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COLLATERAL AGENCY AND INTERCREDITOR
AGREEMENT, dated as of August 29, 2001,
among (i) EXCHANGE APPLICATIONS, INC., a
Delaware corporation ("Exchange"), and
EXSTATIC SOFTWARE, INC. (f/k/a Xxxx
Xxxxxxxx, Inc.), a Washington corporation
("eXstatic"; and together with Exchange,
collectively, the "Grantors"); (ii) INSIGHT
VENTURE PARTNERS IV, L.P. ("Partners IV"),
INSIGHT VENTURE PARTNERS (CAYMAN) IV, L.P.
("Cayman IV"), INSIGHT VENTURE PARTNERS IV
(FUND B), L.P. ("Fund B IV"), INSIGHT
VENTURE PARTNERS IV (CO-INVESTORS), L.P.
("Co-Investors IV"; and, together with
Partners IV, Cayman IV, Fund B IV, and their
respective successors and assigns,
collectively, the "Existing Investors");
(iii) the Persons listed on Schedule I
hereto as New Investors which are party
hereto, together with their respective
successors and assigns (the "New
Investors"); and (iv) INSIGHT VENTURE
PARTNERS IV (COLLATERAL AGENT), LLC as
Collateral Agent, together with its
successors, the "Collateral Agent".
WITNESSETH:
WHEREAS, the Grantors and the Existing Investors have entered
into the Existing Debenture Documents and the Grantors have caused their
obligations thereunder to be secured pursuant to the Existing Security
Agreement;
WHEREAS, concurrently herewith, the Grantors and the New
Investors are entering into the New Debenture Documents and the Grantors are
causing their obligations thereunder to be secured pursuant to the New Security
Agreement;
WHEREAS, the New Investors desire to appoint the Collateral
Agent as their agent under the New Security Agreement and to hold the Collateral
and exercise rights, powers and remedies for their benefit; and
WHEREAS, the parties hereto desire to set forth certain
agreements among them with respect to the Security Documents, the Collateral,
and the exercise of certain rights, powers and remedies.
NOW, THEREFORE, the parties hereto hereby agree as follows:
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ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS.
As used herein, the following terms, and the single and plural
thereof shall have the following meanings:
"Affiliate" means, with respect to any specified Person, any
other Person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such specified
Person. As used in this definition, the term "control" (including, with
correlative meaning, the terms "controlling," "controlled by" and "under common
control with") as used with respect to any Person, means the possession, direct
or indirect, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting Securities, by
contract or otherwise.
"Aggregate Convertible Debentures" has the meaning assigned to
it in the New Purchase Agreement.
"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.
"Code" shall mean the Uniform Commercial Code as in effect
from time to time in the State of New York.
"Collateral" shall mean all the properties and assets of
whatever nature, tangible or intangible, now owned or existing or hereafter
acquired or arising, in which any of the Collateral Agent, the Existing
Investors or the New Secured Parties have been granted a lien or security
interest pursuant to any of the Security Documents and all Proceeds thereof,
including, without limitation, the Existing Collateral and the New Collateral.
"Collateral Agent" shall have the meaning given thereto in the
preamble hereof.
"Debenture Documents" shall mean the Existing Debenture
Documents and the New Debenture Documents, collectively.
"Debenture Obligations" shall mean at any time, the sum
(without duplication) of (a) the Existing Debenture Obligations, and (b) the New
Debenture Obligations (it being understood that Persons who are Existing
Investors may also be New Investors and hold both Existing Debenture Obligations
and New Debenture Obligations and Persons who are New Investors may also be
Existing Investors and hold both Existing Debenture Obligations and New
Debenture Obligations, and, in any such case, there shall not be deemed to be
any duplication).
"Default" shall mean any Default or Event of Default under,
and as such terms are defined in, any Debenture Documents.
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"Designated Investor Majority" means any two Designated
Investors who hold Aggregate Convertible Debentures with an aggregate face or
principal amount equal to at least 67% of the aggregate face or principal amount
of the Aggregate Convertible Debentures then held by the third Designated
Investor; provided, however, that if no such Designated Investor Majority exists
at such time, then the term "Designated Investor Majority" shall mean Investors
holding at least 40% of the aggregate principal or face amount of Aggregate
Convertible Debentures then outstanding.
"Designated Investors" means Insight, Boston Pipes, LLC and
THK Private Equities, in each case, together will all Affiliates thereof.
"Dollars" and "$" shall mean lawful currency of the United
States of America.
"Existing Collateral" shall mean the Collateral in which a
security interest is created in favor of the Existing Investors under the
Existing Security Agreement.
"Existing Debentures" shall mean, collectively, (i) 12%
Convertible Debenture in the aggregate principal amount of U.S. $7,322,251.30,
and (ii) the 12% Convertible Debenture in the aggregate principal amount of U.S.
$5,055,890.41, both (i) and (ii) issued by the Grantors to the Existing
Investors on August 29, 2001 (amending, respectively (a) the 12% Convertible
Debenture in the aggregate principal amount of U.S. $7,241,307.37, and (b) the
12% Convertible Debenture in the aggregate principal amount of U.S. $5,000,000,
both (a) and (b) issued by the Grantors to the Existing Investors on July 26,
2001).
