EXHIBIT 10.03
STOCKHOLDERS' AGREEMENT
THIS STOCKHOLDERS' AGREEMENT (this "Agreement"), dated as of November
30, 2006 (the "Effective Date"), is by and among Mortgage Assistance Center
Corporation, a Florida corporation (the "Company"), those certain holders of
Common Stock (as hereinafter defined) of the Company as set forth on Exhibit A
(individually, a "Stockholder," and collectively, the "Stockholders") and each
of the existing Series A Preferred Stock (as hereinafter defined) investors and
holders of warrants as set forth on Exhibit B (individually, an "Investor," and
collectively, the "Investors").
RECITALS:
A. The Company has an authorized capitalization consisting of (i) Fifty
million (50,000,000) shares of common stock, $0.001 par value per share (the
"Common Stock"), and (ii) Four million (4,000,000) shares of preferred stock,
$0.001 par value per share, including the designation of Three million
(3,000,000) shares of Series A Preferred Stock, $0.001 par value per share
("Series A Preferred Stock"), pursuant to the Company's Articles of
Incorporation, as amended (collectively, the "Articles of Incorporation").
B. The record and beneficial ownership of the issued and outstanding
shares of the Common Stock, the Series A Preferred Stock and warrants (the
"Warrants") to purchase Common Stock (the "Warrant Shares") (collectively, the
"Capital Stock") held by the Stockholders and the Investors are set forth on
Exhibits A and B.
C. The Company and the Investors are parties to the Company's Series A
Preferred Stock and Common Stock Warrant Purchase Agreement, dated as of the
Effective Date (the "Purchase Agreement"), pursuant to which the Company will
sell Series A Preferred Stock and the Warrants to the Investors.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, and intending to be legally bound hereby, each of
the parties covenants and agrees as follows:
ARTICLE I
STOCK CERTIFICATES
The Stockholders and the Investors agree that the stock certificate or
certificates from time to time representing their respective shares of the
Company's Capital Stock shall be registered in the name of the Stockholders and
the Investors and shall bear, in addition to any other legend required to be
placed thereon, a conspicuous legend substantially stating the following:
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THE SHARES REPRESENTED HEREBY ARE SUBJECT TO A STOCKHOLDERS'
AGREEMENT DATED AS OF NOVEMBER 30, 2006, AS MAY BE AMENDED OR
RESTATED, AMONG THE COMPANY AND CERTAIN STOCKHOLDERS AND
INVESTORS OF THE COMPANY. A COPY OF SUCH STOCKHOLDERS'
AGREEMENT IS AVAILABLE FOR INSPECTION AT THE OFFICES OF THE
COMPANY AND MAY BE REVIEWED UPON REQUEST.
Upon execution and delivery of this Agreement, the Stockholders agree to return
to the Secretary of the Company any stock certificate or certificates previously
delivered to it so that such legend shall be placed thereon. The Company agrees
that it shall not remove, and shall not permit to be removed, such legend from
any certificate, and the Company shall place or cause to be placed such legend
on any new certificate issued.
ARTICLE II
TRANSFER RIGHTS AND RESTRICTIONS
Section 2.1 General Restriction on Common Stock. Except as otherwise
expressly permitted by this Agreement, none of the Stockholders may sell,
exchange, give, encumber, pledge, hypothecate or otherwise dispose of
("Transfer"), either voluntarily, involuntarily or by operation of law
(including any Transfer pursuant to equitable distribution proceedings or
pursuant to a divorce decree) any of the Common Stock held by such Stockholders,
or any rights or interest appertaining thereto, whether now owned or hereafter
acquired.
Section 2.2 Transfers of Preferred Stock. Subject to the requirements
of Section 2.3(i) below, the Investors may freely Transfer any of the Series A
Preferred Stock held by such Investors, or any rights or interest appertaining
thereto, whether now owned or hereafter acquired, upon receiving the prior
written approval of the Company, such approval not to be unreasonably withheld.
Section 2.3 Transfer Requirements. A Stockholder may Transfer Common
Stock under and as permitted by this Section 2.3, but not otherwise. For
purposes of this Section 2.3, an "Investor" who exercises his or its Warrant(s)
shall be deemed a "Stockholder" with respect to the Warrant Shares upon the
exercise of such Warrant and issuance of the Warrant Shares.
(a) First Offer Rights. If a Stockholder shall desire to
Transfer any shares of Common Stock held by him or it, such Stockholder
(the "Selling Stockholder") shall first offer such Common Stock (the
"Offered Stock") to the Investors and then to the Company in accordance
with the provisions of this Section 2.3 (the "First Offer Right").
(b) Notice. The Selling Stockholder shall give a written
notice (the "Offer Notice") to each of the Investors and the Company
setting forth (i) the class or series, and number of shares, of Common
Stock proposed to be Transferred (the "Offered Stock"), (ii) the terms
and conditions (the "Offer Terms"), including the proposed sale price,
upon which the Selling Stockholder proposes to Transfer the Offered
Stock, and (iii) the name of the proposed transferee.
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(c) Option to the Investors. The Investors shall have the
exclusive right during the period of twenty (20) days following receipt
of such Offer Notice (the "Investor Refusal Period") to elect to
collectively purchase any or all of the Offered Stock proposed to be
sold in accordance with the Offer Terms; provided, however, that, an
election by the Investors to purchase less than all of the Offered
Stock shall not be effective unless the option in Section 2.3(d) is
exercised as to all of the Offered Stock not elected to be purchased by
the Investors under this Section 2.3(c). In the event that more than
one Investor wishes to purchase the Offered Stock to be sold, the right
to purchase shall be allocated (i) first among such Investors who hold
shares of Series A Preferred Stock in proportion to their respective
ownership of Series A Preferred Stock, then (ii) to the extent the
Investors who hold Series A Preferred Stock do not acquire all of the
Offered Stock, or if there are no shares of Series A Preferred Stock
outstanding at such time, among such other Investors in proportion to
their ownership of Common Stock Equivalent Shares. The term "Common
Stock Equivalent Shares" held by any Investor shall be all shares of
the Company's Common Stock held by such Investor and all shares of
Common Stock issuable upon conversion or exchange of any convertible or
exchangeable security held by such Investor or issuable upon exercise
of any option, warrant, or other right held by such Investor, in each
case whether or not such security, option, warrant, or right is by its
terms then convertible, exchangeable, or exercisable. Any election by
an Investor to purchase Offered Stock shall be binding upon such
Investor and may not be withdrawn without the written consent of the
Company and the Selling Stockholder.
(d) Option to the Company. If the Investors do not exercise
their right to purchase all of the Offered Stock proposed to be sold
pursuant to Section 2.3(c), the Investors shall give notice to the
Company of such fact during the twenty (20) day period provided for in
Section 2.3(c). The Company shall then have the exclusive right during
the period of twenty (20) days following receipt of such Offer Notice
(the "Company Refusal Period") to elect to purchase all of the Offered
Stock proposed to be sold and not purchased by the Investors pursuant
to Section 2.3(c) in accordance with the Offer Terms and Section
2.3(g).
(e) Co-Sale Right
(i) To the extent that neither the Investors nor the
Company exercise their respective First Offer Rights in full
with respect to the Offered Stock under Sections 2.3(a)
through (d) above, then each Investor (a "Co-Sale Investor")
that notifies the Selling Stockholder in writing within ten
(10) days after the expiration of the Company Refusal Period
will have the right to participate in such Selling
Stockholder's proposed sale of Offered Stock on the same terms
and conditions as the Offer Terms (the "Co-Sale Right").
Co-Sale Investors shall have the right to include their
outstanding shares of Series A Preferred Stock in exercising
their Co-Sale Right pursuant to this Section 2.3(e)(i) to the
extent that the Offered Stock, when aggregated with all other
sales of Offered Stock pursuant to this Section 2.3,
represents at least ten percent (10%) of the total Common
Stock outstanding as of the date of such sale.
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(ii) A Co-Sale Investor may include in the proposed
transfer Capital Stock held by such Investor (A) with respect
to Series A Preferred Stock, all shares of Series A Preferred
Stock held by such Co-Sale Investor, and (B) with respect to
all other Capital Stock other than Series A Preferred Stock,
in an amount not to exceed the product obtained by multiplying
(i) the aggregate number of shares of Offered Stock by (ii) a
fraction, the numerator of which is the number of shares of
Common Stock Equivalent Shares owned by such Co-Sale Investor
immediately before consummation of the proposed Transfer and
the denominator of which is, in the aggregate, the total
number of shares of Common Stock Equivalent Shares owned by
all Investors electing to exercise their Co-Sale Rights
immediately prior to the consummation of the proposed Transfer
and the total number of Offered Stock that represents Capital
Stock owned by the Selling Stockholder immediately prior to
the consummation of the proposed Transfer.
(iii) A Co-Sale Investor shall effect its
participation in the proposed Transfer by delivering to the
Selling Stockholder, no later than ten (10) days after a
Co-Sale Investor's exercise of its Co-Sale Rights, one or more
stock certificates, properly endorsed for transfer or
accompanied by executed stock powers to the prospective
transferee, representing the number of shares of Capital Stock
that a Co-Sale Investor elects to include in the proposed
Transfer.
(iv) Except for representations regarding its
ownership of the Capital Stock it requests to sell pursuant to
this Section 2.3(e), a Co-Sale Investor shall not be required
to make any representation or covenant in connection with its
participation in the proposed Transfer, and its
indemnification obligations shall be limited to the proceeds
received by it in such sale.
(v) Each stock certificate a Co-Sale Investor
delivers to the Selling Stockholder pursuant to subparagraph
(iii) above will be transferred to the prospective transferee
against payment therefor in consummation of the sale of the
Offered Stock pursuant to the Offer Terms, and the Selling
Stockholder shall concurrently therewith remit to each Co-Sale
Investor the portion of the sale proceeds to which the Co-Sale
Investor is entitled by reason of its participation in such
sale. To the extent a Co-Sale Investor desires to include his
or its shares of Series A Preferred Stock in exercising its
Co-Sale Right, the sales price for such Series A Preferred
Stock shall be the Redemption Price (as such term is defined
in the Articles of Incorporation). If any prospective
transferee or transferees refuse(s) to purchase securities
subject to the Co-Sale Right from a Co-Sale Investor
exercising its Co-Sale Rights hereunder, no Stockholder may
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sell any Capital Stock to such prospective transferee or
transferees unless and until, simultaneously with such sale,
such Stockholder purchases all securities that such Co-Sale
Investor is entitled to sell to the prospective transferee
pursuant to their Co-Sale Rights.
(f) Non-Exercise. If the Investors and the Company
collectively fail to elect to exercise the rights granted under
Sections 2.3(a) through (e) above, then the Selling Stockholder may
sell the shares of Offered Stock so offered hereunder to the proposed
transferee set forth in the Offer Notice under Section 2.3(a) on terms,
including the sale price, no more favorable to such proposed transferee
than the Offer Terms. However, if the Selling Stockholder does not
effect such sale within thirty (30) days after the termination (by
passage of time or default) of the first refusal and co-sale rights
created under Sections 2.3(a) through (e), the Selling Stockholder may
not thereafter transfer any such shares without again complying with
the provisions of this Section 2.3.
(g) Closing. All purchase transactions between and among the
parties hereto (or their assignees) pursuant to this Section 2.3 shall
be consummated at a closing to be held not later than five (5) days
after the expiration of the ten (10) day period provided for in Section
2.3(e). At the closing, the purchaser shall deliver to the seller the
consideration (cash or other, as set forth in the Offer Terms) against
delivery of the appropriate stock certificate(s) (or voting trust
certificate(s)) duly endorsed for transfer.
(h) Exempted Transfers. Except as otherwise set forth in this
Section 2.3(h), the provisions of Section 2.3 shall not apply to the
transfer or retransfer of, and each Stockholder or Investor who is an
individual may transfer or retransfer any Capital Stock held by such
Stockholder or Investor to or for the benefit of (i) any spouse,
parent, child, grandchild, lineal descendant (including adopted
children and stepchildren), siblings, aunts, uncles, nieces, nephews or
in-laws (collectively, "Relatives") of such holder (including, without
limitation, trustee(s) of a trust exclusively for the benefit of the
Stockholder or Investor or any of the foregoing); (ii) any trustee or
other fiduciary holding securities for the benefit of the Stockholder
or Investor upon retirement; (iii) any partnership, corporation or
limited liability company of which there are no owners other than such
Stockholder or its Relatives; or (iv) any legal representative,
devisee, or heir of a Stockholder or Investor upon his or her death
(collectively, "Permitted Transferees"); provided, that all such
transferees shall take such Capital Stock subject to all the
restrictions, terms, and conditions of this Agreement and shall comply
with Section 5.1; and provided further, that there shall be no further
Transfer of such Capital Stock except in accordance with this
Agreement.
(i) Securities Law Compliance. Notwithstanding anything to the
contrary in this Section 2.3, no Capital Stock may be Transferred
unless such Transfer is made in compliance with all applicable federal
and state securities laws.
Section 2.4 Transfers in Violation of this Agreement. Any transfer of
Capital Stock in violation of the terms of this Agreement will be void and of no
effect, and the purported transferee of such shares will not be recognized as
the owner or holder of the Capital Stock purportedly transferred. The
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Stockholders consent to the notation of "Stop Transfer" restrictions in the
Company's stock transfer books with respect to their holdings of Capital Stock
in order to assist in the enforcement of the restrictions set forth in this
Agreement.
Section 2.5 Compelled Sale Right.
(a) Compelled Sale. If any Investor or group of Investors
shall desire to Transfer all or substantially all of the Series A
Preferred Stock and Common Stock Equivalent Shares held by them, which
Series A Preferred Stock and Common Stock Equivalent Shares represent
at least fifty percent (50%) of each of the outstanding Series A
Preferred Stock and Common Stock (the "Majority Holders"), to any third
party other than a Permitted Transferee (the "Third Party Purchaser"),
then all the other Stockholders and Investors (the "Minority Holders")
shall be required, at the election of the Majority Holders, to Transfer
to the Third Party Purchaser (a "Compelled Sale") all of the Capital
Stock then held by the Minority Holders (the "Compelled Sale Shares"),
on the same terms and conditions upon which the Majority Holders
propose to Transfer their shares of Capital Stock. In the event of a
Compelled Sale, any options or stock appreciation rights that are not
at such time exercisable shall become exercisable by reason of such
transaction only to the extent provided in the instrument evidencing
the grant of such options or stock appreciation rights.
(b) Notice. The Majority Holders shall give written notice
(the "Compelled Sale Notice") to each of the Minority Holders setting
forth the terms and conditions, including the proposed sale price, of
the Compelled Sale (the "Compelled Sale Terms") and the name of the
Third Party Purchaser. Within ten (10) days after receipt of the
Compelled Sale Notice, the Minority Holders shall deliver to the
Company stock certificate(s) (or voting trust certificate(s))
representing the Compelled Sale Shares, duly endorsed for transfer, and
all other documents reasonably requested by the Majority Holders.
Pending consummation of the Compelled Sale, the Majority Holders shall
promptly notify the Minority Holders of any material changes in the
Compelled Sale Terms and any other material developments in connection
with the Compelled Sale.
(c) Closing. The Compelled Sale shall be consummated at a
closing to be held in accordance with the Compelled Sale Terms.
Promptly after the closing, the Company shall remit or cause to be
remitted to Minority Holders the consideration with respect to the
Compelled Sale Shares. If the closing has not occurred within one
hundred twenty (120) days after delivery of the Compelled Sale Notice,
the Company shall promptly return to the Minority Holders all
certificates representing the Compelled Sale Shares previously
delivered to the Company. The provisions of this Section 2.5 shall
remain in effect, notwithstanding any such return of the Compelled Sale
Shares.
Section 2.6 Pre-emptive Rights.
(a) Upon the terms and subject to the conditions set forth in
this Section 2.6, the Company hereby grants to each Investor and
Stockholder a preemptive right with respect to future sales by the
Company of its Common Stock or securities convertible into or
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exchangeable for any Common Stock; provided, however, such right shall
not apply to the sale or issuance of Shares (i) to any person pursuant
to the terms of any stock option plan adopted by the Company, (ii)
issued or issuable pursuant to the acquisition of another corporation
or business entity by the Company by merger, purchase of substantially
all of the assets, or other reorganization, or to a joint venture
agreement, provided that such issuances are approved by the Board (as
defined below); (iii) issued or issuable to banks, equipment lessors,
or other financial institutions pursuant to a commercial leasing or
debt financing transaction approved by the Board; (iv) issued or
issuable to suppliers of goods or third party service providers in
connection with the provision of goods or services pursuant to
transactions approved by the Board; (v) issued pursuant to stock
splits, stock dividends, recapitalization, or other similar
reclassification for which a proportional adjustment has been made;
(vi) issued pursuant to any warrant outstanding as of the date hereof;
and (vii) issued pursuant to a public offering of Common Stock or other
securities of the Company pursuant to an underwritten offering made in
accordance with the Securities Act. In consideration of the rights
granted in this Section 2.6, each Investor and Stockholder hereby
covenants and agrees to vote its Common Stock in favor of any amendment
or modification to the Articles of Incorporation of the Company that is
required in order to issue any Common Stock in compliance with this
Section 2.6 and the other provisions of this Agreement.
