EXECUTION COPY
LOCK-UP AND VOTING AGREEMENT
LOCK-UP AND VOTING AGREEMENT (the "Agreement") dated as of August 18,
2004, by and among FRONT PORCH DIGITAL INC., a Nevada corporation (the
"Company"), and each Person whose name appears on SCHEDULE A attached hereto
(each a "Former MSI Stockholder").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, pursuant to the terms of an Agreement and Plan of Merger dated
as of August 16, 2004 (the "Merger Agreement") between the Company,
ManagedStorage International, Inc., a Delaware corporation ("MSI"), and Front
Porch Merger Corp., a Delaware corporation, on the date hereof, the Company has
agreed to issue to each Former MSI Stockholder such number of shares of Common
Stock, $.001 par value, of the Company (the "Common Stock") or Series A
Convertible Preferred Stock, $.001 par value, of the Company (the "Series A
Preferred Stock") as determined pursuant to the Merger Agreement; and
WHEREAS, as a condition precedent to the consummation of the
transactions contemplated by the Merger Agreement, the Company and the Former
MSI Stockholders desire to provide for certain restrictions on the transfer of
such shares by the Former MSI Stockholders and the voting agreement by the
Former MSI Stockholders as to certain corporate action by the Company;
NOW THEREFORE, in consideration of the premises and the mutual covenants
of the parties hereto, it is hereby agreed as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 DEFINITIONS. Whenever used in this Agreement, unless otherwise
defined or the subject matter or context dictates, the following terms shall
have these respective meanings:
(a) "Affiliate" shall have the meaning ascribed to it in
Rule 12(b)(2) promulgated under the Securities Exchange Act of 1934, as
amended.
(b) "Agreement" means this Lock-up Agreement, any agreement
which is supplementary to or in amendment or confirmation of this Agreement, and
any schedules hereto or thereto.
(c) "Certificate of Designations" means the Certificate of
Designations, Preferences and Rights of the Series A Preferred Stock.
(d) "Disposition" shall have the meaning assigned in Section
2.1.
(e) "Person" means any individual, estate, trust,
partnership, joint venture, limited liability company, association, firm,
corporation, company or other entity.
(f) "Shares" mean the shares of Common Stock issued to the
Former MSI Stockholders pursuant to the Merger Agreement, as well as: (i) any
shares into which such shares may be converted, reclassified, redesignated,
subdivided, consolidated or otherwise changed; (ii) any shares of the Company or
any successor or other body corporate which may be received by the holders of
such shares on a merger, amalgamation or other reorganization of or including
the Company; and (iii) any securities which may now or hereinafter be
convertible or exercisable into such shares, including without limitation,
shares of Series A Preferred Stock.
(g) "Transfer" shall have the meaning assigned in Section
2.1.
1.2 EXTENDED MEANINGS. Words importing the singular number include
the plural and vice versa and words importing gender include all genders.
ARTICLE II
DISPOSITION OF SHARES
2.1 RESTRICTION ON TRANSFER OF SHARES.
(a) Except as provided in Section 2.1(b), prior to February 18,
2006, no Former MSI Stockholder may sell, assign, transfer, mortgage, alienate,
pledge, hypothecate, create or permit to exist a security interest in or lien
on, place in trust or in any other way encumber or otherwise dispose of (any of
the foregoing shall constitute a "Transfer," and the consummation of such being
a "Disposition") any Shares now owned or any interest therein except as
expressly permitted by the terms and provisions of this Agreement. The Company
shall have no obligation to recognize or accede to any Disposition or to
register any Transfer of Shares on its books unless such Disposition is effected
in accordance with the terms and provisions of this Agreement. No Person who
purports to be a holder of Shares acquired in violation of the terms and
provisions of this Agreement shall be entitled to any rights with respect to
such Shares, including any rights to vote such Shares, to receive any dividends
declared thereon, or to receive any notice with respect thereto under this
Agreement or otherwise. The sale or transfer of outstanding equity securities
of, or the issuance of equity securities of, a Former MSI Stockholder shall not
be deemed a `Transfer' for the purposes of this Agreement.
