EXHIBIT 99.5
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SECURITIES PURCHASE AGREEMENT
AMONG
EXCHANGE APPLICATIONS, INC.
AND THE
PURCHASERS IDENTIFIED HEREIN
DATED AS OF MARCH 28, 2001
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TABLE OF CONTENTS
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PAGE
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SECTION 1. DEFINITIONS.................................................21
SECTION 2. PURCHASE AND SALE OF THE NOTE AND THE WARRANT...............25
SECTION 3. THE CLOSINGS; DELIVERY OF DOCUMENTS AT THE CLOSINGS.........25
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY...............27
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS............31
SECTION 6. POST-CLOSING COVENANTS......................................32
SECTION 7. PARTIES IN INTEREST; ASSIGNMENT.............................33
SECTION 8. ENTIRE AGREEMENT............................................33
SECTION 9. NOTICES.....................................................33
SECTION 10. AMENDMENTS..................................................34
SECTION 11. COUNTERPARTS................................................34
SECTION 12. HEADINGS....................................................35
SECTION 13. GOVERNING LAW...............................................35
SECTION 14. EXPENSES....................................................35
SECTION 15. CONSENT OF THE PURCHASERS...................................35
EXHIBITS
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Exhibit A - Form of 10% Bridge Promissory Note
Exhibit B - Form of Warrant
Exhibit C - Form of Second Amended and Restated Registration Rights Agreement
SCHEDULES
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Schedule 2.1 - Purchasers and Allocations
Schedule 4.1 - Foreign Jurisdictions
Schedule 4.2 - Capitalization
Schedule 4.6 - Commission Filings; Financial Statements
Schedule 4.10 - Intellectual Property Rights
Schedule 4.11 - Litigation and other Proceedings and Claims
Schedule 4.14 - Registration Rights
SECURITIES PURCHASE AGREEMENT (this "AGREEMENT"), dated as of March 28,
2001, among EXCHANGE APPLICATIONS, INC., a Delaware corporation (the "Company"),
and the purchasers (each a "Purchaser" and together, the "Purchasers")
identified on the signature page hereto.
WHEREAS, the Company desires to sell to the Purchasers and the
Purchasers desire to purchase from the Company (i) up to U.S. $1,500,000 in
principal amount of the Company's 10% bridge promissory note, and (ii) the
Warrant, each on the terms and subject to the conditions set forth in this
Agreement.
NOW, THEREFORE, the parties hereto hereby agree as follows:
DEFINITIONS.
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Capitalized terms used and not otherwise defined in this Agreement have
the meaning ascribed to them below or in the other locations of this Agreement
specified below:
"Advance" means each advance of funds in respect of the Total
Commitment.
"Agreement" has the meaning ascribed to such term in the
preamble.
"By-laws" has the meaning ascribed to such term in Section
4.1.
"Business Day" means each day except for Saturday, Sunday,
Federal holidays and any other state-recognized holidays in the States of New
York and Massachusetts.
"Certificate of Incorporation" has the meaning ascribed to
such term in Section 4.1.
"Claim" means any claim, demand, assessment, judgment, order,
decree, action, cause of action, litigation, suit, investigation or other
proceeding.
"Commission" means the United States Securities and Exchange
Commission.
"Commission Filings" means all reports, registration
statements and other filings filed by the Company with the Commission (and all
notes, exhibits and schedules thereto and documents incorporated by reference
therein).
"Common Stock" means the common stock, $.001 par value per
share, of the Company.
"Common Stock Equivalents" means all shares of Common Stock
outstanding and all shares of Common Stock issuable (without regard to any
present restrictions on such
issuance) upon the conversion, exchange or exercise of all Securities of the
Company that are convertible, exchangeable or exercisable for share of Common
Stock.
"Company" has the meaning ascribed to such term in the
preamble.
"Company Contracts" has the meaning ascribed to such term in
Section 4.9.
"Contract" means any written or oral loan contract, agreement,
or credit agreement, note, bond, mortgage, indenture, lease, sublease, purchase
order, instrument, permit, concession, franchise or license.
"DrawDown Date" has the meaning ascribed to such term in
Section 3.2(a).
"Encumbrances" means any liens, charges, encumbrances, claims,
options, proxies, pledges, security interests, or other similar rights of any
nature.
"Equity Financing" means the closing of the issuance and sale
by the Company on or after the date hereof (other than the transactions
contemplated hereby) of an existing or newly created class or series of equity
Securities of the Company to any Person, other than (i) Securities issued or
granted to eligible officers, employees or directors of, or consultants to, the
Company pursuant to the Equity Incentive Plans and any Securities issued upon
exercise of such Securities, (ii) any Securities issued by the Company in a
Public Offering, (iii) Securities issued upon the exercise, conversion or
exchange of any Common Stock Equivalents outstanding on the date hereof or
pursuant to the MicroStrategy Agreement, (iv) Securities issued by the Company
upon conversion of the Series A Preferred Stock, (v) Securities issued as a
stock dividend or upon any stock split, recapitalization or other subdivision or
combination of Common Stock, (vi) Securities issued pursuant to acquisitions,
strategic alliances and joint ventures, and (vii) issuances of Securities
excluded in writing by the Purchasers.
"Equity Incentive Plans" means the (i) 2000 Customer Analytics
Holdings, Inc. Equity Incentive Plan, (ii) 1999 Customer Analytics, Inc. Stock
Option and Purchase Plan, (iii) 1999 GBI Stock Acquisition Plan, (iv) 1999
Knowledge Stream Partners, Inc. Stock Option Plan, (v) 1998 Stock Incentive
Plan, (vi) 1998 Director Stock Option Plan, (vii) 1998 Employee Stock Purchase
Plan and (viii) 1996 Stock Incentive Plan, each as amended, and any other stock
option, issuance, appreciation rights or other equity incentive plan for the
directors, officers and employees of, and consultants to, the Company, which
plan has been approved by the Board or appropriate committee thereof.
"Event of Default" has the meaning ascribed to such term in
the Note.
"Exchange Act" means the Securities and Exchange Act of 1934,
as amended.
"Financing Documents" has the meaning ascribed to such term in
Section 4.3.
"Fundamental Documents" means the documents by which any
Person (other than an individual) establishes its legal existence or which
govern its internal affairs. The "Fundamental Documents" of the Company are the
Certificate of Incorporation and the By-laws.
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"Governmental Entity" means any federal, state, municipal, or
other government, governmental department, commission, board, bureau, agency or
instrumentality, or any court or tribunal.
"GAAP" means United States generally accepted accounting
principles, consistently applied.
"Initial Closing" has the meaning ascribed to such term in
Section 3.1(a).
"Law" means any constitution, law, statute, treaty, rule,
ordinance, permit, certificate, directive, requirement, regulation or Order (in
each case, whether foreign or domestic) of any Governmental Entity.
"Lien" means any security interest, pledge, lien, bailment (in
the nature of a pledge or for purposes of security), mortgage, deed of trust,
the grant of a power to confess judgment, conditional sale or title retention
agreement (including any lease in the nature thereof), charge, encumbrance,
easement, reservation, restriction, cloud, right of first refusal or first
offer, option, commitment or other similar arrangement or interest in real or
personal property, whether oral or written.
"MicroStrategy Agreement" means the Payment and Registration
Rights Agreement, dated as of December 28, 1999, between the Company and
MicroStrategy Incorporated in effect on the date hereof or as amended from time
to time.
"Material Adverse Effect" means, with respect to the Company,
a material adverse effect on the business, operations, assets, conditions
(financial or otherwise), operating results, liabilities or prospects of the
Company and its Subsidiaries, taken as a whole, since November 14, 2000.
"Note" has the meaning ascribed to such term in Section 2.
"Notes" means, collectively, the (i) Note and (ii) 9% Bridge
Promissory Note, dated February 20, 2001, issued by the Company to the
Purchasers.
"Orders" means judgments, writs, decrees, injunctions, orders,
compliance agreements or settlement agreements of or with any Governmental
Entity or arbitrator.
"Original Warrant" means the Warrant, dated February 20, 2001,
issued by the Company to the Purchasers.
"Original Warrant Shares" means shares of Common Stock
issuable upon exercise of the Original Warrant.
"Person" shall be construed in the broadest sense and shall
include an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, and any other entity, including a Governmental
Entity.
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"Preferred Stock" means the preferred stock, $.001 par value
per share, of the Company.
"Proceeding" means any action, suit, proceeding, complaint,
charge, hearing, inquiry or investigation before or by a Governmental Entity or
an arbitrator or administrator.
"Projections" has the meaning ascribed to such term in Section
4.8.
"Public Offering" means the consummation of a public offering
of Common Stock pursuant to a registration statement declared effective under
the Securities Act, except that a Public Offering shall not include an offering
of securities to be issued as consideration in connection with a business
acquisition or an offering of Securities issuable pursuant to the Equity
Incentive Plans.
"Request Letter" has the meaning ascribed to such term in
Section 3.2(a).
"Second Amended and Restated Registration Rights Agreement"
has the meaning ascribed to such term in Section 3.1(b)(iii).