"Existing Debenture Documents" shall mean, collectively, the
Existing Purchase Agreement, the Existing Debentures, the Existing Security
Agreement and all other documents, instruments and agreements in connection
therewith.
"Existing Debenture Obligations" shall mean, at any time, the
sum (without duplication) of (a) the aggregate principal or face amount of the
Existing Debentures and the aggregate amount of accrued and unpaid interest
thereon at such time, and (b) the aggregate amount of all other monetary
obligations of the Grantors that are accrued, identified and owing at such time
to any Existing Investor under any Existing Debenture Document, including,
without limitation, indemnification and expense reimbursement obligations.
"Existing Investors" shall have the meaning given thereto in
the preamble hereof.
"Existing Purchase Agreement" shall mean the Securities
Purchase Agreement among the Existing Investors and the Grantors, dated as of
July 26, 2001, as amended, modified, supplemented and restated from time to
time.
"Existing Secured Obligations" shall mean the Obligations as
such term is defined in the Existing Security Agreement.
"Existing Security Agreement" shall mean the Security
Agreement, dated as of July 26, 2001, among the Grantors and the Existing
Investors, as amended, modified, supplemented and restated from time to time.
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"Investors" shall mean the Existing Investors and the New
Investors, collectively (it being understood that Persons who are Existing
Investors may also be New Investors and hold both Existing Debenture Obligations
and New Debenture Obligations and Persons who are New Investors may also be
Existing Investors and hold both Existing Debenture Obligations and New
Debenture Obligations, and, in any such case, there shall not be deemed to be
any duplication).
"New Collateral" shall mean the Collateral in which a security
interest is created in favor of the Collateral Agent for the benefit of the New
Secured Parties under the New Security Agreement.
"New Debentures" shall mean, collectively, the U.S.
$15,500,000 in principal amount 12% Senior Secured Convertible Debentures issued
by the Grantors to the New Investors dated as of the date hereof.
"New Debenture Documents" shall mean, collectively, the New
Purchase Agreement, the New Debentures, the New Security Agreement and all other
documents, instruments and agreements in connection therewith.
"New Debenture Obligations" shall mean, at any time, the sum
(without duplication) of (a) the aggregate principal or face amount of the New
Debentures and the aggregate amount of accrued and unpaid interest thereon at
such time, and (b) the aggregate amount of all other monetary obligations of the
Grantors that are accrued, identified and owing at such time to any New Investor
under any New Debenture Document, including, without limitation, indemnification
and expense reimbursement obligations.
"New Investors" shall have the meaning given thereto in the
preamble hereof.
"New Purchase Agreement" shall mean the Securities Purchase
Agreement among the New Investors and the Grantors, dated as of the date hereof,
as amended, modified, supplemented and restated from time to time.
"New Secured Obligations" shall mean the New Debenture
Obligations as such term is defined in the New Security Agreement.
"New Secured Parties" shall mean the New Investors and the
Collateral Agent.
"New Security Agreement" shall mean the Security Agreement,
dated as of the date hereof, among the Grantors and the New Investors, as
amended, modified, supplemented and restated from time to time.
"Notice of Default" shall have the meaning given thereto in
Section 2.1.
"Person" shall mean any individual, a corporation, a
partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Proceeds" shall mean all proceeds within the meaning of the
Code.
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"Ratable Basis" shall mean, with respect to any Investor, the
ratable interest or amount of such Investor determined ratably in accordance
with the portion of the Aggregate Convertible Debentures held by such Investor
in relation to the total amount of the Aggregate Convertible Debentures held by
all Investors collectively.
"Required Investors" shall mean Investors holding more than
51% of the aggregate principal or face amount of the Debenture Obligations in
respect of the Aggregate Convertible Debentures then outstanding.
"Secured Obligations" shall mean Existing Secured Obligations
and the New Secured Obligations, collectively.
"Secured Parties" shall mean, collectively, the Existing
Investors and the New Secured Parties, collectively.
"Security Documents" shall mean the Existing Security
Agreement and the New Security Agreement, collectively.
1.2 OTHER DEFINITIONAL PROVISIONS.
The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, the words "include",
"includes" and "including" when used in this Agreement shall be deemed to be
followed by the phrase "without limitation".
ARTICLE II
DEFAULTS; RIGHTS AND REMEDIES
2.1 NOTICE OF DEFAULT.
Upon any Grantor becoming aware of the occurrence of any
Default, such Grantor shall promptly notify the Collateral Agent of the Default
in writing, describing in reasonable detail the nature of such Default (any such
notice, "Notice of Default"). Upon acquiring knowledge of any Default, to the
extent that the Investors have not previously received a Notice of Default in
respect of such Default, each Investor shall endeavor to provide the Notice of
Default to the Collateral Agent and each other Investor.
