1
Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
MCM CAPITAL GROUP, INC.
Dated as of May 22, 2000
2
TABLE OF CONTENTS
Page
----
1. REGISTRATIONS RIGHTS .................................................. 2
1.1. Incidental Registration .......................................... 2
1.2. Expenses ......................................................... 4
2. REGISTRATION PROCEDURES ............................................... 4
3. UNDERWRITTEN OFFERINGS ................................................ 7
3.1. Underwriting Agreement ........................................... 7
3.2. Selection of Underwriters ........................................ 7
4. HOLDBACK AGREEMENTS ................................................... 7
5. PREPARATION; REASONABLE INVESTIGATION ................................. 8
6. OTHER REGISTRATION RIGHTS ............................................. 8
7. INDEMNIFICATION ....................................................... 8
7.1. Indemnification by the Company ................................... 8
7.2. Indemnification by the Sellers ................................... 9
7.3. Notices of Claims, etc. .......................................... 10
7.4. Other Indemnification ............................................ 10
7.5. Indemnification Payments ......................................... 10
7.6. Other Remedies ................................................... 11
8. REPRESENTATIONS AND WARRANTIES ........................................ 11
9. DEFINITIONS ........................................................... 12
10. MISCELLANEOUS ......................................................... 13
10.1.Rule 144, etc. ................................................... 13
10.2.Successors, Assigns and Transferees .............................. 13
10.3.Amendment and Modification ....................................... 14
10.4.Governing Law .................................................... 14
10.5.Invalidity of Provision .......................................... 14
10.6.Notices .......................................................... 14
10.7.Headings; Execution in Counterparts .............................. 15
10.8.Injunctive Relief ................................................ 16
10.9.Term ............................................................. 16
10.10.Further Assurances .............................................. 16
10.11. Entire Agreement ............................................... 16
i
3
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is dated as of the
22nd day of May, 2000 by and among MCM Capital Group, Inc., a Delaware
corporation (the "COMPANY"), and West Capital Financial Services Corp. (together
with its Affiliated Stockholders (as herein defined), if any, "WEST CAPITAL"),
and WCFSC Special Purpose Corporation (together with its Affiliated Stockholders
(as herein defined), if any "WCFSC SPC"). Capitalized terms used but not
otherwise defined herein have their respective meanings set forth in Section 9.
WHEREAS, West Capital has entered into an Asset Purchase Agreement, dated
as of May 11, 2000 (the "ASSET PURCHASE AGREEMENT"), with the Company pursuant
to which the Company agreed to purchase from West Capital certain assets, on the
terms and subject to the conditions therein set forth;
WHEREAS, pursuant to the Asset Purchase Agreement, the Company issued to
West Capital certain securities or consideration for the Company's purchase of
assets thereunder;
WHEREAS, WCFSC SPC has entered into a Trust Assets Purchase Agreement,
dated as of May 22, 2000 (the "TRUST ASSETS PURCHASE AGREEMENT"), with the
Company pursuant to which the Company agreed to purchase from WCFSC SPC certain
assets, on the terms and subject to the conditions therein set forth;
WHEREAS, pursuant to the Trust Assets Purchase Agreement, the Company
issued to WCFSC SPC certain securities or consideration for the Company's
purchase of assets thereunder;
WHEREAS, it is a condition of the consummation of the transactions
contemplated by the Asset Purchase Agreement that the Company and West Capital
enter into this Agreement for the purpose of providing for certain registration
rights for the benefit of holders of Registrable Securities (as hereinafter
defined);
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and subject to and on the terms
and conditions herein set forth, the parties hereto agree as follows:
1. Registrations Rights.
1.1. Incidental Registration. If the Company at any time proposes to
register any of its equity securities under the Securities Act for its own
account (other than pursuant to a registration on Form S-4 or S-8 or any
successor form) it shall give written notice thereof to each Stockholder. If
within 10 days after the receipt of any such notice, any Stockholder requests
that the Company include all or any portion of the Registrable Securities owned
by such Stockholder in such registration, then, subject to subsection (a) below,
the Company will give prompt written notice to all holders of Registrable
Securities regarding such proposed registration. Upon the written request of any
such holder made within 10 days after the receipt of any such notice (which
request shall specify the number of Registrable Securities intended to be
disposed of by such holder and the intended method or methods of disposition
thereof), the Company will use its best efforts to effect the registration under
the Securities Act of such Registrable Securities, together with any other
securities proposed to be registered by other
4
holders of the Company's securities exercising incidental registration rights
with respect thereto, on a pro rata basis (based on the number of Registrable
Securities proposed to be registered by each such requesting holder and the
number of other registrable securities proposed to be registered by each such
other holder) in accordance with such intended method or methods of disposition,
provided that:
(a) the Company shall not include any Registrable Securities of
holders of Registrable Securities in such proposed registration if it
believes in good faith that inclusion of such securities would not be in
the best interests of the Company, provided that the Company will include
in such registration that number of Registrable Securities of the holders
of Registrable Securities that such managing underwriter and the Company
determine would not be adverse to the best interests of the Company and
provided further that the Company shall give the holders of Registrable
Securities prompt notice after any such determination has been made (in
lieu of the notice otherwise required under the second sentence of this
Section 1.1);
(b) if, at any time after giving written notice pursuant to this
Section 1.1 of its intention to register equity securities and prior to
the effective date of the registration statement filed in connection with
such registration, the Company shall determine for any reason not to
register such equity securities, the Company may, at its election, give
written notice of such determination to each holder of Registrable
Securities and, thereupon, shall not be obligated to register any
Registrable Securities in connection with such registration (but shall
nevertheless pay the Registration Expenses in connection therewith); and
(c) if, in connection with a registration pursuant to this Section
1.1, the managing underwriter of such registration (or, in the case of an
offering that is not underwritten, a nationally recognized investment
banking firm) shall advise the Company in writing (with a copy to each
holder of Registrable Securities requesting registration thereof) that, in
its opinion, the number of securities requested and otherwise proposed to
be included in such registration exceeds the number which can be sold in
such offering without materially and adversely affecting the offering
price or the market price of the Common Stock or would otherwise
jeopardize the offering, then in the case of any registration pursuant to
this Section 1.1, the Company will include in such registration, the
number of securities which the Company is so advised can be sold in such
offering without such material adverse effect, in the following order of
priority:
first, if such registration is initiated by the Company
pursuant to Section 1.1 of either of the Prior Registration Rights
Agreements, the "Registrable Securities of all Stockholders
(including the Requesting Party)" (with the preceding phrase having
the same meaning as used in Section 1.4 of the Prior Registration
Rights Agreements) together with the Registrable Securities of the
Stockholders, if any, exercising incidental registration rights with
respect thereto, on a pro rata basis (based on the number of shares
of "Registrable Securities" owned by each such "Stockholder", as
such terms are defined in the Prior Registration Rights Agreements,
as applicable);
second, the securities (if any) being sold by the Company;
and
third, the Registrable Securities of the Stockholders, if any,
exercising incidental registration rights with respect thereto,
together with securities, if any, of
5
any other holder of securities of the Company exercising incidental
registration rights with respect thereto, on a pro rata basis (based
on the number of shares of registrable securities owned by each such
holder), subject to the limitations of Section 4.
Notwithstanding the foregoing, the holders of Registrable Securities will
not be entitled to participate in any registration pursuant to this Section 1.1
to the extent that the managing underwriter (or, in the case of an offering that
is not underwritten, a nationally recognized investment banker) shall determine
in good faith and in writing (with a copy to each affected Person requesting
registration of Registrable Securities) that the participation of any such
holder would adversely affect the marketability or offering price of the
securities being sold by the Company or any Stockholder in such registration.
The parties acknowledge that nothing herein grants demand registration rights to
the holders of Registrable Securities
1.2. Expenses. The Company will pay all Registration Expenses in
connection with any registration requested and effectuated under Section 1.1;
provided that each seller of Registrable Securities shall pay all Registration
Expenses to the extent required to be paid by such seller under applicable law
and all underwriting discounts and commissions and transfer taxes, if any.
2. Registration Procedures. If and whenever the Company is required to use
its best efforts to effect the registration of any Registrable Securities under
the Securities Act as provided in Section 1.1, the Company will promptly:
(a) prepare, and as soon as practicable, but in any event within 60
days thereafter, file with the Commission, a registration statement with
respect to such Registrable Securities, on such form as is determined by
the Company to be appropriate under the circumstances, make all required
filings with the NASD and use its reasonable best efforts to cause such
registration statement to become effective as soon as practicable;
(b) prepare and promptly file with the Commission such amendments
and post-effective amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for so long as is
required to comply with the provisions of the Securities Act and to
complete the disposition of all securities covered by such registration
statement in accordance with the intended method or methods of disposition
thereof, but in no event for a period of more than six months after such
registration statement becomes effective;
(c) furnish copies of all documents proposed to be filed with the
Commission in connection with such registration to counsel selected by the
holders of at least 51% of the Registrable Securities proposed to be sold
in connection with such registration (such holders, the "MAJORITY
HOLDERS"), and such documents shall be subject to the review of such
counsel and the Majority Holders, and the Company shall not file any
registration statement or amendment or post-effective amendment or
supplement to such registration statement or the prospectus used in
connection therewith to which either such counsel or the Majority Holders,
as the case may be, shall have reasonably objected in writing on the
grounds that such amendment or supplement does not comply (explaining why)
in all material respects with the requirements of the Securities Act or of
the rules or regulations thereunder;
6
(d) furnish to each seller of Registrable Securities, without
charge, such number of conformed copies of such registration statement and
of each such amendment and supplement thereto (in each case including all
exhibits and documents filed therewith) and such number of copies of the
prospectus included in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, in conformity
with the requirements of the Securities Act, and such other documents, as
such seller may reasonably request in order to facilitate the disposition
of the Registrable Securities owned by such seller in accordance with the
intended method or methods of disposition thereof;
(e) use its reasonable best efforts to register or qualify such
Registrable Securities covered by such registration statement under the
securities or blue sky laws of such jurisdictions as each seller shall
reasonably request, and do any and all other acts and things which may be
necessary or advisable to enable such seller to consummate the disposition
of such Registrable Securities in such jurisdictions in accordance with
the intended method or methods of disposition thereof, provided that the
Company shall not for any such purpose be required to qualify generally to
do business as a foreign corporation in any jurisdiction wherein it is not
so qualified, subject itself to taxation in any jurisdiction wherein it is
not so subject, or take any action which would subject it to general
service of process in any jurisdiction wherein it is not so subject;
(f) use its reasonable best efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies, authorities or
self-regulatory bodies as may be necessary by virtue of the business and
operations of the Company to enable the seller or sellers thereof to
consummate the disposition of such Registrable Securities in accordance
with the intended method or methods of disposition thereof;
(g) notify each seller of any Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any
event or existence of any fact as a result of which the prospectus
included in such registration statement as then in effect, includes an
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing, and, as
promptly as is practicable, prepare and furnish to such seller a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing;
(h) otherwise comply with all applicable rules and regulations of
the Commission, and make available to its security holders, as soon as
reasonably practicable, an earnings statement of the Company (in form
complying with the provisions of Rule 158 under the Securities Act)
covering the period of at least 12 months, but not more than 18 months,
beginning with the first month after the effective date of such
registration statement;
7
(i) notify each seller of any Registrable Securities covered by such
registration statement (i) when the prospectus or any prospectus
supplement or post-effective amendment has been filed, and, with respect
to such registration statement or any post-effective amendment, when the
same has become effective, (ii) of any request by the Commission for
amendments or supplements to such registration statement or to amend or to
supplement such prospectus or for additional information, (iii) of the
issuance by the Commission of any stop order suspending the effectiveness
of such registration statement or the initiation of any proceedings for
that purpose and (iv) of the suspension of the qualification of such
securities for offering or sale in any jurisdiction, or of the institution
of any proceedings for any of such purposes;
(j) use its reasonable best efforts to obtain the lifting of any
stop order that might be issued suspending the effectiveness of such
registration statement as soon as practicable;
(k) use its reasonable best efforts (i) (A) to list such Registrable
Securities on any securities exchange on which the equity securities of
the Company are then listed or, if no such equity securities are then
listed, on an exchange selected by the Company, if such listing is then
permitted under the rules of such exchange, or (a) if such listing is not
practicable, to secure designation of such securities as a NASDAQ
"national market system security" within the meaning of Rule 11Aa2-1 under
the Exchange Act or, failing that, to secure NASDAQ authorization for such
Registrable Securities, and, without limiting the foregoing, to arrange
for at least two market makers to register as such with respect to such
Registrable Securities with the NASD, and (ii) to provide a transfer agent
and registrar for such Registrable Securities not later than the effective
date of such registration statement and to instruct such transfer agent
upon sale of the Registrable Securities pursuant to such registration (A)
to release any stop transfer order with respect to the certificates with
respect to the Registrable Securities being sold and (B) to furnish
certificates without restrictive legends representing ownership of the
shares being sold, in such denominations requested by the sellers of the
Registrable Securities or the lead underwriter; and
(l) use its reasonable best efforts to take all other steps
necessary to effect the registration of such Registrable Securities
contemplated hereby.
As a condition to its registration of Registrable Securities of any
prospective seller, the Company may require such seller of any Registrable
Securities as to which any registration is being effected to furnish to
the Company such information regarding such seller, its ownership of
Registrable Securities and the disposition of such Registrable Securities
as the Company may from time to time reasonably request in writing and as
shall be required by law in connection therewith, together with such
certificates, if any, as may be required to permit the delivery of the
opinions and comfort letters contemplated by Section 2(g) and the
execution of the underwriting agreement and the delivery of the documents
required to be delivered thereunder. Each such holder agrees to furnish
promptly to the Company all information required to be disclosed in order
to make the information previously furnished to the Company by such holder
not materially misleading.
The Company agrees not to file or make any amendment to any registration
statement with respect to any Registrable Securities, or any amendment of or
supplement to the prospectus used in connection therewith, which refers to any
seller of any Registrable Securities
8
covered thereby by name, or otherwise identifies such seller as the holder of
any Registrable Securities, without the consent of such seller, such consent not
to be unreasonably withheld or delayed, unless such disclosure is required by
law.
By acquisition of Registrable Securities, each holder of such Registrable
Securities shall be deemed to have agreed that upon receipt of any notice from
the Company of the happening of any event of the kind described in Section 2(i),
such holder will promptly discontinue such holder's disposition of Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until such holder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 2(i). If so directed by the Company,
each holder of Registrable Securities will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies, in such
holder's possession of the prospectus covering such Registrable Securities at
the time of receipt of such notice. In the event that the Company shall give any
such notice, the period mentioned in Section 2(b) shall be extended by the
number of days during the period from and including the date of the giving of
such notice to and including the date when each seller of any Registrable
Securities covered by such registration statement shall have received the copies
of the supplemented or amended prospectus contemplated by Section 2(i).
3. Underwritten Offerings.
----------------------
3.1. Underwriting Agreement. If, for any underwritten offering pursuant to
a registration requested under Section 1.1, the Company enters into an
underwriting agreement with the underwriters for such offering, any such
underwriting agreement shall contain such representations and warranties by the
Company and such other terms and provisions as are customarily contained in
agreements of this type, including, without limitation and unless waived by the
Majority Holders, indemnities to the effect and to the extent provided in
Section 7. The holders of Registrable Securities to be distributed by such
underwriter shall be parties to such underwriting agreement. No underwriting
agreement (or other agreement in connection with such offering) shall require
any Stockholder, in its capacity as stockholder and/or controlling Person, to
make any representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding such
holder, the ownership of such holder's Registrable Securities and such holder's
intended method or methods of disposition and any other representation
customarily furnished by selling stockholders in similar transactions or
required by law.
3.2. Selection of Underwriters. If the Company at any time proposes to
register any of its securities under the Securities Act for sale for its own
account pursuant to an underwritten offering in which holders of Registrable
Securities are participants, the Company will have the right to select the
managing underwriter (which shall be of nationally recognized standing) to
administer the offering.
4. Holdback Agreements. If and whenever the Company proposes to register
any of its equity securities under the Securities Act for its own account (other
than on Form S-4 or S-8 or any successor form) or is required to effect the
registration of any securities pursuant to any registration rights agreement or
similar contractual undertaking, each holder of Registrable Securities agrees by
acquisition of such Registrable Securities, if it is then an officer, director
or the beneficial owner (determined in accordance with Rule 13d-3 under the
Exchange Act) of more than 5% of any class of the Company's equity securities
(or any securities convertible into or exchangeable or exercisable for any of
such securities), not to effect any public sale or distribution of the Company's
equity securities (other than pursuant to such registration), within
9
seven days prior to and 90 days (unless advised in writing by the managing
underwriter that a longer period, not to exceed 180 days, is required, or such
shorter period as the managing underwriter for any underwritten offering may
agree) after the effective date of the registration statement relating to such
registration, except its part of such registration.
5. Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement registering Registrable
Securities under the Securities Act, the Company will give the holders of such
Registrable Securities so to be registered and their underwriters, if any, and
their respective counsel and accountants the opportunity to participate in the
preparation of such registration statement, each prospectus included therein or
filed with the Commission, and each amendment thereof or supplement thereto, and
will give each of them such access to the financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries and such
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have issued audit reports on its financial
statements as shall be reasonably requested by such holders in connection with
such registration statement.
6. Other Registration Rights. Each Stockholder acknowledges that the
Company is a party to that certain Registration Rights Agreement dated as of
June 30, 1999 by and among the Company, C.P. International Investments Limited,
MCM Holding Company LLC and certain other parties named therein, and, that
certain Registration Rights Agreement dated as of January 12, 2000, by and among
the Company and ING (US) Capital LLC and its Affiliated Stockholders (together,
the "PRIOR REGISTRATION RIGHTS AGREEMENTS") and consents to all terms and
provisions of the Prior Registration Rights Agreements. To the extent that the
Prior Registration Rights Agreements provide demand or incidental registration
rights that are of a higher priority to the rights granted to holders of
Registrable Securities hereunder, or to the extent there is any conflict between
any term or provision of the Prior Registration Rights Agreements and any term
or provision set forth herein, the parties acknowledge and agree that the terms
and provisions of the Prior Registration Rights Agreements shall take priority
over the terms and provisions of this Agreement. The Company may grant to any
Person any other registration rights from and after the date hereof.
7. Indemnification.
----------------
7.1. Indemnification by the Company. In the event of any registration of
any Registrable Securities pursuant to this Agreement, the Company agrees to
indemnify, defend and hold harmless (a) each seller of such Registrable
Securities, (b) the directors, members, stockholders, officers, partners,
employees, agents and Affiliates of such seller, (c) each Person who
participates as an underwriter in the offering or sale of such securities and
(d) each person, if any, who controls (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) any of the foregoing against
any and all losses, claims, damages, expenses or other liabilities (or actions
or proceedings in respect thereof), jointly or severally, directly or
indirectly, based upon or arising out of (i) any untrue statement or alleged
untrue statement of a fact contained in any registration statement under which
such Registrable Securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained therein
or used in connection with the offering of securities covered thereby, or any
amendment or supplement thereto, or (ii) any omission or alleged omission to
state a fact required to be stated therein or necessary to make the statements
therein not misleading; and the Company will reimburse each such indemnified
party for any legal or any other expenses reasonably incurred by them in
connection with enforcing its rights hereunder or under the underwriting
agreement entered into in connection with such offering or investigating,
10
preparing, pursuing or defending any such loss, claim, damage, liability, action
or proceeding, except insofar as any such loss, claim, damage, liability,
action, proceeding or expense arises out of or is based upon (A) an untrue
statement or omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by such seller expressly for use in the preparation thereof, or (B) any
preliminary prospectus to the extent that any such loss claim, damage,
liability, action or proceeding results solely from the fact that the seller
sold Registrable Securities to a person as to whom the Company shall establish
that there was not sent by commercially reasonable means, at or prior to the
written confirmation of such sale, a copy of the final prospectus in any case
where such delivery is required by the Securities Act, if the Company has
previously furnished copies thereof in sufficient quantity to the seller or the
underwriters for such offering and the loss, claim, damage, liability, action or
proceeding results from an untrue statement or omission of a material fact
contained in the preliminary prospectus that was corrected in the final
prospectus. Such indemnity shall remain in full force and effect regardless of
any investigation made by such indemnified party and shall survive the transfer
of such Registrable Securities by such seller. If the Company is entitled to,
and does, assume the defense of the related action or proceedings provided
herein, then the indemnity agreement contained in this Section 7.1 shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability,
action or proceeding if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld or delayed). The
Company shall also indemnify any underwriters of the Registrable Securities,
their officers, directors and employees, and each person who controls (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) to the same extent as provided above with respect to indemnification of the
seller of Registrable Securities.
7.2. Indemnification by the Sellers. The Company may require, as a
condition to including any Registrable Securities in any registration statement
filed pursuant to Section 1.1, that the Company shall have received an
undertaking reasonably satisfactory to it from each of the prospective sellers
of such Registrable Securities to indemnify and hold harmless, severally, not
jointly, in the same manner and to the same extent as set forth in Section 7.1,
the Company, its directors, officers, employees, agents and each person, if any,
who controls (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) the Company, but only with respect to any written
information furnished to the Company by such seller expressly for use in the
preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement. The Company and the
holders of the Registrable Securities hereby acknowledge and agree that, unless
otherwise expressly agreed to in writing by such holders, the only information
furnished to or to be furnished to the Company for use in any registration
statement or prospectus relating to the Registrable Securities or in any
amendment, supplement or preliminary materials associated therewith are
statements specifically relating to (a) transactions between such holder and its
Affiliates, on the one hand, and the Company, on the other hand, (b) the
beneficial ownership of shares of Common Stock by such holder and its Affiliates
and (c) the name and address of such holder. If any additional information about
such holder or the plan of distribution (other than for an underwritten
offering) is required by law to be disclosed in any such document, then such
holder shall not unreasonably withhold its agreement referred to in the
immediately preceding sentence of this Section 7.2. Such indemnity shall remain
in full force and effect, regardless of any investigation made by or on behalf
of the Company or any such director, officer or controlling Person and shall
survive the transfer of such Registrable Securities by such seller. The
indemnity agreement contained in this Section 7.2 shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability, action or
proceeding if such settlement is effected
11
without the consent of such seller (which consent shall not be unreasonably
withheld or delayed). The indemnity provided by each seller of Registrable
Securities under this Section 7.2 shall be limited in amount to the net amount
of proceeds actually received by such seller from the sale of Registrable
Securities pursuant to such registration statement giving rise to such
liability.