"Securities" means, with respect to any Person, such Person's
"securities" as defined in Section 2(1) of the Securities Act and includes such
Person's capital stock or other equity interests or any options, warrants or
other securities or rights that are directly or indirectly convertible into, or
exercisable or exchangeable for, such Person's capital stock or other equity
interests.
"Securities Act" means the Securities Act of 1933, as amended.
"Series A Preferred Stock" means the Series A Convertible
Redeemable Preferred Stock, $.001 par value per share, of the Company.
"Subsidiary" means, at any time, with respect to any Person
(the "Subject Person"), (i) any Person of which either (x) more than 50% of the
Securities entitled to vote in the election of directors or comparable Persons
performing similar functions (excluding Securities entitled to vote only upon
the failure to pay dividends thereon or other contingencies) or (y) more than a
50% interest in the profits or capital of such Person, are at the time owned or
controlled directly or indirectly by the Subject Person or through one or more
Subsidiaries of the Subject Person or (ii) any Person whose assets, or portions
thereof, are consolidated with the net earnings of the Subject Person and are
recorded on the books of the Subject Person for financial reporting purposes in
accordance with GAAP.
"Subject Person" has the meaning ascribed to such term in the
definition of "Subsidiary".
"Total Commitment" has the meaning ascribed to such term in
Section 2.
"Warrant" has the meaning ascribed to such term in Section 2.
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"Warrant Shares" means the shares of Common Stock issuable
upon the exercise of the Warrant.
PURCHASE AND SALE OF THE NOTE AND THE WARRANT.
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Upon the terms and subject to the conditions contained in this
Agreement, the Company has authorized the issuance and sale to the Purchasers
of, and the Purchasers have agreed to advance and purchase from the Company, (a)
a 10% Bridge Promissory Note in the aggregate principal amount of up to US
$1,500,000 (the "Total Commitment"), substantially in the form of EXHIBIT A (the
"Note") and (b) a Warrant substantially in the form of EXHIBIT B (the "Warrant")
for the warrant coverage amount set forth opposite each Purchaser's name on
SCHEDULE I of the Warrant. Each Advance under the Note shall be allocated to
each Purchaser as set forth in SCHEDULE I hereto, as updated from time to time.
THE CLOSINGS; DELIVERY OF DOCUMENTS AT THE CLOSINGS.
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The Initial Closing.
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The initial closing (the "Initial Closing") shall take place
simultaneously with the execution and delivery of this Agreement at the offices
of X'Xxxxxxxx Graev & Karabell, LLP, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000.
At the Initial Closing, the Company shall deliver or cause to
be delivered to the Purchasers:
the duly executed Note;
the duly executed Warrant;
the Second Amended and Restated Registration Rights
Agreement in substantially the from attached hereto as EXHIBIT C (the
"Second Amended and Restated Registration Rights Agreement"), which
Second Amended and Restated Registration Rights Agreement shall have
been duly authorized, executed and delivered by the Company and shall
be in full force and effect and enforceable against the Company in
accordance with its terms;
a certificate of the Secretary or an Assistant
Secretary of the Company, dated as of the Initial Closing Date and
certifying on behalf of the Company: (A) that attached thereto is a
true, correct and complete copy of each of the Fundamental Documents of
the Company as in effect on the date of such certification; (B) that
attached thereto is a true, correct and complete copy of all
resolutions adopted by the Board of Directors (and any committees
thereof) of the Company authorizing (1) the execution, delivery and
performance of the Financing Documents, (2) the issuance, sale, and
delivery of the Note and the Warrant, and (3) the reservation of the
Warrant Shares for issuance upon exercise of the Warrant, and that all
such resolutions are in full force and effect; and (C) the incumbency
and specimen signature of all officers of the Company executing the
Financing Documents, and any certificate or instrument furnished
pursuant
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hereto, and a certification by another officer of the Company as to the
incumbency and signature of the officer signing the certificate
referred to in this clause (iv); and
a telegram, telex or other acceptable method of
confirmation from the Secretary of State of the State of Delaware dated
as of the Initial Closing as to the continued good standing of the
Company.
At the Initial Closing, each Purchaser shall deliver to the
Company by wire transfer of immediately available funds the amount set forth
opposite such Purchaser's name on SCHEDULE I hereto to such bank account as the
Company shall designate to each Purchaser in writing on or prior to the day
immediately preceding the Initial Closing.
The Subsequent Closings.
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At least two (2) Business Days (or such lesser time as may be
agreed by the Purchasers in their reasonable discretion) prior to each funding
date (each, a "DrawDown Date"), the Company shall deliver to the Purchasers a
written request (the "Request Letter") stating (i) the amount of the Advance to
be funded by the Purchasers on such DrawDown Date; provided, however, that in no
event shall any Advance (A) be less than $1,500,000 or (B) cause the principal
amount of the Note to exceed the Total Commitment, and (ii) the bank account
designated by the Company for the wire transfer of such Advance; provided,
however, notwithstanding anything to the contrary in this Section 3.2, the
Purchasers shall in no way be obligated to make an Advance after March 28, 2001.
On each DrawDown Date, the Company shall deliver or cause to
be delivered to the Purchasers a certificate signed by an officer of the Company
to the effect that, both before and immediately after the consummation of such
Advance and the other transactions contemplated to take place on such DrawDown
Date, (i) no Event of Default shall have occurred and be continuing under the
Note and (ii) the representations and warranties made by the Company in the
Financing Documents are true and correct in all material respects.
On each DrawDown Date, the Purchasers shall deliver or cause
to be delivered to the Company:
an updated Schedule 1 to the Note reflecting each
Advance, the allocation of each Advance among the Purchasers and any
other adjustments thereto;
an updated Schedule 1 to the Warrant reflecting each
Advance, the allocation of each Advance among the Purchasers, the
adjustments to the number of the Warrant Shares and any other
adjustments thereto; and
by wire transfer of immediately available funds, such
Advance requested by the Company to such bank account as the Company
designated in the Request Letter.
The Note does not constitute a revolving loan and any amounts repaid or
prepaid under the Note may not be reborrowed.
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The obligations of the Purchasers hereunder are joint and several.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
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The Company hereby represents and warrants to each of the Purchasers as
follows:
Organization, Power, Authority and Good Standing. Each of the Company
and its Subsidiaries is duly organized, validly existing and in good standing
under the Laws of the jurisdiction of its incorporation or formation and has all
requisite corporate or other power and authority to own, lease and operate its
properties and other assets and to carry on its business as presently conducted
and as proposed to be conducted. Each of the Company and its Subsidiaries is
duly qualified and in good standing to transact business as a foreign Person in
those jurisdictions listed on SCHEDULE 4.1, which constitute all the
jurisdictions in which the character of the property owned, leased or operated
by the Company or such Subsidiary or the nature of the activities conducted by
the Company or such Subsidiary makes such qualification necessary, except where
the failure to be so qualified would not have a Material Adverse Effect. The
Company has delivered to the Purchasers a correct and complete copy of the
Amended and Restated Certificate of Incorporation of the Company in effect on
the date hereof (the "Certificate of Incorporation"). A copy of the Amended and
Restated By-laws of the Company in effect on the date hereof (the "By-laws") is
filed as an exhibit to the Commission Filings.
Capitalization.
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Immediately upon consummation of the Initial Closing, the
authorized, issued and outstanding capital stock of the Company shall consist
of:
10,000,000 shares of Preferred Stock, of which
5,330,000 are designated as Series A Preferred Stock and 5,325,645 are
validly issued and outstanding, fully paid and nonassessable; and
150,000,000 shares of Common Stock, of which:
33,101,295 shares are validly issued and
outstanding, fully paid and nonassessable;
6,488,781 shares are reserved for issuance
upon conversion of the Series A Preferred Stock;
108,877 shares are reserved as Original
Warrant Shares for issuance upon exercise of the Original
Warrant;
294,118 shares are reserved as Warrant
Shares for issuance upon exercise of the Warrant;
366,565 shares are reserved as treasury
shares; and
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12,010,897 shares are reserved for issuance
in accordance with the Equity Incentive Plans.
Except as contemplated by the Financing Documents or as
otherwise set forth on SCHEDULE 4.2, there are, and immediately after
consummation of the Initial Closing there will be, no (i) outstanding warrants,
options, agreements, convertible Securities or other commitments or instruments
pursuant to which the Company is obligated to issue, sell or otherwise transfer
any Securities or (ii) preemptive or similar rights to purchase or otherwise
acquire Securities of the Company pursuant to any provision of Law, the
Company's Fundamental Documents or any Contract to which the Company is a party.
All Securities issued by the Company have been issued in
transactions in accordance in all material respects with applicable state and
federal Laws governing the sale and purchase of Securities.
The authorization, reservation, issuance, sale and delivery,
as applicable, of the Warrant Shares have been duly and validly authorized by
all requisite corporate action on the part of the Company. The Warrant Shares
(assuming the issuance thereof in accordance with the applicable terms of the
Warrant), will be duly and validly issued and outstanding, fully paid and
nonassessable, with no personal liability attaching to the ownership thereof,
free and clear of any Encumbrances whatsoever and with no restrictions on the
voting rights thereof and not subject to any preemptive rights, rights of first
refusal or other similar rights of the stockholders of the Company.
Authorization of Agreement, Etc. The Company has all requisite
corporate power and authority to execute and deliver this Agreement, the Note,
the Warrant, the Second Amended and Restated Registration Rights Agreement and
any and all instruments necessary or appropriate in order to effectuate fully
the terms and conditions of each such agreement and all related transactions
(collectively, the "Financing Documents") and to perform its obligations under
and to consummate the transactions contemplated by each such Financing Document.
The execution, delivery and performance by the Company of each Financing
Document to which it is a party and the issuance, sale and delivery of the Note
and the Warrant has been duly authorized by all requisite corporate action by
the Company, and this Agreement and each other Financing Document has been duly
executed and delivered by the Company. No other corporate or stockholder action
on the part of the Company is necessary for such authorization, execution and
delivery. Each of the Financing Documents constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar Laws affecting creditors'
rights and remedies generally, and subject, in the case of enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
Proceeding at law or in equity).
No Conflicts. The execution, delivery and performance by the Company of
this Agreement and each of the other Financing Documents, the issuance, sale and
delivery of the Note and the Warrant and compliance with the provisions hereof
and thereof by the Company, will not (a) violate any provision of Law or any
Order applicable to the Company or any of its
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properties or assets or (b) conflict with or result in any breach of any of the
terms, conditions or provisions of, or constitute (with notice or lapse of time
or both) a default (or give rise to any right of termination, cancellation or
acceleration) under, or result in the creation of, any Encumbrance upon any of
the properties or assets of the Company or, except as previously disclosed in
writing to the Purchasers, any material Contract to which it is a party or (c)
conflict with or violate any provision of the Fundamental Documents of the
Company currently in effect or in effect on any DrawDown Date.
Approvals. No permit, authorization, consent or approval of or by, or
any notification of or filing with, any Person is required in connection with
the execution, delivery or performance by the Company of each Financing Document
to which it is a party.
Commission Filings; Financial Statements.
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The Company has filed all Commission Filings that it has been
required to file with the Commission under the Securities Act and the Exchange
Act. As of the respective dates of their filing with the Commission, or the date
of any amendment thereto filed on or prior to the date hereof, the Commission
Filings complied as to form in all material respects with the applicable
provisions of the Securities Act and the Exchange Act and did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein, in the light
of the circumstances under which they were made, not misleading.
Each of the historical consolidated financial statements of
the Company (including any related notes or schedules) included in the
Commission Filings was prepared in accordance with GAAP (except as may be
disclosed therein), and complied in all material respects with the rules and
regulations of the Commission. Such financial statements fairly present in all
material respects the consolidated financial position of the Company and its
Subsidiaries as of the dates thereof and the consolidated results of operations,
cash flows and changes in stockholders' equity for the periods then ended
(subject, in the case of the unaudited interim financial statements, to normal,
recurring year-end audit adjustments). Except as set forth or reflected in the
Commission Filings filed prior to the date hereof or as set forth on SCHEDULE
4.6, neither the Company nor any of its Subsidiaries have any liabilities or
obligations of any nature (whether accrued, absolute, contingent, unasserted or
otherwise) that individually or in the aggregate could reasonably be expected to
have a Material Adverse Effect.
Private Offering. Assuming the accuracy of the representations of the
Purchasers in Section 5.2, the offering, sale, issuance and delivery by the
Company of the Note and the Warrant are exempt from the registration and
prospectus delivery requirements of the Securities Act and applicable state
securities laws and the rules and regulations promulgated thereunder. Neither
the Company or its Subsidiaries, nor any Person acting on their behalf, has
offered or sold or will offer or sell any Securities, or has taken or will take
any other action (including, without limitation, any offering of any Securities
of the Company under circumstances that would require, under the Securities Act
or any applicable blue-sky laws, the integration of such offering with the
transactions contemplated by this Agreement), which would subject the
transactions contemplated by this Agreement to the registration provisions of
the Securities Act.
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Provided Information. All written summaries provided by the Company to
legal counsel for the Purchasers on or about December 26, 2000 with regard to
the events leading up to the Company's press releases of September 29, 2000 and
October 2, 2000 are accurate in all material respects and do not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements contained therein not misleading in light of the
circumstances under which such statements are made. The financial projections
concerning the Company and its Subsidiaries and the transactions contemplated by
this Agreement contained in the "street plan" projections (the "Projections")
that have been made available to the Purchasers and their accountants in
connection with the transactions contemplated by this Agreement were at the time
they were made available to the Purchasers and their accountants prepared on a
basis reflecting the reasonable good faith estimates and judgments of the
Company's management as to the future financial performance of the Company and
its Subsidiaries for the periods covered thereby. The Projections are
specifically and expressly limited and qualified by underlying written
assumptions disclosed therein.
Certain Contracts. All material Contracts to which the Company or any
of its Subsidiaries is a party or may be bound that are required by Item
610(b)(10) of Regulation S-K to be filed as exhibits to, or incorporated by
reference in, the Company's Form 10-K or the Company's Form 10-Q are referred to
herein as "Company Contracts". All Company Contracts are legal, valid and
binding and in full force and effect on the date hereof except to the extent
previously disclosed in writing to the Purchasers, to the extent they have
previously expired in accordance with their terms or to the extent such failure
to be so legal, valid and binding would not reasonably be expected to have a
Material Adverse Effect and, neither the Company nor any of its Subsidiaries has
violated any provision of, or committed or failed to perform any act that, with
or without notice, lapse of time, or both, would constitute a default under the
provisions of any Company Contract, except as previously disclosed in writing to
the Purchasers or for defaults that would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
Intellectual Property Rights.
----------------------------
To the Company's knowledge, each of the Company and its
Subsidiaries owns or is licensed to use all trademarks, copyrights, service
marks, and applications and registrations therefor, and all trade names, domain
names, web sites, customer lists, trade secrets, proprietary processes and
formulae, inventions, know-how, other confidential and proprietary information,
and other industrial and intellectual property rights necessary to permit each
of the Company and its Subsidiaries to carry on its business as presently
conducted. To the Company's knowledge, each of the Company and its Subsidiaries
has the right to bring infringement actions with respect to all trademarks,
copyrights, service marks, trade names, domain names, trade secrets, proprietary
processes and formulae, inventions, know how and other confidential and
proprietary information that it owns. Except as otherwise disclosed in SCHEDULE
4.10, all registered patents, copyrights, trademarks, and service marks owned by
the Company and its Subsidiaries are in full force and effect and are not
subject to any taxes or maintenance fees. Except as otherwise disclosed in
SCHEDULE 4.10, there is no pending or, to the knowledge of the Company,
threatened Claim or litigation against the Company or any Subsidiary contesting
the right to use its intellectual property rights, asserting the material misuse
of any thereof, or asserting the material
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infringement or other material violation of any intellectual property right of a
third party. All inventions and know-how conceived by employees of the Company
or its Subsidiaries and used by the Company and its Subsidiaries in the business
of the Company and its Subsidiaries as currently conducted are owned by the
Company or its Subsidiaries. Except as disclosed on SCHEDULE 4.10, each of the
Company and its Subsidiaries has taken reasonable security measures to protect
the secrecy, confidentiality, and value of its trade secrets, proprietary
processes, formulae, inventions, know-how and other confidential and proprietary
information.
Except as otherwise disclosed in SCHEDULE 4.11, no Proceedings
or Claims in which the Company or any Subsidiary alleges that any Person is
materially infringing upon, or otherwise materially violating, any patents,
trademarks, copyrights, service marks, and applications and registrations
therefor are pending, and none have been served by, instituted or asserted by
the Company or any Subsidiary, nor are any Proceedings or Claims threatened
alleging any such material violation or material infringement, nor does the
Company or any Subsidiary know of any valid basis for any such Proceedings or
Claims.
Litigation Other Proceedings or Claims. Except as set forth on SCHEDULE
4.11, there are no (i) Proceedings or Claims pending against or initiated by the
Company or any Subsidiary or, to the best knowledge of the Company, threatened
against the Company or any Subsidiary, whether at law or in equity, whether
civil or criminal in nature, except for Proceedings or Claims that, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect, or (ii) material Orders with respect to the Company or any Subsidiary.
Termination of Employment. To the Company's knowledge, no executive
officer or key employee, or any group of key employees, intends to terminate
their employment with the Company or any Subsidiary, nor does the Company or any
Subsidiary have a present intention to terminate the employment of any officer,
key employee or group of key employees.
Brokers. Neither the Company nor any of its Subsidiaries have employed
or otherwise retained any broker or finder in connection with the transactions
contemplated by this Agreement.
Registration Rights. Except as contemplated by the Second Amended and
Restated Registration Rights Agreement and except as set forth on SCHEDULE 4.14,
no Person has any right to cause the Company to effect the registration under
the Securities Act of any shares of Common Stock or any other Securities of the
Company.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.
-------------------------------------------------
Each Purchaser hereby represents and warrants to the Company as
follows:
Authorization of the Financing Documents. Each Purchaser has the
requisite power and authority (corporate or otherwise) to execute, deliver and
perform the Financing Documents to which it is a party and the transactions
contemplated thereby, and the execution, delivery and performance by such
Purchaser of the Financing Documents to which it is a party have been duly
authorized by all requisite action by such Purchaser and each such Financing
Document, when
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executed and delivered by such Purchaser, constitutes a legal, valid and binding
obligation of such Purchaser, enforceable against such Purchaser in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar Laws affecting creditors'
rights and remedies generally, and subject, in the case of enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
Proceeding at law or in equity).
Investment Representations.
--------------------------
The Note and the Warrant to be purchased by each Purchaser
hereunder are acquired for its own account, for investment and not with a view
to the distribution thereof in violation of the Securities Act or applicable
foreign or state securities Laws.
Each Purchaser understands that (i) the Note and the Warrant
have not been, and the Securities issuable upon conversion or exercise thereof
will not be, registered under the Securities Act or applicable foreign or state
securities Laws, by reason of their issuance by the Company in a transaction
exempt from the registration requirements of the Securities Act and applicable
foreign and state securities Laws and (ii) the Note and the Warrant, and the
Securities issuable upon conversion or exercise thereof, must be held by the
Purchasers or each Purchaser, as the case may be, indefinitely unless a
subsequent disposition thereof is registered under the Securities Act and
applicable foreign and state securities Laws or is exempt from registration
thereof. Each Purchaser is an "accredited investor" (as defined in Rule 501(a)
of Regulation D promulgated under the Securities Act).
Except for the acquisition of the Securities of the Company
pursuant to the Note Purchase Agreement, dated December 15, 2000, the Securities
Purchase Agreement, dated January 10, 2001, and the Securities Purchase
Agreement, dated February 20, 2001, each such agreement by and among the Company
and the Purchasers, and for the transactions contemplated hereby, no Purchaser
or any affiliate has (i) bought or sold Securities, or options to buy or sell
Securities, of the Company, (ii) requested, instructed or knowingly participated
in a plan or arrangement with another Person to buy or sell Securities, or
options to buy or sell Securities, of the Company, at any time during the period
commencing on October 15, 2000 and ending on (and including) the Initial
Closing.
None of the Purchasers have employed or otherwise retained any
broker or finder in connection with the transactions contemplated by this
Agreement.
POST-CLOSING COVENANTS.
-----------------------
Covenants of the Company.
------------------------
Subsequent Financings. From and after the Initial
Closing, if the Company consummates one or more Equity Financings,
other than an Equity Financing pursuant to which the Purchasers elect
to participate by converting all of the outstanding principal amount of
the Note and all accrued and unpaid interest thereon into Securities
issued in such Equity Financing, then the proceeds received by the
Company in such
-12-
Equity Financing shall first be used to payoff the outstanding
principal amount of the Notes and any accrued and unpaid interest
thereon.
Use of Proceeds. The proceeds received by the Company
from the sale of the Note and the Warrant shall be used by the Company
for working capital and other general corporate purposes.
Covenants of the Purchasers. At the Company's request, the
Purchasers shall negotiate in good faith with the Company and its bank lenders
to execute and deliver reasonable and customary documentation required to
subordinate to such bank lenders (on reasonable and customary terms) the right
of the Purchasers to receive payments of cash from the Company with respect to
the Notes.
PARTIES IN INTEREST; ASSIGNMENT.
--------------------------------
This Agreement shall bind and inure to the benefit of the Company, the
Purchasers and their respective successors and assigns. No party hereto may
assign this Agreement, any other Financing Document or any of its rights,
interests or obligations hereunder or thereunder without the prior written
consent of the other parties; provided, however, that each Purchaser may assign
any of its rights under this Agreement or any other Financing Document to any
affiliate of such Purchaser.
ENTIRE AGREEMENT.
-----------------
This Agreement and the other writings and agreements referred to herein
or delivered pursuant hereto contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings among the parties with respect thereto.
NOTICES.
--------
All notices, demands and requests of any kind to be delivered to any
party in connection with this Agreement shall be in writing and shall be deemed
to have been duly given if personally delivered or if sent by
internationally-recognized overnight courier or by registered or certified mail,
return receipt requested and postage prepaid, addressed as follows:
if to the Company, to:
Exchange Applications, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
-13-
with a copy to:
Xxxxxxx Xxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, X.X. 00000-0000
Attention: Xxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to the Purchasers, to:
InSight Capital Partners
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, X.X. 00000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, X.X. 00000
Attention: Xxxx X. Nissan, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or to such other address as the party to whom notice is to be given may have
furnished to the other parties hereto in writing in accordance with the
provisions of this Section 9. Any such notice or communication shall be deemed
to have been received (i) in the case of personal delivery, on the date of such
delivery, (ii) in the case of internationally-recognized overnight courier, on
the next business day after the date when sent and (iii) in the case of mailing,
on the third business day following that on which the piece of mail containing
such communication is posted.
AMENDMENTS.
-----------
This Agreement may not be modified or amended, or any of the provisions
hereof waived, except by written agreement of the Company and the Purchasers.
COUNTERPARTS.
-------------
This Agreement may be executed in any number of counterparts, and each
such counterpart hereof shall be deemed to be an original instrument, but all
such counterparts together shall constitute but one agreement.
-14-
HEADINGS.
---------
The section and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
GOVERNING LAW.
--------------
This Agreement shall be governed by and construed in accordance with
the Laws of the State of New York (without giving effect to principles of
conflicts of laws).
EXPENSES.
---------
The Company agrees to pay, and hold the Purchasers harmless against
liability for the payment of: (i) the reasonable out-of-pocket expenses
(including attorneys' fees and expenses) of the Purchasers arising in connection
with its due diligence and the negotiation and execution of this Agreement and
the consummation of the transactions contemplated by this Agreement which shall
be payable at the Initial Closing and on each DrawDown Date and may be netted
from the wire transfers contemplated by Section 3.1(c) and Section 3.2(c)(iii),
(ii) the reasonable out-of-pocket expenses (including attorneys' fees and
expenses) of the Purchasers with respect to documentation of the conversion of
the Note and the exercise of the Warrant pursuant to their terms or any
amendments or waivers (whether or not the same become effective) under or in
respect of this Agreement, or the other agreements contemplated hereby and (iii)
the reasonable fees and expenses incurred by the Purchasers with respect to the
enforcement by the Purchasers or their permitted assigns of their rights granted
under this Agreement, or the agreements contemplated hereby.
CONSENT OF THE PURCHASERS.
-------------------------
Pursuant to Section 3(b) of the Company's Certificate of Designation
dated January 10, 2001, the Purchasers hereby consent to the transactions
contemplated by this Agreement and the other Financing Documents; provided,
however, that notwithstanding the foregoing, the Purchasers are not hereby
consenting to any Equity Financing.
* * * * *
-15-
IN WITNESS WHEREOF, each of the undersigned has duly executed this
Securities Purchase Agreement as of the date first written above.
COMPANY:
--------
EXCHANGE APPLICATIONS, INC.
By:
--------------------------------------------
Name:
Title:
PURCHASERS:
-----------
INSIGHT CAPITAL PARTNERS IV, L.P.
By: Insight Venture Associates IV, L.L.C.,
its general partner
By:
--------------------------------------------
Name:
Title:
INSIGHT CAPITAL PARTNERS
(CAYMAN) IV, L.P.
By: Insight Venture Associates IV, L.L.C.,
its investment general partner
By:
--------------------------------------------
Name:
Title:
INSIGHT CAPITAL PARTNERS
IV (FUND B), L.P.
By: Insight Venture Associates IV, L.L.C.,
its general partner
By:
--------------------------------------------
Name:
Title:
INSIGHT CAPITAL PARTNERS
IV (CO-INVESTORS), L.P.
By: Insight Venture Associates IV, L.L.C.,
its general partner
By:
--------------------------------------------
Name:
Title:
EXHIBIT A
---------
Form of 10% Bridge Promissory Note
----------------------------------
See attached.
-------------
EXHIBIT B
---------
Form of Warrant
---------------
See attached.
-------------
EXHIBIT C
---------
Form of Second Amended and Restate Registration Rights Agreement
----------------------------------------------------------------
See attached.
-------------
SCHEDULE I
PURCHASERS
Initial Closing: March 28, 2001
--------------- --------------
Percentage of Initial Initial Advance
---------------------- ----------------
Purchaser Advance Amount
------------------------------------------------------- ----------------------- --------------------
InSight Capital Partners IV, L.P. 78.211447% $1,173,171.70
------------------------------------------------------- ----------------------- --------------------
InSight Capital Partners (Cayman) IV, L.P. 9.056941% $135,854.12
------------------------------------------------------- ----------------------- --------------------
InSight Capital Partners IV (Fund B), L.P. 12.105748% $181,586.22
------------------------------------------------------- ----------------------- --------------------
InSight Capital Partners IV (Co-Investors), L.P. 0.625864% $9,387.96
------------------------------------------------------- ----------------------- --------------------
TOTAL: 100.00% $1,500,000.00
------------------------------------------------------- ----------------------- --------------------
EXHIBIT 99.5
------------
================================================================================
SECURITIES PURCHASE AGREEMENT
AMONG
EXCHANGE APPLICATIONS, INC.
AND THE
PURCHASERS IDENTIFIED HEREIN
DATED AS OF MARCH 28, 2001
================================================================================
TABLE OF CONTENTS
-----------------
PAGE
----
SECTION 1. DEFINITIONS.................................................21
SECTION 2. PURCHASE AND SALE OF THE NOTE AND THE WARRANT...............25
SECTION 3. THE CLOSINGS; DELIVERY OF DOCUMENTS AT THE CLOSINGS.........25
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY...............27
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS............31
SECTION 6. POST-CLOSING COVENANTS......................................32
SECTION 7. PARTIES IN INTEREST; ASSIGNMENT.............................33
SECTION 8. ENTIRE AGREEMENT............................................33
SECTION 9. NOTICES.....................................................33
SECTION 10. AMENDMENTS..................................................34
SECTION 11. COUNTERPARTS................................................34
SECTION 12. HEADINGS....................................................35
SECTION 13. GOVERNING LAW...............................................35
SECTION 14. EXPENSES....................................................35
SECTION 15. CONSENT OF THE PURCHASERS...................................35
EXHIBITS
--------
Exhibit A - Form of 10% Bridge Promissory Note
Exhibit B - Form of Warrant
Exhibit C - Form of Second Amended and Restated Registration Rights Agreement
SCHEDULES
---------
Schedule 2.1 - Purchasers and Allocations
Schedule 4.1 - Foreign Jurisdictions
Schedule 4.2 - Capitalization
Schedule 4.6 - Commission Filings; Financial Statements
Schedule 4.10 - Intellectual Property Rights
Schedule 4.11 - Litigation and other Proceedings and Claims
Schedule 4.14 - Registration Rights
SECURITIES PURCHASE AGREEMENT (this "AGREEMENT"), dated as of March 28,
2001, among EXCHANGE APPLICATIONS, INC., a Delaware corporation (the "Company"),
and the purchasers (each a "Purchaser" and together, the "Purchasers")
identified on the signature page hereto.
WHEREAS, the Company desires to sell to the Purchasers and the
Purchasers desire to purchase from the Company (i) up to U.S. $1,500,000 in
principal amount of the Company's 10% bridge promissory note, and (ii) the
Warrant, each on the terms and subject to the conditions set forth in this
Agreement.
NOW, THEREFORE, the parties hereto hereby agree as follows:
DEFINITIONS.
------------
Capitalized terms used and not otherwise defined in this Agreement have
the meaning ascribed to them below or in the other locations of this Agreement
specified below:
"Advance" means each advance of funds in respect of the Total
Commitment.
"Agreement" has the meaning ascribed to such term in the
preamble.
"By-laws" has the meaning ascribed to such term in Section
4.1.
"Business Day" means each day except for Saturday, Sunday,
Federal holidays and any other state-recognized holidays in the States of New
York and Massachusetts.
"Certificate of Incorporation" has the meaning ascribed to
such term in Section 4.1.
"Claim" means any claim, demand, assessment, judgment, order,
decree, action, cause of action, litigation, suit, investigation or other
proceeding.
"Commission" means the United States Securities and Exchange
Commission.
"Commission Filings" means all reports, registration
statements and other filings filed by the Company with the Commission (and all
notes, exhibits and schedules thereto and documents incorporated by reference
therein).
"Common Stock" means the common stock, $.001 par value per
share, of the Company.
"Common Stock Equivalents" means all shares of Common Stock
outstanding and all shares of Common Stock issuable (without regard to any
present restrictions on such
issuance) upon the conversion, exchange or exercise of all Securities of the
Company that are convertible, exchangeable or exercisable for share of Common
Stock.
"Company" has the meaning ascribed to such term in the
preamble.
"Company Contracts" has the meaning ascribed to such term in
Section 4.9.
"Contract" means any written or oral loan contract, agreement,
or credit agreement, note, bond, mortgage, indenture, lease, sublease, purchase
order, instrument, permit, concession, franchise or license.
"DrawDown Date" has the meaning ascribed to such term in
Section 3.2(a).
"Encumbrances" means any liens, charges, encumbrances, claims,
options, proxies, pledges, security interests, or other similar rights of any
nature.
"Equity Financing" means the closing of the issuance and sale
by the Company on or after the date hereof (other than the transactions
contemplated hereby) of an existing or newly created class or series of equity
Securities of the Company to any Person, other than (i) Securities issued or
granted to eligible officers, employees or directors of, or consultants to, the
Company pursuant to the Equity Incentive Plans and any Securities issued upon
exercise of such Securities, (ii) any Securities issued by the Company in a
Public Offering, (iii) Securities issued upon the exercise, conversion or
exchange of any Common Stock Equivalents outstanding on the date hereof or
pursuant to the MicroStrategy Agreement, (iv) Securities issued by the Company
upon conversion of the Series A Preferred Stock, (v) Securities issued as a
stock dividend or upon any stock split, recapitalization or other subdivision or
combination of Common Stock, (vi) Securities issued pursuant to acquisitions,
strategic alliances and joint ventures, and (vii) issuances of Securities
excluded in writing by the Purchasers.
"Equity Incentive Plans" means the (i) 2000 Customer Analytics
Holdings, Inc. Equity Incentive Plan, (ii) 1999 Customer Analytics, Inc. Stock
Option and Purchase Plan, (iii) 1999 GBI Stock Acquisition Plan, (iv) 1999
Knowledge Stream Partners, Inc. Stock Option Plan, (v) 1998 Stock Incentive
Plan, (vi) 1998 Director Stock Option Plan, (vii) 1998 Employee Stock Purchase
Plan and (viii) 1996 Stock Incentive Plan, each as amended, and any other stock
option, issuance, appreciation rights or other equity incentive plan for the
directors, officers and employees of, and consultants to, the Company, which
plan has been approved by the Board or appropriate committee thereof.
"Event of Default" has the meaning ascribed to such term in
the Note.
"Exchange Act" means the Securities and Exchange Act of 1934,
as amended.
"Financing Documents" has the meaning ascribed to such term in
Section 4.3.
"Fundamental Documents" means the documents by which any
Person (other than an individual) establishes its legal existence or which
govern its internal affairs. The "Fundamental Documents" of the Company are the
Certificate of Incorporation and the By-laws.
-2-
"Governmental Entity" means any federal, state, municipal, or
other government, governmental department, commission, board, bureau, agency or
instrumentality, or any court or tribunal.
"GAAP" means United States generally accepted accounting
principles, consistently applied.
"Initial Closing" has the meaning ascribed to such term in
Section 3.1(a).
"Law" means any constitution, law, statute, treaty, rule,
ordinance, permit, certificate, directive, requirement, regulation or Order (in
each case, whether foreign or domestic) of any Governmental Entity.
"Lien" means any security interest, pledge, lien, bailment (in
the nature of a pledge or for purposes of security), mortgage, deed of trust,
the grant of a power to confess judgment, conditional sale or title retention
agreement (including any lease in the nature thereof), charge, encumbrance,
easement, reservation, restriction, cloud, right of first refusal or first
offer, option, commitment or other similar arrangement or interest in real or
personal property, whether oral or written.
"MicroStrategy Agreement" means the Payment and Registration
Rights Agreement, dated as of December 28, 1999, between the Company and
MicroStrategy Incorporated in effect on the date hereof or as amended from time
to time.
"Material Adverse Effect" means, with respect to the Company,
a material adverse effect on the business, operations, assets, conditions
(financial or otherwise), operating results, liabilities or prospects of the
Company and its Subsidiaries, taken as a whole, since November 14, 2000.
"Note" has the meaning ascribed to such term in Section 2.
"Notes" means, collectively, the (i) Note and (ii) 9% Bridge
Promissory Note, dated February 20, 2001, issued by the Company to the
Purchasers.
"Orders" means judgments, writs, decrees, injunctions, orders,
compliance agreements or settlement agreements of or with any Governmental
Entity or arbitrator.
"Original Warrant" means the Warrant, dated February 20, 2001,
issued by the Company to the Purchasers.
"Original Warrant Shares" means shares of Common Stock
issuable upon exercise of the Original Warrant.
"Person" shall be construed in the broadest sense and shall
include an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, and any other entity, including a Governmental
Entity.
-3-
"Preferred Stock" means the preferred stock, $.001 par value
per share, of the Company.
"Proceeding" means any action, suit, proceeding, complaint,
charge, hearing, inquiry or investigation before or by a Governmental Entity or
an arbitrator or administrator.
"Projections" has the meaning ascribed to such term in Section
4.8.
"Public Offering" means the consummation of a public offering
of Common Stock pursuant to a registration statement declared effective under
the Securities Act, except that a Public Offering shall not include an offering
of securities to be issued as consideration in connection with a business
acquisition or an offering of Securities issuable pursuant to the Equity
Incentive Plans.
"Request Letter" has the meaning ascribed to such term in
Section 3.2(a).
"Second Amended and Restated Registration Rights Agreement"
has the meaning ascribed to such term in Section 3.1(b)(iii).
"Securities" means, with respect to any Person, such Person's
"securities" as defined in Section 2(1) of the Securities Act and includes such
Person's capital stock or other equity interests or any options, warrants or
other securities or rights that are directly or indirectly convertible into, or
exercisable or exchangeable for, such Person's capital stock or other equity
interests.
"Securities Act" means the Securities Act of 1933, as amended.
"Series A Preferred Stock" means the Series A Convertible
Redeemable Preferred Stock, $.001 par value per share, of the Company.
"Subsidiary" means, at any time, with respect to any Person
(the "Subject Person"), (i) any Person of which either (x) more than 50% of the
Securities entitled to vote in the election of directors or comparable Persons
performing similar functions (excluding Securities entitled to vote only upon
the failure to pay dividends thereon or other contingencies) or (y) more than a
50% interest in the profits or capital of such Person, are at the time owned or
controlled directly or indirectly by the Subject Person or through one or more
Subsidiaries of the Subject Person or (ii) any Person whose assets, or portions
thereof, are consolidated with the net earnings of the Subject Person and are
recorded on the books of the Subject Person for financial reporting purposes in
accordance with GAAP.
"Subject Person" has the meaning ascribed to such term in the
definition of "Subsidiary".
"Total Commitment" has the meaning ascribed to such term in
Section 2.
"Warrant" has the meaning ascribed to such term in Section 2.
-4-
"Warrant Shares" means the shares of Common Stock issuable
upon the exercise of the Warrant.
PURCHASE AND SALE OF THE NOTE AND THE WARRANT.
----------------------------------------------
Upon the terms and subject to the conditions contained in this
Agreement, the Company has authorized the issuance and sale to the Purchasers
of, and the Purchasers have agreed to advance and purchase from the Company, (a)
a 10% Bridge Promissory Note in the aggregate principal amount of up to US
$1,500,000 (the "Total Commitment"), substantially in the form of EXHIBIT A (the
"Note") and (b) a Warrant substantially in the form of EXHIBIT B (the "Warrant")
for the warrant coverage amount set forth opposite each Purchaser's name on
SCHEDULE I of the Warrant. Each Advance under the Note shall be allocated to
each Purchaser as set forth in SCHEDULE I hereto, as updated from time to time.
THE CLOSINGS; DELIVERY OF DOCUMENTS AT THE CLOSINGS.
----------------------------------------------------
The Initial Closing.
-------------------
The initial closing (the "Initial Closing") shall take place
simultaneously with the execution and delivery of this Agreement at the offices
of X'Xxxxxxxx Graev & Karabell, LLP, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000.
At the Initial Closing, the Company shall deliver or cause to
be delivered to the Purchasers:
the duly executed Note;
the duly executed Warrant;
the Second Amended and Restated Registration Rights
Agreement in substantially the from attached hereto as EXHIBIT C (the
"Second Amended and Restated Registration Rights Agreement"), which
Second Amended and Restated Registration Rights Agreement shall have
been duly authorized, executed and delivered by the Company and shall
be in full force and effect and enforceable against the Company in
accordance with its terms;
a certificate of the Secretary or an Assistant
Secretary of the Company, dated as of the Initial Closing Date and
certifying on behalf of the Company: (A) that attached thereto is a
true, correct and complete copy of each of the Fundamental Documents of
the Company as in effect on the date of such certification; (B) that
attached thereto is a true, correct and complete copy of all
resolutions adopted by the Board of Directors (and any committees
thereof) of the Company authorizing (1) the execution, delivery and
performance of the Financing Documents, (2) the issuance, sale, and
delivery of the Note and the Warrant, and (3) the reservation of the
Warrant Shares for issuance upon exercise of the Warrant, and that all
such resolutions are in full force and effect; and (C) the incumbency
and specimen signature of all officers of the Company executing the
Financing Documents, and any certificate or instrument furnished
pursuant
-5-
hereto, and a certification by another officer of the Company as to the
incumbency and signature of the officer signing the certificate
referred to in this clause (iv); and
a telegram, telex or other acceptable method of
confirmation from the Secretary of State of the State of Delaware dated
as of the Initial Closing as to the continued good standing of the
Company.
At the Initial Closing, each Purchaser shall deliver to the
Company by wire transfer of immediately available funds the amount set forth
opposite such Purchaser's name on SCHEDULE I hereto to such bank account as the
Company shall designate to each Purchaser in writing on or prior to the day
immediately preceding the Initial Closing.
The Subsequent Closings.
-----------------------
At least two (2) Business Days (or such lesser time as may be
agreed by the Purchasers in their reasonable discretion) prior to each funding
date (each, a "DrawDown Date"), the Company shall deliver to the Purchasers a
written request (the "Request Letter") stating (i) the amount of the Advance to
be funded by the Purchasers on such DrawDown Date; provided, however, that in no
event shall any Advance (A) be less than $1,500,000 or (B) cause the principal
amount of the Note to exceed the Total Commitment, and (ii) the bank account
designated by the Company for the wire transfer of such Advance; provided,
however, notwithstanding anything to the contrary in this Section 3.2, the
Purchasers shall in no way be obligated to make an Advance after March 28, 2001.
On each DrawDown Date, the Company shall deliver or cause to
be delivered to the Purchasers a certificate signed by an officer of the Company
to the effect that, both before and immediately after the consummation of such
Advance and the other transactions contemplated to take place on such DrawDown
Date, (i) no Event of Default shall have occurred and be continuing under the
Note and (ii) the representations and warranties made by the Company in the
Financing Documents are true and correct in all material respects.
On each DrawDown Date, the Purchasers shall deliver or cause
to be delivered to the Company:
an updated Schedule 1 to the Note reflecting each
Advance, the allocation of each Advance among the Purchasers and any
other adjustments thereto;
an updated Schedule 1 to the Warrant reflecting each
Advance, the allocation of each Advance among the Purchasers, the
adjustments to the number of the Warrant Shares and any other
adjustments thereto; and
by wire transfer of immediately available funds, such
Advance requested by the Company to such bank account as the Company
designated in the Request Letter.
The Note does not constitute a revolving loan and any amounts repaid or
prepaid under the Note may not be reborrowed.
-6-
The obligations of the Purchasers hereunder are joint and several.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
----------------------------------------------
The Company hereby represents and warrants to each of the Purchasers as
follows:
Organization, Power, Authority and Good Standing. Each of the Company
and its Subsidiaries is duly organized, validly existing and in good standing
under the Laws of the jurisdiction of its incorporation or formation and has all
requisite corporate or other power and authority to own, lease and operate its
properties and other assets and to carry on its business as presently conducted
and as proposed to be conducted. Each of the Company and its Subsidiaries is
duly qualified and in good standing to transact business as a foreign Person in
those jurisdictions listed on SCHEDULE 4.1, which constitute all the
jurisdictions in which the character of the property owned, leased or operated
by the Company or such Subsidiary or the nature of the activities conducted by
the Company or such Subsidiary makes such qualification necessary, except where
the failure to be so qualified would not have a Material Adverse Effect. The
Company has delivered to the Purchasers a correct and complete copy of the
Amended and Restated Certificate of Incorporation of the Company in effect on
the date hereof (the "Certificate of Incorporation"). A copy of the Amended and
Restated By-laws of the Company in effect on the date hereof (the "By-laws") is
filed as an exhibit to the Commission Filings.
Capitalization.
--------------
Immediately upon consummation of the Initial Closing, the
authorized, issued and outstanding capital stock of the Company shall consist
of:
10,000,000 shares of Preferred Stock, of which
5,330,000 are designated as Series A Preferred Stock and 5,325,645 are
validly issued and outstanding, fully paid and nonassessable; and
150,000,000 shares of Common Stock, of which:
33,101,295 shares are validly issued and
outstanding, fully paid and nonassessable;
6,488,781 shares are reserved for issuance
upon conversion of the Series A Preferred Stock;
108,877 shares are reserved as Original
Warrant Shares for issuance upon exercise of the Original
Warrant;
294,118 shares are reserved as Warrant
Shares for issuance upon exercise of the Warrant;
366,565 shares are reserved as treasury
shares; and
-7-
12,010,897 shares are reserved for issuance
in accordance with the Equity Incentive Plans.
Except as contemplated by the Financing Documents or as
otherwise set forth on SCHEDULE 4.2, there are, and immediately after
consummation of the Initial Closing there will be, no (i) outstanding warrants,
options, agreements, convertible Securities or other commitments or instruments
pursuant to which the Company is obligated to issue, sell or otherwise transfer
any Securities or (ii) preemptive or similar rights to purchase or otherwise
acquire Securities of the Company pursuant to any provision of Law, the
Company's Fundamental Documents or any Contract to which the Company is a party.
All Securities issued by the Company have been issued in
transactions in accordance in all material respects with applicable state and
federal Laws governing the sale and purchase of Securities.
The authorization, reservation, issuance, sale and delivery,
as applicable, of the Warrant Shares have been duly and validly authorized by
all requisite corporate action on the part of the Company. The Warrant Shares
(assuming the issuance thereof in accordance with the applicable terms of the
Warrant), will be duly and validly issued and outstanding, fully paid and
nonassessable, with no personal liability attaching to the ownership thereof,
free and clear of any Encumbrances whatsoever and with no restrictions on the
voting rights thereof and not subject to any preemptive rights, rights of first
refusal or other similar rights of the stockholders of the Company.
Authorization of Agreement, Etc. The Company has all requisite
corporate power and authority to execute and deliver this Agreement, the Note,
the Warrant, the Second Amended and Restated Registration Rights Agreement and
any and all instruments necessary or appropriate in order to effectuate fully
the terms and conditions of each such agreement and all related transactions
(collectively, the "Financing Documents") and to perform its obligations under
and to consummate the transactions contemplated by each such Financing Document.
The execution, delivery and performance by the Company of each Financing
Document to which it is a party and the issuance, sale and delivery of the Note
and the Warrant has been duly authorized by all requisite corporate action by
the Company, and this Agreement and each other Financing Document has been duly
executed and delivered by the Company. No other corporate or stockholder action
on the part of the Company is necessary for such authorization, execution and
delivery. Each of the Financing Documents constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar Laws affecting creditors'
rights and remedies generally, and subject, in the case of enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
Proceeding at law or in equity).
No Conflicts. The execution, delivery and performance by the Company of
this Agreement and each of the other Financing Documents, the issuance, sale and
delivery of the Note and the Warrant and compliance with the provisions hereof
and thereof by the Company, will not (a) violate any provision of Law or any
Order applicable to the Company or any of its
-8-
properties or assets or (b) conflict with or result in any breach of any of the
terms, conditions or provisions of, or constitute (with notice or lapse of time
or both) a default (or give rise to any right of termination, cancellation or
acceleration) under, or result in the creation of, any Encumbrance upon any of
the properties or assets of the Company or, except as previously disclosed in
writing to the Purchasers, any material Contract to which it is a party or (c)
conflict with or violate any provision of the Fundamental Documents of the
Company currently in effect or in effect on any DrawDown Date.
Approvals. No permit, authorization, consent or approval of or by, or
any notification of or filing with, any Person is required in connection with
the execution, delivery or performance by the Company of each Financing Document
to which it is a party.
Commission Filings; Financial Statements.
----------------------------------------
The Company has filed all Commission Filings that it has been
required to file with the Commission under the Securities Act and the Exchange
Act. As of the respective dates of their filing with the Commission, or the date
of any amendment thereto filed on or prior to the date hereof, the Commission
Filings complied as to form in all material respects with the applicable
provisions of the Securities Act and the Exchange Act and did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein, in the light
of the circumstances under which they were made, not misleading.
Each of the historical consolidated financial statements of
the Company (including any related notes or schedules) included in the
Commission Filings was prepared in accordance with GAAP (except as may be
disclosed therein), and complied in all material respects with the rules and
regulations of the Commission. Such financial statements fairly present in all
material respects the consolidated financial position of the Company and its
Subsidiaries as of the dates thereof and the consolidated results of operations,
cash flows and changes in stockholders' equity for the periods then ended
(subject, in the case of the unaudited interim financial statements, to normal,
recurring year-end audit adjustments). Except as set forth or reflected in the
Commission Filings filed prior to the date hereof or as set forth on SCHEDULE
4.6, neither the Company nor any of its Subsidiaries have any liabilities or
obligations of any nature (whether accrued, absolute, contingent, unasserted or
otherwise) that individually or in the aggregate could reasonably be expected to
have a Material Adverse Effect.
Private Offering. Assuming the accuracy of the representations of the
Purchasers in Section 5.2, the offering, sale, issuance and delivery by the
Company of the Note and the Warrant are exempt from the registration and
prospectus delivery requirements of the Securities Act and applicable state
securities laws and the rules and regulations promulgated thereunder. Neither
the Company or its Subsidiaries, nor any Person acting on their behalf, has
offered or sold or will offer or sell any Securities, or has taken or will take
any other action (including, without limitation, any offering of any Securities
of the Company under circumstances that would require, under the Securities Act
or any applicable blue-sky laws, the integration of such offering with the
transactions contemplated by this Agreement), which would subject the
transactions contemplated by this Agreement to the registration provisions of
the Securities Act.
-9-
Provided Information. All written summaries provided by the Company to
legal counsel for the Purchasers on or about December 26, 2000 with regard to
the events leading up to the Company's press releases of September 29, 2000 and
October 2, 2000 are accurate in all material respects and do not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements contained therein not misleading in light of the
circumstances under which such statements are made. The financial projections
concerning the Company and its Subsidiaries and the transactions contemplated by
this Agreement contained in the "street plan" projections (the "Projections")
that have been made available to the Purchasers and their accountants in
connection with the transactions contemplated by this Agreement were at the time
they were made available to the Purchasers and their accountants prepared on a
basis reflecting the reasonable good faith estimates and judgments of the
Company's management as to the future financial performance of the Company and
its Subsidiaries for the periods covered thereby. The Projections are
specifically and expressly limited and qualified by underlying written
assumptions disclosed therein.
Certain Contracts. All material Contracts to which the Company or any
of its Subsidiaries is a party or may be bound that are required by Item
610(b)(10) of Regulation S-K to be filed as exhibits to, or incorporated by
reference in, the Company's Form 10-K or the Company's Form 10-Q are referred to
herein as "Company Contracts". All Company Contracts are legal, valid and
binding and in full force and effect on the date hereof except to the extent
previously disclosed in writing to the Purchasers, to the extent they have
previously expired in accordance with their terms or to the extent such failure
to be so legal, valid and binding would not reasonably be expected to have a
Material Adverse Effect and, neither the Company nor any of its Subsidiaries has
violated any provision of, or committed or failed to perform any act that, with
or without notice, lapse of time, or both, would constitute a default under the
provisions of any Company Contract, except as previously disclosed in writing to
the Purchasers or for defaults that would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
Intellectual Property Rights.
----------------------------
To the Company's knowledge, each of the Company and its
Subsidiaries owns or is licensed to use all trademarks, copyrights, service
marks, and applications and registrations therefor, and all trade names, domain
names, web sites, customer lists, trade secrets, proprietary processes and
formulae, inventions, know-how, other confidential and proprietary information,
and other industrial and intellectual property rights necessary to permit each
of the Company and its Subsidiaries to carry on its business as presently
conducted. To the Company's knowledge, each of the Company and its Subsidiaries
has the right to bring infringement actions with respect to all trademarks,
copyrights, service marks, trade names, domain names, trade secrets, proprietary
processes and formulae, inventions, know how and other confidential and
proprietary information that it owns. Except as otherwise disclosed in SCHEDULE
4.10, all registered patents, copyrights, trademarks, and service marks owned by
the Company and its Subsidiaries are in full force and effect and are not
subject to any taxes or maintenance fees. Except as otherwise disclosed in
SCHEDULE 4.10, there is no pending or, to the knowledge of the Company,
threatened Claim or litigation against the Company or any Subsidiary contesting
the right to use its intellectual property rights, asserting the material misuse
of any thereof, or asserting the material
-10-
infringement or other material violation of any intellectual property right of a
third party. All inventions and know-how conceived by employees of the Company
or its Subsidiaries and used by the Company and its Subsidiaries in the business
of the Company and its Subsidiaries as currently conducted are owned by the
Company or its Subsidiaries. Except as disclosed on SCHEDULE 4.10, each of the
Company and its Subsidiaries has taken reasonable security measures to protect
the secrecy, confidentiality, and value of its trade secrets, proprietary
processes, formulae, inventions, know-how and other confidential and proprietary
information.
Except as otherwise disclosed in SCHEDULE 4.11, no Proceedings
or Claims in which the Company or any Subsidiary alleges that any Person is
materially infringing upon, or otherwise materially violating, any patents,
trademarks, copyrights, service marks, and applications and registrations
therefor are pending, and none have been served by, instituted or asserted by
the Company or any Subsidiary, nor are any Proceedings or Claims threatened
alleging any such material violation or material infringement, nor does the
Company or any Subsidiary know of any valid basis for any such Proceedings or
Claims.
Litigation Other Proceedings or Claims. Except as set forth on SCHEDULE
4.11, there are no (i) Proceedings or Claims pending against or initiated by the
Company or any Subsidiary or, to the best knowledge of the Company, threatened
against the Company or any Subsidiary, whether at law or in equity, whether
civil or criminal in nature, except for Proceedings or Claims that, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect, or (ii) material Orders with respect to the Company or any Subsidiary.
Termination of Employment. To the Company's knowledge, no executive
officer or key employee, or any group of key employees, intends to terminate
their employment with the Company or any Subsidiary, nor does the Company or any
Subsidiary have a present intention to terminate the employment of any officer,
key employee or group of key employees.
Brokers. Neither the Company nor any of its Subsidiaries have employed
or otherwise retained any broker or finder in connection with the transactions
contemplated by this Agreement.
Registration Rights. Except as contemplated by the Second Amended and
Restated Registration Rights Agreement and except as set forth on SCHEDULE 4.14,
no Person has any right to cause the Company to effect the registration under
the Securities Act of any shares of Common Stock or any other Securities of the
Company.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.