2.2 GENERAL AUTHORITY OF THE COLLATERAL AGENT; REMEDIES NOT EXCLUSIVE.
(a) Upon receipt by the Collateral Agent of a Notice of
Default, the Collateral Agent shall at the request of a Designated Investor
Majority and on behalf of the Secured Parties exercise the rights and remedies
and take the actions as provided in this Agreement, in the Security Documents
and under applicable law in accordance with the direction of such Designated
Investor Majority as provided herein. Each Secured Party and each Grantor hereby
agrees that the Collateral Agent shall have the authority and discretion to
exercise all such rights and remedies and take all such action.
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(b) No remedy conferred upon or reserved to the Collateral
Agent herein or in any Security Document is intended to be exclusive of any
other remedy or remedies, but every such remedy shall be cumulative and shall be
in addition to every other remedy conferred herein, in any Security Document or
now or hereafter existing at law or in equity or by statute.
(c) No delay by the Collateral Agent in exercising, or failure
by the Collateral Agent to exercise, any right, remedy or power hereunder or
under any Security Document shall impair any such right, remedy or power or
shall be construed to be a waiver thereof, and every right, power and remedy
given to the Collateral Agent under this Agreement or any Security Document may
be exercised from time to time and as often as may be deemed expedient by the
Collateral Agent or a Designated Investor Majority.
2.3 WAIVER AND ESTOPPEL.
(a) To the extent permitted by applicable law, each Grantor
hereby agrees that it will not at any time in any manner whatsoever claim, or
take the benefit or advantage of, any appraisement, valuation, stay, extension,
moratorium, turnover or redemption law, or any law permitting it to direct the
order in which the Collateral shall be sold, now or at any time hereafter in
force, which may delay, prevent or otherwise affect the performance or
enforcement of this Agreement or any Security Document and, to the extent
permitted by applicable law, waives all benefit or advantage of all such laws,
and each Grantor hereby covenants that it will not hinder, delay or impede the
execution of any power granted to the Collateral Agent in this Agreement or any
Security Document but will suffer and permit the execution of every such power
as though no such law were in force.
(b) To the extent permitted by applicable law, each Grantor,
on behalf of itself and all who may claim through or under it, including,
without limitation, any and all subsequent creditors, vendees, assignees and
lienors, waives and releases all rights to demand or to have any marshalling of
the Collateral upon any sale, whether made under any power of sale granted
herein or in any Security Document or pursuant to judicial proceedings or upon
any foreclosure or any enforcement of this Agreement or any Security Document
and consents and agrees that all the Collateral may at any such sale be offered
and sold as an entirety.
(c) Each Grantor waives, to the extent permitted by applicable
law, presentment, demand, protest and any notice of any kind (except notices
explicitly required hereunder or under any Debenture Document or any Security
Document) in connection with this Agreement and the Security Documents, and any
action taken by the Collateral Agent with respect to the Collateral.
2.4 LIMITATION ON COLLATERAL AGENT'S DUTY IN RESPECT OF COLLATERAL.
Beyond its duties as to the custody thereof expressly provided
herein or in any Security Document and to account to the Secured Parties and the
Grantors for monies and other property received by it hereunder or under any
Security Document, the Collateral Agent shall not have any duty to the Grantors
or to the Secured Parties as to any Collateral in its possession or control or
in the possession or control of any of its agents or nominees, or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto, except
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to treat such Collateral in its possession with the same degree of care as it
affords its own property and in accordance with applicable law.
2.5 LIMITATION BY LAW.
All rights, remedies and powers provided herein or in any
Security Document may be exercised only to the extent that the exercise thereof
does not violate any applicable provision of law, and all the provisions hereof
are intended to be subject to all applicable provisions of law which may be
controlling and to be limited to the extent necessary so that they will not
render this Agreement invalid, unenforceable in whole or in part or not entitled
to be recorded, registered or filed under the provisions of any applicable law.
2.6 RIGHTS OF SECURED PARTIES UNDER DEBENTURE DOCUMENTS.
Notwithstanding any other provision of this Agreement, (a) the
right of each Investor (i) to receive payment of the Debenture Obligations held
by such Investor when due (whether at the stated maturity thereof, by
acceleration or otherwise) as expressed in the related Debenture Document (ii)
to convert all or any portion of the Aggregate Convertible Debentures held by
such Investor or (iii) with respect to any indemnity or reimbursement claim
against any Grantor not arising in connection with any Default, to institute
suit or to obtain a judgment for the collection of such Debenture Obligations or
to enforce any such judgment on or after such due date, and to otherwise
exercise the rights and remedies as a general creditor in accordance with the
Debenture Document to which it is a party, in each case, in accordance with the
applicable provisions of the Debenture Documents; and (b) the obligation of each
Grantor to pay such Debenture Obligation when due, shall not be impaired or
affected except as provided in such Debenture Document.