7.3. Notices of Claims, etc. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding paragraphs of this Section 7, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the indemnifying party of the
commencement of such action or proceeding, provided that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding paragraphs of this
Section 7, except to the extent that the indemnifying party is materially
prejudiced by such failure to give notice. In case any such action is brought
against an indemnified party, the indemnifying party will be entitled to
participate therein and to assume the defense thereof jointly with any other
indemnifying party similarly notified, to the extent that it may wish, 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 for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof except for the reasonable fees and
expenses of any counsel retained by such indemnified party to monitor such
action or proceeding. Notwithstanding the foregoing, if such indemnified party
reasonably determines, based upon advice of independent counsel, that a conflict
of interest exists between the indemnified party and the indemnifying party with
respect to such action and that it is advisable for such indemnified party to be
represented by separate counsel or that there may be one or more legal defenses
available to it which are different from or additional to those available to the
indemnifying party, such indemnified party may retain other counsel, reasonably
satisfactory to the indemnifying party, to represent such indemnified party, and
the indemnifying party shall pay all reasonable fees and expenses of such
counsel. No indemnifying party, in the defense of any such claim or litigation,
shall, except with the consent of such indemnified party, which consent shall
not be unreasonably withheld, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect of such claim or litigation. The rights accorded to any
indemnified party hereunder shall be in addition to any rights that such
indemnified party may have at common law, by separate agreement or otherwise.
7.4. Other Indemnification. Indemnification similar to that specified in
the preceding paragraphs of this Section 7 (with appropriate modifications)
shall be given by the Company and each seller of Registrable Securities with
respect to any required registration (other than under the Securities Act) or
other qualification of such Registrable Securities under any federal or state
law or regulation of any governmental authority.
7.5. Indemnification Payments. Any indemnification required to be made by
an indemnifying party pursuant to this Section 7 shall be made by periodic
payments to the indemnified party during the course of the action or proceeding,
as and when bills are received by such indemnifying party, with respect to an
indemnifiable loss, claim, damage, liability or expense incurred by such
indemnified party.
12
7.6. Other Remedies. If for any reason the foregoing indemnity is
unavailable, or is insufficient to hold harmless an indemnified party, other
than by reason of the exceptions provided therein, then the indemnifying party
shall contribute to the amount paid or payable by the indemnified party as a
result of such losses, claims, damages, liabilities, actions, proceedings or
expenses in such proportion as is appropriate to reflect the relative benefits
to and faults of the indemnifying party on the one hand and the indemnified
party on the other in connection with the offering of Registrable Securities and
the statements or omissions or alleged statements or omissions which resulted in
such loss, claim, damage, liability, action, proceeding or expense, as well as
any other relevant equitable considerations. The relative fault of the
indemnifying party and of the indemnified party shall be determined by reference
to, among other things, whether the untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statements or omissions. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. No party shall be liable for contribution under this Section
7.6 except to the extent as such party would have been liable to indemnify under
this Section 7 if such indemnification were enforceable under applicable law.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7.6 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph.
8. Representations and Warranties. Each Stockholder, severally and not
jointly, represents and warrants to the Company and each other Stockholder that:
(i) such Stockholder has the power, authority and capacity (or, in
the case of any Stockholder that is a corporation or limited partnership, all
corporate or limited partnership power and authority, as the case may be) to
execute, deliver and perform this Agreement;
(ii) in the case of a Stockholder that is a corporation or limited
partnership, the execution, delivery and performance of this Agreement by such
Stockholder has been duly and validly authorized and approved by all necessary
corporate or limited partnership action, as the case may be;
(iii) this Agreement has been duly and validly executed and
delivered by such Stockholder and constitutes a valid and legally binding
obligation of such Stockholder, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting or relating to creditors' rights generally and general principles
of equity; and
(iv) the execution, delivery and performance of this Agreement by
such Stockholder does not and will not violate the terms of or result in the
acceleration of any obligation under (A) any material contract, commitment or
other material instrument to which such Stockholder is a party or by which such
Stockholder is bound, (B) in the case of a Stockholder that is a corporation or
limited partnership, the certificate of incorporation, certificate of limited
partnership, by-laws or limited partnership agreement, as the case may be, or
(C) any law, statute, regulation, order or decree applicable to such
Stockholder.
13
9. Definitions. For purposes of this Agreement, the following terms
-----------
shall have the following respective meanings:
Affiliate: (i) with respect to any Person, a Person that directly,
or indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, such Person, and (ii) with respect to any
natural Person, (A) the spouse, parents and direct descendants of such Person,
(B) the estate, testamentary trust, trustees, executors, administrators,
legatees or testamentary beneficiaries of such Person, and (C) any trust
established by such Person for the exclusive benefit of any of the foregoing
Persons.
Affiliated Stockholder: with respect to West Capital and WCFSC SPC,
each of its Affiliates if and so long as it owns any Registrable Securities and
has agreed in writing to be bound by the terms and conditions of this Agreement,
a copy of which agreement shall have been delivered to the Company.
Asset Purchase Agreement: as defined in the recitals of this
------------------------
Agreement.
Board: the board of directors of the Company.
-----
Commission: the Securities and Exchange Commission.
----------
Common Stock: the Common Stock of the Company, par value $.01 per
------------
share, and any securities into which such Common Stock shall have been changed
or any securities resulting from any reclassification of such Common Stock.
Exchange Act: the Securities Exchange Act of 1934, as amended,
------------
or any successor federal statute, and the rules and regulations thereunder
which shall be in effect at the time.
Majority Holders: as defined in Section 2(c).
----------------
NASD: National Association of Securities Dealers, Inc.
----
NASDAQ: the Nasdaq National Market.
------
Permitted Transferee: as defined in Section 10.2.
--------------------
Person: an individual, corporation, partnership, limited
------
liability company, joint venture, association, trust or other entity or
organization, including a government or political subdivision or an agency or
instrumentality, thereof.
Prior Registration Rights Agreements: as defined in Section 6.
------------------------------------
Registrable Securities: (A) the 375,000 shares of Common Stock
----------------------
issued to West Capital pursuant to Asset Purchase Agreement, and (B) the 25,000
shares of Common Stock issued to WCFSC SPC pursuant to the Trust Assets Purchase
Agreement, and in each case, any other shares of Common Stock issued as a
dividend or other distribution with respect to, or in exchange for or in
replacement of, the shares of Common Stock issued. As to any particular shares
of Common Stock, such securities shall cease to be Registrable Securities when
(i) a registration statement with respect to the sale of such securities shall
have become effective under the Securities Act and such securities shall have
been disposed of in accordance with
14
such registration statement, (ii) such securities shall have been sold to the
public pursuant to Rule 144 under the Securities Act or are eligible for resale
by the holder thereof without regard to volume limitation pursuant to paragraph
(k) of Rule 144 under the Securities Act, (iii) such securities shall have been
otherwise transferred other than to a Permitted Transferee and subsequent
disposition of them shall not require registration or qualification of them
under the Securities Act or any similar state law then in force or (iv) such
securities shall have ceased to be outstanding.
Registration Expenses: all expenses incident to the Company's
performance of or compliance with any registration pursuant to this Agreement,
including, without limitation, (i) registration, filing and NASD fees, (ii) fees
and expenses of complying with securities or blue sky laws, (iii) fees and
expenses associated with listing securities on an exchange or NASDAQ, (iv) word
processing, duplicating and printing expenses, (v) messenger and delivery
expenses, (vi) transfer agents', trustees', depositories', registrars' and
fiscal agents fees, (vii) reasonable fees and disbursements of counsel for the
Company and of its independent public accountants, including the expenses of any
special audits or "cold comfort" letters, (viii) reasonable fees and
disbursements of any one counsel retained by the sellers of Registrable
Securities, which counsel shall be designated in the manner specified in Section
2 and (ix) any fees and disbursements of underwriters customarily paid by
issuers or sellers of securities, but excluding underwriting discounts and
commissions and transfer taxes, if any.
Securities Act: the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations thereunder which
shall be in effect at the time.
Stockholders: (i) West Capital, (ii) WCFSC SPC, and (iii) each
of their Affiliated Stockholders, in each case if and so long as such
Stockholder owns any Registrable Securities.
Trust Asset Purchase Agreement as defined in the recitals of this
Agreement.
10. Miscellaneous.
10.1. Rule 144, etc. The Company will file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the Commission thereunder, and will take such further
action as any holder of Registrable Securities may reasonably request, all to
the extent required from time to time to enable such holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (A) Rule 144 under the Securities Act, as such
rule may be amended from time to time or (b) any successor rule or regulation
hereafter adopted by the Commission. Upon the request of any holder of
Registrable Securities, the Company will deliver to such holder a written
statement as to whether it has complied with such requirements.
10.2. Successors, Assigns and Transferees. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
predecessors and permitted assigns under this Section 10.2. Provided that an
express assignment shall have been made, a copy of which shall have been
delivered to the Company, the provisions of this Agreement which are for the
benefit of a holder of Registrable Securities shall be for the benefit of and
enforceable by any subsequent holder of any Registrable Securities to which such
Registrable Securities are transferred in compliance with the provisions of such
Registrable Securities ("PERMITTED TRANSFEREES"), subject to the provisions
respecting the minimum numbers or percentages of shares of Registrable
Securities required in order to be entitled to certain rights, or to take
certain actions, contained herein.
