[DESCRIPTION] FORM 8-K
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 2, 1999
MICROS-TO-MAINFRAMES, INC.
(Exact name of registrant as specified in its charter)
New York 022122 13-3354896
___________________________ _______________________ _______________________
(State or Other Jurisdiction (Commission File Number)(IRS Employer Ident. No.)
of Incorporation)
614 Corporate Way, Valley Cottage, New York 10989
__________________________________________________
(Address of Principal Executive Offices) (Zip Code)
(914) 268-5000
______________________________
Registrant's telephone number, including area code
<PAGE>
Item 5. Other Events
On June 2, 1999, MICROS-TO-MAINFRAMES, INC., a New York
corporation (the "Registrant"), entered into an Agreement and Plan
of Merger (the "Merger Agreement") consummating a merger (the
"Merger") with Pivot Technologies, Inc., a Delaware corporation
("Pivot"), and the principal shareholders of Pivot ("Pivot
Shareholders"). Prior to the Merger, the Registrant owned 33.4% of
Pivot's outstanding stock. Pursuant to the Merger Agreement, the
non-Registrant Pivot Shareholders received 377,129 shares of
Registrant Common Stock, five (5) year warrants to acquire 100,000
shares of Registrant Common Stock at an exercise price of $2.916767
per share and $337,600 in cash.
The shares of Registrant Common Stock which the Pivot
Shareholders received in connection with the Merger Agreement are
subject to Lock-up Agreements which have a two year restriction on
resale. Twenty-five percent of the shares subject to the lock-up
will be released therefrom on the first anniversary of the Merger,
and the remainder thereof shall be released on the second
anniversary thereof. The Lock-up Agreements grant the Registrant
a right of first offer should any of the Pivot Shareholders elect
to sell such Registrant Common Stock in a non-public transaction.
Anthony Travaglini, Pivot's president and chief executive
officer, entered into an Employment Agreement with the Registrant
to remain president of Pivot and to serve as the Registrant's Chief
Technology Officer. The term of the Employment Agreement is from
the date of the Merger until March 31, 2002 and can be extended for
additional consecutive twelve month periods unless terminated upon
thirty days written notice by Mr. Travaglini or the Registrant.
The Employment Agreement provides for Mr. Travaglini to receive a
base salary based on an April 1 to March 31 fiscal year of
$150,000, $175,000 for the second fiscal year, $185,00 for the
third fiscal year and for any extension period, as well as, among
other things, a performance bonus, benefit participation and car
allowance.
(c) Exhibits.
4.1 Form of Warrant issued by the Registrant to Pivot
Shareholders.
99.1 Agreement and Plan of Merger dated June 2, 1999 by
and among the Registrant, Registrant Mergerco and Pivot
Shareholders.
99.2 Employment Agreement dated June 2, 1999 by and among
the Registrant, Pivot and Anthony Travaglini.
99.3 Press Release of Registrant dated June 2, 1999.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
MICROS-TO-MAINFRAMES, INC.
(Registrant)
Date: June 7 , 1999 By: /s/ Steve Rothman
Steve Rothman
CEO and President
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<PAGE>
Exhibit 4.1
Warrant No. P-3
Warrant to Purchase 25,000 Shares
STOCK PURCHASE WARRANT
To Purchase Common Shares ($.001 par value)
of
MICROS-TO-MAINFRAMES, INC.
(a New York corporation)
Expires June 1, 2004
<PAGE>
Warrant No. P-3
NEITHER THIS WARRANT NOR THE COMMON SHARES ISSUABLE UPON EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), AND THIS WARRANT MAY NOT BE EXERCISED BY OR
ON BEHALF OF ANY PERSON UNLESS REGISTERED UNDER THE ACT OR AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
VOID AFTER 5:00 P.M. NEW YORK TIME, ON June 1, 2004
MICROS-TO-MAINFRAMES, INC.
Warrant to Purchase Common Shares
25,000 Shares
THIS CERTIFIES that, for good and valuable consideration
received, ______ (the "Holder") is entitled to subscribe for
and purchase from Micros-to-Mainframes, Inc., a New York
corporation (the "Company"), upon the terms and conditions set
forth herein, at any time or from time to time until 5:00 P.M. New
York City time on June 1, 2004 (the "Expiration Date"), all or
any portion of twenty-five thousand (25,000) shares of the
Company's Common Shares, par value $.001 per share, subject to
adjustment as provided herein (the "Warrant Shares"), at a price
(the "Exercise Price") hereinafter defined and also subject to
adjustment as provided herein. This Warrant shall not be redeemable
by the Company. The term "Common Stock" as used herein shall mean
the Company's Common Shares, par value $.001 per share. This
Warrant may not be sold, transferred, assigned or hypothecated at
any time, except as permitted by applicable law and the terms of
this Warrant, and the term "Holder" as used herein shall include
any transferee to whom this Warrant has been transferred.
1. Method of Exercise. This Warrant may be exercised at any
time prior to the Expiration Date, as to the whole or any lesser
number of Warrant Shares, by the surrender of this Warrant (with
the election at the end hereof duly executed) to the Company at its
office at 614 Corporate Way, Valley Cottage, New York 10989 or at
such other place as may be designated in writing by the Company,
together with (i)(I) a certified or bank cashier's check payable to
the order of the Company in an amount equal to the Exercise Price
multiplied by the number of Warrant Shares for which this Warrant
is being exercised, (II) by delivery of shares of Common Stock
having a fair market value equal to the exercise price of the
Warrant Shares being exercised or (III) by surrender to the
Company of the number of Warrants set forth below:
X = Y(A-B)
________
A A
Where: X = the number of shares of Common Stock to be issued to
the Holder upon exercise pursuant to the foregoing
clause (III).
Y = the number of shares of Common Stock represented by
the Warrants so surrendered.
A = the Current Market Price (as defined below) of one
share of Common Stock on the date of exercise of the
Warrant.
B = the Exercise Price for the Warrants so surrendered;
and (ii) a written opinion of the Company=s counsel, or an opinion
of other counsel satisfactory to the Company's counsel, to the
effect that the issuance of the Warrant Shares is exempt from
registration thereunder.
2. Issuance of Certificates. Upon each exercise of the
Holder's rights to purchase Warrant Shares, the Holder shall be
deemed to be the holder of record of the Warrant Shares issuable
upon such exercise, notwithstanding that the transfer books of the
Company shall then be closed or certificates representing such
Warrant Shares shall not then have been actually delivered to the
Holder. As soon as practicable after each such exercise of this
Warrant, the Company shall issue and deliver to the Holder a
certificate or certificates for the Warrant Shares issuable upon
such exercise, registered in the name of the Holder or his
designee. If this Warrant should be exercised in part only, upon
surrender of this Warrant for cancellation, the Company shall
execute and deliver a new Warrant evidencing the right of the
Holder to purchase the balance of the Warrant Shares (or portions
thereof) subject to purchase hereunder.
3. Recording of Transfer. Any warrants issued upon the
transfer or exercise in part of this Warrant shall be numbered and
shall be registered in a Warrant Register as they are issued. The
Company shall be entitled to treat the registered holder of any
Warrant on the Warrant Register as the owner in fact thereof for
all purposes and shall not be bound to recognize any equitable or
other claim to or interest in such Warrant on the part of any other
person, and shall not be liable for any registration or transfer of
warrants which are registered or to be registered in the name of a
fiduciary or the nominee of a fiduciary unless made with the actual
knowledge that a fiduciary or nominee is committing a breach of
trust in requesting such registration or transfer, or with the
knowledge of such facts that his participation therein amounts to
bad faith. This Warrant shall be transferable only on the books of
the Company upon delivery thereof duly endorsed by the Holder or by
his or its duly authorized attorney or representative, or
accompanied by proper evidence of succession, assignment or
authority to transfer. In all cases of transfer by an attorney,
executor, administrator, guardian or other legal representative,
duly authenticated evidence of his or its authority shall be
produced. Upon any registration of transfer, the Company shall
deliver a new warrant or warrants to the person entitled thereto.
This Warrant may be exchanged, at the option of the Holder hereof,
for another warrant, or other warrants of different denominations,
of like tenor and representing in the aggregate the right to
purchase a like number of Warrant Shares (or portions thereof),
upon surrender to the Company or its duly authorized agent.
Notwithstanding the foregoing, the Company shall have no obligation
to cause this Warrant to be transferred on its books to any person
if, in the written opinion of counsel to the Company, such transfer
does not comply with the provisions of the Securities Act of 1933,
as amended (the "Act"), and the rules and regulations thereunder.
4. Reservation of Common Stock. The Company currently has
and shall at all times reserve and keep available out of its
authorized and unissued Common Stock, solely for the purpose of
providing for the exercise of the Warrants, such number of shares
of Common Stock as shall, from time to time, be sufficient
therefor. The Company covenants that all shares of Common Stock
issuable upon exercise of this Warrant, upon receipt by the Company
of the full payment therefor, shall be validly issued, fully paid,
nonassessable and free of preemptive rights.
5. Exercise Price; Exercise Price Adjustments. (a) The
Exercise Price shall be equal to $2.916767.
(b) Subject to the provisions of this Section 5, the
Exercise Price in effect from time to time shall be subject to
adjustment, as follows:
(i) In case the Company shall at any time after the date
hereof (i) declare a dividend or make a distribution on the
outstanding Common Stock payable in shares of its capital stock,
(ii) subdivide the outstanding Common Stock, (iii) combine the
outstanding Common Stock into a smaller number of shares, or (iv)
issue any shares of its capital stock by reclassification of the
Common Stock (other than a change in par value, or from par value
to no par value, or from no par value to par value, but including
any such reclassification in connection with the consolidation or
merger of the Company with or into another corporation (other than
a merger in which the Company is the continuing corporation and
which does not result in any reclassification or change of the then
outstanding shares of Common Stock or other capital stock issuable
upon exercise of the Warrants)), then, in each case, the Exercise
Price in effect, and the number of shares of Common Stock issuable
upon exercise of the Warrants outstanding, at the time of the
record date for such dividend or at the effective date of such
subdivision, combination or reclassification, shall be
proportionately adjusted so that the holders of the Warrants after
such time shall be entitled to receive the aggregate number and
kind of shares which, if such Warrants had been exercised
immediately prior to such time, such holders would have owned upon
such exercise and immediately thereafter been entitled to receive
by virtue of such dividend, subdivision, combination or
reclassification. Such adjustment shall be made successively
whenever any event listed above shall occur.
(ii) In case the Company shall distribute to all holders
of Common Stock (including any such distribution made to the
shareholders of the Company in connection with a consolidation or
merger in which the Company is the continuing corporation, but
excluding any such distribution made to the shareholders of the
Company in connection with a consolidation or merger in which the
Company is not the continuing corporation) evidences of its
indebtedness, cash or assets (other than (X) distributions and
dividends referred to in Section 5(b)(i) in shares of Common Stock
or (Y) any non-extraordinary cash dividends paid out of retained
earnings from current operations), or rights, options or warrants
to subscribe for or purchase capital stock, or securities conver-
tible into or exchangeable for shares of capital stock, then, in
each case, the Exercise Price shall be reduced (and the number of
shares issuable adjusted in accordance with Section 5(b) to the
price determined by multiplying the Exercise Price in effect
immediately prior to the record date (the "Distribution Record
Date") for the determination of shareholders of the Company
entitled to receive such distribution by a fraction, (x) the
numerator of which shall be the Current Market Price per share of
Common Stock immediately prior to the Distribution Record Date,
less the reduction, if any, in the fair value of a share of Common
Stock (as reasonably determined by the Board of Directors of the
Company, taking into account, where applicable, the market price of
the Common Stock following the Distribution Record Date) as a
result of such distribution and (y) the denominator of which shall
be the Current Market Price per share of Common Stock immediately
prior to the Distribution Record Date. Such adjustment shall
become effective at the close of business on the Distribution
Record Date.
(iii) Whenever there shall be an adjustment as provided
in this Section 5, the Company shall within 15 days thereafter
cause written notice thereof to be sent by registered mail, postage
prepaid, to the Holder, at his address as it shall appear in the
Warrant Register, which notice shall be accompanied by an officer's
certificate setting forth the number of Warrant Shares issuable
hereunder and the exercise price thereof after such adjustment and
setting forth a brief statement of the facts requiring such
adjustment and the computation thereof, which officer's certificate
shall be conclusive evidence of the correctness of any such
adjustment absent manifest error.
(iv) The Company shall not be required to issue
fractions of shares of Common Stock or other capital stock of the
Company upon the exercise of this Warrant. If any fraction of a
share would be issuable upon the exercise of this Warrant (or
specified portions thereof), the Company may issue a whole share in
lieu of such fraction or the Company may purchase such fraction for
an amount in cash equal to the same fraction of the Current Market
Price of such share of Common Stock on the date of exercise of this
Warrant.
(v) The Current Market Price per share of Common Stock
on any date shall be deemed to be the average of the daily closing
prices for the thirty (30) consecutive trading days immediately
preceding the date in question. The closing price for each day
shall be the last reported sales price regular way or, in case no
such reported sale takes place on such day, the closing bid price
regular way, in either case on the principal national securities
exchange on which the Common Stock is listed or admitted to trading
or, if the Common Stock is not listed or admitted to trading on any
national securities exchange, the highest reported bid price for
the Common Stock as furnished by the National Association of
Securities Dealers, Inc. through NASDAQ or a similar organization
if NASDAQ is no longer reporting such information. If on any such
date the Common Stock is not listed or admitted to trading on any
national securities exchange and is not quoted by NASDAQ or any
similar organization, the fair value of a share of Common Stock on
such date, as determined in good faith by the Board of Directors of
the Company, whose determination shall be conclusive absent
manifest error, shall be used.
(vi) No adjustment in the Exercise Price shall be
required if such adjustment is less than $0.02; provided, however,
that any adjustments which but for this paragraph 5(b)(v) would be
required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this Section
5 shall be made to the nearest cent.
(vii) Upon each adjustment of the Exercise Price as a
result of the calculations made in this Section 5, the Warrants
shall thereafter evidence the right to purchase, at the adjusted
Exercise Price, that number of shares of Common Stock (calculated
to the nearest hundredth) obtained by dividing (i) the product
obtained by multiplying the (A) number of shares of Common Stock
purchasable upon exercise of the Warrants prior to adjustment of
the number of shares of Common Stock by (B) the Exercise Price in
effect prior to adjustment of the Exercise Price, by (ii) the
Exercise Price in effect after such adjustment of the Exercise
Price.
6. Consolidations and Mergers.
(a) In the event of (X) the consolidation or merger of
the Company with or into another corporation (other than a merger
or consolidation in which the Company is the surviving or
continuing corporation) or (Y) any sale, lease or conveyance to
another corporation of the property and assets of any nature of the
Company as an entirety or substantially as an entirety (the
transactions referred to in clauses (X) and (Y) being referred
herein as a ATermination Transaction"), then upon the consummation
of the Termination Transaction, each Warrant shall, unless it has
been previously exercised, expire and instead shall represent the
right of each Warrant holder to receive (and the Company shall pay
to such Warrant holder) the sum of (A) (i) the product of the
number of shares of Common Stock issuable upon exercise of such
Warrant on the day preceding the consummation of the Termination
Transaction, multiplied by (ii) the excess of (x) the closing price
for a share of Common Stock, as reported by the principal national
securities exchange or quotation system on which the Common Stock
is then traded over (y) seventy-five percent (75%) of the Exercise
Price therefor, immediately preceding the consummation of the
Termination Transaction. Alternatively, the holder of the Warrant
may exercise same after notice of the Termination Transaction has
been given to the holder of the Warrant pursuant to Section 7
hereof and through the earlier of the consummation of the
Termination Transaction and the time notice has been given to the
holder of the Warrant that the Termination Transaction will not be
consummated.
(b) In case of any reclassification or change of the
shares of Common Stock issuable upon exercise of this Warrant
(other than a change in par value or from no par value to a
specified par value, or as a result of a subdivision or
combination, but including any change in the shares into two or
more classes or series of shares), or in case of any consolidation
or merger of another corporation into the Company in which the
Company is the continuing corporation and in which there is a
reclassification or change (including a change to the right to
receive cash or other property) of the shares of Common Stock
(other than a change in par value, or from no par value to a
specified par value, or as a result of a subdivision or
combination, but including any change in the shares into two or
more classes or series of shares), the Holder shall have the right
thereafter to receive upon exercise of this Warrant solely the kind
and amount of shares of stock and other securities, property, cash
or any combination thereof receivable upon such reclassification,
change, consolidation or merger by a holder of the number of shares
of Common Stock for which this Warrant might have been exercised
immediately prior to such reclassification, change, consolidation
or merger. Thereafter, appropriate provision shall be made for
adjustments which shall be as nearly equivalent as practicable to
the adjustments in Section 5.
(c) The above provisions of this Section 6 shall
similarly apply to successive reclassifications and changes of
shares of Common Stock and to successive consolidations, mergers,
sales, leases, or conveyances not covered by (a) above.