ARTICLE III
RANKING; REQUIRED INVESTORS; APPLICATIONS
3.1 PARI PASSU OBLIGATIONS.
The Existing Investors hereby consent to the incurrence of the
New Debenture Obligations and the creation of the security interest in the New
Collateral to secure the New Secured Obligations. Notwithstanding anything to
the contrary, each of the Grantors, the Existing Investors and the New Investors
hereby agrees that (i) the (x) Existing Secured Obligations and the (y) New
Secured Obligations shall constitute pari passu obligations of the Grantors,
(ii) as between the Existing Investors and the New Secured Parties, the security
interest in the Existing Collateral in favor of the Existing Investors and the
security interest in the New Collateral in favor of the Collateral Agent for the
benefit of the New Secured Parties shall be of equal ranking and priority, (iii)
the rights and interests of each Investor in respect of the Debenture
Obligations, Secured Obligations, the Collateral and all other matters related
thereto shall be determined on a Ratable Basis in accordance with the provisions
of this Agreement, (iv) all rights, interests and priorities with respect to the
Collateral, the Proceeds thereof, the exercise of any rights or remedies or the
taking of any action under any Security Document and any matters related thereto
shall be governed by the terms of this Agreement, and (v) the Secured
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Parties shall share the Collateral and all Proceeds thereof on a Ratable Basis
in accordance with the terms of this Agreement.
3.2 DESIGNATED INVESTOR MAJORITY.
Each Investor agrees that (i) it shall not take any action to
accelerate any Debenture Obligations or enforce any liens under any Security
Document (except as permitted in Section 2.6) without the written consent or
authorization of a Designated Investor Majority, (ii) except as provided in
Section 2.2, the Collateral Agent shall not be required to exercise any
applicable rights or remedies, or take any applicable actions, whether under
this Agreement, any Debenture Document, any Security Documents or applicable
law, unless directed by a Designated Investor Majority (except as permitted in
Section 2.6), and (iii) notwithstanding the provisions of clause (ii), the
Collateral Agent may exercise any rights and remedies and take any actions,
whether under this Agreement, any Security Documents or applicable law, in the
absence of any such direction, without liability, if the Collateral Agent
believes in good faith that (A) time is of the essence in preserving the rights
and interests of the Secured Parties hereunder and under the Security Documents
and (B) the failure to exercise or take any such rights, remedies or actions
promptly could adversely affect the rights and interests of the Secured Parties.
No Default under any of the Aggregate Convertible Debentures may be declared or
waived, as the case may be, without the consent of a Designated Investor
Majority.
3.3 APPLICATION OF MONIES.
(a) Notwithstanding anything to the contrary in any Security
Document, all Proceeds of Collateral and any other monies received by any
Investor under, or in connection with, any Security Document shall be promptly
remitted to the Collateral Agent for application pursuant to this Agreement.
(b) All Proceeds of Collateral and any other moneys received
by the Collateral Agent, whether from any Investor pursuant to Section 3.3(a) or
under, or in connection with, any Security Document, shall be distributed and
applied as follows:
First: to the Collateral Agent, in an amount equal to any
unpaid costs or expenses of the Collateral Agent incurred in performing
its duties hereunder and under any Security Documents;
Second: to the Secured Parties, in an amount equal to all sums
which constitute Secured Obligations then held by the Secured Parties,
on a Ratable Basis, including without limitation the unpaid principal
or face amount of, and unpaid interest on and other charges, if any, in
respect of, the Secured Obligations then outstanding whether or not due
and payable and the costs and expenses of the Secured Parties and their
representatives which are due and payable under the relevant Debenture
Documents and Security Documents; and
Third: any surplus then remaining shall be paid to the
Grantors or its successors or assigns or to whomsoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction
may direct.
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3.4 NO LIABILITY.
The Collateral Agent shall have no liability to the Grantors
or any of the Secured Parties for any actions, distributions or applications
taken or made pursuant to this Article III in good faith. If any Secured Party
receives an amount in excess of the amount to which it was entitled to receive
pursuant to Section 3.3(b), then such Secured Party shall pay such excess to the
Collateral Agent pursuant to Section 3.3(a) for further application in
accordance with Section 3.3(b) as soon as practicable after the existence of
such overstatement shall have been determined. Each Secured Party agrees to act
in accordance with this Agreement and not take any action inconsistent herewith.
ARTICLE IV
AGREEMENTS WITH COLLATERAL AGENT
4.1 DELIVERY OF AMENDMENTS, ETC.
The Grantors shall deliver to the Collateral Agent, promptly
upon the execution thereof, a true and complete copy of all amendments,
supplements or other modifications to any Debenture Document.
4.2 EXPENSES.
Each Grantor, jointly and severally, agrees to pay to the
Collateral Agent, from time to time upon demand, all of the fees, costs and
out-of-pocket expenses of the Collateral Agent (including, without limitation,
the reasonable fees and disbursements of its counsel and such special counsel as
the Collateral Agent shall reasonably elect to retain) (a) arising in connection
with the preparation, execution, delivery, modification, and termination of or
performance under this Agreement and any Security Document or the enforcement of
any of the provisions hereof or thereof, (b) incurred or required to be advanced
in connection with the administration of the Collateral, the sale or other
disposition of Collateral pursuant to any Security Document and the
preservation, protection, enforcement or defense of the Collateral Agent's
rights under this Agreement and the Security Documents and in and to the
Collateral in accordance with the terms hereof or thereof or (c) incurred by the
Collateral Agent in connection with the replacement of the Collateral Agent as
provided in this Agreement. The obligations of each Grantor under this
subsection shall survive (i) the termination of this Agreement, and (ii) the
resignation or removal of the Collateral Agent.
4.3 STAMP AND OTHER SIMILAR TAXES.
Each Grantor, jointly and severally, agrees to indemnify and
hold harmless the Collateral Agent and each Secured Party from any present or
future claim for liability for any stamp or any other similar tax and any
penalties or interest with respect thereto, which may be assessed, levied or
collected by any jurisdiction in connection with this Agreement, any Security
Document, or any Collateral. The obligations of each Grantor under this
subsection shall survive (i) the termination of this Agreement, and (ii) the
resignation or removal of the Collateral Agent.
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4.4 FILING FEES, EXCISE TAXES, ETC.
Each Grantor, jointly and severally, agrees to pay or to
reimburse the Collateral Agent for any and all payments made by the Collateral
Agent in respect of all search, filing, recording and registration fees, taxes,
excise taxes and other similar imposts which may be payable or determined to be
payable in respect of the execution and delivery of this Agreement and the
Security Documents. The obligations of each Grantor under this subsection shall
survive (i) the termination of this Agreement, and (ii) the resignation or
removal of the Collateral Agent.
4.5 INDEMNIFICATION.
Each Grantor, jointly and severally, agrees to pay, indemnify,
and hold the Collateral Agent harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including, without limitation, the fees and disbursements and other
charges of counsel) or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Agreement, the Security Documents or any other Debenture Documents or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Collateral Agent under or in connection with any of the foregoing, unless
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements which are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the indemnified party,
including, without limitation, indemnification of the Collateral Agent for
liabilities of the Collateral Agent for the net amount of taxes (after taking
into account any deduction, credit or other tax reduction or benefit available
by reason of the imposition of such tax) in any jurisdiction in which the
Collateral Agent would not otherwise be subject to tax except solely by reason
of acting under this Agreement or any Security Document (directly or through
agents).
In any suit, proceeding or action brought by the Collateral
Agent under or with respect to any contract, agreement, interest or obligation
constituting part of the Collateral for any sum owing thereunder, or to enforce
any provisions thereof in accordance with the provisions hereof and of the
Security Documents, each Grantor, jointly and severally, will save, indemnify
and keep the Collateral Agent harmless from and against all expense, loss or
damage suffered by reason of any defense, setoff, counterclaim, recoupment or
reduction of liability whatsoever of the obligor thereunder, arising out of a
breach by the Grantor of any obligation thereunder or arising out of any other
agreement, indebtedness or liability at any time owing to or in favor of such
obligor or its successors from such Grantor and all such obligations of each
Grantor shall be and remain enforceable against and only against such Grantor
and shall not be enforceable against the Collateral Agent. The obligations of
each Grantor under this Section 4.5 shall survive (i) the termination of this
Agreement, and (ii) the resignation or removal of the Collateral Agent.
4.6 FURTHER ASSURANCES.
At any time and from time to time, upon the written request of
the Collateral Agent, and at the expense of the Grantors (on a joint and several
basis), each Grantor and Secured Party will promptly execute and deliver any and
all such further instruments and
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documents and take such further action as the Collateral Agent reasonably
requests to obtain the full benefits of this Agreement and the Security
Documents and of the rights and powers herein and therein granted or to cause
any Collateral to be subject to a perfected security interest of the Collateral
Agent to be so subject, including, without limitation, the filing of any
financing or continuation statements under the Uniform Commercial Code in effect
in any jurisdiction with respect to the liens and security interests granted
under the Security Documents. Each Grantor also hereby authorizes the Collateral
Agent to sign and to file any such documents, instruments or financing or
continuation statements without the signature of such Grantor to the extent
permitted by applicable law, but in no way is the Collateral Agent obligated to
do so.
ARTICLE V
THE COLLATERAL AGENT
5.1 APPOINTMENT.
(a) Each New Investor hereby irrevocably designates and
appoints the Collateral Agent as the agent of such New Investor under this
Agreement and the Security Documents and each New Investor irrevocably (i)
directs the Collateral Agent to enter into this Agreement and the New Security
Agreement, and (ii) authorizes the Collateral Agent, in such capacity, to take
such action on its behalf under the provisions of this Agreement and the
Security Documents and to exercise such powers and perform such duties as are
expressly delegated to the Collateral Agent by the terms of this Agreement and
the Security Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Collateral Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any New Investor, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into
Agreement and the Security Documents or otherwise exist against the Collateral
Agent.
(b) Each of the Grantors and the Existing Investors hereby
agree that, notwithstanding anything to the contrary in the Existing Security
Agreement, the Existing Investors may execute any of their respective duties,
rights, powers and remedies as secured parties under the Existing Debenture
Documents by or through agents or attorneys-in-fact. Each Existing Investor
hereby designates and appoints the Collateral Agent as the agent and
attorney-in-fact of such Existing Investor under this Agreement and the Security
Documents and each Existing Investor authorizes the Collateral Agent, in such
capacity, to take such action on its behalf under the provisions of this
Agreement and the Security Documents and to exercise such powers and perform
such duties as are expressly delegated to the Collateral Agent by the terms of
this Agreement and the Security Documents, together with such other powers as
are reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Collateral Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Existing Investor, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into
Agreement and the Security Documents or otherwise exist against the Collateral
Agent.
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5.2 DELEGATION OF DUTIES.
The Collateral Agent may execute any of its duties under this
Agreement, the Security Documents and the Guarantee by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Collateral Agent shall not be responsible
for the negligence or misconduct of any agents or attorneys in-fact selected by
it with reasonable care.
5.3 EXCULPATORY PROVISIONS.
Neither the Collateral Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Agreement or the Security Documents (except to
the extent that any of the foregoing resulted from its or such Person's own
gross negligence or willful misconduct) or (ii) responsible in any manner to any
of the Secured Parties for any recitals, statements, representations or
warranties made by the Grantors or any officer thereof contained in this
Agreement, the Security Documents or any other Debenture Documents or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Collateral Agent under or in connection with, this Agreement,
the Security Documents or any other Debenture Documents or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement, the Security Documents or any other Debenture Documents or for any
failure of the Grantors to perform its obligations hereunder or thereunder. The
Collateral Agent shall not be under any obligation to any Secured Party to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement, the Security
Documents or any other Debenture Documents, or to inspect the properties, books
or records of the Grantors.
5.4 RELIANCE BY COLLATERAL AGENT.
The Collateral Agent shall be entitled to rely, and shall be
fully protected in relying, upon any instrument, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Grantor or any of its Subsidiaries), independent
accountants and other experts selected by the Collateral Agent with reasonable
care. The Collateral Agent shall be fully justified in failing or refusing to
take any action under this Agreement, or the Debenture Documents unless it shall
first receive such advice or concurrence of a Designated Investor Majority as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Secured Parties against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action. The Collateral
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement, or the Debenture Documents in accordance with a
request of a Designated Investor Majority, and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Secured Parties
and all future holders of the Secured Obligations.
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5.5 NON-RELIANCE ON COLLATERAL AGENT OR OTHER SECURED PARTIES.
Each Secured Party expressly acknowledges that neither the
Collateral Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates have made any representations or warranties to
it and that no act by the Collateral Agent hereafter taken, including any review
of the affairs of the Grantors or any Affiliate thereof, shall be deemed to
constitute any representation or warranty by the Collateral Agent to any Secured
Party. Each Secured Party represents to the Collateral Agent that it has,
independently and without reliance upon the Collateral Agent or any other
Secured Party, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Grantors and their Affiliates and made its own decision to extend credit to the
Grantors and enter into this Agreement and the Debenture Documents to which it
is a party. Each Secured Party also represents that it will, independently and
without reliance upon the Collateral Agent or any other Secured Party, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement, the Security Documents or any other
Debenture Documents, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Grantors and their Affiliates. Except for
notices, reports and other documents expressly required to be furnished to the
Secured Parties by the Collateral Agent hereunder, the Collateral Agent shall
not have any duty or responsibility to provide any Secured Party with any credit
or other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of the Grantors or any
Affiliate which may come into the possession of the Collateral Agent or any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates.
5.6 INDEMNIFICATION.
The Secured Parties agree to pay, indemnify and hold harmless
the Collateral Agent in its capacity as such (to the extent not reimbursed by
the Grantor after the Collateral Agent shall have reasonably pursued such
reimbursement and without limiting the obligation of the Grantor to do so),
ratably according to the amounts of Secured Obligations held by them on the date
on which indemnification is sought hereunder (or, if indemnification is sought
after the date upon which the Secured Obligations shall have been paid in full,
ratably in accordance with the amounts of Secured Obligations held by them
immediately prior to such date), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including without limitation, the fees and disbursements and other
charges of counsel) or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Debenture Obligations) be imposed on, incurred by or asserted against the
Collateral Agent in any way relating to or arising out of this Agreement, the
Security Documents or any other Debenture Documents or the transactions
contemplated hereby or thereby or any action taken or omitted by the Collateral
Agent under or in connection with any of the foregoing; provided that no Secured
Party shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements which are found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted from the Collateral
Agent's gross
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negligence or willful misconduct. The agreements in this Section 5.6 shall
survive (i) the termination of this Agreement and (ii) the resignation of the
Collateral Agent.
5.7 COLLATERAL AGENT IN ITS INDIVIDUAL CAPACITY.
The Collateral Agent, in its individual capacity, and its
Affiliates may make loans to, invest in and generally engage in any kind of
business with the Grantors or any of their Affiliates as though the Collateral
Agent were not the Collateral Agent. With respect to Secured Obligations held by
it or any of its Affiliates, the Collateral Agent or such Affiliate shall have
the same rights and powers under this Agreement, the Security Documents or any
other Debenture Documents as any Secured Party or Investor and may exercise the
same as though it were not the Collateral Agent, and the terms "Secured Party"
and "Secured Parties" shall include the Collateral Agent in its individual
capacity.
