration thereof or right to
accelerate.”

      

      3.10.           Definitions.  The
following new definitions are inserted in alphabetical order to Exhibit
2.1:

      

      “Pequot
Indebtedness -- is defined in Section 14.2.12.”

       

      “Pequot
Indebtedness Documents -- each document, instrument and agreement
evidencing all or any portion of the Pequot Indebtedness.”

       

      The
definition of Material Agreement is deleted in its entirety and replaced with
the following:

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      “Material
Agreement -- as to Borrower, any Guarantor or any other Covered Person,
any Contract to which Borrower, any Guarantor or any Covered Person is a party
or by which any such Borrower, any Guarantor or any other Covered Person is
bound which, if violated or breached, has or is reasonably likely to have a
Material Adverse Effect, including, without limitation, all Other Creditor
Indebtedness Documents, all Subordinated Indebtedness Documents, all Pequot
Indebtedness Documents, all documents referenced in any Intercreditor Agreement,
including, without limitation, the Other Creditor Indebtedness
Documents.”

      

      4.      General Representations and
Warranties of Borrower.  Each Borrower hereby represents and
warrants to Administrative Agent and the Lender that (i) such Borrower’s
execution of this Agreement has been duly authorized by all requisite action of
such Borrower, (ii) no consents are necessary from any third parties for such
Borrower’s execution, delivery or performance of this Agreement except for those
already duly obtained, (iii) this Agreement, the Loan Agreement, and each of the
other Loan Documents, constitute the legal, valid and binding obligations of
such Borrower enforceable against such Borrower in accordance with their terms,
except to the extent that the enforceability thereof against such Borrower may
be limited by bankruptcy, insolvency or other laws affecting the enforceability
of creditors rights generally or by equity principles of general application,
(iv) except as disclosed on the disclosure schedule attached to the Loan
Agreement, and as set forth on Exhibit B attached hereto, all of the
representations and warranties contained in Section 11 of the Loan Agreement are
true and correct with the same force and effect as if made on and as of the date
of this Agreement with such exceptions as have been disclosed to Administrative
Agent and the Lenders in writing, (v) there is no Existing Default, (vi) the
execution, delivery and performance of this Agreement by Borrower does not
violate, contravene, or conflict with any Material Law or Material Agreement,
(vii) there are no Material Proceedings pending or, to the knowledge of
Borrower, threatened, and (viii) since August 21, 2007, no Borrower’s Charter
Documents have been amended, restated or otherwise modified in any manner which
has or is reasonably likely to have a Material Adverse Effect on any Covered
Person or which will or is reasonably likely to cause a Default or Event of
Default.

      

      5.      Reaffirmation; No
Claims.  Each Borrower hereby represents, warrants,
acknowledges and confirms that (i) the Loan Agreement and the other Loan
Documents remain in full force and effect, (ii) the Security Interests of the
Administrative Agent under the Security Documents secure all the Loan
Obligations under the Loan Agreement, continue in full force and effect, and
have the same priority as before this Agreement, (iii) no Borrower has any
defenses to its obligations under the Loan Agreement and the other Loan
Documents, and (iv) no Borrower has any claim against Administrative Agent or
the Lenders arising from or in connection with the Loan Agreement or the other
Loan Documents, and each Borrower hereby releases and waives and discharges
forever any such claims it may have against Administrative Agent or the Lenders
arising from or in connection with this Agreement, the Loan Agreement or the
other Loan Documents which have arisen or accrued on or prior to the date
hereof.  Until the
Loan Obligations are paid in full in good funds and all obligations and
liabilities of Borrower under the Loan Agreement and the Loan Documents are
performed and paid in full in good funds, Borrower agrees and covenants that it
is bound by the covenants and agreements set forth in the Loan Agreement, the
Loan Documents and in this Agreement.  Borrower hereby ratifies and
confirms the Loan Obligations.  This Agreement is a part of the Loan
Documents.

      

      6.           Effect of
Agreement.  The execution, delivery and effectiveness of this
Agreement shall not and does not operate as a waiver of any right, power or
remedy of Administrative Agent or the Lenders under the Loan Agreement or any of
the other Loan Documents, nor constitute a waiver of any provision of the Loan
Agreement or any of the other Loan Documents or any Existing Default or Event of
Default.  The

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      execution,
delivery and effectiveness of this Agreement shall not and does not act as a
release or subordination of the liens and Security Interests of Administrative
Agent under the Loan Documents. 

      

      7.      Payment of Fees and
Expenses.  Borrower shall promptly pay to Administrative Agent
an amount equal to all reasonable fees, costs, and expenses, incurred by the
Administrative Agent (including all reasonable attorneys fees and expenses) in
connection with the preparation, negotiation, execution, and delivery of this
Agreement, and any further documentation which may be required in connection
herewith.

      

      8.      Governing Law.  This
Agreement and the rights and obligations of the parties hereunder and thereunder
shall be governed by and construed and interpreted in accordance with the
internal Laws of the State of Illinois applicable to contracts made and to be
performed wholly within such state, without regard to choice or conflicts of law
principles.