-------------------------------------------------
Each Purchaser hereby represents and warrants to the Company as
follows:
Authorization of the Financing Documents. Each Purchaser has the
requisite power and authority (corporate or otherwise) to execute, deliver and
perform the Financing Documents to which it is a party and the transactions
contemplated thereby, and the execution, delivery and performance by such
Purchaser of the Financing Documents to which it is a party have been duly
authorized by all requisite action by such Purchaser and each such Financing
Document, when
-11-
executed and delivered by such Purchaser, constitutes a legal, valid and binding
obligation of such Purchaser, enforceable against such Purchaser in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar Laws affecting creditors'
rights and remedies generally, and subject, in the case of enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
Proceeding at law or in equity).
Investment Representations.
--------------------------
The Note and the Warrant to be purchased by each Purchaser
hereunder are acquired for its own account, for investment and not with a view
to the distribution thereof in violation of the Securities Act or applicable
foreign or state securities Laws.
Each Purchaser understands that (i) the Note and the Warrant
have not been, and the Securities issuable upon conversion or exercise thereof
will not be, registered under the Securities Act or applicable foreign or state
securities Laws, by reason of their issuance by the Company in a transaction
exempt from the registration requirements of the Securities Act and applicable
foreign and state securities Laws and (ii) the Note and the Warrant, and the
Securities issuable upon conversion or exercise thereof, must be held by the
Purchasers or each Purchaser, as the case may be, indefinitely unless a
subsequent disposition thereof is registered under the Securities Act and
applicable foreign and state securities Laws or is exempt from registration
thereof. Each Purchaser is an "accredited investor" (as defined in Rule 501(a)
of Regulation D promulgated under the Securities Act).
Except for the acquisition of the Securities of the Company
pursuant to the Note Purchase Agreement, dated December 15, 2000, the Securities
Purchase Agreement, dated January 10, 2001, and the Securities Purchase
Agreement, dated February 20, 2001, each such agreement by and among the Company
and the Purchasers, and for the transactions contemplated hereby, no Purchaser
or any affiliate has (i) bought or sold Securities, or options to buy or sell
Securities, of the Company, (ii) requested, instructed or knowingly participated
in a plan or arrangement with another Person to buy or sell Securities, or
options to buy or sell Securities, of the Company, at any time during the period
commencing on October 15, 2000 and ending on (and including) the Initial
Closing.
None of the Purchasers have employed or otherwise retained any
broker or finder in connection with the transactions contemplated by this
Agreement.
POST-CLOSING COVENANTS.
-----------------------
Covenants of the Company.
------------------------
Subsequent Financings. From and after the Initial
Closing, if the Company consummates one or more Equity Financings,
other than an Equity Financing pursuant to which the Purchasers elect
to participate by converting all of the outstanding principal amount of
the Note and all accrued and unpaid interest thereon into Securities
issued in such Equity Financing, then the proceeds received by the
Company in such
-12-
Equity Financing shall first be used to payoff the outstanding
principal amount of the Notes and any accrued and unpaid interest
thereon.
Use of Proceeds. The proceeds received by the Company
from the sale of the Note and the Warrant shall be used by the Company
for working capital and other general corporate purposes.
Covenants of the Purchasers. At the Company's request, the
Purchasers shall negotiate in good faith with the Company and its bank lenders
to execute and deliver reasonable and customary documentation required to
subordinate to such bank lenders (on reasonable and customary terms) the right
of the Purchasers to receive payments of cash from the Company with respect to
the Notes.
PARTIES IN INTEREST; ASSIGNMENT.
--------------------------------
This Agreement shall bind and inure to the benefit of the Company, the
Purchasers and their respective successors and assigns. No party hereto may
assign this Agreement, any other Financing Document or any of its rights,
interests or obligations hereunder or thereunder without the prior written
consent of the other parties; provided, however, that each Purchaser may assign
any of its rights under this Agreement or any other Financing Document to any
affiliate of such Purchaser.
ENTIRE AGREEMENT.
-----------------
This Agreement and the other writings and agreements referred to herein
or delivered pursuant hereto contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings among the parties with respect thereto.
NOTICES.
--------
All notices, demands and requests of any kind to be delivered to any
party in connection with this Agreement shall be in writing and shall be deemed
to have been duly given if personally delivered or if sent by
internationally-recognized overnight courier or by registered or certified mail,
return receipt requested and postage prepaid, addressed as follows:
if to the Company, to:
Exchange Applications, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
-13-
with a copy to:
Xxxxxxx Xxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, X.X. 00000-0000
Attention: Xxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to the Purchasers, to:
InSight Capital Partners
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, X.X. 00000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, X.X. 00000
Attention: Xxxx X. Nissan, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or to such other address as the party to whom notice is to be given may have
furnished to the other parties hereto in writing in accordance with the
provisions of this Section 9. Any such notice or communication shall be deemed
to have been received (i) in the case of personal delivery, on the date of such
delivery, (ii) in the case of internationally-recognized overnight courier, on
the next business day after the date when sent and (iii) in the case of mailing,
on the third business day following that on which the piece of mail containing
such communication is posted.
AMENDMENTS.
-----------
This Agreement may not be modified or amended, or any of the provisions
hereof waived, except by written agreement of the Company and the Purchasers.
COUNTERPARTS.
-------------
This Agreement may be executed in any number of counterparts, and each
such counterpart hereof shall be deemed to be an original instrument, but all
such counterparts together shall constitute but one agreement.
-14-
HEADINGS.
---------
The section and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
GOVERNING LAW.
--------------
This Agreement shall be governed by and construed in accordance with
the Laws of the State of New York (without giving effect to principles of
conflicts of laws).
EXPENSES.
---------
The Company agrees to pay, and hold the Purchasers harmless against
liability for the payment of: (i) the reasonable out-of-pocket expenses
(including attorneys' fees and expenses) of the Purchasers arising in connection
with its due diligence and the negotiation and execution of this Agreement and
the consummation of the transactions contemplated by this Agreement which shall
be payable at the Initial Closing and on each DrawDown Date and may be netted
from the wire transfers contemplated by Section 3.1(c) and Section 3.2(c)(iii),
(ii) the reasonable out-of-pocket expenses (including attorneys' fees and
expenses) of the Purchasers with respect to documentation of the conversion of
the Note and the exercise of the Warrant pursuant to their terms or any
amendments or waivers (whether or not the same become effective) under or in
respect of this Agreement, or the other agreements contemplated hereby and (iii)
the reasonable fees and expenses incurred by the Purchasers with respect to the
enforcement by the Purchasers or their permitted assigns of their rights granted
under this Agreement, or the agreements contemplated hereby.
CONSENT OF THE PURCHASERS.
-------------------------
Pursuant to Section 3(b) of the Company's Certificate of Designation
dated January 10, 2001, the Purchasers hereby consent to the transactions
contemplated by this Agreement and the other Financing Documents; provided,
however, that notwithstanding the foregoing, the Purchasers are not hereby
consenting to any Equity Financing.
* * * * *
-15-
IN WITNESS WHEREOF, each of the undersigned has duly executed this
Securities Purchase Agreement as of the date first written above.
COMPANY:
--------
EXCHANGE APPLICATIONS, INC.
By:
--------------------------------------------
Name:
Title:
PURCHASERS:
-----------
INSIGHT CAPITAL PARTNERS IV, L.P.
By: Insight Venture Associates IV, L.L.C.,
its general partner
By:
--------------------------------------------
Name:
Title:
INSIGHT CAPITAL PARTNERS
(CAYMAN) IV, L.P.
By: Insight Venture Associates IV, L.L.C.,
its investment general partner
By:
--------------------------------------------
Name:
Title:
INSIGHT CAPITAL PARTNERS
IV (FUND B), L.P.
By: Insight Venture Associates IV, L.L.C.,
its general partner
By:
--------------------------------------------
Name:
Title:
INSIGHT CAPITAL PARTNERS
IV (CO-INVESTORS), L.P.
By: Insight Venture Associates IV, L.L.C.,
its general partner
By:
--------------------------------------------
Name:
Title:
EXHIBIT A
---------
Form of 10% Bridge Promissory Note
----------------------------------
See attached.
-------------
EXHIBIT B
---------
Form of Warrant
---------------
See attached.
-------------
EXHIBIT C
---------
Form of Second Amended and Restate Registration Rights Agreement
----------------------------------------------------------------
See attached.
-------------
SCHEDULE I
PURCHASERS
Initial Closing: March 28, 2001
--------------- --------------
Percentage of Initial Initial Advance
---------------------- ----------------
Purchaser Advance Amount
------------------------------------------------------- ----------------------- --------------------
InSight Capital Partners IV, L.P. 78.211447% $1,173,171.70
------------------------------------------------------- ----------------------- --------------------
InSight Capital Partners (Cayman) IV, L.P. 9.056941% $135,854.12
------------------------------------------------------- ----------------------- --------------------
InSight Capital Partners IV (Fund B), L.P. 12.105748% $181,586.22
------------------------------------------------------- ----------------------- --------------------
InSight Capital Partners IV (Co-Investors), L.P. 0.625864% $9,387.96
------------------------------------------------------- ----------------------- --------------------
TOTAL: 100.00% $1,500,000.00
------------------------------------------------------- ----------------------- --------------------
