[DESCRIPTION] FORM 8-K/A
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
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
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MICROS-TO-MAINFRAMES, INC.
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(Exact name of registrant as specified in its charter)
New York 022122 13-3354896
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(State or Other Jurisdiction (Commission File Number)(IRS Employer Ident. No.)
of Incorporation)
614 Corporate Way, Valley Cottage, New York 10989
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(Address of Principal Executive Offices) (Zip Code)
(914) 268-5000
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Registrant's telephone number, including area code
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Item 5. Other Events
The Registrant is amending its Form 8-K dated June 2, 1999, to delete the
Agreement and Plan of Merger filed as Exhibit 99.1 to that Form, which did
not correctly reflect the agreement among the parties, and to file the
Agreement and Plan of Merger that correctly reflected the agreement among
the parties. All other information set forth under Item 5 and Item 7
of the previously filed Form 8-K remains the same.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits.
99.1 Agreement and Plan of Merger dated as of June 2, 1999 by and among
the Registrant, Pivot Acquisition Corporation, Pivot Technologies, Inc., and
certain stockholders of Pivot Technologies, Inc.
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SIGNATURE
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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: December 9, 1999 By: /s/Steven H. Rothman
Steven H. Rothman
CEO and President
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EXHIBIT 99.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
MICROS-TO-MAINFRAMES, INC.
PIVOT TECHNOLOGIES, INC.
PIVOT ACQUISITION CORPORATION
AND
CERTAIN STOCKHOLDERS OF PIVOT
AS OF
JUNE 2, 1999
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TABLE OF CONTENTS
ARTICLE I .......................................................... 2
1.1 The Merger.................................................. 2
1.2 Effective Time ............................................. 2
1.3 Effect of the Merger........................................ 3
1.4 Certificate of Incorporation and By-laws of the
Surviving Corporation ...................................... 4
1.5 Directors and Officers of the Surviving
Corporation ................................................ 5
1.6 Closing .................................................... 5
ARTICLE II ........................................................ 6
2.1 Conversion of Securities .................................. 6
(a) Conversion of Pivot Common Stock ....................... 6
(b) Treasury Stock ......................................... 7
(c) MTM-Owned Stock ........................................ 7
(d) Dissenter's Stock....................................... 7
2.2 ........................................................... 7
Transfer Books................................................. 7
2.3 Exchange of Stock ......................................... 7
(b) No Fractional Shares of MTM Common Stock
or Warrants........................................... 8
(c) No Dividends Before Surrender of Certificates ........ 8
(d) No Further Ownership Rights in Pivot Stock............ 9
(e) Abandoned Property Laws............................... 9
ARTICLE III ....................................................... 9
3.1 Reasonable Efforts ....................................... 9
ARTICLE IV ....................................................... 11
4.1 Organization and Qualification............................. 11
4.2 Ownership.................................................. 11
4.3 Authorization and Binding Effect; No Governmental
Consents Required ......................................... 12
4.4 Financial Statements; No Undisclosed Liabilities .......... 12
4.5 No Violation or Breach .................................... 13
4.6 Accounts Receivable ....................................... 14
4.7 Contracts ................................................. 14
4.8 Accounts Payable .......................................... 15
4.9 Binding Nature of Contracts; No Breach .................... 16
4.10 Title to Assets; Liens .................................. 16
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4.11 Litigation ............................................... 17
4.12 Taxes .................................................... 17
4.13 Permits .................................................. 18
4.14 Compliance with Law ..................................... 19
4.15 Customers and Suppliers ................................. 19
4.17 All Documentation has Been Furnished or
Made Available to MTM .................................... 21
4.18 Full Disclosure .......................................... 22
ARTICLE V ....................................................... 23
5.1 Organization and Standing ................................. 23
5.2 Corporate Power ........................................... 23
5.3 Authorization; Binding Effect ............................. 23
5.4 Capitalization ............................................ 23
5.5 No Violation .............................................. 25
5.6 SEC Filings ............................................... 25
5.7 Litigation ................................................ 27
5.8 Full Disclosure ........................................... 27
ARTICLE VI ...................................................... 28
6.1 Conduct of Business Until Closing ........................ 28
6.2 No Solicitation of Competing Offers ...................... 30
ARTICLE VII ..................................................... 31
7.1 Non-Competition........................................... 31
ARTICLE VIII .................................................... 33
8.1 Representations and Warranties Correct ................... 33
8.2 Compliance with Obligations .............................. 33
8.3 Furnishing of Documents................................... 34
8.4 No Action or Litigation .................................. 34
8.5 Third Party Consents ..................................... 34
8.6 Opinion of Counsel ....................................... 35
ARTICLE IX ..................................................... 35
9.1 Representations and Warranties Correct ................... 35
9.2 No Action or Litigation .................................. 35
9.3 Opinion of Counsel ....................................... 36
9.4 Compliance with Obligations .............................. 36
9.5 NASDAQ Listing............................................ 36
Article X ..................................................... 36
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ARTICLE XI .................................................... 45
11.1 In Favor of MTM and MTM Mergerco ........................ 45
11.2 In Favor of Stockholders ................................ 47
11.3 Procedure for Indemnification .......................... 48
ARTICLE XII .................................................... 49
ARTICLE XIII ................................................... 49
ARTICLE XIV ................................................... 50
ARTICLE XV ..................................................... 51
ARTICLE XVI .................................................... 51
ARTICLE XVII ................................................... 52
ARTICLE XVIII .................................................. 53
ARTICLE XIX .................................................... 53
ARTICLE XX ..................................................... 54
ARTICLE XXI ..................................................... 54
ARTICLE XXII .................................................... 54
ARTICLE XXIII ................................................... 55
ARTICLE XXIV .................................................... 55
ARTICLE XXV ..................................................... 55
ARTICLE XXVI .................................................... 56
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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"),
PIVOT TECHNOLOGIES, INC., a Delaware corporation ("Pivot"), PIVOT
ACQUISITION CORPORATION, a Delaware corporation and a wholly-owned
subsidiary of MTM ("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, 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 MTM (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.