(b) Procedures. At any time the Company proposes to issue and
sell any Common Stock, the Company shall first make an offering of such
Common Stock to each Investor and Stockholder in accordance with the
following provisions:
(i) The Company shall deliver a notice by certified
mail (a "Preemptive Right Notice") to the Investors and the
Stockholders stating (A) its bona fide intention to offer such
Common Stock, (B) the number of shares of Common Stock to be
offered, and (C) the price and material terms, if any, upon
which it proposes to offer such shares of Common Stock.
(ii) Within fifteen (15) days after delivery of the
Preemptive Right Notice, each Investor and Stockholder may
elect to purchase or obtain, at the price and on such terms as
specified in the Preemptive Right Notice, up to that portion
of such shares of Series A Preferred Stock, Common Stock
Equivalents or Common Stock (as the case may be) as would be
required to maintain the percentage ownership of the Investor
and the Stockholder in the Series A Preferred Stock, Common
Stock Equivalents or Common Stock (as the case may be) of the
Company as it existed immediately prior to the sale of
additional shares of Common Stock. Such sale shall occur not
later than the date on which the Company wishes to close the
sale for which the Preemptive Right Notice was issued. If an
Investor or Stockholder fails to timely respond to the
Preemptive Right Notice, such shall be deemed a rejection of
the preemptive rights of such Investor or Stockholder as to
the transaction referenced in the Preemptive Right Notice.
Nothing contained herein shall be deemed to be a waiver of any
future preemptive rights.
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Section 2.7 Repurchase Restrictions.
(a) Company Right to Repurchase. In the event of termination
of a Management Holder's (hereinafter defined) employment with the
Company and its Subsidiaries (as defined below) either voluntarily by
such Management Holder or for "cause" (as such term is defined in such
Management Holder's employment agreement), the Company shall have the
right, exercisable by written notice to the Management Holder at any
time prior to the expiration of the ninety (90) day period following
such termination of employment, to elect to repurchase all or any
portion of the Capital Stock (including vested options) held, directly
or indirectly, by such Management Holder and its permitted transferees
(the "Eligible Stock"), at a cash price per share equal to (i) in the
case of termination of such Management Holder for "cause", the fair
market value of the Eligible Stock (or, in the case of vested options,
the excess of such fair market value over the per-share exercise price
under such options), in each case at a thirty-five percent (35%)
discount, and (ii) in the case of the voluntary termination by such
Management Holder, the fair market value of the Eligible Stock (or, in
the case of vested options, the excess of such fair market value over
the per-share exercise price under such options), in either case, as
appropriately adjusted for stock splits, stock dividends, combinations,
reclassifications and other similar transactions. A "Management Holder"
is a holder of Capital Stock who has agreed to be bound by the
provisions hereof and is or was an employee of the Company.
(b) Investors' Right to Repurchase. If the Company is unable
to purchase all of the Eligible Stock due to inadequate surplus, of if
the Company otherwise does not exercise its right to purchase all of
the Eligible Stock, the Company shall give notice to the Investors of
such fact during the ninety (90) day period provided for in Section
2.7(a). The Investors shall have the exclusive right during the period
of thirty (30) days following receipt of such notice to elect to
purchase all or any portion of the Eligible Stock not purchased by the
Company pursuant to Section 2.7(a) at a cash price per share equal to
(i) in the case of termination of such Management Holder for "cause",
the fair market value of the Eligible Stock (or, in the case of vested
options, the excess of such fair market value over the per-share
exercise price under such options), in each case at a thirty-five
percent (35%) discount, and (ii) in the case of the voluntary
termination of such Management Holder, the fair market value of the
Eligible Stock (or, in the case of vested options, the excess of such
fair market value over the per-share exercise price under such
options), in either case, as appropriately adjusted for stock splits,
stock dividends, combinations, reclassifications and other similar
transactions. In the event that more than one Investor wishes to
purchase the Eligible Stock to be sold, the right to purchase shall be
allocated among such Investors in proportion to their ownership of
Common Stock Equivalent Shares. Any election by an Investor to purchase
Eligible Stock shall be binding upon such Investor and may not be
withdrawn without the written consent of the Company and the Management
Holder.