7. Notice of Certain Events.
In case at any time any of the following occur:
(a) The Company shall take a record of the holders of
its shares of Common Stock for the purpose of entitling them to
receive a dividend or distribution payable otherwise than in cash,
or a cash dividend or distribution payable otherwise than out of
current or retained earnings, as indicated by the accounting
treatment of such dividend or distribution on the books of the
Company; or
(b) The Company shall offer to all the holders of its
Common Stock any additional shares of capital stock of the Company
or securities convertible into or exchangeable for shares of
capital stock of the Company, or any option, right or warrant to
subscribe therefor; or
(c) The Company shall take any action to effect any
reclassification or change of outstanding shares of Common Stock or
any consolidation, merger, sale, lease or conveyance of property,
described in Section 6; or
(a) The Company shall take any action to effect any
liquidation, dissolution or winding-up of the Company or a sale of
all or substantially all of its property, assets and business;
then, and in any one or more of such cases, the Company shall give
written notice thereof, by registered mail, postage prepaid, to the
Holder at the Holder's address as it shall appear in the Warrant
Register, mailed at least thirty (30) days prior to (i) the date as
of which the holders of record of shares of Common Stock to be
entitled to receive any such dividend, distribution, rights,
warrants or other securities are to be determined, (ii) the date on
which any such offer to holders of Common Stock is made, or
(iii) the date on which any such reclassification, change of
outstanding shares of Common Stock, consolidation, merger, sale,
lease, conveyance of property, liquidation, dissolution or winding-
up is expected to become effective and the date as of which it is
expected that holders of record of shares of Common Stock shall be
entitled to exchange their shares for securities or other property,
if any, deliverable upon such reclassification, change of
outstanding shares, consolidation, merger, sale, lease, conveyance
of property, liquidation, dissolution or winding-up.
8. Taxes. The issuance of any shares or other securities
upon the exercise of this Warrant and the delivery of certificates
or other instruments representing such shares or other securities
shall be made without charge to the Holder for any tax (other than
income tax) or other charge in respect of such issuance. The
Company shall not, however, be required to pay any tax which may be
payable in respect of any transfer involved in the issue and
delivery of any certificate in a name other than that of the Holder
and the Company shall not be required to issue or deliver any such
certificate unless and until the person or persons requesting the
issue thereof shall have paid to the Company the amount of such tax
or shall have established to the satisfaction of the Company that
such tax has been paid.
9. Legend. Unless registered under the Securities Act of
1933, as amended, the Warrant Shares issued upon exercise of the
Warrant shall bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE AACT@). THESE SHARES MAY NOT BE OFFERED OR
SOLD, EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR (B) IN A TRANSACTION WHICH IS
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT.
10. Replacement of Warrants. Upon receipt of evidence
satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant (and upon surrender of any Warrant if
mutilated), and upon reimbursement of the Company's reasonable
incidental expenses, the Company shall execute and deliver to the
Holder thereof a new Warrant of like date, tenor and denomination.
11. No Rights as Stockholder. The Holder of any Warrant
shall not have, solely on account of such status, any rights of a
stockholder of the Company, either at law or in equity, or to any
notice of meetings of stockholders or of any other proceedings of
the Company, except as provided in this Warrant.
12. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed to
have been duly made when delivered, or mailed by registered or
certified mail, return receipt requested:
(a) If to the registered Holder of this Warrant, to the
address of such Holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth in
Section 1 of this Warrant or to such other address as the Company
may designate by notice to the Holder.
13. Successors. All the covenants, agreements,
representations and warranties contained in this Warrant shall bind
the parties hereto and their respective heirs, executors,
administrators, distributees, successors and assigns.
14. Headings. The Article and Section headings in this
Warrant are inserted for purposes of convenience only and shall
have no substantive effect.
15. Governing Law. This Warrant shall be construed in
accordance with the laws of the State of New York applicable to
contracts made and performed within such State, without regard to
principles of conflicts of law.
16. Modification of Agreement. This Warrant shall not be
modified, supplemented or amended in any respect unless such
modification, supplement or amendment is in writing and signed by
the Company and the Holder of this Warrant and Holders of any
portion of the Warrant subsequently assigned or transferred in
accordance with the terms of this Warrant.
17. Consent to Jurisdiction. The Company and the Holder
irrevocably consent to the jurisdiction of the courts of the State
of New York and of any federal court located in such State in
connection with any action or proceeding arising out of or relating
to this Warrant, any document or instrument delivered pursuant to,
in connection with or simultaneously with this Warrant, or a breach
of this Warrant or any such document or instrument. In any such
action or proceeding, the Company waives personal service of any
summons, complaint or other process and agrees that service thereof
may be made in accordance with Section 12 hereof.
IN WITNESS WHEREOF, the undersigned has executed this
instrument as of the date set forth below.
Dated: As of June 2, 1999
MICROS-TO-MAINFRAMES, INC.
By:_______________
<PAGE>
FORM OF ASSIGNMENT
(To be executed by the registered Holder if such Holder
desires to transfer the attached Warrant. Pursuant to the terms of
the attached Warrant, such transfer may not be effected prior to -
__________________).
FOR VALUE RECEIVED, _______________________ hereby sells,
assigns, and transfers unto _________________, having an address at
______________________________ _______________________, the
attached Warrant (having an Exercise Price defined therein) to the
extent of the right to purchase ____________ Common Shares, $.001
par value per share, of Micros-to-Mainframes, Inc. (the "Company"),
together with all right, title, and interest therein, and does
hereby irrevocably constitute and appoint _________________ as
attorney to transfer such Warrant on the books of the Company, with
full power of substitution.
Dated: _______________, 199_
_____________________________
Print name of holder of Warrant
By:
Name:
Title:
NOTICE
The signature on the foregoing Assignment must correspond
to the name as written upon the face of this Warrant in every
particular, without alteration or enlargement or any change
whatsoever.
<PAGE>
To: MICROS-TO-MAINFRAMES, INC.
614 Corporate Way
Valley Cottage, New York 10989
The undersigned hereby exercises his right to purchase
_________ Warrant Shares covered by the within Warrant and tenders
payment herewith in the amount of $_____________ in accordance with
the terms thereof, and requests that certificates for such
securities be issued in the name of, and delivered to:
(Print Name, Address and Social Security
or Tax Identification Number)
and, if such number of Warrant Shares shall not be all the Warrant
Shares covered by the within Warrant, that a new Warrant for the
balance of the Warrant Shares covered by the within Warrant be
registered in the name of, and delivered to, the undersigned at the
address stated below.
By signing below, the undersigned certifies that the
undersigned has obtained an opinion of counsel, satisfactory to the
counsel of Micros-to-Mainframes, Inc., to the effect that the
Warrant and the Warrant Shares have been registered under the Act
or are exempt from registration thereunder.
Dated:__________________ Name: _________________________
(Print)
__________________________
(Signature)
(Signature must conform
to the name of the
Warrant Holder specified
on the face of the
Warrant)
Address: _______________________
_______________________
<PAGE>
EXHIBIT 99.2
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
MICROS-TO-MAINFRAMES, INC.
MTM ADVANCED TECHNOLOGY, INC.
PIVOT TECHNOLOGIES, INC.
PIVOT ACQUISITION CORPORATION
AND
CERTAIN STOCKHOLDERS OF PIVOT
AS OF
JUNE 2, 1999
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of June 2, 1999, by and
among MICROS-TO-MAINFRAMES, INC., a New York corporation ("MTM"),
MTM ADVANCED TECHNOLOGY, INC., a New York corporation and a wholly-
owned subsidiary of MTM (ATechnology@), PIVOT TECHNOLOGIES, INC.,
a Delaware corporation ("Pivot"), PIVOT ACQUISITION CORPORATION,
a Delaware corporation and a wholly-owned subsidiary of Technology
("MTM Mergerco") and the principal stockholders of Pivot
Technologies, Inc. set forth on Schedule A hereto (the
"Stockholders").
WHEREAS, the respective Boards of Directors of MTM,
Technology, Pivot and MTM Mergerco have approved and deem it in the
best interests of their respective shareholders/stockholders to
consummate the business combination transaction provided for
herein, in which Pivot would merge with and into MTM Mergerco (the
"Merger") and MTM Mergerco will thereafter change its name to Pivot
Technologies, Inc., and the surviving corporation of the Merger
would become a wholly-owned subsidiary of Technology (MTM Mergerco
and Pivot hereinafter referred to as the "Constituent
Corporations");
WHEREAS, the stockholders of Pivot have approved the Merger
and the execution of the Certificate of Merger, as defined below;
WHEREAS, the laws of the State of Delaware permit such
mergers, and the Constituent Corporations desire to merge under and
pursuant to the provisions of such laws; and
WHEREAS, for Federal income tax purposes it is intended that
the Merger qualify as a statutory merger under Sections
368(a)(1)(A) and 368(a)(2)(D) of the Internal Revenue Code of 1986,
as amended.
NOW, THEREFORE, in consideration of the premises and the
respective representations, warranties, covenants and agreements
set forth herein, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 1.2), (i)
Pivot shall be merged with and into MTM Mergerco in accordance with
the provisions of the General Corporation Law of the State of
Delaware (the "GCL"), and the separate corporate existence of Pivot
shall cease and MTM Mergerco shall continue as the surviving
corporation (hereinafter sometimes referred to as the "Surviving
Corporation") under the laws of the State of Delaware under the
name "Pivot Technologies, Inc."
1.2 Effective Time. Subject to the terms and provisions
of this Agreement, there shall be filed with the Delaware Secretary
of State, as soon as practicable on or after the Closing Date (as
defined in Section l.6), a certificate of merger with respect to
the Merger (the "Certificates of Merger"), in such form as is
required by, and executed in accordance with, the applicable
provisions of the GCL . The Merger shall become effective at the
time of filing by the Secretary of State of the State of Delaware
in accordance with the GCL of the original, properly executed
Certificate of Merger, or at the time specified as the effective
time in the Certificate of Merger. The Certificate of Merger shall
be submitted for filing at the time of the Closing and may be
submitted prior thereto for clearance. The time at which the Merger
shall become effective is referred to herein as the "Effective
Time."
1.3 Effect of the Merger. The Merger shall have the effects
set forth in Section 259 of the GCL. Without limiting the
generality of the foregoing, and subject thereto, from and after
the Effective Time (i) the corporate identity, existence, purposes,
powers, objects, franchises, rights, immunities, liabilities and
duties of and property (real, personal and mixed) and all debts due
on whatever account, including subscriptions to shares, and all
<PAGE>
other choses in action and every other interest of or belonging to
the Surviving Corporation shall continue unaffected and unimpaired
by the Merger; and (ii) and the corporate identity, existence,
purposes, powers, objects, franchises, rights, immunities,
liabilities and duties of and property (real, personal and mixed)
and all debts due on whatever account, including subscriptions to
shares, and all other choses in action and every other interest of
or belonging to Pivot shall be continued in and merged into MTM
Mergerco as of the Effective Time and MTM Mergerco shall be fully
vested therewith as of the Effective Time. From and after the
Effective Time, by virtue of the filing of the Merger Certificate
by the Delaware Secretary of State, all of the above shall be
deemed to be transferred and so vested in the Surviving Corporation
without further act or deed. If, at any time after the Effective
Time, the Surviving Corporation considers or is advised that any
deeds, bills of sale, assignments, assurances or any other actions
or things are necessary or desirable to vest, perfect or confirm of
record or otherwise in the Surviving Corporation its right, title
or interest in, to or under any of the rights, properties or assets
of Pivot, or otherwise to carry out the intent and purposes of this
Agreement, the officers and directors of such Surviving Corporation
will be authorized to execute and deliver, in the name and on
behalf of Pivot, all such deeds, bills of sale, assignments and
assurances and to take and do, in the name and on behalf of Pivot,
all such other actions and things as may be necessary or desirable
to vest, perfect or confirm any and all right, title and interest
in, to and under such rights, properties or assets in the Surviving
Corporation or otherwise to carry out the intent and purposes of
this Agreement. Furthermore, all debts, liabilities and duties of
Pivot from and after the Effective Time, including under the
employment agreements with Shareholders of Pivot, shall attach to
MTM Mergerco and may be enforced against it to the same extent as
if said debts, liabilities and duties had been incurred or
contracted by MTM Mergerco. Neither the rights of creditors nor
any liens upon the property of any of the Constituent Corporations
shall be impaired by the Merger.
1.4 Certificate of Incorporation and By-laws of the Surviving
Corporation. The Certificate of Incorporation of MTM Mergerco, as
in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation until
thereafter amended in accordance with the GCL and the terms of such
Certificate of Incorporation. The By-Laws of MTM Mergerco, as in
effect immediately prior to the Effective Time, shall be the By-
Laws of the Surviving Corporation until thereafter amended in
accordance with the GCL, the Certificate of Incorporation of the
Surviving Corporation and such By-Laws. The Certificate of
Incorporation and By-Laws of MTM Mergerco at the Effective Time
shall read in their entirety as set forth as Exhibits A and B.
1.5 Directors and Officers of the Surviving Corporation. (a)
At the Effective Time the initial directors of the Surviving
Corporation shall be Anthony Travaglini, Steven Rothman and Howard
Pavony, and all such directors will continue to hold office from
the Effective Time until their respective successors are duly
elected or appointed and qualify in the manner provided in the
Certificate of Incorporation and By-laws of the Surviving
Corporation, or as otherwise provided by applicable law. The
President of the Surviving Corporation at the Effective Time shall
be Anthony Travaglini and the remaining officers shall be
determined by the initial directors of the Surviving Corporation at
the Effective Time. All such officers will continue to hold office
from the Effective Time until their respective successors are duly
appointed and qualify in the manner provided in the By-laws of the
Surviving Corporation, or as otherwise provided by applicable law.
1.6 Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of
Snow Becker Krauss P.C., 605 Third Avenue, New York, New York, at
10:00 a.m., local time on the second business day after the day on
which the last of the conditions set forth in Articles VIII and IX
(other than any such conditions which, by their terms, are not
capable of being satisfied until the Closing Date) is satisfied or,
where permissible, waived, unless another place, date or time is
agreed to by MTM and Pivot (the date on which the Closing takes
place being referred to herein as the "Closing Date").
ARTICLE II
CONVERSION AND EXCHANGE OF SECURITIES
2.1 Conversion of Securities. At the Effective Time, by virtue
of the Merger and without any action on the part of any party
hereto or the holder of any of the following securities:
(a) Conversion of Pivot Common Stock. Subject to subsection
(d) below, each share of the Common Stock, par value $.01 per
share, of Pivot (the "Pivot Common Stock") issued and outstanding
immediately prior to the Effective Time (other than shares of Pivot
Common Stock to be canceled pursuant to Section 2.1(b) or 2.1(c) be
converted into the right to receive (X) 2.6937857, as adjusted to
give effect to any stock split, stock dividends, merger,
consolidation or recapitalization of MTM after the date hereof but
prior to the Effective Time (AReorganization Event@), of validly
issued, fully paid and non-assessable shares of Common Stock of
MTM, par value $.001 per share (AMTM Common Stock@), (Y) five (5)
year warrants, in substantially the form attached hereto as Exhibit
D, (AWarrant@) to acquire, subject to adjustment to reflect a
Reorganization event, .7142857 shares of MTM Common Stock with an
exercise price of $2.916767 per share; and (Z) $1.8757142 of cash,
(the MTM Common Stock, Warrants and cash payable above is
hereinafter collectively referred to as the AMerger
Consideration@). All shares of Pivot Common Stock shall no longer
be outstanding and shall automatically be canceled and retired and
shall cease to exist upon the Effective Date, and each holder of a
certificate representing any such shares shall cease to have any
rights with respect thereto, except the right to receive the Merger
Consideration pursuant to this Section 2.1 (a) (and any dividends
or other distributions payable pursuant to Section 2.3(c)) upon the
surrender of such certificate, offset by any Stockholder
indemnification pursuant to Article XI hereof (AStockholder
Indemnification@).
(b) Treasury Stock. All shares of Pivot Common Stock which
are held immediately prior to the Effective Time by Pivot in its
treasury shall be canceled and retired and shall cease to exist at
the Effective Time, and no capital stock of MTM or other
consideration shall be delivered with respect thereto.
(c) MTM-Owned Stock. All shares of capital stock of Pivot
owned, directly or indirectly, by MTM, Technology, MTM Mergerco or
any transferee of either shall be canceled and extinguished at the
Effective Time without any conversion thereof and no consideration
shall be delivered or deliverable in exchange therefor.
(d) Dissenter's Stock. Notwithstanding anything contained
herein to the contrary, in the event any person not set forth on
schedule 4.2 owns or is deemed to own shares of Pivot Common Stock
and exercises his Dissenter's Rights under the GCL, any amounts to
which he is entitled shall reduce the cash portion of the Merger
Consideration payable to the other Stockholders of Pivot on a pro
rata basis.
2.2 Transfer Books. At the Effective Time, the stock transfer
books of Pivot shall be closed and no transfer of shares of capital
stock of Pivot shall thereafter be made.
2.3 Exchange of Stock. (a) On the Closing Date, the
Stockholders shall cause their shares of Pivot Technologies, Inc.
Common Stock to be surrendered for conversion. Each certificate so
surrendered shall forthwith be canceled.
(b) No Fractional Shares of MTM Common Stock or Warrants. No
certificates or scrip representing fractional shares of MTM Common
Stock or Warrants shall be issued upon the surrender for exchange
of certificates which immediately prior to the Effective Time
represented shares of Pivot Common Stock, no stock split or
dividend with respect to shares of MTM Common Stock shall relate to
any fractional share interest, and no such fractional share
interest will entitle the owner thereof to vote as, or to any other
rights of, a shareholder of MTM. In lieu of such fractional shares,
any holder of Pivot Common Stock who would otherwise be entitled to
a fractional share of MTM Common Stock or fractional share of a
Warrant, will, upon surrender of his certificate, be entitled to
receive an additional amount of cash representing the deemed value
of the MTM Common Stock and Warrant based on the closing price of
MTM Common Stock on the day prior to the Effective Date.
(c) No Dividends Before Surrender of Certificates. No
dividends or other distributions declared or made with respect to
MTM Common Stock shall be paid to the holder of any unsurrendered
certificate with respect to the shares of MTM Common Stock
represented thereby, until the holder of record of such certificate
shall surrender such certificate. Subject to the effect of
applicable laws, following surrender of any such certificate, there
shall be paid to the record holder of the certificates representing
whole shares of MTM Common Stock issued in exchange therefor,
without interest, (i) at the time of such surrender, the amount of
dividends or other distributions, if any, theretofore payable by
MTM with respect to such whole shares of MTM Common Stock the
payment date for which was on or prior to such surrender, and (ii)
at the appropriate payment date, the amount of dividends or other
distributions, if any, with a record date prior to such surrender
and with a payment date subsequent to such surrender payable with
respect to such whole shares of MTM Common Stock.
(d) No Further Ownership Rights in Pivot Stock. All shares of
MTM Common Stock issued upon the surrender for exchange of shares
of Pivot Common Stock in accordance with the terms hereof shall be
deemed to have been issued and paid in full satisfaction of all
rights pertaining to such shares of Pivot Common Stock. Subject to
Section 2.3(e), if, after the Effective Time, certificates are
presented to the Surviving Corporation for any reason, they shall
be canceled and exchanged as provided in this Article II.
(e) Abandoned Property Laws. Payment or delivery of any
shares of MTM Common Stock, any cash in lieu of fractional shares
of MTM Common Stock, Warrants, any cash in lieu of fractional
Warrants, and cash, and any dividends or distributions with respect
to MTM Common Stock shall be subject to applicable abandoned
property, escheat and similar laws and neither MTM nor the
Surviving Corporation shall be liable to any holder of shares of
Pivot Common Stock for any such shares, for any dividends or
distributions with respect thereto or for any cash in lieu of
fractional shares which may be delivered to any public official
pursuant to any abandoned property, escheat or similar laws.
ARTICLE III
CERTAIN ACTIONS
3.1 Reasonable Efforts. Subject to the terms and conditions
of this Agreement and applicable law, each of the parties hereto
shall use his/its reasonable efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, all things reasonably
necessary, proper or advisable to consummate and make effective the
transactions contemplated by this Agreement as soon as reasonably
practicable, including such actions or things as any other party
hereto may reasonably request in order to cause any of the
conditions to such other party's obligation to consummate such
transactions specified in Articles VIII and IX to be fully
satisfied. Without limiting the generality of the foregoing, the
parties shall (and shall cause their respective subsidiaries, and
use their reasonable efforts to cause their respective affiliates,
directors, officers, employees, agents, attorneys, accountants and
representatives, to) consult and fully cooperate with and provide
reasonable assistance to each other in (i) obtaining all necessary
consents, approvals, waivers, licenses, permits, authorizations,
registrations, qualifications or other permission or action by, and
giving all necessary notices to and making all necessary filings
with and applications and submissions to, any Governmental Entity
or other person or entity, (ii) providing all such information
about such party, its subsidiaries and its officers, directors,
partners and affiliates and making all applications and filings as
may be necessary or reasonably requested in connection with MTM
securities filings (which obligation shall survive the consummation
of the Merger); and (iii) in general, consummating and making
effective the transactions contemplated hereby.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS OF PIVOT
Pivot hereby represents, warrants and covenants that as of the
date hereof, the following are true and correct:
4.1 Organization and Qualification. Pivot is a corporation,
duly organized, validly existing and in good standing under the
laws of the state of Delaware; has full corporate power and
authority to (i) carry on its business, (ii) own or lease its
properties as and in the places where such business is now
conducted and such properties are now owned, leased or operated,
and (iii) enter into this Agreement, consummate the transactions
contemplated by this Agreement and perform its obligations under
this Agreement. Schedule 4.1 sets forth all the jurisdictions in
which Pivot does business. Pivot is not qualified or licensed to
do business as a foreign corporation in any jurisdiction other than
as set forth in section 4.1.
4.2 Ownership. The authorized, issued and outstanding capital
stock of Pivot is set forth and owned by the persons set forth on
Schedule 4.2. The shares of Pivot Common Stock are owned by the
persons set forth on Schedule 4.2, free and clear of all liens,
security interest, pledge, charge, claim, option, right to acquire,
restriction on transfer, voting restriction or agreement, or any
other restriction or encumbrance of any nature whatsoever, and no
third person holds any proxy or similar right with respect thereto.
Pivot and the Stockholders acknowledge and agree that other than
as set forth in Section 4.2, no other person is a beneficial owner
or owner of record of any shares of capital stock (including Common
Stock) of Pivot and has no contingent or actual right thereto.
Except as set forth on Schedule 4.2, Pivot has no subsidiaries and
does not own, directly or indirectly, shares or other securities in
any other corporation, or any interest in any partnership, joint
venture or other business entity.
4.3 Authorization and Binding Effect; No Governmental Consents
Required. The execution and delivery by Pivot of this Agreement,
the Certificate of Merger and the consummation of the transactions
contemplated by this Agreement, as well as the performance of its
obligations under this Agreement, have been duly and validly
authorized by all necessary corporate action on the part of Pivot,
including, but not limited to approval of Pivot's Board of
Directors and stockholders. This Agreement has been duly executed
and delivered by Pivot and constitutes the legal, valid and binding
obligation of Pivot, enforceable in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect
relating to or affecting the rights or remedies of creditors. To
Pivot's knowledge, no consent, approval, or authorization of,
notice to, or declaration, filing or registration with, any
governmental body is required in connection with the execution,
delivery and performance of this Agreement, or the consummation of
the transactions contemplated by this Agreement.
4.4 Financial Statements; No Undisclosed Liabilities (a) The
unaudited balance sheets of Pivot as at December 31, 1998 and for
the interim period from January 1, 1999 to April 30, 1999, and the
applicable unaudited statements of income and retained earnings,
and statements of cash flows of Pivot for such periods and the
related notes thereto delivered to MTM (collectively, the
"Financial Statements"), present fairly the financial position,
results of operations and retained earnings, results of operations
and cash flows of Pivot, as at such dates and for such periods.
(b) Except as set forth on the Financial Statements, as
of April 30, 1999, (A) Pivot did not have any known claims,
liabilities or obligations of any material nature, fixed or
contingent, matured or unmatured, liquidated or unliquidated, which
were not shown or otherwise provided for in the Financial
Statements and (B) all reserves (if any) established by Pivot and
set forth in the Financial Statements are adequate, appropriate and
reasonable with respect to such claims, liabilities or obligations.
For purposes of this Section 4.4, a claim, liability or obligation
shall be deemed known by Pivot if, among other reasons, Pivot knew
of the existence of the event but was not aware that such event may
result in a claim, liability or obligation.
4.5 No Violation or Breach. The execution and delivery of
this Agreement, and the fulfillment of the terms and conditions
herein set forth and the consummation of the transactions herein
contemplated, will not (i) violate or conflict with any provision
of the Certificate of Incorporation or By-laws of Pivot, as in
effect on the date hereof; or (ii) materially violate, result in a
material breach of, conflict with, or (with or without notice or
the lapse of time or both) entitle any party to terminate, cancel,
accelerate or call a default under the terms, conditions or
provisions of any material agreement, contract, instrument, lease,
license, note, bond, mortgage, indenture or other obligation to
which Pivot is a party or by which it or any of its assets may be
bound, or (iii) violate, result in a breach of, or conflict with
any statute, rule, regulation, order, judgment or decree applicable
to Pivot or any of its assets. Except as set forth on Schedule
4.5, no consent of any party to any agreement, contract,
instrument, lease, license, note, bond, mortgage, indenture or
other obligation to which Pivot is a party, or by which it or any
of its assets is subject, is required for the execution, delivery
and performance of this Agreement and the consummation of the
transactions contemplated hereby and the continuation thereof after
the Merger without the Surviving Corporation becoming obligated to
make payments greater than would have been required in the event
the merger was not consummated.
4.6 Accounts Receivable. To the best knowledge of Pivot,
accounts receivable and trade receivables (collectively defined as
the "Accounts Receivable") of Pivot reflected in the Financial
Statements and the Accounts Receivable created by Pivot since the
commencement of business on May 1, 1999 are valid, bona-fide
subsisting claims for the aggregate amounts thereof reflected in
the Financial Statements net of the reserves or allowances for
doubtful receivables reflected in such Financial Statement or
thereafter in Pivot's books and records uniformly maintained in
accordance with the financial statements, accounted for in
accordance with GAAP. This representation is in no manner a
representation as to the amount of Accounts Receivable which will
ultimately be collected.
4.7 Contracts. Schedule 4.7 contains a true and complete list
and description of all material contracts, agreements, instruments,
commitments, understandings and arrangements to which Pivot is a
party or by which it or its properties or assets were bound, as at
the date hereof (other than contracts, agreements, instruments and
commitments set forth on any other Schedule to this Agreement).
For purposes of this Section 4.7, only contracts, agreements,
instruments, commitments, understandings and arrangements relating
to the following are deemed material:
(i) the acquisition of services, materials, equipment,
inventory, supplies or other personal property involving more than
$15,000 over the remaining term, not terminable within thirty days
or less without obligation on the part of Pivot;
(ii) the sale of products or services in excess of
$15,000 over the remaining term;
(iii) the lease of real or personal property as lessor or
lessee or sublessor or sublessee;
(iv) distribution, dealer, agency, or financing
agreements or arrangements (including without limitation, letters
of credit) not terminable within thirty days or less without
obligation on the part of Pivot;
(v) employment agreements not terminable within thirty
days or less;
(vi) the sale of personal property in excess of $15,000
in the aggregate (other than in the ordinary course of business);
(vii) purchase of inventory on consignment;
(viii) non-competition, confidential information or
similar agreements; or
(ix) other contracts, agreements, commitments or
understandings which materially affect the business, properties or
assets of Pivot or which were entered into other than in the
ordinary and usual course of business and are in excess of $15,000
in the aggregate.
4.8 Accounts Payable. Schedule 4.8 sets forth to the best of
Pivot's knowledge, a true, correct and complete list of all
accounts payable of Pivot at the date hereof, including amounts
payable to trade creditors (the "Trade Creditors") and other
short-term liabilities commonly identified as accounts payable,
which are, to the best of its knowledge, bona fide, valid and
binding obligations of Pivot incurred in the ordinary course of
business on an arms-length basis.
4.9 Binding Nature of Contracts; No Breach. To Pivot's
knowledge, each of the agreements, contracts, instruments, leases
and licenses listed on any Schedule hereto is in full force and
effect and is the legal, valid and binding obligation of Pivot, and
to Pivot's knowledge, the other parties thereto and is enforceable
as to them in accordance with its terms, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or affecting the rights
or remedies of creditors. Pivot has not given or received notice
of, it does not know that there exists, any material default or
event of default under any such agreement, contract, instrument,
lease or license, or any event or condition which with or without
notice or lapse of time or both would constitute an event of
default under any such agreement, contract, instrument, lease or
license by Pivot or by any other party thereto. Each
distribution, agency or other arrangement or understanding of
Pivot, all of which are listed on Schedule 4.7 is a valid and
continuing arrangement or understanding and will continue after the
Merger. Neither Pivot nor any other party to any such arrangement
or understanding has given notice of termination or to the best
knowledge of Pivot, taken any action inconsistent with the
continuance of such arrangement or understanding.
4.10 Title to Assets; Liens. Pivot has good and marketable
title to all of its assets (except real and other properties and
assets held pursuant to leases or licenses described in the
Schedules to this Agreement), free and clear of all Liens, except
such Liens as are specified in Schedule 4.10. Following the Merger
and subject to the representations and warranties of MTM,
Technology and MTM Mergerco herein, MTM Mergerco will have good and
marketable title to all such assets (except real and other
properties and assets held pursuant to leases or licenses described
in the Schedules to this Agreement), free and clear of all Liens,
except as provided in Schedule 4.10.
4.11 Litigation. Except as set forth in Schedule 4.11 to this
Agreement, there are no actions, suits, claims or legal,
administrative or arbitration proceedings or investigations
pending, or to Pivot's knowledge threatened, against, involving or
affecting Pivot, its assets or business, or which relates to any
product alleged to have been assembled, produced, distributed or
sold by Pivot and alleged to have been defective or improperly
designed, assembled or produced, and it does not have knowledge of
any state of facts or of the occurrence of any event which is
likely to form the basis of any thereof. There are no outstanding
orders, writs, injunctions or decrees of any court, governmental
agency or arbitration tribunal against, involving or affecting
Pivot, its assets or business, other than decrees of general
applicability.
4.12 Taxes. Except as set forth on Schedule 4.12, to the
knowledge of Pivot (i) there has been duly filed by or on behalf of
Pivot and each of its subsidiaries (and each of their respective
predecessors, if any), or filing extensions from the appropriate
Federal, state, foreign and local governmental and quasi-
governmental entities or agencies have been obtained with respect
to, all material Federal, state, foreign and local tax returns and
reports required to be filed on or prior to the date hereof, (ii)
payment in full or adequate provision for the payment of all taxes
required to be paid in respect of the periods covered by such tax
returns and reports has been made (except in respect of state,
local and foreign taxes which are in the aggregate immaterial in
amount) and (iii) a reserve which Pivot reasonably believes to be
adequate has been set up for the payment of all such taxes
anticipated to be payable in respect of periods through the date
hereof. To Pivot's knowledge, none of the Federal income tax
returns required to be filed by or on behalf of Pivot are
currently under examination by the Internal Revenue Service
("IRS"). There have not been any deficiencies or assessments
asserted in writing by the IRS with respect to any such returns.
For the purpose of this Agreement, the term "tax" (including, with
correlative meaning, the terms "taxes" and "taxable") shall include
all Federal, state, local and foreign income, profits, franchise,
gross receipts, payroll, sales, employment, use, property,
withholding, excise and other taxes, duties or assessments of any
nature whatsoever, together with all interest, penalties and
additions imposed with respect to such amounts. Without limiting
the above portion of this representation, Pivot has not made any
payments and is not required to pay sales and use taxes in any
jurisdiction and it has not received any claim or notice, and
Pivot does not have any knowledge that it has not paid all required
sales and use taxes.
4.13 Permits. All of the governmental permits, business
licenses and approvals held by Pivot are in full force and effect
as of the date hereof and constitute all of the governmental
permits, business licenses and approvals required for the conduct
of its business. No violations are or have been recorded in respect
of any such existing permits, business licenses or approvals and
remain uncorrected as of the date hereof, no proceeding is pending
or to Pivot's knowledge, threatened looking toward the revocation
or limitation of any such existing permits, business licenses or
approvals, and there are no violations of any laws, rules,
regulations, orders or ordinances applicable to the business
conducted by Pivot with respect to its assets or the assets and
properties used in the operation of that business (including
reporting requirement of any Federal or state agency) which would
materially and adversely affect its assets or business.
4.14 Compliance with Law. Pivot has conducted its business
in compliance with all applicable Federal, state and local laws,
rules, regulations and orders (collectively, "Laws"), including
without limitation, all Laws relating to the disposal of toxic or
hazardous substances and occupational health and safety standards.
4.15 Customers and Suppliers. Attached hereto as Schedule
4.15 is a list of Pivot's top 10 suppliers and customers and the
percentage of gross revenues attributable to each with respect to
customers. To the best of Pivot's knowledge, the Merger would not
have an adverse effect on Surviving Corporation continuing to do
business with such customers and suppliers. Notwithstanding the
foregoing, Pivot does not represent or warrant that any customer or
supplier will continue to do business with MTM Mergerco after the
Merger.
4.16 Intellectual Property. Pivot owns or is the licensee of
the inventions, letters patent, applications for letters patent and
patent license rights, inventions, processes, designs, formulas,
technology, trade secrets, know-how, computer software programs and
other intellectual property rights (collectively AIntellectual
Property@) necessary for the conduct of its business. Schedule
4.16 sets forth a list of the Intellectual Property licensed by
Pivot and a true, correct and complete list of the Patents, as
defined below, and trademarks owned or licensed by Pivot. The
letter patents and patent license rights (APatents@), if any, have
been duly issued and neither the Patents nor Pivot's rights to any
of the other Intellectual Property, to the extent licensed have
been canceled, abandoned or otherwise terminated except as
otherwise indicated on such schedule. Pivot is not in default
under any of the licenses or agreements relating to the
Intellectual Property and all of such licenses and agreements are
in effect. Pivot has not granted, and will not grant prior to the
Effective Time, licenses or other rights to use such Intellectual
Property. To the knowledge of Pivot, there is no currently
unauthorized use, infringement or misappropriation of any of the
Intellectual Property by any third party, including any of the
former employees of Pivot. The operation of Pivot's business does
not infringe on the Intellectual Property rights of any third
party. No claim has been made that there is any such infringement.
