X0202 4 2005-06-23 0000906282 MTM Technologies, Inc. MTMC 0001293523 Constellation Venture Capital Offshore II, LP 383 MADISON AVENUE NEW YORK NY 10179 0 0 1 0 7% Convertible Secured Notes 2005-06-23 4 C 0 443226 D Series A-4 Convertible Preferred Stock 443226 0 D Series A-4 Convertible Preferred Stock 3.25 2005-06-23 4 C 0 443226 A Common Stock 443226 443226 D The 7% Convertible Secured Notes (the "Notes"), which were issued on 12/10/04 and 3/11/05, were automatically convertible on the date of the shareholders' approval, into Series A-4 Convertible Preferred Stock of the Issuer. The interest accrued on the Notes was added to the principal of the Notes, and the entire outstanding principal and accrued interest on the Notes was automatically converted into Series A-4 Convertible Preferred Stock. The Series A-4 Convertible Preferred Stock will be convertible into shares of Common Stock at any time at the election of the individual holders. Subject to certain exceptions, the Series A-4 Convertible Preferred Stock will automatically convert into Common Stock, $0.001 par value of the Issuer (the "Common Stock"), if at any time following the 18 months after the issuance of the Series A-4 Convertible Preferred Stock, the weighted average closing price of the Common Stock for the immediately preceding 60 consecutive trading days exceeds four times the weighted average of the applicable Series A-4 Convertible Preferred Stock conversion price then in effect. The Series A-4 Convertible Preferred Stock will convert to Common Stock, initially at a ratio of one share of Common Stock for every share of Series A-4 Convertible Preferred Stock and subject to adjustments for common dilutive equity issuances and for stock splits, stock dividends and similar events. There is no expiration date applicable to the Series A-4 Convertible Preferred Stock. Clifford H. Friedman, Senior Managing Director of Bear Stearns Asset Management Inc., the Managing Member of Constellation Ventures Management II, L.L.C., the General Partner of Constellation Venture Capital Offshore II, L.P. 2005-06-29