AMENDMENT TO
SUBORDINATED PROMISSORY NOTES
This AMENDMENT TO SUBORDINATED
PROMISSORY NOTES (this “Amendment”), dated as of
February 11, 2009, is entered into by and among FIRSTMARK III L.P.
(“FirstMark Fund”), FIRSTMARK III OFFSHORE PARTNERS,
L.P. (“FirstMark Offshore” and, together with FirstMark
Fund, “FirstMark”), CONSTELLATION VENTURE CAPITAL II,
L.P. (“Constellation Ventures”), CONSTELLATION VENTURE
CAPITAL OFFSHORE II, L.P. (“Constellation Offshore”),
THE BSC EMPLOYEE FUND VI, L.P. (“BSC”) and CVC II
PARTNERS, LLC (“CVC” and, together with Constellation
Ventures, Constellation Offshore and BSC,
“Constellation”) and MTM TECHNOLOGIES, INC.
(“MTM”).
A.
FirstMark has made loans to MTM in the aggregate original principal
amount of $6,500,000 (the “FirstMark Loans”), which
loans are evidenced by (i) a Second Amended Subordinated Promissory
Note dated June 11, 2008 in the amount of $2,191,123, a
Subordinated Promissory Noted dated June 11, 2008 in the amount of
$2,410,235, a Subordinated Promissory Note dated June 16, 2008 in
the amount of $219,112 and a Subordinated Promissory Noted dated
January 29, 2009 in the amount of $876,449.00 all of which are
issued by MTM and payable to the order of Pequot Private Equity
Fund III, L.P. (now FirstMark Fund) or FirstMark Fund
(collectively, the “FirstMark Fund Notes”), and (ii) a
Second Amended Subordinated Promissory Note dated June 11, 2008 in
the amount of $308,877, a Subordinated Promissory Noted dated June
11, 2008 in the amount of $339,765, a Subordinated Promissory Note
dated June 16, 2008 in the amount of $30,888 and a Subordinated
Promissory Noted dated January 29, 2009 in the amount of
$123,551.00 all of which are issued by MTM and payable to the order
of Pequot Offshore Private Equity Partners III, L.P. (now FirstMark
Offshore) or FirstMark Offshore (collectively, the “FirstMark
Offshore Notes” and, together with the FirstMark Fund Notes,
the “FirstMark Notes”).
B.
Constellation has made loans to MTM in the aggregate original
principal amount of $500,000 which loans are evidenced by a
Subordinated Promissory Note dated June 16, 2008 in the amount of
$249,617.80 from MTM payable to the order of Constellation
Ventures, a Subordinated Promissory Note dated June 16, 2008 in the
amount of $132,834.65 from MTM payable to the order of
Constellation Offshore, a Subordinated Promissory Note dated June
16, 2008 in the amount of $111,313.95 from MTM payable to the order
of BSC, and a Subordinated Promissory Note dated June 16, 2008 in
the amount of $6,233.60 from MTM payable to the order of CVC
(collectively, the “Constellation Notes” and, together
with the FirstMark Notes, the “Notes”).
C.
Each of the Notes provides that no amendment to the Note shall be
effective unless in writing and signed by the holders of a majority
of the then outstanding aggregate principal balance of the Notes
and that no amendment that materially and adversely affects one
holder of the Notes shall be effective without the written consent
of such adversely affected holder.
D.
The Subordinated Promissory Note dated January 29, 2009 in the
amount of $876,449.00 from MTM payable to the order of FirstMark
Fund and the Subordinated Promissory Note dated January 29, 2009 in
the amount of $123,551.00 from MTM payable to the order of
FirstMark Offshore (collectively, the “New FirstMark
Notes”) are scheduled to mature on February 13, 2009.
E.
FirstMark desires to extend the maturity of and modify the New
FirstMark Notes and Constellation and MTM desire to give the
FirstMark Notes priority over the Constellation Notes with respect
to any distributions made in the event of liquidation of MTM and
subordinate the Constellation Notes to the FirstMark Notes.
F.
The parties hereto desire to modify the Notes as set forth
herein.
NOW, THEREFORE, in consideration
of the mutual promises of the parties hereto and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:
1.
Amendments to the New FirstMark Notes . FirstMark, as the
holder of the New FirstMark Notes and the holder of a majority of
the then outstanding aggregate principal balance of the Notes,
agrees to the extension of the maturity date of the New FirstMark
Notes to December 15, 2009 and the other amendments to the New
FirstMark Notes set forth in the forms of Amended and Restated
Subordinated Promissory Notes attached hereto as Exhibit A-1 and
Exhibit A-2.
2.
Amendments to the Notes . The Notes are hereby amended as
follows:
(a) Section
4 of each of the Notes is hereby amended and restated to read in
its entirety as follows:
“Section
4. Payment Priority . If the
Borrower is not able to pay to FirstMark III L.P. (“FirstMark
Fund”), FirstMark III Offshore Partners, L.P.
(“FirstMark Offshore” and, toget
