-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OxIw8ZuU1jZUSMm0An2oEgWgZdSjLgs4k48KKrz/8QxwyH9Nxb3vj+h1KdRCybHR glwZkeysho56KeTCAjYxLw== 0001012975-05-000259.txt : 20050823 0001012975-05-000259.hdr.sgml : 20050823 20050823164103 ACCESSION NUMBER: 0001012975-05-000259 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20050823 DATE AS OF CHANGE: 20050823 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MTM Technologies, Inc. CENTRAL INDEX KEY: 0000906282 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 133354896 STATE OF INCORPORATION: NY FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-48499 FILM NUMBER: 051044034 BUSINESS ADDRESS: STREET 1: 850 CANAL STREET CITY: STAMFORD STATE: CT ZIP: 06902 BUSINESS PHONE: 2039753700 MAIL ADDRESS: STREET 1: 850 CANAL STREET CITY: STAMFORD STATE: CT ZIP: 06902 FORMER COMPANY: FORMER CONFORMED NAME: MICROS TO MAINFRAMES INC DATE OF NAME CHANGE: 19930527 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: PEQUOT CAPITAL MANAGEMENT INC CENTRAL INDEX KEY: 0001071955 IRS NUMBER: 061524885 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 500 NYALA FARM ROAD CITY: WESTPORT STATE: CT ZIP: 06880 BUSINESS PHONE: 2034292200 MAIL ADDRESS: STREET 1: 500 NYALA FARM ROAD CITY: WESTPORT STATE: CT ZIP: 06880 FORMER COMPANY: FORMER CONFORMED NAME: PEQUOT CAPITAL MANAGEMENT INC/CT/ DATE OF NAME CHANGE: 19981118 SC 13D/A 1 e583092v2.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D/A UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 6) MTM Technologies, Inc. ---------------------- (Name of Issuer) Common Stock, par value $0.001 per share ---------------------------------------- (Title of Class of Securities) 594944-10-0 ----------- (CUSIP Number) Aryeh Davis, General Counsel Pequot Capital Management, Inc. 500 Nyala Farm Road, Westport, CT 06880 (203) 429-2200 ----------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) August 16, 2005 --------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No. 594944-10-0
1 Names of Reporting Persons. Pequot Capital Management, Inc. I.R.S. Identification Nos. of above persons (entities only) 06-1524885 ------------------------------------------------------------------------------------------------------- 2 Check the Appropriate Box if a Member of a Group (See Instructions) (a) [ ] (b) |X| - ---------------------------------------------------------------------------------------------------------------- 3 SEC Use Only - ---------------------------------------------------------------------------------------------------------------- 4 Source of Funds (See Instructions) 00 - ---------------------------------------------------------------------------------------------------------------- 5 Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] - ---------------------------------------------------------------------------------------------------------------- 6 Citizenship or Place of Organization Connecticut - ---------------------------------------------------------------------------------------------------------------- 7 Sole Voting Power 14,564,191(1)(2) -------------------------------------------------------------------------- Number of 8 Shared Voting Power 0 -------------------------------------------------------------------------- Shares Bene- 9 Sole Dispositive Power 14,564,191(1)(2) -------------------------------------------------------------------------- ficially Owned 10 Shared Dispositive Power 0 -------------------------------------------------------------------------- 11 Aggregate Amount Beneficially Owned by Each Reporting Person 14,564,191(1)(2) - ---------------------------------------------------------------------------------------------------------------- 12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ]1 - ---------------------------------------------------------------------------------------------------------------- 13 Percent of Class Represented by Amount in Row (11) 66.0%(1)(2) - ---------------------------------------------------------------------------------------------------------------- 14 Type of Reporting Person (See Instructions) IA - ----------------------------------------------------------------------------------------------------------------
- ---------- (1) See Item 5 below. (2) The Reporting Person (as defined below) may be deemed to be part of a group with: (i) the other Shareholder Parties (as defined below) pursuant to the terms of the Restated Shareholders' Agreement; (ii) the other Voting Agreement Parties (as defined below) pursuant to the terms of the Voting Agreement; and/or (iii) the other NEXL Voting Agreement Parties, in each case, as described in Items 4 and 5. The Reporting Person does not affirm to be part of a group and expressly disclaims beneficial ownership of (i) the 7,187,630 shares of Common Stock (as defined herein), in the aggregate, beneficially owned by the other Shareholder Parties (including shares underlying options exercisable in 60 days); (ii) the 7,187,630 shares of Common Stock, in the aggregate, beneficially owned by the other Voting Agreement Parties (including shares underlying options exercisable in 60 days); and (iii) the 5,391,413 shares of Common Stock, in the aggregate, beneficially owned by the other NEXL Voting Agreement Parties (including shares underlying options exercisable in 60 days). Accordingly, such shares of Common Stock are not included in the amounts specified by the Reporting Person above. 2 This Amendment No. 6 is filed by Pequot Capital Management, Inc., a Connecticut corporation (the "Reporting Person"), and amends Items 3, 4, 5 and 7 of the Amendment No. 5 to Schedule 13D filed by the Reporting Person on July 14, 2005 ("Amendment No. 5," together with (i) the Amendment No. 4 to Schedule 13D filed by the Reporting Person on March 25, 2005 ("Amendment No. 4"); (ii) the Amendment No. 3 to Schedule 13D filed by the Reporting Person on December 17, 2004 ("Amendment No. 3"), (iii) the Amendment No. 2 filed by the Reporting Person on September 23, 2004, (iv) Amendment No. 1, filed by the Reporting Person on May 28, 2004, and (v) the Schedule 13D filed by the Reporting Person on February 9, 2004, the "Schedule 13D," and together with this Amendment No. 6, the "Statement"). This Amendment No. 6 relates to the Common Stock, par value $0.001 per share (the "Common Stock"), of MTM Technologies, Inc. (formerly known as Micros-to-Mainframes, Inc.), a New York corporation (the "Issuer"). Capitalized terms used below and not otherwise defined herein shall have the meaning set forth in the Schedule 13D, as previously amended. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION Item 3 is hereby amended and restated in its entirety as follows: As more fully described in Item 4 hereof, pursuant to the Purchase Agreement (as defined below) and the 12/7 Purchase Agreement (as defined below), the Reporting Person previously acquired the Series A-1 Preferred Stock, the Series A-2 Preferred Stock, the Series A-3 Preferred Stock, the A-4 First Tranche Preferred Stock, the A-4 Second Tranche Preferred Stock, the A-1 Warrants, A-2 Warrants, the A-3 Warrants, the A-4 First Tranche Warrants and the A-4 Second Tranche Warrants (each, as defined below) for aggregate consideration of approximately $29,500,000. Pursuant to the 12/7 Purchase Agreement, the Reporting Person has acquired (i) the A-4 Third Tranche Preferred Stock and the A-4 Third Tranche Warrants (each, as defined below), for aggregate consideration of approximately $3,500,000; and (ii) the A-4 Fourth Tranche Preferred Stock and the A-4 Fourth Tranche Warrants (each, as defined below), for aggregate consideration of approximately $2,050,000. The funds for the purchase of such securities held by the Accounts were obtained from the contributions of the Accounts' partners/shareholders. The Reporting Person entered into the NEXL Voting Agreement as a condition to NEXL's execution of the NEXL Merger Agreement (as such term is defined in Item 4), and as such, no funds were expended by the Reporting Person in connection with the NEXL Voting Agreement. A copy of the Purchase Agreement was previously filed as Exhibit 1 to the Schedule 13D and is incorporated herein by reference. A copy of the 12/7 Purchase Agreement was previously filed as Exhibit 1 to Amendment No. 3 and is incorporated herein by reference. A copy of the NEXL Merger Agreement is incorporated herein by reference as Exhibit 1. A copy of the NEXL Voting Agreement is attached hereto as Exhibit 2 and is incorporated herein by reference. The descriptions herein of such agreements are qualified in their entirety by reference to such agreements. ITEM 4. PURPOSE OF TRANSACTION Item 4 is hereby amended and restated in its entirety as follows: The Reporting Person acquired the First Round Preferred Stock (as defined below) that is convertible into Common Stock and the First Round Warrants (as defined below) to purchase Common Stock pursuant to the terms of the Purchase Agreement. The Reporting Person acquired or will acquire, the Notes (as defined below), which were converted on the Shareholder Approval Date (as defined below) into shares of Series A-4 Preferred Stock (as defined below) and the Second Round Preferred Stock (as defined below), which is convertible into shares of Common Stock and the Second Round Warrants (as defined below) to purchase Common Stock pursuant to the terms of the 12/7 Purchase Agreement. The Reporting Person considers the shares of Common Stock that it beneficially owns an investment made in the ordinary course of its business. The Reporting Person intends to review on a continuing basis its investment in the Issuer, including the Issuer's 3 business, financial condition and operating results and general market and industry conditions and, based upon such review, may acquire additional Notes, Preferred Stock, Warrants (each, as defined below) or Common Stock or dispose of Notes, Preferred Stock, Warrants or Common Stock, in the open market, in privately negotiated transactions or in any other lawful manner. PURCHASE AGREEMENT On May 21, 2004, pursuant to a Purchase Agreement, dated as of January 29, 2004 (the "Purchase Agreement"), with the Funds, the Issuer issued and sold to the Funds: (i) an aggregate of 3,255,814 shares of the Issuer's Series A-1 Convertible Preferred Stock, par value $0.001 per share (the "Series A-1 Preferred Stock") for a purchase price of $2.15 per share of Series A-1 Preferred Stock, and (ii) warrants to purchase an aggregate of 500,000 shares of Common Stock, at an exercise price of $2.46 per share (the "A-1 Warrants"), representing an aggregate consideration of approximately $7,000,000. Subsequently, on September 16, 2004, pursuant to the Purchase Agreement, the Issuer issued and sold to the Funds: (i) an aggregate of 2,000,000 shares of the Issuer's Series A-2 Convertible Preferred Stock, par value $0.001 per share (the "Series A-2 Preferred Stock") for a purchase price of $2.75 per share of Series A-2 Preferred Stock, and (ii) warrants to purchase an aggregate of 400,000 shares of Common Stock, at an exercise price of $3.44 per share (the "A-2 Warrants"), representing an aggregate consideration of approximately $5,500,000. On December 7, 2004, pursuant to the Purchase Agreement, the Issuer issued and sold to the Funds: (i) an aggregate of 1,923,077 shares of the Issuer's Series A-3 Convertible Preferred Stock, par value $0.001 per share (the "Series A-3 Preferred Stock", together with the Series A-1 Preferred Stock and the Series A-2 Preferred Stock, the "First Round Preferred Stock") for a purchase price of $3.25 per share of Series A-3 Preferred Stock, and (ii) warrants to purchase an aggregate of 384,616 shares of Common Stock, at an exercise price of $4.0625 per share (the "A-3 Warrants," together with the A-1 Warrants and the A-2 Warrants, the "First Round Warrants"), representing an aggregate consideration of approximately $6,250,000. Concurrently with the acquisition of the Series A-3 Preferred Stock and the A-3 Warrants, the Reporting Person assigned to Constellation (as defined below) all of its rights and obligations under the Purchase Agreement to purchase from the Issuer an additional $6,250,000 of the Series A-3 Preferred Stock and Series A-3 Warrants, together with any and all rights and obligations of a "Purchaser" under the Purchase Agreement with respect to such Series A-3 Preferred Stock and Series A-3 Warrants. Immediately thereafter, Constellation purchased 1,923,077 shares of the Issuer's Series A-3 Convertible Preferred Stock (the "Constellation A-3 Preferred Stock") and warrants to purchase 384,616 shares of Common Stock (the "Constellation A-3 Warrants"). 12/7 PURCHASE AGREEMENT On December 10, 2004, pursuant to a Purchase Agreement, dated as of December 7, 2004 (the "12/7 Purchase Agreement"), with the Funds and Constellation Venture Capital II, L.P. ("CVC2"), Constellation Venture Capital Offshore II, L.P. ("CVCO2"), The BSC Employee Fund VI, L.P. ("BSC") and CVC II Partners, LLC ("CVC2LLC" and, collectively with CVC2, CVCO2 and BSC, "Constellation"), the Issuer issued and sold to the Funds: (i) $6,250,000 in aggregate principal amount of its 7% secured subordinated convertible promissory notes (the "A-4 First Tranche Notes"), which converted on the Shareholder Approval Date (as defined below) into 1,995,790 shares of Series A-4 convertible preferred stock, $0.001 par value per share (the "A-4 First Tranche Preferred Stock") (subject to adjustment in accordance with the terms of the Restated Certificate), including 72,713 shares attributable to accrued interest on the A-4 First Tranche Notes, and (ii) warrants to purchase up to 384,616 shares (as such amount may be adjusted in accordance with the terms thereof) of Common Stock (the "A-4 First Tranche Warrants"). Under the terms of the 12/7 Purchase Agreement, the Funds and Constellation (the "Investor Stockholders") have the right purchase their respective percentage amounts of, at any time, but in no event later than September 10, 2005, on any Subsequent Closing Date (as defined in the 12/7 Purchase Agreement) (i) up to $15,000,000 in aggregate principal amount of the Issuer's 7% secured subordinated convertible promissory notes, which amounts may be adjusted in accordance with the terms of the 12/7 Purchase Agreement (the "A-4 Second Tranche Notes" and, together with the A-4 First Tranche Notes, the "Series A-4 Notes") which are