15
10.3. Amendment and Modification. This Agreement may be amended, modified
or supplemented by the Company with the written consent of a majority (by number
of shares) of the holders of Registrable Securities, provided that all
Stockholders shall be notified of such amendment, modification or supplement.
10.4. Governing Law. This Agreement and the rights and obligations of the
parties hereunder and the persons subject hereto shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York,
without giving effect to the choice of law principles thereof.
10.5. Invalidity of Provision. The invalidity or unenforceability of any
provision of this Agreement in any jurisdiction shall not affect the validity or
enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of this Agreement, including that provision, in any
other jurisdiction.
10.6. Notices. All notices, requests, demands, letters, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed, certified or registered mail with postage prepaid, (c)
sent by next-day or overnight mail or delivery or (d) sent by fax, as follows:
(i) If to the Company, to it at:
MCM Capital Group, Inc.
0000 Xxxx Xxxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
Telecopier No.: (000) 000-0000
with a copy to:
MCM Capital Group, Inc.
0000 Xxxx Xxxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
Telecopier No.: (000) 000-0000
and copies to:
Squire, Xxxxxxx & Xxxxxxx L.L.P.
00 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telecopier No.: (000) 000-0000
and
16
Xxxxx & Xxxxxx L.L.P.
Xxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopier No.: (000) 000-0000
(ii) If to West Capital, to it at:
West Capital Financial Services Corp.
0000 Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chairman and Chief Executive Officer
Telecopier No.:
with a copy to:
Attention:
Telecopier No.:
(iii) If to WCFSC SPC, to it at:
WCFSC Special Purpose Corporation
0000 Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chairman and Chief Executive Officer
Telecopier No.:
with a copy to:
Attention:
Telecopier No.:
or to such other person or address as any party shall specify by notice in
writing to the Company. All such notices, requests, demands, letters, waivers
and other communications shall be deemed to have been received (w) if by
personal delivery on the day after such delivery, (x) if by certified or
registered mail, on the eighth business day after the mailing thereof, (y) if by
next-day or overnight mail or delivery, on the day delivered or (z) if by fax,
on the next day following the day on which such fax was sent, provided that a
copy is also sent by certified or registered mail.
10.7. Headings; Execution in Counterparts. The headings and captions
contained herein are for convenience and shall not control or affect the meaning
or construction of any provision hereof. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original and
which together shall constitute one and the same instrument.
17
10.8. Injunctive Relief. Each of the parties recognizes and agrees that
money damages may be insufficient and, therefore, in the event of a breach of
any provision of this Agreement the aggrieved party may elect to institute and
prosecute proceedings in any court of competent jurisdiction to enforce specific
performance or to enjoin the continuing breach of this Agreement. Such remedies
shall, however, be cumulative and not exclusive, and shall be in addition to any
other remedy which such party may have.
10.9. Term. This Agreement shall be, effective as of the date hereof and
shall continue in effect thereafter until the earlier of (a) its termination by
the consent of the parties hereto or their respective successors in interest,
(b) the date on which no Registrable Securities remain outstanding, and (c) the
date on which all remaining Registrable Securities are subject to immediate
resale by the holder thereof without regard to volume limitation pursuant to
paragraph (k) of Rule 144 under the Securities Act.
10.10. Further Assurances. Subject to the specific terms of this
Agreement, each of the Company and the Stockholders shall make, execute,
acknowledge and deliver such other instruments and documents, and take all such
other actions, as may be reasonably required in order to effectuate the purposes
of this Agreement and to consummate the transactions contemplated hereby.
10.11. Entire Agreement. This Agreement is intended by the parties hereto
as a final expression of their agreement and intended to be a complete and
exclusive statement of their agreement and understanding in respect of the
subject matter contained herein. This Agreement supersedes all prior agreements
and understandings between the parties with respect to such subject matter.
[Remainder of Page Intentionally Left Blank]
18
IN WITNESS WHEREOF this Agreement has been signed by each of the parties
hereto, and shall be effective as of the date first above written.
MCM CAPITAL GROUP, INC.
By: /s/ R. Xxxxxx Xxxxxxx, Xx.
----------------------------------
Name: R. Xxxxxx Xxxxxxx, Xx.
Title: Exec. VP & CFO
WEST CAPITAL FINANCIAL SERVICES CORP.
By: /s/ Xxxx X. Xxxxxxx III
----------------------------------
Name: Xxxx X. Xxxxxxx III
Title: Chairman/CEO
WCFSC SPECIAL PURPOSE CORPORATION
By: /s/ Xxxx X. Xxxxxxx III
----------------------------------
Name: Xxxx X. Xxxxxxx III
Title: President/CEO