(b) Any Former MSI Stockholder may Transfer all or a portion of his,
her or its Shares to (i) any Person to which such Former MSI Stockholder shall
sell, assign or transfer all or substantially all of its assets; (ii) any
Affiliate of such Former MSI Stockholder, including, any funds affiliated with
such Former MSI Stockholder, (iii) any member, partner or stockholder of such
Former MSI Stockholder; provided, however, that no Transfer of shares of Series
A Preferred Stock shall be permitted pursuant to this clause (b)(iii), (iv) any
other Former MSI Stockholder, (v) in connection with any sale of all or
substantially all of the Company's assets, any Transfer of at least a majority
of the Company's outstanding voting securities (as of immediately prior to such
transfer) or any merger or consolidation in which the Company is not the
surviving entity or any other transaction (or series of related transactions)
following which the holders of the Company's outstanding capital stock prior to
such transaction(s) do not own a majority of the outstanding capital stock of
the Company (or any successor entity) immediately after such transaction (any
such transaction, a "Sale Transaction"), or (vi) in connection with its exercise
of any "piggy-back" or similar registration rights. If any Former MSI
Stockholder intends to make a Disposition of all or a portion of his, her or its
Shares pursuant to this paragraph, such Former MSI Stockholder shall give at
least 15 days prior written notice of such proposed Disposition to the Company
(except in respect of a Disposition pursuant to clauses (v) or (vi) above). Any
such notice shall specify the number of Shares subject to such proposed
Disposition, identify the proposed transferee and state the relationship between
such Former MSI Stockholder and the proposed transferee.
ARTICLE III
VOTING AGREEMENT
Each of the Former MSI Stockholders hereby agrees to vote all of
his or its Shares in favor of the resolutions hereafter proposed by the Board of
Directors of the Company and submitted to a vote of the stockholders of the
Company within ninety (90) days following the date hereof, the purpose of which
are to cause the number of authorized but unissued shares of Common Stock to be
sufficient to issue the maximum number of such shares issuable upon the
conversion of the Series A Preferred Stock into Common Stock pursuant to the
terms of the Certificate of Designations.
ARTICLE IV
MISCELLANEOUS
4.1 LEGEND. The Company may cause each certificate representing
Shares that are subject to this Agreement to have stamped, printed or typed
thereon the following legend:
The securities represented by this certificate are subject to a
Lock-Up, dated as of August 18, 2004, among Front Porch Digital
Inc. (the "Company") and certain of its stockholders, a copy of
which may be examined at the principal office of the Company.
4.2 NOTICE. Any notice or document required or permitted by this
Agreement to be given to a party hereto shall be in writing and is sufficiently
given if delivered personally, or if sent by prepaid certified mail, return
receipt requested, to the Company or to a Former MSI Stockholder addressed as
follows:
the Company: Front Porch Digital Inc.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
with a copy to: Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, X.X. 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Former MSI Stockholder: To the address of such Former MSI Stockholder
set forth on SCHEDULE A attached hereto or at
such other address as may have been furnished
the Company in writing.
Notice so mailed shall be deemed to have been given upon receipt if delivered
personally or on the fifth business day next following the date of the returned
receipt. Any notice delivered to the party to whom it is addressed shall be
deemed to have been given and received on the day it is delivered. Any party may
from time to time notify the others in the manner provided herein of any change
of address which thereafter, until changed by like notice, shall be the address
of such party for all purposes hereof.
4.3 TERM OF AGREEMENT.
(a) The provisions of this Agreement shall terminate upon
the consummation of a Sale Transaction, at such time as provided in Articles II
and III, respectively, or on such earlier date as is mutually agreed in writing
by the Company and the Former MSI Stockholders holding a majority of the then
outstanding Shares.
(b) Nothing contained in this Section 4.3 shall affect or
impair any rights or obligations arising prior to the time of the termination of
this Agreement, or which may arise by an event causing the termination of this
Agreement.
4.4 SEVERABILITY. If in any jurisdiction, any provision of this
Agreement or its application to any party or circumstance is restricted,
prohibited or unenforceable, such provision shall, as to such jurisdiction, be
ineffective only to the extent of such restriction, prohibition or
unenforceability without invalidating the remaining provisions hereof and
without affecting the validity or enforceability of such provision in any other
jurisdiction or its application to other parties or circumstances.
4.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and together shall
constitute one document.
4.6 ENTIRE AGREEMENT; ETC. This Agreement sets forth the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, among the parties hereto and there are no warranties,
representations and other agreements between the parties hereto in connection
with the subject matter hereof except as specifically set forth herein or
therein. No supplement, modification, waiver or termination of this Agreement
shall be binding unless executed in writing by the Company and the Former MSI
Stockholders holding a majority of the then outstanding Shares. No waiver of any
of the provisions of this Agreement shall be deemed or shall constitute a waiver
of any other provisions nor shall such waiver constitute a continuing waiver
unless otherwise expressly provided.