5.8 SUCCESSOR AGENT.
The Collateral Agent may resign as Collateral Agent upon 30
days' notice to the Secured Parties and the Grantors and may be removed at any
time by a Designated Investor Majority. If the Collateral Agent shall resign or
be removed as Collateral Agent under this Agreement, then the Required Investors
shall appoint from among the Secured Parties a successor collateral agent for
the Secured Parties, whereupon such successor agent shall succeed to the rights,
powers and duties of the Collateral Agent, and the term "Collateral Agent" shall
mean such successor agent effective upon such appointment and approval, and the
former Collateral Agent's rights, powers and duties as Collateral Agent shall be
terminated, without any other or further act or deed on the part of such former
Collateral Agent or any of the parties to this Agreement or any Secured Party.
After any retiring Collateral Agent's resignation or removal as Collateral Agent
hereunder, the provisions of this Article V shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Collateral Agent under
this Agreement, the Security Documents or any other Debenture Documents. The
resigning Collateral Agent will take such actions as shall be reasonably
required to transfer and deliver the Collateral to the successor Collateral
Agent.
ARTICLE VI
MISCELLANEOUS
6.1 NOTICES.
Unless otherwise specified herein or in the relevant Security
Document, all notices, requests, demands or other communications pursuant to
this Agreement or any Security Document given to any Grantor, the Collateral
Agent, or any Secured Party to be effective shall be given in writing or by
facsimile transmission and shall be deemed to have been duly given when
personally delivered or when duly deposited in the mails, registered or
certified mail postage prepaid, or if transmitted by facsimile transmission,
when received in legible form.
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6.2 NO WAIVERS.
No failure on the part of the Collateral Agent or any Secured
Party to exercise, no course of dealing with respect to, and no delay in
exercising, any right, power or privilege under this Agreement, the Security
Documents or any other Debenture Documents shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right, power or privilege
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
6.3 AMENDMENTS, SUPPLEMENTS, WAIVERS AND RELEASES.
(a) With the written consent of the Required Investors, the
Collateral Agent and the Grantors may, from time to time, enter into written
agreements supplemental hereto for the purpose of adding to, or waiving any
provisions of, this Agreement or changing in any manner the rights of the
Collateral Agent, the Secured Parties or the Grantors hereunder; provided that
no such supplemental agreement shall (i) (A) amend, modify or waive any
provision of this Section 6.3 without the written consent of each Secured Party
affected thereby, (B) amend, modify or waive any provision of Article III,
Sections 2.2 or 2.6, or the definitions of "Secured Obligations", "Designated
Investors", "Secured Parties", "Required Investors", "Designated Investor
Majority", "Debenture Obligations" or any other defined term used in such
definitions or in such Article or Sections, without the consent of each of the
Designated Investors or (ii) amend, modify, or waive any provisions of Article
III or Article V or alter the duties, rights or obligations of the Collateral
Agent hereunder or under the Security Documents without the written consent of
the Collateral Agent. Any such supplemental agreement shall be binding upon each
Grantor, the Secured Parties and the Collateral Agent and their respective
successors and assigns.
(b) With the written consent of each of the Designated
Investors, the Collateral Agent and the Grantors may, from time to time, enter
into written agreements supplemental to such Security Document for the purpose
of adding to, or waiving any provisions of, such Security Document or changing
in any manner the rights of the Collateral Agent, the Secured Parties or the
Grantors thereunder. Any such supplemental agreement shall be binding upon each
Grantor, the Secured Parties and the Collateral Agent and their respective
successors and assigns.
(c) Without the consent of any Investor or Secured Party, the
Collateral Agent and the Grantors, at any time and from time to time, may enter
into one or more agreements supplemental hereto or to any Security Document, in
form satisfactory to the Collateral Agent, (i) to add to the covenants of the
Grantor for the benefit of the Secured Parties or to surrender any right or
power herein conferred upon the Grantors; or (ii) to cure any ambiguity, to
correct or supplement any provision herein or in any Security Document which may
be defective or inconsistent with any other provision herein or therein, or to
make any other provision with respect to matters or questions arising hereunder
which shall not be inconsistent with any provision hereof.
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6.4 HEADINGS.
The headings of Sections have been included herein for
convenience only and should not be considered in interpreting this Agreement.
6.5 SEVERABILITY.
It is the desire and intent of the parties that the provisions
of this Agreement be enforced to the fullest extent permissible under the law
and public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, in the event that any provision of this Agreement would be held in
any jurisdiction to be invalid, prohibited or unenforceable for any reason, such
provision, as to such jurisdiction, shall be ineffective, without invalidating
the remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction. Notwithstanding the
foregoing, if such provision could be more narrowly drawn so as not be invalid,
prohibited or unenforceable in such jurisdiction, it shall, as to such
jurisdiction, be so narrowly drawn, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
6.6 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit
of each of the parties hereto and shall inure to the benefit of each of the
Secured Parties and their respective successors and assigns, and nothing herein
is intended or shall be construed to give any other Person any right, remedy or
claim under, to or in respect of this Agreement or any Collateral.