convertible into shares of Series A-4 Convertible Preferred Stock, $0.001 par value per share, or, after the Shareholder Approval Date, shares of Series A-4 Convertible Preferred Stock, $0.001 par value per share, (ii) warrants to purchase up to 923,077 shares (as such amount may be adjusted in accordance with the terms thereof) of Common Stock (the "Additional A-4 Warrants" and together with the A-4 First Tranche Warrants, the "Second Round Warrants) and (iii) up to $22,500,000 in aggregate principal amount of the Issuer's 7% 4 secured subordinated convertible promissory notes, which amounts may be adjusted in accordance with the terms of the 12/7 Purchase Agreement (the "Series A-5 Notes" and together with the Series A-4 Notes, the "Notes") which are convertible into shares of Series A-5 Convertible Preferred Stock, $0.001 par value per share (the "Series A-5 Preferred Stock" and, together with the Series A-4 Preferred Stock, the "Second Round Preferred Stock) or, after the Shareholder Approval Date, shares of Series A-5 Preferred Stock. The First Round Preferred Stock and the Second Round Preferred Stock are collectively referred to herein as "Preferred Stock." The First Round Warrants and the Second Round Warrants are collectively referred to herein as "Warrants". In accordance with the terms of the 12/7 Purchase Agreement, since the Funds and Constellation purchased all of the Series A-4 Preferred Stock and Additional A-4 Warrants, only an aggregate principal amount of up to $15,000,000 of Series A-5 Notes can be purchased. On March 11, 2005, pursuant to the 12/7 Purchase Agreement, the Issuer issued and sold to the Funds: (i) $4,500,000 in aggregate principal amount of it's A-4 Second Tranche Notes, which converted on the Shareholder Approval Date into 1,412,587 shares of Series A-4 convertible preferred stock, $0.001 par value per share (the "A-4 Second Tranche Preferred Stock") (subject to adjustment in accordance with the terms of the Restated Certificate), including 27,972 shares attributable to accrued interest on the A-4 Second Tranche Notes, and (ii) Additional A-4 Warrants to purchase up to 276,923 shares (the "A-4 Second Tranche Warrants") (as such amount may be adjusted in accordance with the terms thereof) of Common Stock. On June 29, 2005, pursuant to the 12/7 Purchase Agreement, the Issuer issued and sold to the Funds: (i) 1,061,538 shares of Series A-4 convertible preferred stock, $0.001 par value per share (the "A-4 Third Tranche Preferred Stock") (subject to adjustment in accordance with the terms of the Restated Certificate) and (ii) warrants to purchase up to 212,308 shares (as such amount may be adjusted in accordance with the terms thereof) of Common Stock (the "A-4 Third Tranche Warrants"). On July 7, 2005, pursuant to the 12/7 Purchase Agreement, the Issuer issued and sold to the Funds: (i) 630,769 shares of Series A-4 convertible preferred stock, $0.001 par value per share (the "A-4 Fourth Tranche Preferred Stock," together with the A-4 Third Tranche Preferred Stock, the A-4 Second Tranche Preferred Stock and the A-4 First Tranche Preferred Stock, the "Series A-4 Preferred Stock") (subject to adjustment in accordance with the terms of the Restated Certificate) and (ii) warrants to purchase up to 126,153 shares (as such amount may be adjusted in accordance with the terms thereof) of Common Stock (the "A-4 Fourth Tranche Warrants," together with the A-4 Third Tranche Warrants, the A-4 Second Tranche Warrants and the A-4 First Tranche Warrants, the "A-4 Warrants"). VOTING AGREEMENT Concurrently with, and as a condition to, the Investor Stockholders' execution of the 12/7 Purchase Agreement, certain shareholders of the Issuer, consisting of the Funds, Constellation, Howard A. Pavony and Steven H. Rothman (the Funds, together with Constellation and Messrs. Pavony and Rothman, the "Voting Agreement Parties"), entered into a Voting Agreement (the "Voting Agreement"). Under the Voting Agreement, such shareholders have agreed that, at any meeting of the shareholders of the Issuer, or in connection with any other circumstances upon which a vote, consent or other approval (including by written consent) to be taken by the shareholders of the Issuer relating to the 12/7 Purchase Agreement and the transactions contemplated thereby or for the Issuer to perform its obligations under the Purchase Agreement, such shareholders will vote in favor of the adoption of the 12/7 Purchase Agreement and the approval of the transactions contemplated thereby. Pursuant to the terms of the Voting Agreement, each shareholder party thereto also agrees that until the transactions contemplated by the 12/7 Purchase Agreement are consummated or the 12/7 Purchase Agreement is terminated, such shareholder will not: (i) sell, transfer, pledge, assign, or otherwise dispose of such shareholder's shares of the Issuer, except as provided in the Voting Agreement; (ii) enter into or exercise its rights under any voting arrangement with respect to such shares; or (iii) take any other action that would in any way restrict, limit, or interfere with, the performance of such shareholder's obligations under the Voting Agreement. Pursuant to its terms, the Voting Agreement, and all rights and obligations of the parties thereunder, terminate upon the earlier of: (i) the Shareholder Approval Date or (ii) payment in full or conversion of the Notes in accordance with their terms. 5 RESTATED SHAREHOLDERS' AGREEMENT On December 10, 2004 (the "Initial Closing"), the Issuer, the Funds, Constellation, Howard A. Pavony and Steven H. Rothman (the Funds, together with Constellation and Messrs. Pavony and Rothman, the "Shareholder Parties") entered into an Amended and Restated Shareholders' Agreement (as further amended and restated on December 21, 2004 and August 1, 2005, the "Restated Shareholders' Agreement") pursuant to which the Shareholder Parties agreed to vote, or cause to be voted, all securities of the Issuer owned by such Shareholder Party or over which such Shareholder Party has voting control so that the number of directors of the Issuer will be ten, consisting of: (i) the Issuer's chief executive officer ("CEO"); (ii) two directors designated by the Funds or its assignee; (iii) one director designated by Constellation or its assignee; (iv) Mr. Rothman; (v) three "independent" directors, within the meaning of "independent" under the current rules of The Nasdaq Stock Market, selected by the Issuer's nominating and corporate governance committee; and (vi) two additional independent directors to be selected by the CEO and reasonably acceptable to the Issuer's nominating and corporate governance committee. Under certain circumstances where the Funds hold less than 25% of the securities the Funds originally purchase at the Initial Closing, the right to designate two directors in (ii) above will be reduced to one director and the above voting provisions will be adjusted in the manner described in the Restated Shareholders' Agreement. The obligation of the Shareholder Parties under the Restated Shareholders' Agreement will expire on December 10, 2009. The obligation of the Funds and Constellation to vote in favor of the appointment of Mr. Rothman as a director will expire on May 20, 2007, provided that he has not terminated his employment, other than for "good reason," nor has been terminated for "cause." Mr. Pavony's and Rothman's obligation to vote (i) in favor of the nominees of the Funds and Constellation for director shall terminate if (a) the Funds or their assignees own less than 10% of the First Round Preferred Stock (or shares of Common Stock issuable upon conversion thereof) issued to the Funds, (b) Constellation or its assignees own less than 10% of the Series A-3 Preferred Stock (or shares of Common Stock issuable upon conversion thereof) issued to Constellation, or (c) any other shareholders that are introduced to the Issuer by Pequot own less than 10% of the shares acquired by such shareholders from the Issuer in a transaction not including a public offering or (ii) if either or both of Messrs. Pavony and Rothman individually owns less than less than 10% of the number of shares of Common Stock owned by such person on December 21, 2004. The Restated Shareholders' Agreement also contains provisions (i) restricting the transfer of any securities by shareholders party to the Restated Shareholders' Agreement in certain circumstances and (ii) granting the Funds and Constellation certain rights of first refusal and tag-along rights with respect to any dispositions by Messrs. Pavony and Rothman of their shares of Common Stock. RESTATED REGISTRATION RIGHTS AGREEMENT In connection with the transactions contemplated by the 12/7 Purchase Agreement, the Issuer, the Investor Stockholders and Messrs. Pavony and Rothman entered into an Amended and Restated Registration Rights Agreement (as further amended and restated on August 1, 2005, the "Restated Registration Rights Agreement"). Pursuant to the Restated Registration Rights Agreement, within 60 days of (a) the date of any issuance of any Preferred Stock or (b) the date of notice to the Company of any acquisition of Common Stock then having a fair market value of at least $150,000 by the Investor Stockholders, the Issuer will be required to file a registration statement registering (for the resale on a continuous basis under Rule 415 of the Securities Act) the Common Stock underlying the Preferred Stock, the Warrants and all other shares of Common Stock owned by the Investor Stockholders at such time, as well as certain shares of Common Stock owned by Messrs. Pavony and Rothman. The Issuer will be required to keep such registration statement effective until all the Common Stock registered thereunder is sold or the holders are entitled to sell such Common Stock under Rule 144(k) under the Securities Act, without compliance with the public information, sales volume, manner of sale or notice requirements of Rule 144(c), (e), (f) or (h) under the Securities Act. The Restated Registration Rights Agreement also provides the Investor Stockholders and Pavony with piggyback registration rights with respect to certain underwritten offerings of the Issuer's Common Stock. NEXL MERGER AGREEMENT On August 16, 2005, the Issuer entered into an Agreement and Plan of Merger (the "NEXL Merger Agreement") with NEXL, Inc., a Massachusetts corporation ("NEXL"), MTM Technologies (Massachusetts), 6 LLC, a Delaware limited liability company and wholly owned subsidiary of the Issuer (the "Merger Subsidiary"), Clifford L. Rucker (the "Controlling Shareholder") and each person added as a party to the NEXL Merger Agreement pursuant to Section 12.02 thereof (collectively with the Controlling Shareholder, the "Shareholders" and each a "Shareholder"), pursuant to which NEXL will be merged with and into the Merger Subsidiary and the Merger Subsidiary will continue as the surviving entity and a wholly owned subsidiary of Issuer (the "NEXL Merger"). Subject to certain adjustments, in exchange for all of the outstanding capital stock of NEXL, the shareholders of NEXL will receive, in the aggregate: (i) $13,050,000 in cash (the "Cash Consideration"); and (ii) 3,000,000 shares of Common Stock (the "Stock Consideration"), a portion of which will be delivered to an escrow agent, to be held and distributed pursuant to the terms of an escrow agreement; provided that if the average of the NASDAQ closing price of Common Stock for the 30 trading days ending on the date five business days prior to the meeting of the Issuer's shareholders convened to approve the sale and issuance of MTM Common Stock (the "Stockholder Meeting") pursuant to the Merger Agreement (such average, the "Stock Value") is greater than $5.85 per share, the Stock Payment will be reduced such that the total value of the shares of Common Stock actually delivered (including the shared delivered to the Escrow Agent) equals $17,550,000. Upon the achievement of certain performance benchmarks, which are subject to adjustment based on the occurrence of certain events specified in the NEXL Merger Agreement, the shareholders of NEXL will be entitled to receive and additional $1,000,000 in cash and additional shares of Common Stock in an aggregate amount determined by dividing $1,000,000 by the greater of (A) the average NASDAQ closing price of the Common Stock for the ten business days ending immediately prior to the end of the period beginning on the first day of the first calendar month following the closing date and ending on the date twelve months thereafter and (B) $4.00. The obligations of the parties to the NEXL Merger Agreement to effect the NEXL Merger are subject to certain conditions, including shareholder approval, regulatory approvals and other customary closing conditions. Prior to the effective time of the NEXL Merger, the Issuer or NEXL may terminate the NEXL Merger Agreement under certain conditions, in each case as set forth in the NEXL Merger Agreement. In addition, the NEXL Merger Agreement may be terminated by either the Issuer or NEXL if five business days prior to the Stockholder Meeting, the Stock Value is less than $2.90, unless either (i) NEXL and the Controlling Shareholder agree to reduce the Cash Consideration such that the value of the Stock Consideration constitutes at least 40% of the total consideration to be paid on the closing date, prior to adjustment or (ii) the Issuer agrees to increase the Stock Consideration such that the value of the Stock Consideration constitutes at least 40% of the total consideration to be paid on the closing date, prior to adjustment. On August 16, 2005, the holders of the Preferred Stock, voting as a separate class, approved the transactions contemplated by the NEXL Merger Agreement by written consent. The issuance of shares of Common Stock in the Merger requires the approval of the Issuer's shareholders in accordance with the requirements of the Nasdaq Stock Market. NEXL VOTING AGREEMENT Concurrently with, and as a condition to, NEXL's execution of the NEXL Merger Agreement, the Funds, Constellation and the Company (collectively, the "NEXL Voting Agreement Parties"), entered into a Voting Agreement (the "NEXL Voting Agreement"). Under the NEXL Voting Agreement, the NEXL Voting Agreement Parties have agreed that, at any meeting of the shareholders of the Issuer, or in connection with any other circumstances upon which a vote, consent or other