To the best of Pivot's knowledge, no Intellectual Property of any
person infringes the Intellectual Property of Pivot. To the best
of Pivot's knowledge, no employee, agent or representative of
Pivot, other than persons subject to confidentiality agreements,
have in his/its possession confidential information of a nature
which would allow such person or persons to duplicate Pivot's
products and/or technology. For purposes of this
Agreement,"confidential information" shall mean information
generally unavailable to the public that has been created,
discovered, developed or otherwise become known to Pivot or in
which property rights have been assigned or otherwise conveyed to
Pivot, which information has economic value or potential economic
value to the business in which Pivot is or will be engaged.
Schedule 4.16 sets forth a complete list of all material
licenses, sublicenses and other agreements to which Pivot is a
party and pursuant to which Pivot or any other person is authorized
to use any of Pivot's Intellectual Property. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby, will neither cause Pivot to be in violation or
default under any such license, sublicense or agreement, entitle
any other party to any such license, sublicense or agreement to
terminate or modify such license, sublicense or agreement.
Each item comprising an item of Intellectual Property, to the
extent not licensed to Pivot, has been created, conceived of,
reduced to practice or developed by employees or contractors of
Pivot and Pivot has absolute ownership rights thereto. Pivot owns,
leases or licenses all assets used in connection with its business
and none of its employees or affiliates of employees has any
proprietary right in connection therewith.
4.17 All Documentation has Been Furnished or Made Available to
MTM. Pivot has previously furnished to, or made available for
inspection by, MTM and its representatives, if requested by MTM,
true and complete copies of all contracts, agreements, instruments,
commitments, licenses and leases referred to in this Agreement or
the Schedules hereto. No material documents relating to the
business of Pivot have been removed, destroyed or withheld from
inspection by MTM.
4.18 Full Disclosure. To the best knowledge of Pivot, no
representation or warranty made by Pivot in this Agreement or in
writing pursuant to this Agreement, including without limitation,
the Schedules or any other documents, certificates or written
statements, delivered or to be delivered to MTM in connection
herewith, contains, or will contain, any untrue statement of a
material fact or omits or will omit to state any material fact
necessary to make the statements contained herein and therein not
misleading, and all copies of the documents delivered hereunder are
true and complete copies. There is no fact known to Pivot which
materially and adversely affects or may (so far as Pivot can now
foresee) materially and adversely affect the business, operations
or condition (financial or otherwise) of Pivot, which has not been
set forth in this Agreement or in the Schedules, or the other
documents, certificates and statements furnished to MTM by or on
behalf of Pivot prior to or on the date hereof in connection with
the transactions contemplated hereby. To the extent the chief
executive officer of MTM has actual knowledge of any fact, MTM
shall be deemed to have knowledge of such fact and the consequences
of such fact for purposes of this Section 4.18 to the extent a
reasonable person without any independent investigation could
reasonably anticipate that such fact and/or the consequences of
such fact could materially and adversely affect the business,
operations or condition of Pivot.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF MTM, TECHNOLOGY
AND MTM MERGERCO
MTM, TECHNOLOGY and MTM Mergerco, jointly and
severally, represent and warrant as follows:
5.1 Organization and Standing. MTM, Technology and MTM
Mergerco are corporations duly organized, validly existing and in
good standing under the laws of the State of New York and Delaware,
respectively.
5.2 Corporate Power. MTM, Technology and MTM Mergerco have
full corporate power and authority to enter into this Agreement and
to consummate the transactions contemplated by this Agreement and
to perform its obligations under this Agreement.
5.3 Authorization; Binding Effect. The execution and delivery
by MTM, Technology and MTM Mergerco of this Agreement, and the
consummation by MTM, Technology and MTM Mergerco of the
transactions contemplated by this Agreement and the performance by
MTM, Technology and MTM Mergerco of their respective obligations
under this Agreement have been duly and validly authorized by all
necessary corporate action on the part of MTM, Technology and MTM
Mergerco, respectively. This Agreement has been duly executed and
delivered by MTM, Technology and MTM Mergerco and constitutes a
legal, valid and binding obligation of MTM, Technology and MTM
Mergerco, enforceable against them in accordance with its terms.
5.4 Capitalization. (a) The authorized capital stock of MTM
consists of 10,000,000 shares of Common Stock, $.001 par value per
share and 1,400,000 shares of Preferred Stock, par value $.001 per
share (the "Preferred Stock"), of which 1,400,000 shares of the
Preferred Stock are designated "Convertible Preferred Stock, Series
A", all of which are held as treasury shares (the "Series A
Stock"). As of the date hereof, the issued and outstanding capital
stock of MTM consists of (i) 4,446,440 shares of Common Stock and
(ii) shares of Common Stock reserved for issuance upon
exercise of all options granted under MTM's stock option plans.
All such shares of the Company are duly authorized, those shares
described in clause (i) above are validly issued, fully paid and
non-assessable, and those shares described in clause (ii) above,
when so issued, will be validly issued, fully paid and non-
assessable.
(b) Except as set forth in Section 5.4(a) and Schedule
5.4, MTM does not have outstanding any capital stock or
securities convertible into or exchangeable for any shares of
capital stock, and there are no options, warrants or other rights,
agreements, arrangements or commitments of any character to which
MTM is a party or otherwise obligating MTM to issue or sell,
entitling any person to acquire from MTM, and MTM is not a party to
any agreement, arrangement or commitment obligating it to
repurchase, redeem or otherwise acquire, any shares of its capital
stock or securities convertible into or exchangeable for any of its
capital stock.
(c) Except as contemplated by this Agreement or as set
forth on Schedule 5.4 hereof, MTM has not granted any registration
rights with respect to any shares of its capital stock to any third
party.
(d) When issued in accordance with the terms of this
Agreement, subject to Section 4.2 hereof, the MTM Common Stock to
be issued as Merger Consideration will be duly authorized, validly
issued and outstanding, fully paid and nonassessable. MTM has
reserved 100,000 shares of MTM Common Stock for issuance upon
exercise of the Warrants to be issued as Merger Consideration (the
AWarrant Shares@). When issued in accordance with the terms of the
Warrants, the warrant Shares will be duly authorized, validly
issued and outstanding, fully paid and nonassessable.
5.5 No Violation. The execution, delivery and performance of
this Agreement will not (i) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a
default or give rise to any right of termination, cancellation or
acceleration under, or result in the creation of any lien or
encumbrance on or against any of the properties of MTM or any of
its subsidiaries pursuant to any of the terms or conditions of any
note, bond, mortgage, indenture, license, agreement or other
instrument or obligation to which MTM or any of its subsidiaries is
a party or by which any of them or any of their properties or
assets may be bound, (ii) violate any statute, law, rule,
regulation, writ, injunction, judgement, order or decree of any
governmental authority, binding on MTM or any of its subsidiaries
or any of their properties or assets, or (iii) result in or give
rise (whether upon demand by the holder of any such securities or
by the terms of any such security) to the issuance of any
additional capital stock of MTM or accelerate or alter the
conversion rights of any holder of any securities exercisable into
or convertible for shares of capital stock of MTM.
5.6 SEC Filings. (a) MTM has made available to Pivot and its
counsel for inspection a true and complete copy of each report,
schedule, registration statement and definitive proxy statement
filed by MTM with the SEC since January 1, 1997 and prior to the
date of this Agreement (the "SEC Documents"), which are all the
documents (other than preliminary material) that MTM was required
to file with the SEC since such date. As of their respective
dates, the SEC Documents complied in all material respects with the
requirements of the Securities Act or the Securities Exchange Act
of 1934, as amended, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to such
SEC Documents, and none of the SEC Documents contained as of the
date of its filing any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statement therein, in light of the
circumstances under which they were made, not misleading.
(b) The financial statements of MTM included in the SEC
Documents (including the information contained in the notes to the
financial statements) comply as to form in all material respects
with the published rules and regulations of the SEC with respect
thereto and were prepared in accordance with generally accepted
accounting principles ("GAAP") applied on a consistent basis during
the periods involved (except as may be indicated on the notes
thereto or, in the case of the unaudited statements, as permitted
by Rule 10-01 of Regulation S-X of the SEC). The consolidated
financial statements fairly present, in accordance with applicable
requirements of GAAP (subject, in the case of the unaudited
statements, to normal, recurring adjustments, none of which will be
material), the consolidated financial position of MTM and its
consolidated subsidiaries as of their respective dates and the
consolidated results of operations and the consolidated cash flows
of MTM and its consolidated subsidiaries for the periods presented
therein.
5.7 Litigation. Other than as set forth in MTM's Form 10-K
dated March 31,1998, the 8-K's or 10-Q's filed subsequent thereto
and as set forth in Schedule 5.7, there is no pending or threatened
legal or governmental claim, action or proceedings against or
relating to MTM which could, individually or in the aggregate, have
a material adverse effect on MTM.
5.8 Full Disclosure. To the best knowledge of MTM, no
representation or warranty made by MTM, Technology and MTM Mergerco
in this Agreement or in writing pursuant to this Agreement,
including without limitation, the Schedules or any other documents,
certificates or written statements, delivered or to be delivered to
Pivot in connection herewith, contains, or will contain, any untrue
statement of a material fact or omits or will omit to state any
material fact necessary to make the statements contained herein and
therein not misleading, and all copies of the documents delivered
hereunder are true and complete copies. There is no fact known to
MTM, Technology or MTM Mergerco which to the best of their
knowledge, materially and adversely affects or may (so far as they
can now foresee) materially and adversely affect the business,
operations or condition (financial or otherwise) of MTM, Technology
or MTM Mergerco, which has not been set forth in this Agreement or
in the Schedules, or the other documents, certificates and
statements furnished to Pivot by or on behalf of MTM, Technology or
MTM Mergerco prior to or on the date hereof in connection with the
transactions contemplated hereby. To the extent the president of
Pivot has actual knowledge of any fact, Pivot shall be deemed to
have knowledge of such fact of such fact and the consequences of
such fact for purposes of this Section 5.8 to the extent a
reasonable person without any independent investigation could
reasonably anticipate that such fact and/or the consequences of
such fact could materially and adversely affect the business,
operations or condition of MTM, Technology or MTM Mergerco.
ARTICLE VI
RESPECTIVE COVENANTS OF PIVOT AND MTM FROM THE DATE
OF EXECUTION OF THIS AGREEMENT THROUGH THE CLOSING DATE
6.1 Conduct of Business Until Closing. Pivot agrees that from
and after the date first written above until the Closing Date,
unless it has received the prior written consent of MTM, it will:
(a) Operate its business only in the usual, regular and
ordinary course consistent with reasonable business practice;
(b) Use all commercially reasonable efforts as to events
within Pivot's control to prevent the occurrence of any change or
event which would prevent any of the representations and warranties
of Pivot contained herein from being true at and as of the Closing
Date with the same effect as though such representations and
warranties had been made at and as of the Closing Date, except for
changes in the ordinary course of business which are not in the
aggregate materially adverse or otherwise in violation of this
section 6.1;
(c) Use its best efforts to preserve its present
relationship with suppliers, customers and others having material
business dealings with it;
(d) Pay and discharge all costs and expenses of carrying
on its business consistent with past business practices;
(e) Not enter or make any contract or commitment and
render no bid or quotation, written or oral, except in the ordinary
course of business consistent with past practice;
(f) Create or suffer any Liens upon any of its assets
(other than Liens set forth in the Schedules);
(g) Not acquire or dispose of any assets or enter into
any transaction, except in the ordinary course of business
consistent with past practice;
(h) Maintain books, accounts and records in the usual,
regular, true and ordinary manner;
(i) Incur any obligation or liability (fixed or
contingent), except in the ordinary course of business consistent
with past practice;
(j) Not cancel or compromise any material debt or claim,
other than in the ordinary course of business consistent with past
practice;
(k) Not waive or release any rights of material value
with respect to its assets, except in the ordinary course of
business consistent with past practice;
(l) Not modify or change in any material respect or
terminate any existing license, lease, contract or other document
required to be listed on the Schedules to this Agreement other than
in the ordinary course of business consistent with past practice,
except that Pivot shall be permitted to modify or change existing
licenses, leases, Contracts and other documents to obtain the
consents required to effectuate the terms of this Agreement if MTM
consents to such modification or change;
(m) Make any loans or extensions of credit, except to
trade purchasers in the ordinary course of business consistent with
past practice;
(n) Not increase the compensation of any employee or make
any representation or commitment to do so, other than the changes
agreed to as at the date hereof and evidenced by MTM's written
consent;
(o) Maintain its properties, machinery and equipment in
their present condition and repair, normal wear and tear excepted;
(p) Not make any dividend or other distribution to the
Stockholders; and
(o) Continue all policies of insurance in full force and
effect up to and including the Closing Date.
6.2 No Solicitation of Competing Offers. (a) Prior to the
Closing Date, Pivot will not, directly or indirectly, seek,
solicit, initiate or encourage (including by way of furnishing any
non-public information concerning the business, properties or
assets of Pivot) or enter into any discussions or negotiations with
any person or group regarding any Acquisition Proposal (as defined
below). Pivot will notify MTM promptly by telephone, and thereafter
confirm in writing, if any Acquisition Proposal is received by
Pivot. As used in this Agreement, "Acquisition Proposal" shall mean
any proposal received by Pivot after the date first written above
and prior to the Closing Date for a merger or other business
combination involving Pivot or relating to the disposition of any
of the assets except for dispositions of assets for not less than
fair market value which are made in the ordinary course of business
and are consistent with past practice and with this Agreement.
(b) Prior to the Closing Date, MTM, Technology and MTM
Mergerco will not, directly seek, solicit, initiate or encourage or
enter into any discussions or negotiations with any person or group
regarding any Acquisition Proposal which would cause MTM,
Technology and MTM Mergerco not to pursue this Agreement or
circumvent Anthony Travaglini's anticipated position with MTM as
its Chief Technology Officer. As used in this Agreement,
"Acquisition Proposal" shall mean any proposal received or
solicited by MTM, Technology or MTM Mergerco after the date first
written above and prior to the Closing Date for a merger or other
business combination involving MTM or other business combination
with, or any arrangement for, the provision of network management
services of the type conducted by Pivot, by any third party.
ARTICLE VII
COVENANTS OF STOCKHOLDERS
7.1 Non-Competition. Each Stockholder acknowledges and agrees
that any non-cash consideration referred to in Section 2.1 hereof
paid by MTM in connection with the Merger is dependent upon said
Stockholder not competing with MTM or Pivot, as defined in their
respective Employment Agreements to become effective upon the
Effective Time and which have been agreed to by the parties hereto,
(X) directly or indirectly with respect to competition relating to
designing a total solution network management service prior to the
earlier of (i) five (5) years from the Effective Date or (ii)
immediately upon the termination by Pivot or MTM of Stockholder's
employment agreement with Pivot or MTM without Cause or by such
Stockholder for Good Reason, as such term is defined in the
respective Stockholder's Employment Agreement which becomes
effective at the Effective Time and (Y) directly or indirectly with
all other non-compete provisions set forth in said Employment
Agreement not directly or indirectly relating to (X) above, the
earlier of (i) three (3) years from the Effective Date or (ii)
immediately upon the termination by Pivot or MTM of Stockholder's
employment agreement with Pivot or MTM without Cause or by such
Stockholder for Good Reason, as such term is defined in the
respective Stockholder's Employment Agreement which becomes
effective at the Effective Time. The parties hereto acknowledge and
agree that in addition to the Merger Consideration, the
Stockholders shall receive an aggregate sum of One Hundred Thousand
Dollars ($100,000) in consideration for the Stockholders' covenant
not to compete referred to in this provision, to be allocated among
the Stockholders in accordance with Schedule 7.1. As such, each
Stockholder agrees not to compete with any business which Pivot is
now in or contemplating, for the respective periods set forth
above. In the event of any breach of said covenant, the
Stockholders agree that MTM, Technology and the Surviving
Corporation will be irreparably harmed and that MTM shall be
entitled to receive from the breaching party, as its sole remedy,
a liquidated damage payment equal to the amount of non-cash
consideration paid such Stockholder in connection with the Merger.
The aforementioned sentence shall in no manner limit MTM's,
Technology's or Pivot's right to injunctive relief under the
Stockholder's respective Employment Agreement with Pivot. The
breach by one Stockholder shall not be deemed a breach of the other
Stockholders. The parties hereto acknowledge that the damage for
any such breach is fair and reasonable and agree not to contest the
amount of the aforementioned damages or the scope of the non-
compete. The delivery by a breaching Stockholder of the actual
shares and warrants he receives in connection with the Merger
pursuant to Sections 2.1(a)(X)and (Y) shall constitute payment of
the stock portion of the Merger Consideration to be delivered to
MTM. In the event the breaching Stockholder has sold the shares
previously delivered in a bona-fide transaction, payment shall be
deemed to occur pursuant to this subsection upon payment to MTM of
an amount equal to the net sale proceeds from such sale.
ARTICLE VIII
Conditions Precedent to Obligations of MTM, TECHNOLOGY and MTM
Mergerco.
The obligations of MTM, Technology and MTM Mergerco under this
Agreement are subject to the satisfaction at or prior to the
Effective Time of each of the following conditions (one or more of
which may be waived by MTM):
8.1 Representations and Warranties Correct. The
representations, warranties and covenants made by Pivot in this
Agreement or in any writing pursuant to this Agreement, including
without limitation, the Schedules or any other documents,
certificates or written statements delivered or to be delivered to
MTM Mergerco in connection with the transactions contemplated by
this Agreement, shall be true and correct in all material respects
as of the Closing Date as though such representations and
warranties were restated and made at and as of the Closing Date,
and Pivot shall have furnished MTM Mergerco with a certificate to
that effect.
8.2 Compliance with Obligations. All of the terms, covenants
and conditions of this Agreement and the Option Agreement required
to be complied with by Pivot at or prior to the Closing, including
the obtaining of any required consents to the transfer or
assignment of its assets and the Surviving Corporation's continued
rights thereto, shall have been duly complied with and Pivot shall
have furnished MTM Mergerco with a certificate to that effect and
such other evidence of compliance as MTM Mergerco may reasonably
request.
8.3 Furnishing of Documents. Pivot shall have furnished MTM
Mergerco with (i) certificates of the Secretary of State of the
State of Delaware dated not more than ten business days prior to
the Closing Date of all documents on file in the office of the
Secretary of State relating to Pivot, including its Certificate of
Incorporation and all amendments thereto; (ii) good standing
certificates issued by the Secretary of State of the State of
Delaware certifying that Pivot is in good standing under the laws
thereof and is not delinquent in the payment of its franchise
taxes; (iii) copies, certified by the Secretary of Pivot as of the
Closing Date, of the By-laws of Pivot at the Closing Date, and of
resolutions duly adopted by the Board of Directors of Pivot and all
of its Stockholders, approving and authorizing the Merger on the
terms hereof; and (iv) counterpart originals or certified or other
copies of all of the documents, certificates, schedules and other
instruments required to be furnished to MTM Mergerco by Pivot or
requested by MTM Mergerco or its counsel, pursuant to or consistent
with the terms of this Agreement.
8.4 No Action or Litigation. There shall be no order of any
court or governmental body restraining or prohibiting the
transactions contemplated by this Agreement, nor shall any
litigation or other proceeding be pending or threatened against
Pivot, MTM, Technology or MTM Mergerco seeking to prohibit or
otherwise challenge the consummation of the transactions
contemplated by this Agreement or to obtain substantial damages in
respect thereof.
8.5 Third Party Consents. Except as otherwise indicated on any
Schedule to this Agreement, Pivot shall have obtained, at or prior
to the Closing Date, all consents required for the consummation of
the transactions contemplated by this Agreement without the
imposition of conditions unacceptable to MTM Mergerco.
8.6 Opinion of Counsel. MTM Mergerco shall have received an
opinion from Pivot 's counsel substantially in the form attached
hereto as Exhibit 8.6.
ARTICLE IX
Conditions Precedent to Obligations of Pivot.
The obligations of Pivot under this Agreement are subject to
the satisfaction at or prior to the Closing Date of each of the
following conditions (one or more of which may be waived by Pivot):
9.1 Representations and Warranties Correct. The warranties and
representations made by MTM, Technology and MTM Mergerco in this
Agreement shall be true and correct in all material respects as of
the Closing Date, as though such warranties and representations
were restated and made as and at the Closing Date, and MTM,
Technology and MTM Mergerco shall have furnished Pivot with a
certificate executed by their respective president or chief
executive officer to that effect.
9.2 No Action or Litigation. There shall be no order of any
court or governmental body restraining or prohibiting the
transactions contemplated by this Agreement, nor shall any
litigation or other proceeding be pending or threatened against
Pivot, MTM, Technology or MTM Mergerco seeking to prohibit or
otherwise challenge the consummation of the transactions
contemplated by this Agreement, or to obtain substantial damages in
respect thereof.
9.3 Opinion of Counsel. Pivot shall have received an opinion
from MTM, Technology and MTM Mergerco's counsel substantially in
the form attached hereto as Exhibit 9.3.
9.4 Compliance with Obligations. All of the terms and
conditions of this Agreement required to be complied with by MTM,
Technology and MTM Mergerco or prior to the Closing shall have been
duly complied with and MTM, Technology and MTM Mergerco shall have
furnished Pivot with a certificate to that effect.
9.5 NASDAQ Listing. MTM Common Stock, or the stock of a
permitted successor, shall be listed on the NASDAQ National Market,
American Stock Exchange or New York Stock Exchange during the term
of this Agreement and MTM shall simultaneously with the Closing
file such documents as may be required to cause the shares of MTM
Common Stock comprising part of the Merger Consideration to be so
listed.
Article X
Registration Rights.
Except as specifically provided herein, MTM is not required to
seek to have the Registrable Securities, as defined below,
registered with the Securities and Exchange Commission or any other
body.
(a) Commencing on the Effective Time, MTM shall advise
each Stockholder or his respective transferee, provided such
transferee is a Stockholder or Permitted Transferee, as defined in
(j) below (such persons being individually referred to as "Holder"
and collectively referred to herein as "Holders") by written notice
at least 30 days prior to the filing of any registration statement
or post-effective amendment thereto ("Registration Statement")
under the Securities Act of 1933 ("Act"), covering a public
offering of equity securities of MTM solely for cash (other than a
registration on Form S-8 relating solely to the sale of securities
to participants in a stock plan of MTM and/or one or more of its
subsidiaries, or a registration on any form which does not include
substantially the same information as would be required to be
included in a registration statement covering the sale of the
Shares) and shall, except as otherwise provided herein, register in
any such Registration Statement the number of Shares and shares of
Common Stock underlying the Warrants ( the Shares and the shares of
Common Stock underlying the Warrants are hereinafter collectively
referred to as the ARegistrable Securities@) that the Holder shall
notify MTM within twenty (20) days after mailing of such notice by
MTM that it desires to register and shall include in any such
Registration Statement such information as may be required to
permit a public offering of such Registrable Securities. MTM shall
supply prospectuses and other documents as the Holder may
reasonably request in order to facilitate the public sale or other
disposition of the Registrable Securities. MTM shall bear the
entire cost and expense of a registration of securities initiated
by it under this subsection including the cost of compliance with
Blue Sky Laws and the reasonable legal fees and expenses of one
counsel for the Holders. The Holder shall, however, bear any
transfer taxes and underwriting discounts or commissions applicable
to the Registrable Securities sold by him and any legal fees
incurred by him in the event such Holder retains his own counsel in
addition to the one counsel for the Holders. MTM may include other
securities in any such Registration Statement. MTM shall do any
and all other acts and things which may be necessary or desirable
to enable the Holder to consummate the public sale or other
disposition of the Registrable Securities, and furnish
indemnification in the manner as set forth in subsection (e) of
this Section 10, but shall not be required to qualify as a foreign
corporation to qualify the Registrable Securities for sale under
the securities laws of any state (provided, however, that MTM
agrees to consent to service of process as required by any such
state). The Holder shall furnish information and indemnification
as set forth in subsection (f) of this Section 10. All decisions as
to whether and when to proceed with any Registration Statement
shall be made solely by MTM. MTM shall use its best efforts to
keep any such Registration Statement effective for no less than 180
days during such time as the Holders can not sell all their
Registrable Securities pursuant to Rule 144 of the Act without
restriction under Rule 144(e) thereof. For purposes of determining
whether all the Registrable Securities can be sold pursuant to Rule
144 of the Act without restriction under Rule 144 (e) thereof, the
Warrants shall be deemed to have been exercised pursuant to a
cashless exercise, if such cashless exercise would not be deemed to
start a new holding period for Rule 144 purposes. Notwithstanding
the above, the aforementioned piggyback registration rights set
forth in this subsection (a) shall terminate with respect to a
Holder five (5) years from the Effective Date.
(b) In connection with any offering involving an
underwriting of shares of MTM's securities, MTM shall not be
required to include any of the Holder's Shares in such underwriting
unless the Holder accepts the terms of the underwriting as agreed
upon between MTM and the underwriters selected by it (or by other
persons entitled to select the underwriters), and then only in such
quantity as the underwriters determine in their sole discretion
will not jeopardize the success of the offering by MTM. If the
total amount of securities requested by selling Stockholders to be
included in such offering exceeds the amount of securities to be
sold, other than by MTM, and the underwriters determine in their
sole discretion that such amount will jeopardize the success of the
offering, then MTM shall be required to include in the offering
only that number of such Shares which the underwriters determine in
their sole discretion will not jeopardize the success of the
offering. The securities so included are to be apportioned pro
rata among the selling Stockholders according to the total amount
of securities that each such selling stockholder has requested to
be registered in such registration (or in such other proportions as
shall mutually be agreed to by such selling Stockholders).
(c) Notwithstanding the foregoing subsection (a), in the
event that there is an underwritten offering of MTM's securities
offered pursuant to said Registration Statement, the underwriters
shall have the right to (X) refuse to permit any Registrable
Securities, or to limit the amount of Registrable Securities, to be
sold by the Holder to such underwriters as such underwriter(s) may
determine in its discretion and (Y) to require that the Holder
refrain from selling such remainder of his Registrable Securities
covered by such Registration Statement for the period of up to 180
days following the effective date, provided, however, that such
period of days shall not be greater than the lock-up period for
directors of MTM or shareholders of MTM who are also employees
thereof and own in excess of 100,000 shares of MTM Common Stock,
whose shares are included within the Registration Statement, and
shall also refrain at any time when notified by MTM that an
amendment or supplement to the prospectus is required.
(d) If there has not been a Registration Statement filed
pursuant to (a) above in which all of the Registrable Securities
are permitted to be included and permitted to be sold by the second
anniversary of the Effective Time, on one occasion after the second
anniversary of the Effective Time, upon the written request of
Holders of a majority in interest of the Registrable Securities,
MTM shall file a registration statement under the Act (a "Demand
Registration Statement") with respect to the resale from time to
time of the Registrable Securities within 60 days after receipt of
such request (the "Filing Deadline"), and MTM shall use its best
efforts to cause such Demand Registration Statement to become
effective under the Act; provided, however, that a Holder may
inform MTM in writing that it wishes to exclude all or a portion of
his Registrable Securities from registration under such Demand
Registration Statement. MTM shall keep such Demand Registration
Statement effective for a period not less than the earlier of 180
days after being declared effective and the date all Registrable
Securities have been sold. Notwithstanding the above, the
aforementioned demand registration right set forth in this
subsection (d) shall terminate with respect to a Holder on the date
such Holder can reasonably be expected to be able to sell all his
Registrable Securities over not more than a sixty day period
pursuant to Rule 144 of the Act. For purposes of determining
whether all the Registrable Securities can be sold pursuant to Rule
144 of the Act without restriction under Rule 144 (e) thereof, the
Warrants shall be deemed to have been exercised pursuant to a
cashless exercise, if such cashless exercise would not be deemed to
start a new holding period for Rule 144 purposes.
(e) Whenever pursuant to this Section 10 a Registration
Statement relating to the Shares is filed under the Act or amended
or supplemented thereto, MTM will indemnify and hold harmless each
Holder covered by such Registration Statement, amendment or
supplement (such Holder being hereinafter called the "Distributing
Holder"), and each person, if any, who controls (within the meaning
of the Act) the Distributing Holder, against any losses, claims,
damages or liabilities, joint or several, to which the Distributing
Holder or any such controlling person may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any
material fact contained in any such Registration Statement or any
preliminary prospectus or final prospectus constituting a part
thereof or any amendment or supplement thereto or arise out of or
are based upon the omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading and will reimburse the Distributing Holder
and each such controlling person for any legal or other expenses
reasonably incurred by the Distributing Holder and each such
controlling person for any legal or other expenses reasonably
incurred by the Distributing Holder or such controlling person or
underwriter in connection with investigating or defending any such
loss, claim, damage, liability or action, provided, however, that
MTM will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged
omission made in said Registration Statement, preliminary
prospectus, final prospectus or amendment or supplement, in
reliance upon and in conformity with written information furnished
by the Distributing Holder or underwriter for use in the
preparation thereof.
(f) To the extent permitted by law, the Distributing
Holder will indemnify and hold harmless MTM, each of its directors,
each of its officers who have signed said Registration Statement
and such amendments and supplements thereto, each person, if any,
who controls MTM (within the meaning of the Act) and MTM's
underwriters) and each person, if any, who controls such
underwriters (within the meaning of the Act) against any losses,
claims, damages or liabilities to which MTM or any such director,
officer, underwriter or controlling person may become subject,
under the Act or otherwise, insofar as such losses, claims,
damages, or liabilities arise out of or are based upon any untrue
or alleged untrue statement of any material fact contained in said
Registration Statement, preliminary prospectus, final prospectus,
or amendment or supplement, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent but only to the
extent that such untrue statement or alleged untrue statement or
omission or alleged omission was made in said Registration
Statement, preliminary prospectus, final prospectus or amendment or
supplement, in reliance upon and in conformity with written
information furnished by such Distributing Holder for use in the
preparation thereof and will reimburse MTM or underwriter or any
such director, officer or controlling person for any legal or other
expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability
or action, provided, however, a Holder's indemnification shall be
limited to net proceeds received by such Holder from the sale of
Registrable Securities pursuant to said Registration Statement.
(g) Promptly after receipt by an indemnified party under
(e) or (f) of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against any indemnifying party, give the indemnifying party notice
of the commencement thereof but the omission so to notify the
indemnifying party will not relieve it from any liability which it
may have to any indemnified party if such delay has not prejudiced
the indemnifying party's ability to defend such claim.
(h) In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate in, and to the extent that it may wish, jointly with
any other indemnifying party similarly notified to assume the
defense thereof, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to
such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such
indemnified party under this Section 10 for any legal or other
expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation.
(i) No Holder shall have any right to obtain or seek an
injunction restraining or otherwise delaying any such registration
as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 10.
(j) A Holder who transfers shares of MTM Common Stock
received in connection with the Merger to a transferee who enters
into an agreement with MTM, in form reasonably acceptable to MTM,
providing among other things, that the transferee (A) will abide by
the terms of this Agreement and (B) enter into a Lock-up Agreement
with MTM in the form attached as Exhibit E hereof shall be deemed
a Permitted Transferee if he/it is a person receiving shares of MTM
as a direct result of a transfer (w) from a Stockholder or
Permitted Transferee to any member of his Family, as defined below;
(x) from a member of the Family of a Stockholder to another member
of the Family of that Stockholder or to that Stockholder
(including but not limited to transfers among trusts complying
herewith); (y) to the personal representative of a Stockholder or
Permitted Transferee hereunder who is deceased or adjudicated
incompetent; or (z) by the personal representative of a Stockholder
or Permitted Transferee who is deceased or adjudicated incompetent
to any member of said Stockholder's or Permitted Transferee's
Family. Any shares transferred to a Permitted Transferee shall
continue to be subject thereafter to this Agreement to the extent
applicable. Family shall mean a spouse or descendant, ancestor or
sibling (in all cases lineal or adopted) of a Stockholder, or a
spouse of a descendant or ancestor or sibling of a Stockholder, or
a trustee of a trust or custodian of a custodianship primarily for
the benefit of one or more of the foregoing and/or such
Stockholder.
ARTICLE XI
Indemnities.
11.1 In Favor of MTM, Technology and MTM Mergerco. (a) Pivot
and Stockholders agree, jointly and severally, to indemnify, defend
and hold MTM, Technology and MTM Mergerco, its successors and
permitted assigns, free and harmless from and against all claims,
actions, liabilities and damages (including reasonable attorneys'
fees and expenses) as and when incurred (AClaims@) arising out of
or based upon (i) the breach by Pivot or Stockholders of any of
their representations, warranties or covenants contained in this
Agreement or (ii) the failure of Pivot to obtain the consent of any
person whose consent is required to effectuate MTM Mergerco's right
to any of Pivot's assets under the terms existing prior to the
Merger. Notwithstanding the above, where such breaches result from
situations where Pivot did not have actual knowledge of such
breach, other than breaches of Sections 4.2 and/or 4.16 hereof,
such indemnification shall only be to the extent of such Claims in
excess of $50,000 in the aggregate. The amount of any such Claim
shall be the full amount of the Claim without reduction for the
amount which would cause the breach to be non-material. For
purposes of this Section 11.1, wherever a representation or
warranty provides for a Amateriality@ qualifier, such qualifier
should be ignored for purposes of determining whether the aggregate
amount of Claims are in excess of $50,000. The aggregate amount
of indemnification for which Pivot and the Stockholders are liable
in the aggregate shall not exceed fifty percent (50%) of the value
of the Merger Consideration as of the Closing with respect to
breaches, other than breaches of Sections 4.2 and/or 4.16 hereof,
where Pivot and the Stockholders had no knowledge of the breach or
facts, the consequences of which, a reasonable person without any
independent investigation would reasonably conclude would result in
or be a breach. With respect to all other breaches hereunder,
including any breach of Sections 4.2 and/or 4.16 hereof, Pivot and
the Stockholders may be liable for indemnification of up to the
value of the Merger Consideration as of the Closing. For purposes
of this Section 11.1, notwithstanding anything contained herein to
the contrary, Stockholders shall not be required to indemnify MTM,
Technology or MTM Mergerco hereunder with respect to any Claims for
which an executive officer of MTM had actual knowledge (without
independent investigation) as at the Effective Time of a fact, the
consequences of which, a reasonable person without any independent
investigation could reasonably anticipate would lead a Stockholder
to be liable, absent this sentence, to indemnify MTM, Technology
and/or MTM Mergerco hereunder. In the event it is determined after
the Effective Time that MTM, Technology and MTM Mergerco are
entitled to indemnification hereunder, each Stockholder shall be
required to indemnify MTM, Technology and MTM Mergerco, up to the
maximum limits set forth above, for an amount equal to the amount
of the Claim multiplied by a fraction the numerator of which is the
number of Shares to which a Stockholder is entitled, assuming no
Claims, and the denominator of which is the aggregate amount of
Shares which the Stockholders would be entitled, assuming no
Claims. In no event will a Stockholder be entitled to indemnify
MTM, Technology and MTM Mergerco for an amount greater than his
share of the Merger Consideration. In the event that a Stockholder
is required to indemnify MTM, Technology or MTM Mergerco, such
Stockholder may, in such Stockholder's sole discretion, satisfy its
obligations with shares of MTM stock received in the Merger
(including shares otherwise subject to the Lock-up Agreement). For
all purposes hereunder, any shares of MTM Common Stock tendered in
satisfaction of this indemnification shall be valued at the average
of the closing prices of the MTM Common Stock on the day before the
announcement of the entering into of this Agreement and the day
following the announcement thereof. An announcement shall be
deemed made at the earlier of the filing of a Form 8-K and MTM's
distribution of a press release with respect to the transaction to
NASDAQ.
