Document:

Amendment No. 2 of the Amended and Restated Registration Rights Agreement

     

    Exhibit
      10.3

     

    MTM
      TECHNOLOGIES, INC.

     

    AMENDMENT
      NO. 2

    TO

    AMENDED
      AND RESTATED REGISTRATION RIGHTS AGREEMENT

     

    This
      Amendment No. 2 (this "Amendment
      No.2")
      to the
      Amended and Restated Registration Rights Agreement dated December 10, 2004,
      as
      amended by Amendment No. 1 on November 23, 2005 (the “Registration
      Rights Agreement”),
      among
      (a) MTM Technologies, Inc., a New York corporation (the "Company"), (b) Steven
      Rothman, a natural person, (c) Howard Pavony, a natural person (Messrs. Rothman
      and Pavony collectively, the “Executives”),
      (d)
      Pequot Private Equity Fund III, L.P. and Pequot Offshore Private Equity Partners
      III, L.P., (collectively, the “Pequot
      Stockholders”),
      and
      (d) Constellation Venture Capital II, L.P., Constellation Venture Capital
      Offshore II, L.P., The BSC Employee Fund VI, L.P. and CVC II Partners, LLC
      (collectively, the “Constellation
      Stockholders”
and
      collectively with the Pequot Stockholders, the “Investor
      Stockholders”)
      is
      entered into as of March 29, 2007. Capitalized terms used herein and not
      otherwise defined shall have the meanings ascribed to such terms in the
      Registration Rights Agreement.

     

    Background

     

    WHEREAS,
      the Company has entered into a Securities Purchase Agreement (the “Series
      A-6 Purchase Agreement”)
      among
      the Company, the Pequot Stockholder and the Constellation Stockholders dated
      as
      of even date whereby provisions were made for the purchase, sale and issuance
      of
      2,020,202 shares of Series A-6 Preferred Stock (the “Series
      A-6 Preferred Stock”)
      and
      detachable warrants to purchase up to 610,000 shares (as such amount may be
      adjusted in accordance with the terms thereof) of the Company’s common stock (
      the “Series
      A-6 Warrants”);

     

    WHEREAS,
      simultaneously with, and as a condition to, entering into the Purchase
      Agreement, the Investor Stockholders are entering into this Amendment No. 2
      in
      order to amend the Registration Rights Agreement and to provide certain
      registration and other rights with respect to the Series A-6 Preferred Stock
      and
      Series A-6 Warrants to be issued in connection with the Purchase Agreement;
      and

     

    WHEREAS,
      pursuant to Section 13(b) of the Registration Rights Agreement, this Amendment
      No. 2 requires the consent of the Company, a Pequot Majority in Interest and
      a
      Constellation Majority in Interest.

     

    NOW,
      THEREFORE, in consideration of the mutual premises and agreements contained
      herein, and intending to be legally bound hereby, the parties hereto agree
      as
      follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              1.

            	
              Amendments.

            

    

     

    (a)   A
      new
      seventh recital to the Registration Rights Agreement shall be added after the
      sixth recital as follows:

     

    WHEREAS,
      pursuant to a Purchase Agreement, dated as of even date herewith (as the same
      may be amended or supplemented, the “Series
      A-6 Purchase Agreement”),
      among
      the Company and the Investor Stockholders, the Company issued and sold and
      the
      Investor Stockholders purchased 2,020,202 shares of Series A-6 convertible
      preferred stock, par value $0.001 per share (the “Series
      A-6 Preferred Stock”)
      and
      detachable warrants to purchase up to 610,000 shares (as such amount may be
      adjusted in accordance with the terms thereof) of the Company’s common stock (
      the “Series
      A-6 Warrants”);

     

    (b)   A
      new
      eighth recital to the Registration Rights Agreement shall be added after the
      new
      seventh recital as follows:

     

    WHEREAS,
      simultaneously with, and as a condition to, the closing of the transactions
      contemplated by the A-6 Purchase Agreement, the Company and the Investor
      Stockholders are entering into this Amendment No. 2, in order to amend the
      Registration Rights Agreement and to provide certain registration and other
      rights with respect to the Common Stock held by or issuable to the Investor
      Stockholders pursuant to the A-6 Purchase Agreement; 

     

    (c)   The
      following definitions in Section 1 of the Registration Rights Agreement shall
      be
      amended in their entirety and replaced with the following: 

     

    
      	 	
              (i)

            	
              “Constellation
                Majority in Interest.” The Constellation Stockholders holding at least a
                majority of the shares of Common Stock issued or issuable, directly
                or
                indirectly, upon conversion or exercise of the Shares and Warrants
                purchased by such Constellation Stockholders in accordance with the
                Initial Series A Purchase Agreement, the Purchase Agreement and the
                Series
                A-6 Purchase Agreement.

            

    

     

    
      	 	
              (ii)

            	
              “Pequot
                Majority in Interest.” The Pequot Stockholders holding at least a majority
                of the shares of Common Stock issued or issuable, directly or indirectly,
                upon conversion or exercise of the Shares and Warrants purchased
                by such
                Pequot Stockholders in accordance with the Initial Series A Purchase
                Agreement, the Purchase Agreement and the Series A-6 Purchase
                Agreement.

            

    

     

    
      	 	
              (iii)

            	
              “Series
                A Preferred Stock.” The Series A-1 Preferred Stock, Series A-2 Preferred
                Stock, Series A-3 Preferred Stock, Series A-4 Preferred Stock, Series
                A-5
                Preferred Stock, and Series A-6 Preferred Stock
                collectively.

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (iv)

            	
              “Shares.”
                The shares of Series A Preferred Stock issued to the Investor Stockholders
                in accordance with the Initial Series A Purchase Agreement, the Purchase
                Agreement and the Series A-6 Purchase
                Agreement.

            

    

     

    
      	 	
              (v)

            	
              “Warrants.”
                The Series A-1 Warrants, Series A-2 Warrants, Series A-3 Warrants,
                Series
                A-4 Warrants, the Series A-5 Warrants and the Series A-6 Warrants
                issued
                to the Investor Stockholders.

            

    

     

    (d)   The
      Following definition shall be added to Section 1 of the Registration Rights
      Agreement:

     

    
      	 	
              (i)

            	
              “Series
                A-6 Preferred Stock” As defined in the seventh recital hereof.
                

            

    

     

    This
      definition shall be inserted after the definition of “Series A-5
      Warrants”

     

    
      	 	
              (ii)

            	
              “Series
                A-6 Warrants” as defined in the seventh recital hereof.
                

            

    

     

    This
      definition shall be inserted after the definition of “Series A-6 Preferred
      Stock.”

     

    (e)   The
      last
      sentence of Section 3(d) that reads “Liquidated damages payable pursuant to this
      Section 3(d) may be paid in cash or such securities valued at the price paid
      for
      such securities” shall be replaced in its entirety as follows:. 

     

    “Liquidated
      damages payable pursuant to this Section 3(d) may be paid in such securities
      valued at the price paid for such securities.”

     

    
      	
              2.

            	
              Entire
                Agreement.
                This Amendment No.2 and the Registration Rights Agreement are to
                be read
                together as one instrument. The Registration Rights Agreement shall
                remain
                in full force and effect, except as modified
                hereby.

            

    

     

    
      	
              3.

            	
              Governing
                Law.
                This Amendment No.2 is made pursuant to, and shall be governed by
                and
                construed in accordance with, the laws of the State of New York,
                other
                than provisions thereof relating to conflicts of
                law.

            

    

     

    
      	
              4.

            	
              Counterparts.
                This Amendment No.2 may be executed in any number of counterparts,
                each of
                which shall be considered an original and which shall together constitute
                one instrument.

            

    

     

    
      	
              5.

            	
              Headings.
                The titles and subtitles used in this Amendment No.2 are used for
                convenience only and are not to be considered in construing or
                interpreting this Amendment No.2.

            

    

     

    [Remainder
      of this page intentionally blank]

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

    

    IN
      WITNESS WHEREOF, the parties have executed this Amendment No. 1 as of the date
      first above written.

     

    
      	 	COMPANY: 
	 	 	 
	 	 	 
	 	MTM
              TECHNOLOGIES,
              INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Name: Francis
              J. Alfano
	 	Title:   Chief
              Executive Officer 

    

     

    
      	 	PEQUOT STOCKHOLDERS: 
	 	 	 
	 	 	 
	 	PEQUOT
              PRIVATE
              EQUITY FUND III, L.P.
	 
 	 
 	 
 
	 	By: 	
              Pequot
                Capital Management, Inc.,

              as
                Investment Manager

            
	 	 	 
	 	By:  	 
	 	
              
Name: 
              Aryeh Davis
	 	Title:   General
              Counsel

    

     

    
      	 	 	 
	 	PEQUOT
              OFFSHORE
              PRIVATE EQUITY PARTNERS III, L.P.
	 
 	 
 	 
 
	 	By: 	
              Pequot
                Capital Management, Inc.,

              as
                Investment Manager

            
	 	 	 
	 	By:  	 
	 	
              
Name: 
              Aryeh Davis
	 	Title:   General
              Counsel

    

     

    
      
        
        

      

      
        
          Signature
            Page to Amendment No. 2 to Registration Rights Agreement

        

        
          

        

      

      
        
        

      

    

     

    
      
        	 	CONSTELLATION
                STOCKHOLDERS: 
	 	 	 
	 	 	 
	 	CONSTELLATION
                VENTURE CAPITAL II,
                L.P.
	 
 	 
 	 
 
	 	By: 	
                Constellation Ventures Management II,
                  LLC,

                Its
                  General Partner

              
	 	 	 
	 	By:  	 
	 	
                
Name: 
	 	Title:  

      

       

      
        	 	 	 
	 	CONSTELLATION
                VENTURE CAPITAL OFFSHORE
                II, L.P.
	 
 	 
 	 
 
	 	By: 	
                
                  Constellation Ventures Management II,
                    LLC,

                  Its
                    General Partner

                

              
	 	 	 
	 	By:  	 
	 	
                
Name: 
                
	 	Title:   

      

       

      
        	 	 	 
	 	THE
                BSC EMPLOYEE
                FUND VI, L.P.
	 
 	 
 	 
 
	 	By: 	
                
                  
                    Constellation Ventures Management II,
                      LLC,

                    Its
                      General Partner

                  

                

              
	 	 	 
	 	By:  	 
	 	
                
Name: 
                
	 	Title:   

      

    

    
       

      
        	 	 	 
	 	CVC
                II PARTNERS,
                LLC
	 
 	 
 	 
 
	 	By: 	
                
                  
                    
                      The
                        Bear Stearns Companies Inc.,

                      Its
                        Managing Member

                    

                  

                

              
	 	 	 
	 	By:  	 
	 	
                
Name: 
                
	 	Title:   

      

    

     

    

      Signature
        Page to Amendment No. 2 to Registration Rights AgreementEX-10.8

 

Exhibit 10.8

RESTRICTED STOCK AGREEMENT

          THIS AGREEMENT, dated as of the 8th day of November, 2006, between KBW, Inc., a Delaware
corporation (the “Corporation”), and the employee who is confirming agreement with these terms
through the facility of the Employee Account Records web site, as defined below (the “Employee”).

W I T N E S S E T H

          In consideration of the mutual promises and covenants made herein and the mutual benefits to
be derived herefrom, the parties hereto agree as follows:

1. Grant, Vesting and Forfeiture of Restricted Stock.

(a) Grant. Subject to the provisions of this Agreement and to the provisions of the KBW,
Inc. 2006 Equity Incentive Plan (the “Plan”), the Corporation hereby grants to the Employee as of
November 8, 2006 (the “Grant Date”), such number of Shares (the “Restricted Stock”) of common stock
of the Corporation, par value $0.01 per Share (“Common Stock”) as shall be set forth in the account
records of the Employee (“Employee Account Records”) as being granted hereby of the Bank of New
York (the “Transfer Agent”). Employee may view such Employee Account Records at the Internet URL
address of BONY maintained for that purpose at www.bnymystock.com/KBW. The Employee Account Records
relating to the Restricted Stock are expressly made a part hereof, subject to correction for errors
by the Corporation, for purposes of the amount and vesting schedule relating to the Restricted
Stock. All capitalized terms used herein, to the extent not defined, shall have the meaning set
forth in the Plan.

(b) Vesting during the Restriction Period. Subject to the terms and conditions of
this Agreement, the Restricted Stock shall vest and no longer be subject to any restriction on the
Vest Dates and in the respective amounts vesting on such dates set forth in the Employee Account
Records (such period during which restrictions apply is the “Restriction Period”).

(c) Forfeiture upon Termination of Employment; Accelerated Vesting upon Termination Due
to Death or Disability. Upon the Employee’s Termination of Employment for any reason (other
than due to the Employee’s death or Disability) during the Restriction Period, all Shares of
Restricted Stock still subject to restriction shall be forfeited. Upon the Employee’s Termination
of Employment during the Restriction Period due to the Employee’s death or Disability, the
restrictions applicable to the Restricted Stock shall lapse, and such Restricted Stock shall become
free of all restrictions and become fully vested. For purposes of this Agreement, employment with
the Corporation shall include employment with the Corporation’s Affiliates and its successors.
Nothing in this Agreement or the Plan shall confer upon the Employee any right to continue in the
employ of the Corporation or any of its Affiliates or interfere in any way with the right of the
Corporation or any such Affiliates to terminate the Employee’s employment at any time.

 

 

2. Issuance of Shares.

     Subject to Paragraph 9 (pertaining to the withholding of taxes), as soon as practicable after
the Restriction Period expires (provided there has been no prior forfeiture of the Restricted Stock
pursuant to the terms of this Agreement and the Plan), the Corporation shall issue (or cause to be
delivered) to the Employee one or more unlegended stock certificates in respect of the Restricted
Stock. Notwithstanding the foregoing, the Corporation shall be entitled to hold the Shares of
Restricted Stock that have vested until the Corporation or the agent selected by the Corporation to
manage the Plan under which the Restricted Stock has been issued shall have received from the
Employee a duly executed Form W-9 or W-8, as applicable.

3. Nontransferability of the Restricted Stock.

          During the Restriction Period, the Shares covered by this Restricted Stock Agreement shall not
be transferable by the Employee by means of sale, assignment, exchange, encumbrance, pledge or
otherwise. Any purported or attempted transfer of such Shares or such rights shall be null and
void.

4. Rights as a Stockholder.

          Except as otherwise specifically provided in this Agreement, during the Restriction Period the
Employee shall have all the rights of a stockholder with respect to the Restricted Stock, including
without limitation the right to vote the Restricted Stock and the right to receive any dividends
with respect thereto. If the Corporation declares and pays dividends on the Common Stock during the
Restriction Period, the Employee shall be paid dividends with respect to the Restricted Stock at
such time as dividends are paid to stockholders of Common Stock generally.

5. Certificates.

          Certificates representing the Restricted Stock hares as originally or from time to time
constituted shall bear the following legend:

The Shares represented by this stock certificate have been granted as restricted stock under
a Restricted Stock Agreement between the registered holder of these Shares and the
Corporation. The Shares represented by this stock certificate may not be sold, exchanged,
assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of until
the restrictions set forth in the Restricted Stock Agreement between the registered holder
of these Shares and the Corporation shall have lapsed.

As soon as administratively practicable after the end of the Restriction Period, the Corporation
shall deliver to the Employee or his or her personal representative, in book-entry or certificate
form, the formerly Restricted Stock that does not bear any restrictive legend making reference to
this Agreement. Such Shares shall be free of restrictions, except for any restrictions required
under Federal securities laws.

-2-

 

6. Adjustment in the Event of Change in Stock; Change in Control.

          In the event of certain transactions before they vest, the Restricted Stock shall be subject
to adjustment as provided in Section 3(c) of the Plan or any applicable successor provision under
the Plan. In the event of a Change in Control before the Restricted Stock vests, the restrictions
applicable to the Restricted Stock shall lapse, and such Restricted Stock shall become free of all
restrictions and become fully vested and transferable in full, consistent with Section 9(a)(ii) of
the Plan.

7. Payment of Transfer Taxes, Fees and Other Expenses.

          The Corporation agrees to pay any and all original issue taxes and stock transfer taxes that
may be imposed on the issuance of Shares received by an Employee in connection with the Restricted
Stock, together with any and all other fees and expenses necessarily incurred by the Corporation in
connection therewith.

8. Other Restrictions.

          (a) The Restricted Stock shall be subject to the requirement that, if at any time the
Committee shall determine that (i) the listing, registration or qualification of the Shares subject
or related thereto upon any securities exchange or under any state or federal law, or (ii) the
consent or approval of any government regulatory body, or (iii) an agreement by the Employee with
respect to the disposition of Shares is necessary or desirable as a condition of, or in connection
with, the delivery or purchase of Shares pursuant thereto, then in any such event, the grant of
Restricted Stock shall not be effective unless such listing, registration, qualification, consent,
approval or agreement shall have been effected or obtained free of any conditions not acceptable to
the Committee.

          (b) The Employee acknowledges that the Employee is subject to the Corporation’s policies
regarding compliance with securities laws, including but not limited to its Insider Trading Policy
(as in effect from time to time and any successor policies), and, pursuant to these policies, the
Employee shall be required to obtain pre-clearance prior to purchasing or selling any of the
Corporation’s securities, including any Shares issued upon vesting of the Restricted Stock, and may
be prohibited from selling such Shares other than during an open trading window. The Employee
further acknowledges that, in its discretion, the Corporation may prohibit the Employee from
selling such Shares even during an open trading window if the Corporation has concerns over the
potential for insider trading.

9. Taxes and Withholding.

          No later than the date as of which an amount first becomes includible in the gross income of
the Employee for federal, state, local or foreign income or employment or other tax purposes with
respect to any Restricted Stock, the Employee shall pay to the Corporation, or make arrangements
satisfactory to the Corporation regarding the payment of, all federal, state, local and foreign
taxes that are required by applicable laws and regulations to be withheld with respect to such
amount. The obligations of the Corporation under this Agreement shall be conditioned on compliance
by the Employee with this Paragraph 9, and the Corporation shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment otherwise

-3-

 

due to the Employee, including the delivery of the Restricted Stock that gives rise to the
withholding requirement.

10. Notices.

          All notices and other communications under this Agreement shall be in writing and shall be
given by hand delivery to the other party or by facsimile, overnight courier, or registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:

          If to the Employee:

At the most recent address

on file at the Corporation.

          If to the Corporation:

KBW, Inc.

787 Seventh Avenue

New York, New York 10019

Attention: Mitchell B. Kleinman, Esq.

Executive Vice President and General Counsel

Facsimile: (212) 541-6668

or to such other address or facsimile number as any party shall have furnished to the other in
writing in accordance with this Paragraph 10. Notices and communications shall be effective when
actually received by the addressee. Notwithstanding the foregoing, the Employee consents to
electronic delivery of documents required to be delivered by the Corporation under the securities
laws.

11. Effect of Agreement.

          Except as otherwise provided hereunder, this Agreement shall be binding upon and shall inure
to the benefit of any successor or successors of the Corporation.

12. Laws Applicable to Construction; Consent to Jurisdiction.

          (a) The interpretation, performance and enforcement of this Agreement shall be governed by the
laws of the State of Delaware without reference to principles of conflict of laws, as applied to
contracts executed in and performed wholly within the State of Delaware. In addition to the terms
and conditions set forth in this Agreement, the Restricted Stock is subject to the terms and
conditions of the Plan, which is hereby incorporated by reference.

