EXHIBIT 10.3
MTM TECHNOLOGIES, INC.
AMENDMENT NO. 1
TO
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
This Amendment No. 1 (this "Amendment No.1") to the Amended and
Restated Registration Rights Agreement dated December 10, 2004 (the
"Registration Rights Agreement"), among (a) MTM Technologies, Inc., a New York
corporation (the "Company"), (b) Xxxxxx Xxxxxxx, a natural person, (c) Xxxxxx
Xxxxxx, a natural person (Messrs. Xxxxxxx and Xxxxxx collectively, the
"Executives"), (d) Pequot Private Equity Fund III, L.P. and Pequot Offshore
Private Equity Partners III, L.P., (collectively, the "Pequot Stockholders"),
and (d) 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 collectively with the Pequot
Stockholders, the "Investor Stockholders") is entered into as of November 23,
2005. Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to such terms in the Registration Rights Agreement.
Background
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WHEREAS, the Company has entered into Amendment No.2 to Purchase
Agreement (the "Purchase Agreement Amendment") dated as of even date whereby
provisions were made for the purchase, sale and issuance of warrants in
connection with the Investor Stockholders agreement to purchase the Series A-5
Preferred Stock;
WHEREAS, simultaneously with, and as a condition to, entering into the
Purchase Agreement Amendment, the Investor Stockholders and the Executives are
entering into this Amendment No. 1 in order to amend the Registration Rights
Agreement and to provide certain registration and other rights with respect to
the warrants to be issued in connection with the Investor Stockholders agreement
to purchase the Series A-5 Preferred Stock; and
WHEREAS, pursuant to Section 13(b) of the Registration Rights
Agreement, this Amendment No. 1 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.
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(a) The fourth recital of the Registration Rights Agreement is hereby
deleted 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
"Purchase Agreement"), among the Company and the Investor
Stockholders, providing for (i) the issuance and sale by the
Company to the Investor Stockholders of (a) convertible secured
subordinated promissory notes in the aggregate principal amount
of up to $10,000,000 (the "Series A-4 First Tranche Notes")
which, subject to Shareholder Approval, are convertible in
accordance with their terms into shares of Series A-4 convertible
preferred stock, par value $0.001 per share, of the Company (the
"Series A-4 Preferred Stock") and (b) detachable warrants,
subject to Shareholder Approval, to purchase up to 615,385 shares
of Common Stock (each, a "Series A-4 Initial Warrant" and,
collectively, the "Series A-4 Initial Warrants"), and (ii) the
grant of an option by the Company to the Investor Stockholders of
(a) convertible secured subordinated promissory notes in the
aggregate principal amount of up to $15,000,000 (the "Series A-4
Second Tranche Notes" and together with the Series A-4 First
Tranche Notes, the "Series A-4 Notes") which are convertible in
accordance with their terms into shares of Series A-4 Preferred
Stock, (b) detachable warrants to purchase up to 923,077 shares
of Common Stock (each, a "Series A-4 Additional Warrant" and,
collectively, the "Series A-4 Additional Warrants" and together
with the Series A-4 Initial Warrants, the "Series A-4 Warrants"),
(c) convertible secured subordinated promissory notes in the
aggregate principal amount of up to $15,000,000 (the "Series A-5
Notes" and together with the Series A-4 Notes, the "Notes")
maturing on the herein defined Maturity Date which are
convertible in accordance with their terms into shares of Series
A-5 Convertible Preferred Stock, $0.001 par value per share (the
"Series A-5 Preferred Stock"), and (d) detachable warrants to
purchase up to 450,000 shares of Common Stock (the "Series A-5
Warrants"), pursuant to the Purchase Agreement;
(b) The following definitions shall be added to Section 1 of the
Registration Rights Agreement:
(i) ""Series A-5 Warrants." As defined in the Preliminary
Statement hereof." This definition shall be inserted after the
definition of "Series A-5 Preferred Stock."
(ii) the definition of Warrants is hereby deleted in its entirety
and replaced with the following: ""Warrants." The Series A-1
Warrants, Series A-2 Warrants, Series A-3 Warrants, the Series
A-4 Warrants and the Series A-5 Warrants issued to the Investor
Stockholders."
2. Entire Agreement. This Amendment No.1 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.
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3. Governing Law. This Amendment No.1 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.1 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.1 are used
for convenience only and are not to be considered in construing or
interpreting this Amendment No.1.
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IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 as
of the date first above written.
COMPANY:
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MTM TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
PEQUOT STOCKHOLDERS:
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PEQUOT PRIVATE EQUITY FUND III, L.P.
By: Pequot Capital Management, Inc.,
as Investment Manager
By: /s/ Xxxxx Xxxxx
--------------------------------
Name: Xxxxx Xxxxx
Title: General Counsel
PEQUOT OFFSHORE PRIVATE EQUITY
PARTNERS III, L.P.
By: Pequot Capital Management, Inc.,
as Investment Manager
By: /s/ Xxxxx Xxxxx
--------------------------------
Name: Xxxxx Xxxxx
Title: General Counsel
Signature Page to Amendment No. 1 to Registration Rights Agreement
CONSTELLATION STOCKHOLDERS:
CONSTELLATION VENTURE CAPITAL
II, L.P.
By: Constellation Ventures
Management II, LLC, Its
General Partner
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Vice President
CONSTELLATION VENTURE CAPITAL
OFFSHORE II, L.P.
By: Constellation Ventures
Management II, LLC, Its
General Partner
By: /s/ Xxxxxx Xxxxxxxxx
----------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Vice President
THE BSC EMPLOYEE FUND VI, L.P.
By: Constellation Ventures
Management II, LLC, Its
General Partner
By: /s/ Xxxxxx Xxxxxxxxx
----------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Vice President
CVC II PARTNERS, LLC
By: The Bear Xxxxxxx Companies
Inc., Its Managing Member
By: /s/ Xxxxxx Xxxxxxxxx
----------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Vice President
Signature Page to Amendment No. 1 to Registration Rights Agreement