(b) Stockholders agree that in order to partially secure
their indemnification obligations hereunder, to enter into lock-up
agreements (ALock-up Agreements@). Pursuant to the Lock-up
Agreement, the directors, officers and affiliates of Pivot will
agree not to sell or otherwise dispose of their MTM Common Stock
which they would receive as a result of the Merger for two years
following the Merger, with 25% of such shares being released from
the Lock-up Agreement on the first anniversary of the Merger and
the balance on the second anniversary of the Merger. The Lock-up
Agreement further provides that in no event will any Stockholder
sell any shares in violation of the registration requirements of
the Securities Act of 1933, as amended. Furthermore, it grants MTM
a right of first offer if a Stockholder elects to sell said MTM
Common Stock in a non-public transaction.
11.2 In Favor of Stockholders. MTM, Technology and MTM
Mergerco agree to indemnify, defend and hold Stockholders free and
harmless from and against all claims, actions, liabilities and
damages (including reasonable attorneys' fees and expenses) as and
when incurred arising out of or based upon the breach by MTM,
Technology or MTM Mergerco of any of its representations,
warranties or covenants contained in this Agreement, up to the
amount of the Merger Consideration.
11.3 Procedure for Indemnification. If any party seeks
indemnification pursuant to Sections 11.1 or 11.2 it shall notify
the party required to provide indemnification hereunder of any
claim made or action commenced against the party to be indemnified,
within a reasonable time after such party shall have been notified
of the Claim or shall have been served with the summons or other
first legal process giving information as to the nature and basis
of the Claim. The indemnifying party shall assume the defense of
such Claim or action, employ counsel of its choice and bear all
expenses relating to such defense. The indemnified party shall
have the right to participate in the defense of such claim or
action and to employ separate counsel, but the fees and expenses of
such counsel shall be at the expense of the indemnified party
unless (a) the engagement thereof shall have been specifically
authorized by the indemnifying party or (b) the indemnifying party
shall fail to assume the defense and engage counsel.
Notwithstanding anything to the contrary in the foregoing, the
indemnified party, upon written notice to the indemnifying party,
may at its expense assume the defense of such claim or action, and
employ counsel of its choice. The parties shall each cooperate in
the defense of any such claim and shall make available to each
other records and other materials required for use in such defense.
In no event shall the indemnifying party be liable for any
settlement of any action or claim made without its written consent.
Anthony Travaglini shall act on behalf of Pivot if indemnification
is sought pursuant to Section 11.1 above with respect to an act of
Pivot.
ARTICLE XII
Use Best Efforts to Satisfy Conditions Precedent.
Each of Pivot and the Stockholders agree to use its or his
best efforts to bring about the satisfaction of the conditions
specified in Article VIII hereof, and MTM, Technology and MTM
Mergerco agree to use their best efforts to bring about the
satisfaction of the conditions specified in Article IX hereof. If
any condition specified in any of said Sections shall not be
satisfied by such best efforts and such condition shall not be
waived by the party or parties for the benefit of which such
condition is stated, such party after giving notice of such
non-satisfaction and giving the other parties a reasonable
opportunity to satisfy such condition, may terminate this Agreement
by notice in writing to the other parties.
ARTICLE XIII
Designation of Forum in the Event of Litigation.
Pivot, the Stockholders, MTM, Technology and MTM Mergerco
agree that any legal action or proceedings with respect to, or
arising out of, the negotiation, execution, performance or breach
of, or the rights and privileges provided by, or responsibilities
and obligations under, this Agreement must be brought in either the
Supreme Court of the State of New York for the County of New York
or the County of Westchester or the United States District Court
for the Southern District of New York and in no other jurisdiction.
By execution and delivery of this Agreement, Pivot, Stockholders,
MTM, Technology and MTM Mergerco accept and submit to the
jurisdiction of such courts in any such legal action or proceeding
and irrevocably consent to service of process in any action or
proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to each of the parties at its
address for notices as specified herein, such service to become
effective five (5) days after such mailing. Nothing herein shall
affect the right to serve process in any other manner permitted by
law.
ARTICLE XIV
Notices.
All notices, requests, demands and other communications which
are required or permitted under this Agreement shall be in writing
and shall be deemed sufficiently given upon receipt if personally
delivered, faxed or mailed by certified mail, return receipt
requested, addressed to the party to be notified at the address
hereafter set forth for such party or to such other address as such
party may hereafter designate in writing:
(a) If to Pivot or Stockholders:
Anthony Travaglini
14 Elliot's Way
Valley Cottage, New York 10989
Fax: (914) 267-2638
with a copy to:
Scott Rothstein, Esq.
Day, Berry & Howard LLP
CityPlace I
Hartford, CT 06103-3499
Fax: (860) 275-0343
(b) If to MTM, Technology or MTM Mergerco:
Steven Rothman, President
Micros-To-Mainframes, Inc.
614 Corporate Way
Valley Cottage, New York 10989
Fax: (914) 267-3785
with a copy to:
Jack Becker, Esq.
Snow Becker Krauss P.C.
605 Third Avenue
New York, New York 10158-0125
Fax: (212) 949-7052
ARTICLE XV
Binding Effect; Benefits.
This Agreement shall inure to the benefit of, and be binding
upon the parties hereto and their respective legal representatives,
successors and permitted assigns, and no other person shall acquire
or have and other rights under this Agreement or by virtue of this
Agreement.
ARTICLE XVI
Assignment.
Neither this Agreement nor any right, remedy, obligation or
liability arising hereunder or by reason hereof shall be assignable
by Pivot, MTM, Technology or MTM Mergerco without the prior written
consent of the other.
ARTICLE XVII
Confidentiality.
Pivot and the Stockholders, on the one hand, and MTM,
Technology and MTM Mergerco on the other hand, shall maintain the
confidentiality of all confidential information furnished to it or
him by the other concerning the other's business, assets and
financial condition, and shall not disclose such information to
others, or use any such information for any purpose, except in
furtherance of the transactions contemplated by this Agreement (and
except as such information may be required to be disclosed under
applicable law or in connection with litigation arising out of this
Agreement), unless and until such information is or becomes in the
public domain by reason other than disclosure by it or him. In the
event the transactions contemplated herein are not consummated, (i)
MTM and its principals, shareholders, officers, employees, agents
or representatives shall not disclose to any third party or use in
any manner whatsoever any of the confidential information disclosed
to them by Pivot, its Stockholders, officers, employees, agents or
representatives in connection with the negotiations for this
transaction, and (ii) Pivot and its principals, Stockholders,
officers, employees, agents or representatives shall not disclose
to any third party or use in any manner whatsoever any of the
confidential information disclosed to them by MTM, its
shareholders, officers, employees, agents or representatives in
connection with the negotiations for this transaction. This
confidential information shall extend, but not be necessarily
limited, to the technology, sales techniques, vendors, independent
contractors, employees, and customer lists disclosed by one party
to the other. Confidential information as used herein shall not
include that which (i) was in the public domain prior to receipt
thereof; (ii) the receiving party can show it was in possession
thereof; (iii) subsequently becomes known to the receiving party by
third parties as a matter of right and without restriction on
disclosure; or (iv) subsequently comes into the public domain
through no fault of the receiving party. In the event this
Agreement is terminated, upon the written request, the
shareholders, officers, employees, agents or representatives of the
respective parties hereto shall return or destroy the confidential
information previously disclosed to them by the disclosing party.
This provision shall survive the termination of this Agreement.
ARTICLE XVIII
Brokerage.
Each of the parties hereto represents and warrants to the
other that it has not dealt with any broker or finder in connection
with the transactions contemplated by this Agreement.
ARTICLE XIX
Governing Law.
This Agreement shall in all respects be governed by, construed
under and enforced in accordance with the laws of the State of New
York.
ARTICLE XX
Expenses.
Each of the parties shall pay its or his own legal,
accounting and other expenses in connection with the negotiation
and preparation of this Agreement, provided, however, that all
obligations of Pivot shall become the obligation of MTM Mergerco.
ARTICLE XXI
Severability.
If any section, term or provision of this Agreement shall to
any extent be held or determined to be invalid or unenforceable,
the remaining sections, terms and provisions shall nevertheless
remain in full force and effect.
ARTICLE XXII
Survival.
The representations, warranties, covenants and agreements of
the parties set forth in this Agreement (including the Schedules)
and in any other documents, certificates or written statements
delivered by or on behalf of any a party to this Agreement shall
survive the Closing for a period of one (1) year, provided,
however, that the provisions with respect to the Non-Competition
Agreement and the Registration Rights shall survive for the later
of the terms thereof and the applicable statute of limitations.
ARTICLE XXIII
Waiver.
Any waiver by any party of a breach of any of the provisions
of this Agreement shall not operate as or be construed to be a
waiver of any other breach of that provision or of any breach of
any other provision of this Agreement. The failure of a party to
insist upon strict adherence to any term of this Agreement on one
or more occasions will not be considered a waiver or deprive that
party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement.
ARTICLE XXIV
Headings.
The headings in this Agreement are for convenience only and
shall not affect the construction of this Agreement.
ARTICLE XXV
Entire Agreement; Modification.
This Agreement constitutes the entire understanding between
the parties with respect to its subject matter. It supersedes and
cancels all prior agreements and understandings among the parties
relating to its subject matter. This Agreement may not be amended
or supplemented, except by subsequent written agreement of the
parties which specifically states that it is intended to be an
amendment or supplement to this Agreement, signed by the parties
hereto. No course of dealing or custom shall be referred to as
modifying any of the terms and conditions of this Agreement.
ARTICLE XXVI
Counterparts.
This Agreement may be executed in one or more counterparts,
each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall
constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement and Plan of Merger as of the date first above written.
Attest: MICROS-TO-MAINFRAMES, INC.
/s/Frank T.Wong By: /s/ Steve Rothman
Steven Rothman
President
Attest: MTM ADVANCED TECHNOLOGY, INC.
/s/Frank T. Wong By: /s/ Steve Rothman
Steven Rothman
Chief Executive Officer
Attest: PIVOT ACQUISITION CORPORATION
/s/ Frank T. Wong By: /s/ Steve Rothman
Steven Rothman
Chief Executive Officer
Attest: PIVOT TECHNOLOGIES, INC.
/s/ Frank T. Wong By: /s/ Anthony Travaglini
Anthony Travaglini
President
/s/ Anthony Travaglini
Anthony Travaglini,
Individually
/s/ Alan McCabe
Alan McCabe,
Individually
/s/ Robert Cann
Robert Cann,
Individually
<PAGE>
Exhibit 99.2
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("this AAgreement") entered into as of
the 2 nd day of June, 1999, by and between Micros-to-Mainframes,
Inc., a New York corporation ("MTM"), Pivot Technologies, Inc., a
Delaware corporation with its principal place of business at 614
Corporate Way, Valley Cottage, New York 10989 (the "Company" or
"Pivot") and collectively with MTM, the "Employer"), and Anthony
Travaglini, residing at 14 Elliot's Alley, Valley Cottage, New
York 10989 (the "Employee").
W I T N E S S E T H :
WHEREAS, the Employee is currently engaged as the President
of the Company;
WHEREAS, the Company has entered into an agreement ("Merger
Agreement") as of even date herewith with MTM, pursuant to which,
among other things, the Company shall merge into a second-tier
wholly-owned subsidiary of MTM (the "Merger"). Unless otherwise
indicated, the "Company" as used herein shall include the
surviving corporation of the Merger ("Merger Sub");
WHEREAS, the Employer is desirous of engaging Employee and
the Employee is desirous of being engaged by the Employer upon
the terms and conditions contained herein;
WHEREAS, the Company owns and develops remote network
technology, provides services in connection therewith and is
engaged in the development of new products and new procedures to
enhance its business (collectively, the "Business"), and MTM
sells computer hardware and software, designs and installs
computer systems, provides computer consulting services and is
engaged in the development of new products and new procedures to
enhance its business;
WHEREAS, MTM desires upon the consummation of the Merger
that Employee shall serve as its Chief Technology Officer ("CTO")
and in connection therewith have primary responsibility for the
network and systems professional services component of MTM's and
its subsidiaries business ("CTO Businesses") set forth in
Schedule A hereto, as amended from time to time to reflect new
acquisitions and/or the Employer entering into a new related
business ("CTO Responsibilities");
WHEREAS, the compensation to be paid to the Employee by the
Employer is at least in part dependent upon profits which may
accrue to the Employer through its ownership and/or operation of
processes and procedures involving trade secrets and proprietary
information relating to its business;
WHEREAS, the Company and MTM are each engaged in a highly
competitive business; and
WHEREAS, the Employer must maintain its competitive position
by protecting its inventions, trade secrets, patents, know-how,
and proprietary information.
NOW, THEREFORE, in consideration of the mutual premises and
agreements contained herein and for other good and valuable
consideration by each of the parties, the parties hereby agree as
follows:
1. Employment
The Employer hereby employs the Employee and the
Employee hereby accepts employment upon the terms and conditions
set forth herein. The Employer shall determine on whose books
and records Employee is recorded as an employee. However, the
liabilities of MTM and the Company hereunder are joint and
several.
2. Term
The term of this Agreement (the "Term") shall commence
as of the effective time of the Merger (the "Commencement Date")
and conclude at 5:00 p.m. on March 31, 2002, unless earlier
terminated as provided herein ("Termination Date"); provided,
however, that the term of this Agreement shall be automatically
continued and extended for additional consecutive twelve month
periods (each, an "Extension Period") commencing upon such
termination date, unless, at least thirty (30) days before the
date of termination of the initial term of this Agreement or of
any such Extension Period, MTM shall give the Employee, or the
Employee shall give MTM, a notice in writing electing to
terminate this Agreement as of such termination date.
3. Services To Be Rendered
During the term of this Agreement, the Employee shall
serve as CTO of MTM and President of the Company and shall
perform such duties as are determined from time to time by the
Employer's respective Board of Directors, provided, however, that
such duties shall be generally consistent with such duties as are
customarily performed by a senior executive officer of a
corporation. Such job description shall not be deemed to be the
sole responsibilities of Employee, which responsibilities shall
be determined from time to time by the respective Employer's
Board of Directors. Upon the consummation of the Merger, Employee
acknowledges that he will assume the CTO Responsibilities for MTM
and its subsidiaries as set forth in Schedule A. If requested by
MTM's Board of Directors, Employee shall serve, in addition to
its responsibilities hereof as CTO of MTM, as a senior executive
officer of one or more other subsidiaries of the Company or MTM
and shall, in the performance of such duties, comply with the
policies of the Board of Directors of such subsidiary. Upon such
appointment, such functions shall be included in Schedule A. If
Employee shall be elected or appointed a director of the Company
or any other subsidiary of MTM or a subsidiary of the Company
during the term of this Agreement, he will serve in such capacity
without further compensation, provided, however, that Employee
shall be entitled to be reimbursed to the same extent as other
directors thereof for expenses incurred in the performance of his
duties as a director thereof. Employee shall also, without
additional compensation other than reimbursement of reasonable
expenses, serve on an advisory management committee reporting to
MTM's Board of Directors ("Management Committee"). The
Management Committee shall be comprised of Steven Rothman, Howard
Pavony and Employee for such period of time such individuals are
employed by MTM as senior executive officers. The Management
Committee shall not have the right to establish policy or make
strategic decisions, all of which are reserved to MTM's Board of
Directors. Unless prevented by death or disability, the Employee
shall devote his full business time, allowing for vacations and
holidays, as set forth in Sections 5(e) and (f) hereof, and
illnesses, exclusively to the business and affairs of the
Employer and its respective subsidiaries, and shall use his best
efforts, skill and abilities to promote its interests. Nothing
herein contained shall be construed as preventing the Employee
from purchasing securities in any publicly held entity which
competes with the Company or MTM, if such purchases shall not
result in his owning beneficially 2% or more of the equity
securities of such company.
Without limiting the foregoing, at all times during the
Term:
(a) Employee shall serve as CTO of MTM and provide the
services necessary to carry out the CTO Responsibilities and
serve as the President of the Company and in connection with
acting as President, shall be responsible for the day to day
operations of the Company and report solely to the Company's
Board of Directors or MTM's Chief Executive Officer, provided
however that the Company shall not have an officer senior to
Employee other than the individual then currently serving as CEO
of MTM, to whom non-financial employees of the Company report;
(b) Employer shall not appoint anyone other than Employee
to perform CTO responsibilities without the consent of Employee.
Employer and Employee agree that in the event MTM acquires
another entity, that the parties hereto shall in good faith
determine based on the CTO Responsibilities then being performed,
which aspects of any such acquisition shall be encompassed in CTO
Responsibilities;
(c) In the event MTM's Chief Executive Officer and
Employee disagree as to a matter before the Management Committee
or day to day operations of the Company, Employee shall have
access to MTM's Board of Directors to set forth his position;
(d) The Company shall have its own budget, developed by
Employee and approved by the Board of Directors of MTM and the
Company, with the right of such Board, or its designee, to modify
or amend same after consultation with Employee from time to time;
(e) The Management Committee (or the Chief Executive
Officer and Employee, if the Board of Directors shall determine)
shall review the budget for those areas included in the CTO
Responsibilities, which budget may be accepted, modified or
amended by the Board of Directors of MTM or its designee from
time to time;
(f) Employee shall primarily perform his duties in the
Company's or MTM's Valley Cottage office for as long as network
management service operations are conducted out of at least one
of such facilities and to the extent not otherwise operated at
such location, at MTM's or the Company's location where such
services are primarily performed, provided such office is within
25 miles of the Valley Cottage, New York office and in the event
none of the above are applicable and MTM's executive offices are
located at MTM's current midtown Manhattan offices, out of MTM's
midtown Manhattan office. Notwithstanding the above, Employee
acknowledges and agrees that to the extent his services are
required at a job site or an office of MTM or a subsidiary or
division thereof other than Employee's primary base location at a
time when Employee does not have other commitments with respect
to his CTO Responsibilities, Employee shall spend as much time as
is reasonably required at such locations to perform the necessary
services required, provided such services are consistent with his
responsibilities as a CTO.
(g) Employee shall be a member of the Management
Committee.
Each of the foregoing (a)- (g) shall be hereinafter
referred to as a "Key Employment Term."
4. Compensation
For the services rendered hereunder, the Company
shall pay and the Employee shall accept the following
compensation:
(a)(i) From the Commencement Date through March 31,
2000, the Employee shall receive a base annual salary based on an
April 1 through March 31 Fiscal Year of $150,000; (ii)from April
1, 2000 through March 31, 2001, the Employee shall receive a base
annual salary equal to $175,000; (iii) from April 1,2001 through
the end of the Term, including any Extension Period, a base
annual salary of $185,000.
(b) The Employee shall be entitled to an annual
non-cumulative bonus during the term hereof based upon the
performance of the divisions and subsidiaries of MTM for which
Employee has CTO Responsibilities and is performing such
responsibilities ("CTO Businesses").
(i) The performance goal for the period ending March
31, 2000 is $2,200,000 of Profits (determined on an
annualized basis). Bonuses will be paid as provided
herein if actual performance are at least equal to
such goal, as may be adjusted below, for the period
commencing on the Commencement Date and ending March
31, 2000, determined on an annualized basis. If the
CTO Businesses' Profits are at least equal to the
goal and below $2,500,000, the bonus will be $35,000
in cash and five year options (which options shall
be subject to earlier termination upon Employee's
termination of employment as provided in the MTM
stock option plan), to acquire 20,000 shares of MTM
Common Stock at an exercise price equal to the Fair
Market Value, as defined below, of the MTM Common
Stock at the date following the date MTM's Profits
for such fiscal year are released; in the event the
CTO Businesses' Profits are equal to or greater than
$2,500,000 and less than $2,750,000, Employee shall
be entitled to a bonus of $55,000 in cash and five
year options having terms identical to the above to
acquire 40,000 shares of MTM Common Stock at an
exercise price equal to the Fair Market Value of the
MTM Common Stock at the date following the date
MTM's Profits for such fiscal year are released; and
in the event the CTO Businesses' Profits are equal
to or greater than $2,750,000, Employee shall be
entitled to a bonus of $70,000 in cash and five year
options having terms identical to the above to
acquire 55,000 shares of MTM Common Stock at an
exercise price equal to the Fair Market Value of the
MTM Common Stock date following the date MTM's
Profits for such fiscal year are released. The
aforementioned options, to the extent granted, shall
vest 33-1/3% at the date of grant and fifty percent
(50%) of the remainder on each of the second and
third anniversary thereof, subject to immediate
vesting in the event the Employee terminates this
Agreement for Good Reason, as defined below or the
Company dismisses Employee for other than Cause.
(ii) The performance goal for the period commencing
April 1, 2000 and ending March 31, 2001 ("Second
Year Performance Goal") is the greater of $2,500,000
of Profits, as adjusted below, and the actual
amount of the CTO Businesses' Profits determined for
purposes of (i) above, as adjusted below. Bonuses
will be paid as provided herein if actual
performance are at least equal to such goal, as may
be adjusted below. for the period commencing on
April 1, 2000 and ending March 31, 2001. If the CTO
Businesses' Profits are at least equal to the Second
Year Performance Goal and below the greater of
$2,750,000 and the sum of $250,000 and the Second
Year Performance Goal, the bonus will be $40,000 in
cash and five year options (which options shall be
subject to earlier termination upon Employee's
termination of employment as provided in the MTM
stock option plan), to acquire 30,000 shares of MTM
Common Stock at an exercise price equal to the Fair
Market Value, as defined below, of the MTM Common
Stock at the date following the date MTM's Profits
for such fiscal year are released; in the event the
CTO Businesses' Profits are equal to the greater of
$2,750,000,000 and the sum of $250,000 and the
Second Year Performance Goal but below the greater
of $3,000,000 and the sum of $500,000 and the Second
Year Performance Bonus, Employee shall be entitled
to a bonus of $60,000 in cash and five year options
having terms identical to the above to acquire
45,000 shares of MTM Common Stock at an exercise
price equal to the Fair Market Value of the MTM
Common Stock at the date following the date MTM's
Profits for such fiscal year are released; in the
event the CTO Businesses' Profits are equal to the
greater of $3,000,000 and the sum of $500,000 and
the Second Year Performance Goal and below the
greater of $3,250,000 and the sum of $750,000 and
the Second Year Performance Goal, Employee shall be
entitled to a bonus of $65,000 in cash and five year
options having terms identical to the above to
acquire 50,000 shares of MTM Common Stock at an
exercise price equal to the Fair Market Value of the
MTM Common Stock at the date following the date
MTM's Profits for such fiscal year are released; and
in the event the CTO Businesses' Profits are equal
to or greater than the greater of $3,250,000 and the
sum of $750,000 and the Second Year Performance
Goal, Employee shall be entitled to a bonus of
$70,000 in cash and five year options having terms
identical to the above to acquire 60,000 shares of
MTM Common Stock at an exercise price equal to the
Fair Market Value of the MTM Common Stock date
following the date MTM's Profits for such fiscal
year are released. The aforementioned options, to
the extent granted, shall vest 33-1/3% at the date
of grant and fifty percent (50%) of the remainder on
each of the second and third anniversary thereof,
subject to immediate vesting in the event the
Employee terminates this Agreement for Good Reason,
as defined below or the Company dismisses Employee
for other than Cause.
(iii) The performance goal for the period commencing
April 1, 2001 and ending March 31, 2002 ("Third Year
Performance Goal") is the greater of $3,000,000 of
Profits, as adjusted below, and the actual amount
of the CTO Businesses' Profits determined for
purposes of (ii) above. Bonuses will be paid as
provided herein if actual performance are at least
equal to such goal, as may be adjusted below. for
the period commencing on April 1, 2001 and ending
March 31, 2002. If the CTO Businesses' Profits are
at least equal to the Third Year Performance Goal
and below the greater of $3,500,000 and the sum of
$500,000 and the Third Year Performance Goal, the
bonus will be $65,000 in cash and five year options
(which options shall be subject to earlier
termination upon Employee's termination of
employment as provided in the MTM stock option
plan), to acquire 50,000 shares of MTM Common Stock
at an exercise price equal to the Fair Market Value,
as defined below, of the MTM Common Stock at the
date following the date MTM's Profits for such
fiscal year are released; in the event the CTO
Businesses' Profits are equal to the greater of
$3,500,000, and the sum of $500,000 and the Third
Year Performance Goal but below the greater of
$3,750,000 and the sum of $750,000 and the Third
Year Performance Bonus, Employee shall be entitled
to a bonus of $70,000 in cash and five year options
having terms identical to the above to acquire
60,000 shares of MTM Common Stock at an exercise
price equal to the Fair Market Value of the MTM
Common Stock at the date following the date MTM's
Profits for such fiscal year are released; in the
event the CTO Businesses' Profits are equal to the
greater of $3,750,000 and the sum of $750,000 and
the Third Year Performance Goal and below the
greater of the greater of $4,000,000 and the sum of
$1,000,000 and the Third Year Performance Goal,
Employee shall be entitled to a bonus of $75,000 in
cash and five year options having terms identical to
the above to acquire 65,000 shares of MTM Common
Stock at an exercise price equal to the Fair Market
Value of the MTM Common Stock at the date following
the date MTM's Profits for such fiscal year are
released; and in the event the CTO Businesses'
Profits are equal to or greater than $4,000,000 and
the sum of $1,000,000 and the Third Year Performance
Goal, Employee shall be entitled to a bonus of
$85,000 in cash and five year options having terms
identical to the above to acquire 70,000 shares of
MTM Common Stock at an exercise price equal to the
Fair Market Value of the MTM Common Stock date
following the date MTM's Profits for such fiscal
year are released. The aforementioned options, to
the extent granted, shall vest 33-1/3% at the date
of grant and fifty percent (50%) of the remainder on
each of the second and third anniversary thereof,
subject to immediate vesting in the event the
Employee terminates this Agreement for Good Reason,
as defined below or the Company dismisses Employee
for other than Cause.
(iv) The performance goal for any Extension Period
shall be the same as set forth in (iii) above except
that the term Third Year Performance Goal shall
refer to the greater of the actual amount of CTO
Businesses/ Profits, as adjusted below for the
previous Fiscal Year and $3,000,000.
Profits shall mean the CTO Businesses' pre-tax earnings
without giving effect to any tax loss carryforward, and
determined in accordance with generally accepted accounting
principles. Profits shall be determined in good faith by MTM's
chief financial officer, within 90 days after the end of the
applicable fiscal year. Notwithstanding anything contained
herein to the contrary, the parties hereto acknowledge that (X)
corporate overhead (including, but not limited to, (i)
compensation payable to MTM's corporate officers and support
staff providing services directly or indirectly to the CTO
Businesses, but excluding warehouse facilities and related
expenses to the extent such facilities do not house Merger Sub
inventory, (ii) legal and accounting fees not attributable to any
specific division or subsidiary of MTM, and (iii) corporate
office expenses shall be allocated among MTM, its divisions and
subsidiaries based on the gross revenues attributable to each,
and shall be an item of deduction in computing Profits and (Y)
earnings shall be computed without giving effect to extraordinary
items of income and expense determined in accordance with
generally accepted accounting principles. In the event a new CTO
Business is added during any Term year, the performance goal and
the trigger points for increased bonuses shall be adjusted in
good faith by the Chief Executive Officer of MTM and Employee,
subject to the right of MTM's Board of Directors to establish in
good faith such new performance goals and trigger points, to
reflect the amount of income earned by such new entity (on an
annualized basis) for the year ending on the day prior to
acquisition or the previous year, if greater. It is the
intention of the parties hereto that Employee be rewarded for any
appreciation over such entities base business. Within sixty (60)
days after such acquisition, MTM's chief financial officer shall
give Employee written notice of the revised bonus goals.
Fair Market Value shall be shall be determined by MTM's
Board of Directors in good faith, provided, however, if the
shares of MTM Common Stock are listed on a national securities
exchange or traded on the over-the-counter market, the fair
market value shall be the closing price as reported by such
exchange or market or, if no such closing price is reported, the
average of the closing bid and asked prices of the shares of
Common Stock on the over-the-counter market, as reported by the
Nasdaq Stock Market, the National Association of Securities
Dealers OTC Bulletin Board or the National Quotation Bureau,
Inc., as the case may be, on the last day of the applicable
measuring period, or, if there is no closing price or bid or
asked price on that day, the closing price or average of the
closing bid and asked prices on the most recent day preceding the
day on which the Option is granted for which such prices are
available.
(c) The Employee's salary shall be payable subject
to such deductions as are then required by law and such further
deductions as may be agreed to by the Employee, in accordance
with the Company's prevailing salary payroll practices.
5. Benefits and Expenses
(a) The Employee shall be entitled to participate,
subject to customary eligibility requirements, in all fringe
benefits customarily granted or made available to an executive
officer of MTM. The Employee shall be entitled to participate,
subject to customary eligibility requirements, in all fringe
benefits customarily granted or made available to a senior
executive officer of the surviving corporation or MTM, other than
to the extent made available to Howard Pavony and Steven Rothman
and not to other executives of the surviving corporation or MTM,
such as medical, disability, hospital and health insurance plans,
and profit sharing and pension plans, life insurance and other
plans, if any.
(b) In the event that the Employee's employment by
the Company is terminated for any reason, the Employee shall have
the right to purchase from the Company any insurance policies on
his life owned by the Company for a price equal to the cash
surrender value of the policies at the date of such termination,
plus prepaid premiums, if any. The right to purchase such life
insurance policies shall be exercised by the Employee by written
notice to the Company not less than thirty (30) days after the
date of such termination of employment, and the purchase price
for such policies shall be paid by the Employee to the Company
simultaneously with such written notice. The Company and any
successor thereto agree to maintain, provided Employee is
insurable, $50,000 of term life insurance on the life of
Employee.
(c) During the term of this Agreement, the Company
shall, upon presentation of proper vouchers, also reimburse the
Employee for all reasonable expenses incurred by him directly in
connection with his performance of services as an officer and
employee of the Company.
(d) The Employer shall pay Employee an additional
$500 per month for the remainder of the Term hereof on the first
day of each month thereof, as a non-accountable car allowance.
The Employer shall not be responsible for insurance for said car
nor any other expenses associated with such car. Any income
taxes resulting from the payment of such allowance shall be the
responsibility of the Employee.
(e) The Employee shall be entitled to four (4) weeks
of vacation per annum each full Term year (proportionately
reduced for any year of the Term ending prior to twelve (12)
months after the end of the previous term year, provided that the
Employee shall not take more than two consecutive weeks of
vacation during any calendar year. To the extent the Company or
its successor has a sick/personal day policy, the vacation set
forth above shall be independent thereof.
(f) The Employee shall receive as paid days off all
holidays that the Company, pursuant to established policy,
recognizes and observes.
6. Disability; Death; Termination for Cause
(a) If, during the term of this Agreement, the Employee
becomes so disabled or incapacitated by reason of any physical or
mental illness so as to be unable to perform the services
required of him pursuant to this Agreement for a continuous
period of ninety (90) days, then this Agreement shall terminate
at the end of such ninety (90) day period, provided that during
such period, the Employee shall be paid the full salary,
benefits, and expenses otherwise payable to him as set forth
above, less the amount paid to the Employee from mandatory
disability insurance for the period of such illness or
incapacity. This agreement shall also terminate upon and as of
the date of death of the Employee at any time during the term of
this Agreement. Upon termination of this Agreement due to death
or disability, Employee (or his estate) shall be entitled to
payment of a bonus pursuant to Section 4(b) computed through the
date of death or disability. The performance goal shall be
proportionally reduced in such case. Other than the payment of
such bonus, no further payments of compensation shall be required
hereunder.
(b) The employment of Employee may be terminated by the
Company for Cause. Such termination for Cause shall be effective
immediately upon delivery of written notice to the Employee
setting forth the reason or reasons for such termination. Upon
the termination of this Agreement in accordance herewith, the
Employer shall not be obligated to make any further payments of
compensation hereunder (including accrued bonuses)to the
Employee. Termination for Cause or, except as provided below, by
reason of disability shall not relieve Employee of its covenants
to the Employer set forth herein, which covenants shall survive
such termination. In the event this Agreement is terminated as a
result of Employee's disability, the covenant set forth in
Section 7(a) hereof shall be of no force and effect upon Employee
giving the Company four (4) week written notice that he is no
longer disabled and the Company (or a successor or assign) not
offering to rehire Employee upon substantially the same terms and
conditions set forth herein.