          (b) Any and all disputes arising under or out of this Agreement, including without limitation
any issues involving the enforcement or interpretation of any of the provisions of this Agreement,
shall be resolved by the commencement of an appropriate action in the state or federal courts
located within the state of New York, which shall be the exclusive jurisdiction for the resolution
of any such disputes. The Employee hereby agrees and consents to the personal jurisdiction of said
courts over the Employee for purposes of the resolution of any and all such disputes.
Notwithstanding the foregoing, any dispute, controversy or claim between the

-4-

 

Employee and the Corporation arising out of or relating to or concerning the Restricted Stock
awarded under this Agreement, any agreement between the Employee and the Corporation relating to or
arising out of the Employee’s employment with the Corporation or otherwise concerning any rights,
obligations or other aspects of the Employee’s employment relationship in respect of the
Corporation or its Affiliates shall be finally settled by arbitration in New York City before, and
in accordance with the rules then obtaining of, the New York Stock Exchange, Inc. (the “NYSE”) or,
if the NYSE declines to arbitrate the matter, the American Arbitration Association (the “AAA”) in
accordance with the commercial arbitration rules of the AAA.

13. Severability.

          The invalidity or enforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.

14. Conflicts and Interpretation.

          In the event of any conflict between this Agreement and the Plan, the Plan shall control. In
the event of any ambiguity in this Agreement, or any matters as to which this Agreement is silent,
the Plan shall govern including, without limitation, the provisions thereof pursuant to which the
Committee has the power, among others, to (a) interpret the Plan, (b) prescribe, amend and rescind
rules and regulations relating to the Plan, and (c) make all other determinations deemed necessary
or advisable for the administration of the Plan.

15. Amendment.

          The Corporation may modify, amend or waive the terms of the Restricted Stock award,
prospectively or retroactively, but no such modification, amendment or waiver shall impair the
rights of the Employee without his or her consent, except as required by applicable law, stock
exchange rules, tax rules or accounting rules. The waiver by either party of compliance with any
provision of this Agreement shall not operate or be construed as a waiver of any other provision of
this Agreement, or of any subsequent breach by such party of a provision of this Agreement.

16. Headings.

          The headings of paragraphs herein are included solely for convenience of reference and shall
not affect the meaning or interpretation of any of the provisions of this Agreement.

17. Counterparts.

          This Agreement may be executed in counterparts, which together shall constitute one and the
same original.

-5-

 

     IN WITNESS WHEREOF, as of the date first above written, the Corporation has caused this
Agreement to be executed on its behalf by a duly authorized officer and the Employee has hereunto
set the Employee’s hand.

	 	 	 	 	 
	 	KBW, INC.

 	 
	 	By:  	______________________________
 	 
	 	 	Mitchell Kleinman 	 
	 	 	Executive Vice President and

General Counsel 	 
	 

-6-

 

KBW, Inc.

Summary of Key Terms of Initial Public Offering

Restricted Stock Award Agreement

	 	 	 
	Number of Shares
Subject to Grant:	 	
As set forth in employee account records maintained by Bank of New York
	
	 	

	Grant Date:	 	
As set forth in employee account records maintained by Bank of New York
	
	 	

	Vesting Schedule of	 	
For awards of more than 100 shares:
	Grant:	 	 
	 	 	
Subject to the employee’s continued employment with the Corporation
through each applicable vesting date:
	 	 	
• 25% of the Restricted Stock will vest and no longer be subject to
any restriction on the second anniversary of the Grant Date;
	 	 	
• 35% of the Restricted Stock will vest and no longer be subject to
any restriction on the third anniversary of the Grant Date; and
	 	 	
• 40% of the Restricted Stock will vest and no longer be subject to
any restriction on the fourth anniversary of the Grant Date.
	 	 	
For awards of 100 shares or less:
	 	 	
The Restricted Stock will vest and no longer be subject to any
restriction on the six-month anniversary of the Grant Date, subject to
the employee’s continued employment with the Corporation through such
date.

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