6.7 GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
6.8 SUBMISSION TO JURISDICTION; WAIVERS.
Each Grantor hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement, or for recognition and enforcement of any
judgment in respect thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof;
(b) to the extent permitted by applicable law, consents that
any such action or proceeding may be brought in such courts and waives any
objection that it may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar
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form of mail), postage prepaid, to such party at its address set forth on the
signature pages hereof or at such other address of which the parties hereto
shall have been notified pursuant hereto; and
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to xxx in any other jurisdiction.
6.9 COUNTERPARTS.
This Agreement may be signed in any number of original or
facsimile counterparts with the same effect as if the signatures thereto and
hereto were upon the same instrument.
6.10 TERMINATION.
This Agreement shall automatically terminate (except such
provisions which are expressly stated to survive the termination hereof) when
(i) the liens and security interests granted under the Security Documents have
terminated and (ii) the Collateral has been released and the Secured Obligations
have been indefeasibly paid and performed in full.
6.11 WAIVER OF JURY TRIAL.
BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE LAWS TO APPLY (RATHER THAN
ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A
JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION
OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO
WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO
ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS
RELATED HERETO.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first written above.
EXCHANGE APPLICATIONS, INC.
By: /s/ F. Xxxxxx Xxxxx
-------------------------------------
Name: F. Xxxxxx Xxxxx
Title: Chief Financial Officer
Address for Notices:
Attention:
Fax:
EXSTATIC SOFTWARE, INC.
By: /s/ F. Xxxxxx Xxxxx
-------------------------------------
Name: F. Xxxxxx Xxxxx
Title: Chief Financial Officer
19
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first written above.
INSIGHT VENTURE PARTNERS IV
(COLLATERAL AGENT), LLC
as Collateral Agent
By: /s/ Xxxxx Xxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Member
Address for Notices:
Attention:
Fax:
20
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first written above.
NEW INVESTORS
INSIGHT VENTURE PARTNERS IV, L.P.
INSIGHT VENTURE PARTNERS (CAYMAN) IV, L.P.
INSIGHT VENTURE PARTNERS IV
(FUND B), L.P.
INSIGHT VENTURE PARTNERS IV
(CO-INVESTORS), L.P.
By: Insight Venture Associates IV, L.L.C., the
general partner of each of the foregoing
limited partnerships
By: /s/ Xxxxx Xxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director
Address for Notices:
Attention:
Fax:
21
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first written above.
SKP INVESTMENTS LLC
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------------
Name: Xxxxxx Xxxxxxx
Title:
Address for Notices:
Attention:
Fax:
22
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first written above.
THK PRIVATE EQUITIES
By: /s/ Xxxxxxxx X. Xxxxxxxxxxxx
-----------------------------------------
Name: Xxxxxxxx X. Xxxxxxxxxxxx
Title: Principal
Address for Notices:
THK Private Equities
x/x Xxxxxxxx X. Xxxxxxxxxxxx
0000 Xx. Xx Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Fax: (000) 000-0000
23
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first written above.
XXXXXX FAMILY FOUNDATION
By: /s/ Xxxx Xxxxxx
--------------------------------------------
Name: Xxxx Xxxxxx
Title: Trustee
Address for Notices:
000 Xxx Xxxxxx Xxxx
Xxxxx Xxxxx, XX 00000
(000) 000-0000
Attention: Xxxx Xxxxxx
Fax:
24
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first written above.
BOSTON PIPES, LLC
By: /s/ Xxxxx Xxxxxxxxx
-----------------------------------------
Name:
Title:
Address for Notices:
0000 Xxxxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
with a copy to;
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxx Xxxxxxx
25
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first written above.
/s/ Xxxxx Xxxxxxxx
-----------------------------------------------
XXXXX XXXXXXXX
Address for Notices:
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
26
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first written above.
EXISTING INVESTORS
INSIGHT VENTURE PARTNERS IV, L.P.
INSIGHT VENTURE PARTNERS (CAYMAN) IV, L.P.
INSIGHT VENTURE PARTNERS IV (FUND B), L.P.
INSIGHT VENTURE PARTNERS IV (CO-INVESTORS), L.P.
By: Insight Venture Associates IV, L.L.C.,
the general partner to each of the above-
referenced entities:
By: /s/ Xxxxx Xxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director
Address for Notices:
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, X.X. 00000
Attention: Xxxxx Xxxxxx
Fax:
27
Schedule I
New Investors
INSIGHT VENTURE PARTNERS IV, L.P.
INSIGHT VENTURE PARTNERS (CAYMAN) IV, L.P.
INSIGHT VENTURE PARTNERS IV (FUND B), L.P.
INSIGHT VENTURE PARTNERS IV (CO-INVESTORS), L.P.
SKP INVESTMENTS LLC
THK PRIVATE EQUITIES
XXXXXX FAMILY FOUNDATION
BOSTON PIPES, LLC
XXXXXX XXXXXXXX
i