For purposes hereof, "Cause" shall mean (i) acts and/or
omissions, or a course of conduct, of Employee, that constitute
gross negligence or willful neglect, (ii) drug or alcohol abuse,
(iii) conviction of a felony, other than traffic offenses which
do not bring the Employee or Company into disgrace or disrepute,
or (iv) any act of embezzlement, conversion of goods or services,
or fraud with respect to the Company.
In the event the Company dismisses Employee for other
than Cause or Employee terminates this Agreement for Good Reason,
Employee shall be entitled to receive (i) his base compensation
for twelve months, without offset or deduction, and (ii) bonus
owing through the date of termination for the year in which
termination occurs calculated in accordance with Section 4(h)
(with proportionately reduced performance goals and bonus
amounts). Termination by the Employee with Good Reason shall not
relieve Employee of his covenants to the Company set forth
herein, which covenants shall survive such termination.
For purposes hereof, "Good Reason" shall mean: (i) a
material reduction in Employee's duties or authority at a time
when Employee is not in material default hereof; (ii) the breach
of a Key Employment Term at a time when Employee is not in
material breach hereof; or (iii) a material breach by the
Employer of this Agreement which is not cured within twenty (20)
days of giving written notice thereof, provided Employee is not
then in material breach hereof ("Employer Breach"). Termination
as a result of an Employer Breach shall not relieve Employee of
his covenants to the Employer set forth herein, which covenants
shall survive such termination.
7. Covenants and Restrictions. The Employee covenants
that, except in carrying out his duties hereunder, during the
term of his employment and for a period of eighteen (18) months
following the date of termination of employment hereunder (or
such longer or lesser period specifically provided herein upon
the happening of certain specified events. Where the time is so
extended or shortened in (a) below with respect to any activity,
except as specifically provided in subsections (a) through (e) of
this Section 7, the non-competition period for each such
subsection shall be increased or decreased with respect to such
activity to the shorter or longer period referred to in (a)):
(a) Employee will not, directly or indirectly, own
any interest in, participate or engage in, assist, render any
services (including advisory services) to, become associated
with, work for, serve (in any capacity whatsoever, including,
without limitation, as an employee, consultant, advisor, agent,
independent contractor, officer or director) or otherwise become
in any way or manner connected with the ownership, management,
operation, or control of, any business, firm, corporation,
partnership or other entity (collectively referred to herein as a
"Person") that engages in, or assists others in engaging in or
conducting any business, which deals, directly or indirectly, in
products or services competitive with the Employer's product line
or services (provided, however, (i) such non competition will be
limited to twelve (12) months with respect to the above to the
extent it does not substantially constitute a total solution
network and systems management services and (ii) such non
competition will be increased to twenty four (24) months in the
event the Employee terminates this Agreement for Good Reason or
Employer dismisses Employee for other than Cause with respect to
any activity to the extent it substantially competes with or
constitutes the development or operation of a total solution
network management service.) Nothing set forth above shall be
deemed to prohibit Employee from owning or acquiring securities
issued by any corporation whose securities are listed with a
national securities exchange or are traded in the
over-the-counter market, provided that Employee at no time owns,
directly or indirectly, beneficially or otherwise, two (2%)
percent or more of any class of any such corporation's
outstanding capital stock). For purposes of this Section 7, an
Employee shall not be deemed to be competing with the Employer if
the Employee performs network management services as an employee
of a corporation, provided such corporation does not directly or
indirectly compete with the Employer, or has become a client of
the Employer after the date hereof and prior to Employee's
termination of employment ("Permitted Alternative Employment").
In the event the Term is not extended by reason of the Company
not agreeing to continue employment of the Employee upon the
terms set forth above, the 18 month non-compete period for
purposes of this subsection (a) shall be reduced to twelve (12)
months. This subparagraph (a) in no way limits Employee's
prohibition from soliciting any of the Company's or its
subsidiaries' customers for the full 18 month period of the non
compete.
(b) Except as specifically provided in this
subsection (b), notwithstanding anything contained in subsection
(a) above, Employee will not knowingly provide or solicit to
provide to any Person or individual, except for any Permitted
Alternative Employment, (i) any goods or services which are
competitive with those provided by the Employer or which would be
competitive with the goods or services that the Employer has
planned to provide, or (ii) any goods or services to any customer
of the Employer. The term "customer" shall mean any Person or
individual to whom the Employer has provided goods or services
within the twelve (12) month period prior to the termination of
Employee's employment hereunder. Notwithstanding anything herein
to the contrary, no limitation shall be imposed on Employee
hereunder with respect to any goods and services that the
Employer has planned to provide and which are not actually being
provided at the time of the termination of Employee's employment
hereunder and which are not actually provided within six (6)
months following the termination of Employee's employment
hereunder. The term "Employer" for purposes of this subsection
(b) shall mean entities with respect to which Employee has CTO
Responsibilities.
(c) Without limiting Section 8 hereof, Employee
agrees that he shall not divulge to others, nor shall he use to
the detriment of the Employer or in any business or process of
manufacture competitive with or similar to any technology,
business or process of manufacture engaged in by the Employer or
any of its subsidiary or affiliated companies, at any time during
his employment with the Employer or thereafter, any confidential
or trade secret information obtained by him during the course of
his employment with the Employer relating to technology, sales,
salesmen, sales volume or strategy, customers, formulas,
processes, methods, machines, manufactures, compositions, ideas,
improvements or inventions belonging to or relating to the
business of the Employer, or its subsidiary or affiliated
companies.
(d) Employee will neither solicit, hire or seek to
solicit or hire any of the Employer's personnel in any capacity
whatsoever nor shall Employee induce or attempt to induce any of
the Employer's personnel to leave the employ of the Employer to
work for Employee or otherwise. Notwithstanding the above, if
Employee's employment is terminated by Employee for Good Reason
or Employer terminates such employment without Cause, Employee
may solicit, hire or seek Alan McCabe and/or Robert Cann to
perform services for Employee or a company with which he is
affiliated, provided, however, that such services in no way
violates the aforementioned persons' respective non-compete under
their respective employment agreements with the Company.
(e) Employee acknowledges that his breach of any
of the restrictive covenants contained in this Section 7 may
cause irreparable damage to the Employer for which remedies at
law would be inadequate. Accordingly, if Employee breaches or
threatens to breach any of the provisions of this Section 7, the
Employer, or a member thereof, shall be entitled to appropriate
injunctive relief, including, without limitation, preliminary and
permanent injunctions, in any court of competent jurisdiction,
restraining Employee from taking any action prohibited hereby.
This remedy shall be in addition to all other remedies available
to the Employer at law or equity. If any portion of this Section
7 is adjudicated to be invalid or unenforceable, this Section 7
shall be deemed amended to delete therefrom the portion so
adjudicated, such deletion to apply only with respect to the
operation of this Section 7 in the jurisdiction in which such
adjudication is made.
8. Proprietary Property.
(a) The Employee agrees that any and all
inventions or improvements as well as any and all ideas,
creations, know-how and methods of applying and putting into
practice any inventions or improvements (all of the foregoing
being hereinafter called "Proprietary Property" and being more
fully defined in subparagraph (b) below) that are created,
developed, conceived of or discovered either (i) by the Employee
(solely or jointly with others) either in the course of his
employment, on the Employer's time, with the Employer's materials
or facilities, relating to any subject matter with which his work
for the Employer is or may be concerned, or relating to any
business in which the Employer or any of its subsidiaries or
affiliated companies is involved, or (ii) by or for the Employer,
or (iii) by any independent individual or Person and thereafter
acquired by the Employer, and which are within the Employee's
knowledge or possession in the case of (i) above or that come
into the Employee's knowledge or possession during and in the
course of the Employee's employment hereunder in the case of (ii)
or (iii) above, shall be, if created, developed, conceived of or
discovered by the Employee, promptly disclosed to the Employer,
or shall be, if otherwise developed or acquired by the Employer,
received by the Employee as an employee of the Employer and not
in any way for his own benefit. Employee shall neither have nor
obtain any right, title or interest in or to such Proprietary
Property unless and until the Employer shall expressly and in
writing waive the rights that it has therein and thereto under
the provisions of this sentence. With respect to any and all
Proprietary Property that is invented, created, written,
developed, furnished or produced by the Employee, or suggested by
the Employee to the Employer, during the term of the Employee's
employment under this Agreement, Employee does hereby agree that
all such Proprietary Property shall be the exclusive property of
the Employer, and that the Employee shall neither have nor retain
any right, title or interest, of any kind therein and thereto or
in and to any results or proceeds therefrom. At any time,
whether during or after the term of this Agreement, the Employee
will, upon the request and at the expense of the Employer, (A)
obtain patents or copyrights on, or (B) permit the Employer to
patent or copyright, any such Proprietary Property, whichever (A)
or (B) is appropriate, and/or (C) execute, acknowledge and
deliver any and all assignments, instruments of transfer, or
other documents, that the Employer deems necessary or appropriate
to transfer to and vest in the Employer all right, title and
interest in and to such Proprietary Property and to evidence the
Employer's ownership of such Proprietary Property, including,
without limitation, taking all steps necessary to enable the
Employer to publish or protect said Proprietary Property by
patents or otherwise in any and all countries and to render all
such assistance as the Employer may require in any patent office
proceeding or litigation involving said Proprietary Property.
The Employee shall not, without limitation as to time or place,
use any Proprietary Property except on Employer business, during
or after his period of employment, nor disclose the same to any
other Person or individual except for disclosure on Employer
business or as may be required by law.
(b) As used in this Agreement, "Proprietary
Property" means proprietary technical information not generally
known in the Employer's industry and which is disclosed to
Employee or known or developed by Employee as a consequence of or
through his employment with the Employer.
(c) During or subsequent to the Employee's
employment by Employer, Employee will never, directly or
indirectly, lecture upon, publish articles concerning, use,
disseminate, disclose, sell or offer for sale any Proprietary
Property without the Employer's prior written permission.
9. Prior Agreements
Employee represents that he is not now under any written
agreement, nor has he previously, at any time, entered into any
written agreement with any person, firm or corporation, which
would or could in any manner preclude or prevent him from giving
freely and the Employer receiving the exclusive benefit of his
services.
10. Miscellaneous
(a) This Agreement shall inure to the benefit of
and be binding upon the Employer, its successors and assigns, and
upon the Employee, his heirs, executors, administrators, legatees
and legal representatives. Employee acknowledges that in the
event of the Merger, this Agreement shall be become the
obligation of the surviving corporation and Employee shall
continue to be bound by the terms hereof.
(b) Should any part of this Agreement, for any
reason whatsoever, be declared invalid, illegal, or incapable of
being enforced in whole or in part, such decision shall not
affect the validity of any remaining portion, which remaining
portion shall remain in full force and effect as if this
Agreement had been executed with the invalid portion thereof
eliminated, and it is hereby declared the intention of the
parties hereto that they would have executed the remaining
portion of this Agreement without including therein any portion
which may for any reason be declared invalid.
(c) This Agreement shall be construed and enforced
in accordance with the laws of the State of New York applicable
to agreements made and performed in such State without
application to the principles of conflicts of laws.
(d) This Agreement and all rights hereunder are
personal to the Employee and shall not be assignable, and any
purported assignment in violation thereof shall be null and void.
Any person, firm or corporation succeeding to the business of
the Employer by merger, consolidation, purchase of assets or
otherwise, shall assume by contract or operation of law the
obligations of the Employer hereunder; provided, however, that
the Employer shall, notwithstanding such assumption and/or
assignment, remain liable and responsible for the fulfillment of
the terms and conditions of the Agreement on the part of the
Employer to the extent the Employer is surviving. In the event
MTM spins-off Pivot, or a corporation of which Pivot is a wholly-
owned subsidiary, to MTM's stockholders, this Agreement shall not
be terminated and deemed continued as if the Employer was the
corporation being spun-off and Pivot, to the extent it is not the
spun-off entity.
(e) This Agreement, and the Merger Agreement (to
the extent applicable) constitutes the entire agreement between
the parties hereto with respect to the terms and conditions of
the Employee's employment by the Company, as distinguished from
any other contractual arrangements between the parties pertaining
to or arising out of their relationship, and this Agreement and
the Merger Agreement, to the extent applicable, supersedes and
renders null and void any and all other prior oral or written
agreements, understandings, or commitments pertaining to the
Employee's employment by the Company, including, without
limitations that certain Employment Agreement dated May 18, 1998.
No variation hereof shall be deemed valid unless in writing and
signed by the parties hereto, and no discharge of the terms
hereof shall be deemed valid unless by full performance by the
parties hereto or by a writing signed by the parties hereto. No
waiver by either party of any provision or condition of this
Agreement by him or it to be performed shall be deemed a waiver
of similar or dissimilar provisions and conditions at the same
time or any prior or subsequent time.
(f) Any notice, statement, report, request or
demand required or permitted to be given by this Agreement shall
be in writing, and shall be sufficient if delivered in person or
if addressed and sent by certified mail, return receipt
requested, to the parties at the addresses set forth above, or at
such other place that either party may designate by notice in the
foregoing manner to the other.
(g) The failure of either party to insist upon the
strict performance of any of the terms, conditions and provisions
of this Agreement shall not be construed as a waiver or
relinquishment of future compliance therewith, and said terms,
conditions and provisions shall remain in full force and effect.
No waiver of any term or any condition of this Agreement on the
part of either party shall be effective for any purpose
whatsoever unless such waiver is in writing and signed by such
party.
(h) The heading of the paragraphs herein are
inserted for convenience and shall not affect any interpretation
of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first written above.
Micros to Mainframes, Inc. PIVOT TECHNOLOGIES, INC.
By:/s/ Steve Rothman /s/ Anthony Travaglini
/s/ Anthony Travaglini
<PAGE>
EXHIBIT 99.3
Press Release
FOR IMMEDIATE RELEASE
Micros-To-Mainframes, Inc. Acquires 100% of Pivot Technologies,
Inc. (www.pivottech.com)
MTM can now provide:
*Internet driven Remote Systems Management
*Virtual Private Network (VPN) Internet based Network
Management
*National & International Network Management Capabilities
*Management of Internet server forms, pops, and
communication links
Valley Cottage, NY - June 4, 1999 -- Micros-To-Mainframes, Inc.
("MTM") (NASDAQ:MTMC), a single source provider of advanced
technology solutions, including design and consulting services,
communications services and products, Internet/Intranet
development services, and network management services, today
announced that it has acquired 100% of Pivot Technologies,
Inc., as of June 2, 1999. Previously MTM had owned 33.4%, but
was able to negotiate the purchase of the remaining shares of
Pivot.
Pivot Technologies, Inc has developed a proprietary network and
systems management solution and provides remote service
management to corporate clients. The clients can range from
small business to the Fortune 500. Presently, Pivot manages
local, wide area, and private virtual networks for national and
international companies. The Internet is key to the reporting
methods of Pivot's technology.
Steven Rothman, President and CEO, stated, "Pivot Technologies,
Inc. is strategic to our business plan. Pivot's founders have
signed long term agreements to remain with the company. This
management team has many years of experience in technology and
were responsible for developing and managing the enterprise
corporate network and systems for a Fortune 100 company, with
one of the world's largest computer networks."
Tony Travaglini will remain President of the Pivot subsidiary
and will aggressively grow the professional services,
including, network and systems management, security, network
engineering, consulting, and Internet related services for the
entire MTM organization. Tony Travaglini stated, "We are
extremely enthusiastic about this merger. Our business plan
calls for us to expand our professional service offerings by
year-end, this merger will enable us to accelerate those plans.
This will allow us to bring additional services to market all
that much sooner. We look forward to a strategy of rolling out
our expansive services to corporate America on a national and
international level."
Micros-To-Mainframes is a premier provider of network analysis
& diagnostics, management, architecture, design, implementation
and support services serving the New York Tri-State area since
1986. Micros-To-Mainframes' practices in Network Analysis,
Network & Systems Management, Internet Services, IT Consulting,
Data & Network Security, Network Infrastructure Engineering,
Integrated Communications, and Enterprise LifeCycle Managed
Services create a comprehensive computer and communication
services suite. The Company maintains sales, technology labs,
help desk, network management operation centers, training and
service facilities in Valley Cottage, New York, New York City,
and Connecticut. Micros-To-Mainframes is an authorized reseller
of Intel Corp (NASDAQ:INTC), IBM (NYSE:IBM), Dell Computer
(NASDAQ:DELL), Compaq Computer (NYSE:CPQ), Hewlett Packard
(NYSE:HWP), Cisco Systems (NASDAQ:CSCO), Citrix (NASDAQ:CTXS),
Axent Technologies (NASDAQ:AXNT), Microsoft (NASDAQ:MSFT),
PSINet ((NASDAQ:PSIX), and Novell (NASDAQ:NOVL). For more
information visit our web sites at www.mtm.com,
www.orderpc.com, and www.pivottech.com.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995: The statements contained in this release which
are not historical facts are forward-looking statements that are
subject to risks and uncertainties that could cause actual results
to differ materially from those set forth in or implied by forward-
looking statements. These risks and uncertainties include the
Company's entry into new commercial businesses, the risk of
obtaining financing, and other risks described in the Company's
Securities and Exchange Commission filings.
CONTACT: Steven H. Rothman
Micros-to-Mainframes, Inc.
Phone: (914) 268-5000
Fax: (914) 267-3785
Email: [email protected]