      

      9.      Patriot
Act.  Administrative Agent and each Lender hereby notifies the
Borrowers that, pursuant to the requirements of the USA Patriot Act, Title III
of Pub. L. 107-56, signed into law October 26, 2001 (as amended from time to
time (including any successor statute) and together with all rules promulgated
thereunder, collectively, the “Act”), it is required to obtain, verify and
record information that identifies the Borrowers and any Guarantor, which
information includes the name and address of the Borrowers and any Guarantor and
other information that will allow Administrative Agent and each Lender to
identify the Borrowers and each Guarantor in accordance with the
Act.

      

      10.  Section Titles.  The
section titles in this Agreement are for convenience of reference only and
shall not be construed so as to modify any provisions of this
Agreement.

      

      11.  Counterparts; Facsimile
Transmissions.  This Agreement may be executed in one or more
counterparts and on separate counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.  Signatures to this Agreement may be given by facsimile or
other electronic transmission, and such signatures shall be fully binding on the
party sending the same.

      

      12.  Binding
Arbitration.  This Agreement is subject to the binding
arbitration provisions contained in the Loan Agreement and the Loan Documents as
applicable to the parties hereto.

      

      13.  Incorporation By
Reference.  Administrative Agent, Lender and Borrower hereby
agree that all of the terms of the Loan Documents are incorporated in and made a
part of this Agreement by this reference.

      

      14.  Notice—Oral Commitments
Not Enforceable.

      

      ORAL AGREEMENTS OR COMMITMENTS TO
LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT
INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE, REGARDLESS
OF THE LEGAL THEORY UPON WHICH IT IS BASED THAT IS IN ANY WAY RELATED TO THE
CREDIT AGREEMENT. TO PROTECT YOU (BORROWER(S)) AND US (CREDITOR) FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE
STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING
TO MODIFY IT.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      
15.  Statutory
Notice-Insurance.

      

      UNLESS
YOU PROVIDE EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY YOUR AGREEMENT WITH
US, WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT OUR INTERESTS IN YOUR
COLLATERAL.  THIS INSURANCE MAY, BUT NEED NOT, PROTECT YOUR
INTERESTS.  THE COVERAGE THAT WE PURCHASE MAY NOT PAY ANY CLAIM THAT
YOU MAKE OR ANY CLAIM THAT IS MADE AGAINST YOU IN CONNECTION WITH THE
COLLATERAL.  YOU MAY LATER CANCEL ANY INSURANCE PURCHASED BY US, BUT
ONLY AFTER PROVIDING EVIDENCE THAT YOU HAVE OBTAINED INSURANCE AS REQUIRED BY
OUR AGREEMENT.  IF WE PURCHASE INSURANCE FOR THE COLLATERAL, YOU WILL
BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE, INCLUDING THE INSURANCE PREMIUM,
INTEREST AND ANY OTHER CHARGES WE MAY IMPOSE IN CONNECTION WITH THE PLACEMENT OF
THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE
INSURANCE.  THE COSTS OF THE INSURANCE MAY BE ADDED TO YOUR TOTAL
OUTSTANDING BALANCE OR OBLIGATION.  THE COSTS OF THE INSURANCE MAY BE
MORE THAN THE COST OF INSURANCE YOU MAY BE ABLE TO OBTAIN ON YOUR
OWN.

      

      {remainder
of page intentionally left blank; signature page immediately
follows}

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      IN
WITNESS WHEREOF, this Agreement has been duly executed as of the date first
above written.

      

      

      GE COMMERCIAL DISTRIBUTION FINANCE
CORPORATION,

       as
Administrative Agent and sole  Lender

      

      

      
        	
                By:

              	/s/	 
      

      

      
        
          	
                  Name:

                	
                  ______________________________________

                
	
                  Title:

                	
                  ______________________________________

                

        

        

MTM TECHNOLOGIES, INC., as a
Borrower

      

      

      
        
          	
                  By:

                	

                  /s/
      J.W. Braukman, III

                	 
      

        

      

      
        
          	
                  Name:

                	
                  J.W.
      Braukman, III

                
	
                  Title:

                	
                  Senior
      Vice President and Chief Financial
Officer

                

        

        

      MTM TECHNOLOGIES (US), INC.,
as a Borrower

      

      
        

        
          
            	
                    By:

                  	

                    /s/
      J.W. Braukman, III

                  	 
      

          

        

        
          
            	
                    Name:

                  	
                    J.W.
      Braukman, III

                  
	
                    Title:

                  	
                    Senior
      Vice President and Chief Financial
Officer

                  

          

          

        

MTM TECHNOLOGIES (MASSACHUSETTS),
LLC, as a Borrower

      

      
        

        
          
            	
                    By:

                  	

                    /s/
      J.W. Braukman, III

                  	 
      

          

        

        
          
            	
                    Name:

                  	
                    J.W.
      Braukman, III

                  
	
                    Title:

                  	
                    Senior
      Vice President and Chief Financial
Officer

                  

          

          

        

INFO SYSTEMS, INC., as a
Borrower

      

      
        

        
          
            	
                    By:

                  	

                    /s/
      J.W. Braukman, III

                  	 
      

          

        

        
          
            	
                    Name:

                  	
                    J.W.
      Braukman, III

                  
	
                    Title:

                  	
                    Senior
      Vice President and Chief Financial
Officer

                  

          

          

          
            
              
              

            

            
              8

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