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NOW, THEREFORE, in consideration of the premises and the
respective representations, warranties, covenants and agreements
et 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
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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
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
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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.
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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").
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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 ("Reorganization Event"), of validly
issued, fully paid and non-assessable shares of Common Stock of
MTM, par value $.001 per share ("MTM Common Stock"), (Y) five (5)
year warrants, in substantially the form attached hereto as Exhibit
D, ("Warrant") 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 "Merger
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
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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 ("Stockholder
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, 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.
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(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
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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,
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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.
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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.
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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,
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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
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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,
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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
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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
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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 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
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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
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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,
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technology, trade secrets, know-how, computer software programs and
other intellectual property rights (collectively "Intellectual
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 ("Patents"), 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
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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.
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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.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF MTM
AND MTM MERGERCO
MTM and MTM Mergerco, jointly and severally, represent
and warrant as follows:
5.1 Organization and Standing. MTM 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 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 and MTM Mergerco of this Agreement, and the consummation by
MTM and MTM Mergerco of the transactions contemplated by this
Agreement and the performance by MTM 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 and MTM Mergerco, respectively. This Agreement has been duly
executed and delivered by MTM and MTM Mergerco and constitutes a
legal, valid and binding obligation of MTM 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
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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
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reserved 100,000 shares of MTM Common Stock for issuance upon
exercise of the Warrants to be issued as Merger Consideration (the
"Warrant 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
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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.
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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 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 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 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 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
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consequences of such fact could materially and adversely affect the
business, operations or condition of MTM 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;
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(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
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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 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 and MTM Mergerco not
to pursue this Agreement or circumvent Anthony Travaglini's
anticipated position with MTM as its Chief Technology Officer. As
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used in this Agreement, "Acquisition Proposal" shall mean any
proposal received or solicited by MTM 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
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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 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 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
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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 and MTM Mergerco.
The obligations of MTM 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
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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 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
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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 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 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 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.
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9.3 Opinion of Counsel. Pivot shall have received an opinion
from MTM 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
and MTM Mergerco or prior to the Closing shall have been duly
complied with and MTM 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
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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 "Registrable 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
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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
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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
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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
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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
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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
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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
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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.
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ARTICLE XI
Indemnities.
11.1 In Favor of MTM and MTM Mergerco. (a) Pivot and
Stockholders agree, jointly and severally, to indemnify, defend and
hold MTM 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 ("Claims") 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 "materiality" 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,
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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
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 and/or MTM Mergerco
hereunder. In the event it is determined after the Effective Time
that MTM and MTM Mergerco are entitled to indemnification
hereunder, each Stockholder shall be required to indemnify MTM 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 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 or MTM
Mergerco, such Stockholder may, in such Stockholde's sole
discretion, satisfy its obligations with shares of MTM stock
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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 ("Lock-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 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 or MTM Mergerco of
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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.
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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 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 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 and MTM
Mergerco accept and submit to the jurisdiction of such courts in
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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
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(b) If to MTM 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 or MTM Mergerco without the prior written consent of
the other.
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ARTICLE XVII
Confidentiality.
Pivot and the Stockholders, on the one hand, and MTM 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
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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.
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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.
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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
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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/Eric Honick By: /s/Steven Rothman
Steven Rothman
President
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Attest: PIVOT ACQUISITION CORPORATION
/s/Eric Honick By: /s/Steven 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
57
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