4.7 TRANSFEREES BOUND. Except in connection with a Disposition
pursuant to Section 2.1(b)(v) or (vi) hereof, each Disposition otherwise
permitted by Article II hereof shall not become effective unless and until the
transferee executes and delivers to the Company a counterpart to this Agreement,
agreeing to be treated in the same manner as a Former MSI Stockholder. Upon such
Disposition and such execution and delivery, the transferee shall be bound by,
and entitled to the benefits of, this Agreement with respect to the transferred
Shares in the same manner as the transferring Former MSI Stockholder.
4.8 GOVERNING LAW. This Agreement shall be construed in accordance
with the internal laws of the State of Delaware applicable to agreements made
and to be performed in Delaware.
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IN WITNESS WHEREOF, this Lock Up and Voting Agreement has been executed
by or on behalf of each of the parties hereto as of the date first above
written.
FRONT PORCH DIGITAL INC.
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Chief Executive Officer
IN WITNESS WHEREOF, this Lock Up and Voting Agreement has been executed
by or on behalf of each of the parties hereto as of the date first above
written.
FORMER MSI STOCKHOLDERS
GREAT HILL EQUITY PARTNERS
LIMITED PARTNERSHIP
By: Great Hill Partners GP, LLC,
its General Partner
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Manager
GREAT HILL INVESTORS, LLC
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Manager
IN WITNESS WHEREOF, this Lock Up and Voting Agreement has been executed
by or on behalf of each of the parties hereto as of the date first above
written.
JPMORGAN CHASE BANK, as Investment
Advisor for X.X. XXXXXX DIRECT VENTURE
CAPITAL INSTITUTIONAL INVESTORS, LLC
By: /s/ Xxxxxx X. Kiss
-----------------------------------
Name: Xxxxxx X. Kiss
Title: Portfolio Manager
X.X. XXXXXX INVESTMENT MANAGEMENT INC.,
as Investment Advisor for X.X. XXXXXX
DIRECT VENTURE CAPITAL PRIVATE
INVESTORS, LLC
By: /s/ Xxxxxx X. Kiss
-----------------------------------
Name: Xxxxxx X. Kiss
Title: Portfolio Manager
X.X. XXXXXX INVESTMENT MANAGEMENT INC.,
as Investment Advisor for
000 XXXXX XXXXXX FUND, L.P.
By: /s/ Xxxxxx X. Kiss
-----------------------------------
Name: Xxxxxx X. Kiss
Title: Portfolio Manager
IN WITNESS WHEREOF, this Lock Up and Voting Agreement has been executed
by or on behalf of each of the parties hereto as of the date first above
written.
TUDOR VENTURES II L.P.
By: Tudor Ventures Group, L.P.,
general partner
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director,
Tudor Ventures Group LLC
THE RAPTOR GLOBAL PORTFOLIO LTD.
By: Tudor Investment Corporation
as Investment Adviser
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
THE ALTAR ROCK FUND L.P.
By: Tudor Investment Corporation
as General Partner
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
SCHEDULE A
NAMES AND ADDRESSES OF FORMER MSI STOCKHOLDERS
GREAT HILL EQUITY PARTNERS LIMITED PARTNERSHIP
GREAT HILLS INVESTORS, LLC
c/o Great Hills Partners
Xxx Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Mr. Xxx Xxxxxx
JPMORGAN CHASE BANK, AS INVESTMENT ADVISOR FOR X.X. XXXXXX DIRECT VENTURE
CAPITAL INSTITUTIONAL INVESTORS, LLC
X.X. XXXXXX INVESTMENT MANAGEMENT, AS INVESTMENT ADVISOR FOR X.X. XXXXXX DIRECT
VENTURE CAPITAL PRIVATE INVESTORS, LLC
X.X. XXXXXX INVESTMENT MANAGEMENT INC., AS INVESTMENT ADVISOR FOR
000 XXXXX XXXXXX FUND, LLC
c/o XX Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx X. Kiss
TUDOR VENTURES II L.P.
THE RAPTOR GLOBAL PORTFOLIO LTD.
THE ALTAR ROCK FUND L.P.
c/o Tudor Ventures
00 Xxxxx Xxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxx