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(c) Fair Market Value. The fair market value of the Eligible
Stock shall be mutually agreed upon by Management Holder and the
Company (or the Investors in the case of Section 2.4(b)). If Management
Holder and the Company (or the Investors in the case of Section 2.4(b))
cannot in good faith agree upon the fair market value of the Eligible
Stock, then Management Holder and the Company (or the Investors in the
case of Section 2.4(b)) shall appoint an independent appraiser who has
knowledge and experience in the business of the Company to make such
determination. If Management Holder and the Company (or the Investors
in the case of Section 2.4(b)) cannot mutually agree upon an
independent appraiser, then Management Holder and the Company (or the
Investors in the case of Section 2.4(b)) shall each appoint a separate
independent appraiser, and such independent appraisers shall appoint a
third independent appraiser, whose determination of the fair market
value of the Eligible Stock shall be binding. Management Holder and the
Company (or the Investors in the case of Section 2.4(b)) shall each be
responsible for the costs of their independent appraisers, and shall
each pay fifty percent (50%) of the initial independent appraiser, if
one is actually agreed upon, or the third independent appraiser if one
is so appointed in accordance with this Section 2.4(c).
(d) Closing. The closing of the repurchase of Eligible Stock
shall occur (i) within forty-five (45) days following the receipt of
the Company's written notice of election to repurchase all of the
Eligible Stock, or (ii) if the Company does not elect to purchase all
of the Eligible Stock, within forty-five (45) days following the
expiration of the thirty (30) day period provided for in Section
2.4(b).
(e) Special Provisions.
(i) Notwithstanding anything contained in this
Section 2.7 to the contrary, for purposes of any repurchase of
Eligible Stock held by Dale Hensel or Dan Barnett, the Company
and/or the Investors (as the case may be) shall only have the
right to purchase Thirty-Five percent (35%) of the total
Eligible Stock held by Dale Hensel or Dan Barnett (as the case
may be) at the time of such repurchase.
(ii) Notwithstanding anything contained in this
Section 2.7 to the contrary, Michelle Taylor shall not be
deemed a "Management Holder" for purposes of this Section 2.7.
ARTICLE III
CORPORATE GOVERNANCE
Section 3.1 Elections of Directors. From and after the date hereof,
each Investor and Stockholder shall vote all of the Capital Stock over which
such Investor and Stockholder has voting control, and shall take all other
necessary or desirable actions within his or its control (whether in his or its
capacity as a stockholder, director, member of a board committee or officer of
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the Company or otherwise, and including, without limitation, attendance at
meetings in person or by proxy for purposes of obtaining a quorum and execution
of written consents or resolutions in lieu of meetings), and the Company shall
take all necessary or desirable actions within its control (including, without
limitation, calling special board and stockholders' meetings) so that:
(a) the authorized number of directors of the Company's and
each of its Subsidiaries' (as defined in the Articles of Incorporation)
Board of Directors (the "Board") shall be established at five (5)
directors; and
(b) all votes of such Investor and Stockholder are cast in
favor of the Series A Directors and the Common Stock Directors (each as
defined in the Articles of Incorporation).
Section 3.2 Vacancies. Vacancies in the Board of Directors of the
Company may be filled by a majority of the holders of (a) Series A Preferred
Stock if there is a vacancy in the Series A Directors, or (b) Common Stock if
there is a vacancy in the Common Stock Directors. A Series A Director may be
removed during his or her term of office, either for or without cause, only by
the holders of the Series A Preferred Stock.
ARTICLE IV
TERM AND AMENDMENT
Section 4.1 Term. This Agreement will terminate upon the earliest to
occur of: (a) the date on which this Agreement is terminated by written
agreement signed by (i) Stockholders and Investors holding not less than a
majority of (A) the Common Stock then held by all holders of Common Stock, (B)
the Series A Preferred Stock then held by all holders of Series A Preferred
Stock, and (C) the Warrant Shares then held by all holders of the Warrants
(based upon the number of shares of Common Stock into which such Warrants are
then exercisable); (b) immediately before the closing of a sale, lease or other
conveyance of all or substantially all of the Company's assets; (c) immediately
before the closing of an acquisition of the Company by another entity by
consolidation, merger or other reorganization in which the holders of the
Company's outstanding voting stock immediately before the acquisition
transaction own, immediately after the acquisition transaction, securities
representing less than fifty percent (50%) of the voting power of the Company or
other entity surviving such transaction (other than a merger effected solely for
the purpose of changing the Company's domicile or effected solely for the
purpose of raising operating capital); (d) on the date immediately prior to the
Company's sale of its Common Stock in a firm commitment underwritten public
offering pursuant to a registration statement under the Securities Act of 1933,
as amended, in which the net proceeds to the Company are equal to or greater
than $20,000,000 (before deduction of underwriters' commissions and expenses);
or (e) on the date that all Investors no longer hold shares of Series A
Preferred Stock, the Warrants and the underlying Warrant Shares.
Section 4.2 Amendment. This Agreement shall not be changed, waived,
discharged, or terminated except by written agreement signed by (a) holders
holding not less than a majority of (A) the Common Stock then held by all
holders of Common Stock, (B) the Series A Preferred Stock then held by all
holders of Series A Preferred Stock, and (C) the Warrant Shares then held by all
holders of the Warrants (based upon the number of shares of Common Stock into
which such Warrants are then exercisable).
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ARTICLE V
MISCELLANEOUS
Section 5.1 Parties. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, their heirs, personal
representatives, successors, and permitted assigns; provided, however, that no
Person other than the Investors shall have any rights hereunder or the power to
enforce any of the duties created hereby unless such Person shall have become
bound to the provisions hereof, as described in Section 5.1.
Section 5.2 Specific Performance. The parties hereto agree that a
breach or violation of any of the terms, covenants, or other obligations under
this Agreement will result in immediate and irreparable harm to the
non-breaching parties in an amount that will be impossible to ascertain at the
time of the breach or violation and that the award of monetary damages will not
be adequate relief to the non-breaching parties. Therefore, the failure on the
part of any party to perform all of the terms, covenants, and obligations
established by this Agreement shall give rise to a right to the other parties to
obtain enforcement of this Agreement in a court of equity by a decree of
specific performance, a writ of mandamus, or other injunctive relief. This
remedy, however, shall be cumulative and in addition to any other remedy the
parties may have.
Section 5.3 Severability. If any provision of this Agreement or the
application thereof shall be invalid or unenforceable, the parties hereto shall
take such action as may be necessary to effectuate the intent of such provision,
and the remainder of this Agreement and any other application of such provision
shall not be affected thereby.
Section 5.4 Sections and Exhibits. The headings of sections in this
Agreement are provided for convenience only and will not affect the Agreement's
construction or interpretation. Unless indicated otherwise, references to
"Section," "Sections," "Exhibit," or "Exhibits" refer to the corresponding
section, sections, exhibit, or exhibits, respectively, of this Agreement.
Section 5.5 Notices. Any notice required or permitted hereunder shall
be given in writing and shall be deemed to have been given, made, or delivered
when actually received (regardless of the manner of transmission) or five (5)
days after deposited in the mail and sent by registered or certified mail,
postage prepaid; or, by facsimile transmission when transmitted with
confirmation of receipt, addressed as the case may be as follows:
If to the Company: Mortgage Assistance Center Corporation
2614 Main Street
Dallas, Texas 75226
Attention: Chief Executive Officer
Facsimile:
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With a copy to:
If to a Stockholder: (as set forth on Exhibit A hereto)
If to an Investor: (as set forth on Exhibit B hereto)
or to such other address as such party shall have furnished to other parties in
writing in accordance with the provisions hereof.
Section 5.6 Confidentiality. Each party to this Agreement agrees to at
all times hold in confidence and keep secret and inviolate all of the Company's
confidential information, including, without limitation, all unpublished matters
relating to the business, property, accounts, books, records, customers and
contracts of the Company which such party may now or hereafter come to know;
provided, that any party to this Agreement may disclose any such information
which has otherwise entered the public domain (not as a result of violation of
this Agreement) or which he or it is required to disclose to any governmental
authority by law or subpoena or judicial process.
Section 5.7 Counterparts. This Agreement may be executed in as many
counterparts as may be deemed necessary or convenient, each of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute but one and the same instrument.
Section 5.8 Governing Law; Venue. This Agreement shall be construed and
enforced in accordance with the laws of the State of Texas.
Section 5.9 Entire Agreement. This Agreement constitutes the entire
agreement among the Company, the Stockholders and the Investors relating to the
subject matter hereof and there are no other terms other than those contained
herein.
Section 5.10 Further Assurances. Each party to this Agreement will take
such further action and will execute and deliver such further documents as may
be reasonably requested by any other party to carry out the provisions and
purposes of this Agreement. In addition, the Company shall use its best efforts
to ensure that the rights granted under this Agreement are effective and that
the parties hereto enjoy the benefits of the rights granted under this
Agreement. Without limiting the generality of the foregoing, the Company (a)
shall use its best efforts to cause the nomination and election of the directors
as provided in Article III; (b) shall not avoid or seek to avoid the observance
or performance of any of the terms to be performed by the Company under this
Agreement; (c) shall at all times in good faith assist in carrying out all of
this Agreement's provisions and in taking all such actions as may be necessary,
appropriate, or reasonably requested by any Investor to protect against
impairment of such Investor's rights as set forth in this Agreement; (d) shall
not transfer on the Company's books any Capital Stock that has been purportedly
Transferred in violation of this Agreement; (e) shall not give effect to any
action in contravention of this Agreement undertaken by any Person; and (f)
shall promptly inform the Investors of any breach or action in contravention of
this Agreement of which the Company becomes aware.
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Section 5.11 Grant of Proxy. If any provisions of this Agreement cause
the termination of the ownership of Capital Stock of any Stockholder (including,
without limitation, in connection with a Compelled Sale as described in Section
2.5), then such Stockholder hereby grants the Company a power of attorney to
take all actions, and execute and deliver all documents, necessary or
appropriate to evidence the transfer of such Capital Stock on the books of the
Company. Such proxy, and if any provisions of this Agreement are construed to
constitute the granting of proxies, then such other proxies, will be deemed
coupled with an interest and are irrevocable for the term of this Agreement.
Section 5.12 Ownership of Capital Stock. Each Stockholder represents
and warrants that such Stockholder is the sole record and beneficial owner of
the Capital Stock set forth opposite such Stockholder's name on Exhibit A and
that no other Person has any interest (other than a community property interest)
in any of such Capital Stock.
Remainder of page left intentionally blank; signature pages follow
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IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of
the day and year first above written.
THE COMPANY:
MORTGAGE ASSISTANCE CENTER
CORPORATION, a Florida corporation
By:_______________________________
Name:Dale Hensel
Its: President
STOCKHOLDERS:
__________________________________
Dale Hensel, Individually
__________________________________
Dan Barnett, Individually
__________________________________
Michelle Taylor, Individually
INVESTORS:
W.C. PAYNE INVESTMENTS, LLC
By:_______________________________
Name: W.C. Payne
Its: Managing Member
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FAX / MACC, L.P.
By: Family Access Exchange II, L.P.
Its: General Partner
By: FAX GenPar, L.L.C.
Its: General Partner
By:_________________________________
Name: Rod Cain Jones
Its: President
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EXHIBIT A
---------
STOCKHOLDERS
Common Stock
- ------------
Name Notice Address Number of Shares
- ---- -------------- ----------------
Dale Hensel 5,031,058
Dan Barnett 4,967,058
Michelle Taylor 1,036,375
----------------
11,034,491
EXHIBIT B
---------
INVESTORS
Purchase Price
Number of Number of for Series A
Investor Series A Shares Warrant Shares Shares
-------- --------------- -------------- ------
W.C. Payne Investments, LLC Up to 1,000,000 Up to 3,037,796 Up to $1,000,000
FAX/MACC, L.P. Up to 2,000,000 Up to 6,075,591 Up to $2,000,000
Total: Up to 3,000,000 Up to 9,113,387 Up to $3,000,000