approval (including by written consent) to be taken by the shareholders of the Issuer relating to the NEXL Merger Agreement and the transactions contemplated thereby or for the Issuer to perform its obligations thereunder, the NEXL Voting Agreement Parties will vote in favor of the adoption of the NEXL Merger Agreement and the approval of the transactions contemplated thereby. Until the transactions contemplated by the NEXL Merger Agreement are consummated or the NEXL Merger Agreement is terminated, each shareholder party to the NEXL Voting Agreement agreed not to enter into or exercise its rigths under any voting arrangement with respect to its shares or take any other action that would restrict, limit or interfere with the performance of its obligations under the NEXL Voting Agreement or the transactions contemplated thereby. Each of the shareholders party to the NEXL Voting Agreement granted an irrevocable proxy to John F. Kohler, the Issuer's general counsel, and any other individual designated by the shareholders, to vote such shareholder's shares or grant consent or approval of the NEXL Merger Agreement and the transactions contemplated thereby. Pursuant to its terms, the NEXL Voting Agreement, and all rights and obligations thereunder, terminate upon the earlier of: (ii) the consummation of the transactions contemplated by the NEXL Merger Agreement; or (ii) the termination of the NEXL Merger Agreement in accordance with its terms. 7 RESTATED CERTIFICATE Pursuant to the 12/7 Purchase Agreement, the Issuer held a meeting of its shareholders on June 23, 2005 (the "Shareholder Approval Date") at which the shareholders approved the adoption of the Restated Certificate of Incorporation to amend the certificate to include the terms of the Second Round Preferred Stock (the "Restated Certificate")), the authorization and issuance of (or the conversion of the Notes into) the Second Round Preferred Stock and the exercise of the A-4 Warrants. Upon obtaining shareholder approval and acceptance and filing of the Issuer's Restated Certificate with the Secretary of State of the State of New York, the A-4 First Tranche Notes and the A-4 Second Tranche Notes, together with accrued interest thereon, converted into shares of Series A-4 Preferred Stock and the Series A-5 Preferred Stock was authorized for issuance at the times designated in, and in accordance with the terms of, the 12/7 Purchase Agreement. CHANGES TO THE BOARD OF DIRECTORS On December 10, 2004, Amish Jani, previously nominated by the Funds, resigned as a member of the Issuer's Board of Directors, as contemplated by the Restated Shareholders' Agreement, and Clifford Friedman, a nominee of Constellation was elected to the Issuer's Board of Directors. On August 9, 2005, Clifford Friedman resigned as a member of the Board of Directors and, pursuant to the terms of the Restated Shareholders' Agreement, Constellation appointed Thomas Wasserman as a director, effective August 9, 2005. A copy of the Purchase Agreement was previously filed as Exhibit 1 to the Schedule 13D and is incorporated herein by reference. Copies of the 12/7 Purchase Agreement, the Voting Agreement, the Restated Shareholders' Agreement and the Restated Registration Rights Agreement were previously filed as Exhibits 1, 2, 3 and 4, respectively, to Amendment No. 3 and are incorporated herein by reference. A copy of the Restated Certificate was incorporated herein by reference as Exhibit 1 to Amendment No. 5. A copy of the NEXL Merger Agreement is incorporated herein by reference as Exhibit 1. A copy of the NEXL Voting Agreement is attached hereto as Exhibit 2 and is incorporated herein by reference. The descriptions herein of such agreements and certificate are qualified in their entirety by reference to such agreements or certificate. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER Item 5 is hereby amended and restated in its entirety as follows: (a) The Reporting Person beneficially owns 14,564,191 shares of Common Stock, representing approximately 66.0% of shares of Common Stock outstanding as of August 16, 2005 (assuming the issuance of (i) 8,463,507 shares of Common Stock issuable upon conversion of the First Round Preferred Stock and the exercise of the First Round Warrants and (ii) 6,100,684 shares of Common Stock issuable upon conversion of the Series A-4 Preferred Stock (giving effect to the conversion of the A-4 First Tranche Notes and the A-4 Second Tranche Notes into Series A-4 Preferred Stock) and the exercise of the A-4 Warrants). In addition, by virtue of each of the Restated Shareholders' Agreement, the Voting Agreement, and/or NEXL Voting Agreement it could be alleged that a "group," within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or Rule 13d-5(b)(1) thereunder, has been formed that includes the other Shareholder Parties and the Reporting Person, the other Voting Agreement Parties and the Reporting Person and/or the other NEXL Voting Agreement Parties and the Reporting Person. While the Reporting Person does not concede that such a "group" has been formed, this filing is being made to ensure compliance with the Exchange Act. Such a group including the other Shareholder Parties and/or the other Voting Agreement Parties and the Reporting Person would be deemed to beneficially own, in the aggregate, 21,751,821 shares of Common Stock (including shares underlying options exercisable within 60 days of the date hereof), representing 78.6% of the Common Stock outstanding as of August 16, 2005. A group including the other NEXL Voting Agreement Parties and the Reporting Person would be deemed to beneficially own, in the aggregate, 19,955,604 shares of Common Stock (including shares underlying options exercisable within 60 days of the date hereof), representing 72.7% of the Common Stock outstanding as of August 16, 2005. The Reporting Person expressly disclaims beneficial ownership of Common Stock beneficially owned by any other group member and does not affirm that any such "group" exists. (b) The Reporting Person has the sole power to vote, direct the vote, dispose and direct the disposition of the 14,564,191 shares of Common Stock. 8 Pursuant to, and to the extent set forth in, the Restated Shareholders' Agreement, it could be alleged that the Reporting Person shares voting and dispositive power with respect to the shares of Common Stock beneficially owned by the other Shareholder Parties. Pursuant to, and to the extent set forth in, the Voting Agreement, it could be alleged that the Reporting Person shares voting and dispositive power with respect to the shares of Common Stock beneficially owned by the other Voting Agreement Parties. Pursuant to, and to the extent set forth in the NEXL Voting Agreement, it could be alleged that the Reporting Person shares voting power with respect to the Common Stock beneficially owned by the other NEXL Voting Agreement Parties. To the knowledge of the Reporting Person and based on documents publicly filed by the Group Members, other than Constellation, (i) the name, address and principal occupation of each Group Member is as filed on Exhibit 3 to the Schedule 13D and is incorporated herein by reference and (ii) each such Group Member is a citizen of the United States. To the knowledge of the Reporting Person, the name, address and principal occupation of the officers, directors and controlling person(s) of Constellation is as set forth on Exhibit 3 hereto and is incorporated herein by reference. To the knowledge of the Reporting Person and based on documents publicly filed by the Group Members, during the last five years, no Group Member has been: (i) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to Federal or State securities laws or finding any violation with respect to such laws. (c) Except for the information set forth, or incorporated by reference, in Items 3 and 4, which is incorporated herein by reference, none of the Reporting Persons has effected any transaction relating to the Common Stock during the past 60 days. (d) Not applicable. (e) Not applicable. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS Exhibit 1 Agreement and Plan of Merger, dated as of August 16, 2005, by and among the Issuer, NEXL, Inc. and MTM Technologies (Massachusetts), LLC, Clifford L. Rucker and each person added thereto pursuant to Section 12.02 thereof (incorporated by reference to Exhibit 1 to the Issuer's Form 8-K, dated August 16, 2005 (filed August 19, 2005)). Exhibit 2 Voting Agreement, by and among the Issuer, the Funds and Constellation. Exhibit 3 Name, address and principal occupation of certain Group Members. S I G N A T U R E After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete, and correct. Date: August 23, 2005 Pequot Capital Management, Inc. /S/ ARYEH DAVIS -------------------------------------- Aryeh Davis, Chief Operating Officer, General Counsel and Secretary 10 EXHIBIT INDEX ------------- Exhibit 1 Agreement and Plan of Merger, dated as of August 16, 2005, by and among the Issuer, NEXL, Inc. and MTM Technologies (Massachusetts), LLC, Clifford L. Rucker and each person added thereto pursuant to Section 12.02 thereof (incorporated by reference to Exhibit 1 to the Issuer's Form 8-K, dated August 16, 2005 (filed August 19, 2005)). Exhibit 2 Voting Agreement, by and among the Issuer, the Funds and Constellation. Exhibit 3 Name, address and principal occupation of certain Group Members. 11 EXHIBIT 2 To the knowledge of the Reporting Person, the principal occupation of Mr. Pavony is serving as a consultant to the Issuer and the principal occupation of Mr. Rothman is Executive Vice President of the Issuer and their address is 850 Canal Street, Stamford, Connecticut 06902. To the knowledge of the Reporting Person, the name, address and principal business or occupation of the officers, directors, partners and/or controlling person(s) of Constellation, in each case, as applicable, are as follows: Constellation Venture Capital II, L.P. ("CV II") is a Delaware limited partnership whose principal business is that of a private investment partnership. The general partner of CVII is Constellation Ventures Management II, LLC, a Delaware limited liability corporation ("Management II"). Constellation Venture Capital Offshore II, L.P. ("Offshore II") is a Cayman Islands limited partnership whose principal business is that of a private investment partnership. The general partner of Offshore II is Management II. The BSC Employee Fund VI, L.P. ("BSC VI") is a Delaware limited partnership whose principal business is that of a private investment partnership. The general partners of BSC VI are Management II and Bear Stearns Merchant Capital II, L.P. ("BSMC"). The principal business of BSMC is that of a private investment partnership. CVC II Partners, L.L.C. ("CVC") is a Delaware limited liability corporation whose principal business is that of a private investment limited liability corporation. The managing member of CVC is The Bear Stearns Companies Inc. ("BSCI"). The principal business of BSCI is that of a securities broker-dealer. Management II is a Delaware limited liability corporation whose principal business is that of a private investment limited liability corporation. The managing member of Management II is Bear Stearns Asset Management Inc. ("BSAM"). BSAM is a New York corporation. The principal business of BSAM is that of a registered investment advisor. The principal business and principal office address of CV II, Offshore II, Management II, BSC VI, BSMC, BSAM BSCI, and CVC is 383 Madison Avenue, 28th Floor, New York, New York 10179. The executive officers and directors of BSAM are citizens of the United States, and their respective principal occupations are as follows: (i) Richard A. Marin is Director, Chairman of the Board, Chief Executive Officer, President and Senior Managing Director of BSAM, (ii) John W. Geisseinger is Director, Chief Investment Officer and Senior Managing Director of BSAM, (iii) Stephen A. Bornstein is General Counsel, Executive Vice President and Managing Director of BSAM,(iv) Michael E. Guarasci is Director, Chief Financial Officer, Chief Operating Officer and Senior Managing Director of BSAM and (v) Lawrence S. Lafer is Secretary, Chief Compliance Officer and Managing Director of BSAM. 12 EX-2 2 e671832v4.txt VOTING AGREEMENT THIS VOTING AGREEMENT (this "Agreement"), dated as of August 16, 2005, is by and among the persons listed on SCHEDULE I hereto (each a "Shareholder", and, collectively, the "Shareholders"). WHEREAS, MTM Technologies, Inc., a New York corporation (the "Company"), proposes to enter into an Agreement and Plan of Merger of even date herewith (the "Merger Agreement") with NEXL, Inc., a Massachusetts corporation ("NEXL"), Clifford L. Rucker and MTM (Massachusetts), LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company ("Merger Subsidiary"), for the merger of NEXL with and into the Merger Subsidiary; WHEREAS, on an as converted basis, the Shareholders own approximately 69% of the Common Stock, $.001 par value per share, of the Company (the "Common Stock"); WHEREAS, as a condition to the execution and delivery of the Merger Agreement, NEXL has requested that the Shareholders enter into this Agreement; WHEREAS, the Shareholders believe that the execution, delivery and performance of the Merger Agreement by the Company and the consummation of the transactions contemplated thereby (the "Transactions") are in the best interests of the Company and its shareholders; and WHEREAS, each Shareholder is the record and beneficial owner, or the trustee of a trust whose beneficiaries are the beneficial owners, of such number of shares of Common Stock of the Company set forth opposite such Shareholder's name on SCHEDULE I hereto (such shares of Common Stock, as such shares may be adjusted by stock dividend, stock split, recapitalization, combination or exchange of shares, merger, consolidation, reorganization or other change or transaction, together with shares of Common Stock that may be acquired after the date hereof by such Shareholder, including shares of Common Stock issued upon the exercise of options or warrants to purchase Common Stock (as the same may be adjusted as aforesaid), being collectively referred to herein as the "Shares"). NOW, THEREFORE, in consideration of the premises and the representations, warranties and agreements contained herein, the Shareholders agree as follows: 1. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS. Each Shareholder hereby, severally and not jointly, represents and warrants to the other Shareholders as follows: (a) AUTHORITY. The Shareholder has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by the Shareholder. This Agreement has been duly executed and delivered by the Shareholder and constitutes a valid and binding obligation of the Shareholder enforceable against the Shareholder in accordance with its terms (subject to (i) laws of general application relating to bankruptcy, insolvency and the relief of debtors, and (ii) rules of law governing specific performance, injunctive relief, or other equitable remedies). Except as set forth on SCHEDULE II hereto, neither the execution, delivery or performance of this Agreement by the Shareholder nor the consummation by the Shareholder of the transactions contemplated hereby will (i) require any filing with, or permit, authorization, consent or approval of, any federal, state, local or municipal foreign or other government or subdivision, branch, department or agency thereof or any governmental or quasi-governmental authority of any nature, including any court or other tribunal, (a "Governmental Entity"), (ii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default under, or give rise to any right of termination, amendment, cancellation or acceleration under, or result in the creation of any pledge, claim, lien, option, charge, encumbrance or security interest of any kind or nature whatsoever (a "Lien") upon any of the properties or assets of the Shareholder under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, lease, license, permit, concession, franchise, contract, agreement or other instrument or obligation (a "Contract") to which the Shareholder is a party or by which the Shareholder or any of the Shareholder's properties or assets, including the Shareholder's Shares, may be bound or (iii) violate any judgment, order, writ, preliminary or permanent injunction or decree (an "Order") or any statute, law, ordinance, rule or regulation of any Governmental Entity (a "Law") applicable to the Shareholder or any of the Shareholder's properties or assets, including the Shareholder's Shares. (b) THE SHARES. Subject to the terms of this Agreement, the Shareholder's Shares and the certificates representing such Shares are now, and at all times during the term hereof will be, held by such Shareholder, or by a nominee or custodian for the benefit of such Shareholder. The Shareholder has good and marketable title to such Shares, free and clear of any Liens, proxies, voting trusts or agreements, understandings or arrangements, except for proxies arising hereunder pursuant to Section 4(a) hereof and except as set forth on SCHEDULE II hereto. The Shareholder owns of record or beneficially no Common Stock or other voting interest in the Company other than such Shareholder's Shares and shares of Company Common Stock issuable upon the exercise of options and warrants, in each case as set forth on SCHEDULE I hereto. (c) MERGER AGREEMENT. Each Shareholder understands and acknowledges that the Company is entering into the Merger Agreement in reliance upon such Shareholder's execution and delivery of this Agreement. 2. BOARD APPROVAL. Each Shareholder understands and acknowledges that the Board of Directors of the Company has, to the extent required by applicable law, duly and validly authorized and approved, this Agreement, the Merger Agreement and the transactions contemplated hereby and thereby. 3. AGREEMENTS OF SHAREHOLDERS. Each Shareholder, severally and not jointly, agrees as follows: (a) Until the Transactions are consummated or the Merger Agreement is terminated in accordance with its terms, the Shareholder shall not, (i) enter into or exercise its rights under any voting arrangement, whether by proxy, voting agreement, voting trust, power-of- 2 attorney or otherwise, with respect to the Shares or (ii) take any other action that would in any way restrict, limit or interfere with the performance of its obligations hereunder or the transactions contemplated hereby. (b) At any meeting of Shareholders of the Company called to vote upon the Transactions and the Merger Agreement or at any adjournment thereof or in any other circumstances upon which a vote, consent or other approval (including by written consent) with respect to the Transactions and the Merger Agreement or which is necessary to consummate the Transactions or for the Company to perform its obligations under the Merger Agreement is sought, each Shareholder shall, including by executing a written consent if requested by the Company, vote (or cause to be voted) such Shareholder's Shares in favor of the Transactions and the adoption by the Company of the Merger Agreement. 4. GRANT OF IRREVOCABLE PROXY COUPLED WITH AN INTEREST; APPOINTMENT OF PROXY. (a) Each Shareholder hereby irrevocably grants to, and appoints John F. Kohler, and any other individual who shall hereafter be designated by the Shareholders, and each of them, as such Shareholder's proxy and attorney-in-fact (with full power of substitution), for and in the name, place and stead of such Shareholder, to vote such Shareholder's Shares, or grant a consent or approval in respect of such Shares, at any meeting of Shareholders of the Company or at any adjournment thereof or in any other circumstances upon which their vote, consent or other approval is sought in favor of the Transactions, the execution by the Company of the Merger Agreement and the approval of the other transactions contemplated by the Merger Agreement, including without limitation, the issuance of shares of Common Stock to the shareholders of NEXL as provided therein. (b) Each Shareholder represents that, except with respect to the Other Voting Agreement listed on SCHEDULE II hereto, any prior proxies heretofore given in respect of such Shareholder's Shares are not irrevocable, and that any such prior proxies are hereby revoked. (c) EACH SHAREHOLDER HEREBY AFFIRMS THAT THE PROXY SET FORTH IN THIS SECTION 4 IS COUPLED WITH AN INTEREST AND IS IRREVOCABLE UNTIL SUCH TIME AS THIS AGREEMENT TERMINATES IN ACCORDANCE WITH ITS TERMS. Such Shareholder hereby further affirms that the irrevocable proxy is given in connection with the execution of the Merger Agreement, and that such irrevocable proxy is given to secure the performance of the duties of such Shareholder under this Agreement. Such Shareholder hereby ratifies and confirms all that such irrevocable proxy may lawfully do or cause to be done by virtue hereof. Such irrevocable proxy is executed and intended to be irrevocable in accordance with the provisions of Section 609 of the New York Business Corporation Law. 5. FURTHER ASSURANCES. Each Shareholder will, from time to time, execute and deliver, or cause to be executed and delivered, such additional or further transfers, assignments, endorsements, consents and other instruments as the Company may reasonably request for the purpose of effectively carrying out the transactions contemplated by this Agreement and to vest the power to vote such Shareholder's Shares as contemplated by Section 4. 3 6. TERMINATION. This Agreement, and all rights and obligations of the parties hereunder, shall terminate upon the consummation of the Transactions or earlier termination of the Merger Agreement in accordance with its terms. Nothing in this Section 6 shall relieve any Shareholder from liability for willful breach of this Agreement. 7. GENERAL. (a) COUNTERPARTS. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective when two or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart. (b) DEFINITIONS. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Merger Agreement. (c) ENTIRE AGREEMENT; THIRD-PARTY BENEFICIARIES. Each party hereby acknowledges that no other party or any other person or entity has made any promises, warranties, understandings or representations whatsoever, express or implied, not contained in this Agreement and acknowledges that it has not executed this Agreement in reliance upon any such promises, representations, understandings or warranties not contained herein and that this Agreement supersedes all prior agreements and understandings between the parties with respect thereto. There are no promises, covenants or undertakings other than those expressly set forth or provided for in this Agreement. The Company shall be a third party beneficiary of the rights and benefits of this Agreement. This Agreement is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder. (d) GOVERNING LAW. This Agreement shall be governed and construed in accordance with the laws of the State of New York without regard to any applicable conflicts of law. (e) TITLES AND SUBTITLES. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. (f) NOTICES. All notices and other communications required or permitted hereunder shall be in writing. Notices shall be delivered personally, via recognized overnight courier (such as Federal Express, DHL or Airborne Express) or via certified or registered mail. Notices may be delivered via facsimile or e-mail, provided that by no later than two days thereafter such notice is confirmed in writing and sent via one of the methods described in the previous sentence. Notices shall be addressed to the address of each Shareholder as is set forth on the books and records of the Company, or at such other address or facsimile number as such Shareholder shall have furnished in writing to the other parties hereto. All notices shall be effective upon receipt. (g) SEVERABILITY Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or 4 unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction to the greatest extent possible to carry out the intentions of the parties hereto. (h) DELAYS OR OMISSIONS. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such nonbreaching or nondefaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. (i) FACSIMILE SIGNATURES. Any signature page delivered by a fax machine shall be binding to the same extent as an original signature page, with regard to any agreement subject to the terms hereof or any amendment thereto. (j) AMENDMENT AND WAIVER. This Agreement may be amended by the parties hereto by execution of an instrument in writing signed on behalf of the Shareholders holding a majority of Shares held by all of the Shareholders and the written consent of the Company as a third-party beneficiary. Any amendment signed by the Shareholders holding a majority of Shares held by all of the Shareholders shall bind all of the Shareholders. An action, extension or waiver signed by the Shareholder holding a majority of Shares held by all of the Shareholders shall bind all of the Shareholders. 8. SHAREHOLDER CAPACITY. No person executing this Agreement who is or becomes during the term hereof a director or officer of the Company makes any agreement or understanding herein in his or her capacity as such director or officer. Each Shareholder signs solely in his, her or its capacity as the record holder and beneficial owner of, or the trustee of a trust whose beneficiaries are the beneficial owners of, such Shareholder's Shares and nothing herein shall limit or affect any actions taken by a Shareholder in its capacity as an officer or director of the Company to the extent specifically permitted by the Merger Agreement or as otherwise required by law.. 9. ENFORCEMENT. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in a court of the United States. This being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the parties hereto waives any right to trial by jury with respect to any claim or proceeding related to or arising out of this Agreement or any of the transactions contemplated hereby. 5 IN WITNESS WHEREOF, each party hereto has signed this Agreement as of the date first written above. PEQUOT PRIVATE EQUITY FUND III, L.P. By: Pequot Capital Management, Inc., its Investment Manager By: /s/ Aryeh Davis ------------------------------------- Name: Aryeh Davis Title: General Counsel PEQUOT OFFSHORE PRIVATE EQUITY PARTNERS III, L.P. By: Pequot Capital Management, Inc., its Investment Advisor By: /s/ Aryeh Davis ------------------------------------- Name: Aryeh Davis Title: General Counsel CONSTELLATION VENTURE CAPITAL II, L.P. By: Constellation Ventures Management II, LLC Its General Partner By: /s/ Thomas Wasserman ------------------------------------- Name: Title: Signature Page to Voting Agreement CONSTELLATION VENTURE CAPITAL OFFSHORE II, L.P. By: Constellation Ventures Management II, LLC Its General Partner By: /s/ Thomas Wasserman ------------------------------------- Name: Title: THE BSC EMPLOYEE FUND VI, L.P. By: Constellation Ventures Management II, LLC Its General Partner By: /s/ Thomas Wasserman ------------------------------------- Name: Title: CVC II PARTNERS, LLC By: The Bear Stearns Companies Inc. Its Managing Member By: /s/ Thomas Wasserman ------------------------------------- Name: Title: Signature Page to Voting Agreement SCHEDULE I ---------- - ---------------------------------------------- --------------------------------- SHAREHOLDER PREFERRED STOCK - ---------------------------------------------- --------------------------------- Pequot Private Equity Fund III, L.P. 10,762,972 - ---------------------------------------------- --------------------------------- Pequot Offshore Private Equity Partners III, 1,517,153 L.P. - ---------------------------------------------- --------------------------------- Constellation Venture Capital II, L.P. 2,330,598 - ---------------------------------------------- --------------------------------- Constellation Venture Capital Offshore II, 1,240,235 L.P. - ---------------------------------------------- --------------------------------- The BSC Employee Fund VI, L.P. 1,039,301 - ---------------------------------------------- --------------------------------- CVC II Partners, LLC 58,200 - ---------------------------------------------- --------------------------------- TOTAL 16,947,909 - ---------------------------------------------- --------------------------------- SCHEDULE II ----------- REQUIRED FILINGS: Filings with the Securities and Exchange Commission pursuant to the requirements of the Securities and Exchange Act of 1934, as amended. OTHER VOTING AGREEMENT Amended and Restated Shareholders' Agreement, dated as of August 1, 2005, among the Company and certain of its shareholders. -----END PRIVACY-ENHANCED MESSAGE-----