LOCK-UP AND VOTING AGREEMENT
LOCK-UP AND VOTING AGREEMENT (the "Agreement") dated as of August 18,
2004, by and among FRONT PORCH DIGITAL INC., a Nevada corporation (the
"Company"), XXXXXX X. XXXXXXX III ("Xxxxxxx"), EQUITY PIER LLC, a Colorado
limited liability company ("EP" and collectively with Xxxxxxx, the "Restricted
Parties") and each Person whose name appears on SCHEDULE A attached hereto
(collectively the "Former MSI Stockholders").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, pursuant to the terms of an Agreement and Plan of Merger dated
as of August 16, 2004 (the "Merger Agreement") between the Company,
ManagedStorage International, Inc., a Delaware corporation ("MSI"), and Front
Porch Merger Corp., a Delaware corporation, on the date hereof, the Company has
agreed to issue to the Former MSI Stockholders such number of shares of Common
Stock, $.001 par value, of the Company (the "Common Stock") or Series A
Convertible Preferred Stock, $.001 par value, of the Company (the "Series A
Preferred Stock") as determined pursuant to the Merger Agreement; and
WHEREAS, pursuant to the terms of an Employment Agreement of even date
herewith (the "Employment Agreement") between the Company and Xxxxxxx, Xxxxxxx
will become the Chief Executive Officer of the Company upon the consummation of
the transactions contemplated by the Merger Agreement; and
WHEREAS, Xxxxxxx is the founder and Managing Member of EP;
WHEREAS, following the consummation of the transactions contemplated in
the Merger Agreement, the Restricted Parties will beneficially own approximately
18,879,289 shares of Common Stock; and
WHEREAS, as a condition precedent to the consummation of the
transactions contemplated by the Merger Agreement and the Employment Agreement,
the Company, the Restricted Parties and the Former MSI Stockholders desire to
provide for certain restrictions on the transfer of such shares by the
Restricted Parties;
NOW THEREFORE, in consideration of the premises and the mutual covenants
of the parties hereto, it is hereby agreed as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 DEFINITIONS. Whenever used in this Agreement, unless otherwise
defined or the subject matter or context dictates, the following terms shall
have these respective meanings:
(a) Affiliate" shall have the meaning ascribed to it in Rule
12(b)(2) promulgated under the Securities Exchange Act of 1934, as amended.
(b) "Agreement" means this Lock-up Agreement, any agreement
which is supplementary to or in amendment or confirmation of this Agreement, and
any schedules hereto or thereto.
(c) "Certificate of Designations" means the Certificate of
Designations, Preferences and Rights of the Series A Preferred Stock.
(d) "Disposition" shall have the meaning assigned in Section
2.1.
(e) "Lock Up Expiration Date" means the earliest date on
which the Former MSI Stockholders and/or their permitted transferees receive
aggregate proceeds (whether in cash or otherwise) of at least $31,500,000 from
the disposition of the shares of Series A Preferred Stock and/or Common Stock
(whether underlying the Series A Preferred Stock or otherwise) acquired pursuant
to the Merger Agreement, including without limitation, upon the occurrence of
one or more of the following events: (A) a Liquidation Event or event deemed to
be a Liquidation Event pursuant to Section 4 of the Certificate of Designations,
(B) a redemption of the Series A Preferred Stock pursuant to Section 5 of the
Certificate of Designations, (C) a public offering of the Common Stock, (D) the
sale of such shares (or the shares of Common Stock into which they may be
converted) in the public or private market or (E) the Transfer of such shares to
any member, partner or stockholder of such Former MSI Stockholder(s).
(f) "Person" means any individual, estate, trust,
partnership, joint venture, limited liability company, association, firm,
corporation, company or other entity.
(g) "Shares" mean the shares of Common Stock beneficially
owned by the Restricted Parties, as well as: (i) any shares into which such
shares may be converted, reclassified, redesignated, subdivided, consolidated or
otherwise changed; (ii) any shares of the Company or any successor or other body
corporate which may be received by the holders of such shares on a merger,
amalgamation or other reorganization of or including the Company; and (iii) any
securities which may now or hereinafter be convertible or exercisable into such
shares.
(h) "Transfer" shall have the meaning assigned in Section
2.1.
1.2 EXTENDED MEANINGS. Words importing the singular number include
the plural and vice versa and words importing gender include all genders.
ARTICLE II
DISPOSITION OF SHARES
2.1 RESTRICTION ON TRANSFER OF SHARES.
(a) Except as provided in Section 2.1(b), prior to the Lock Up
Expiration Date, the Restricted Parties may not sell, assign, transfer,
mortgage, alienate, pledge, hypothecate, create or permit to exist a security
interest in or lien on, place in trust or in any other way encumber or otherwise
dispose of (any of the foregoing shall constitute a "Transfer," and the
consummation of such being a "Disposition") any Shares now owned or any interest
therein except as expressly permitted by the terms and provisions of this
Agreement. The Company shall have no obligation to recognize or accede to any
Disposition or to register any Transfer of Shares on its books unless such
Disposition is effected in accordance with the terms and provisions of this
Agreement. No Person who purports to be a holder of Shares acquired in violation
of the terms and provisions of this Agreement shall be entitled to any rights
with respect to such Shares, including any rights to vote such Shares, to
receive any dividends declared thereon, or to receive any notice with respect
thereto under this Agreement or otherwise.
(b) Any Restricted Party may Transfer all or a portion of his
or its Shares to (i) any Person to which such Restricted Party shall sell,
assign or transfer all or substantially all of its assets; or (ii) any Affiliate
of such Restricted Party. If a Restricted Party intends to make a Disposition of
all or a portion of his, her or its Shares pursuant to this paragraph, such
Restricted Party shall give at least 30 days prior written notice of such
proposed Disposition to the Company, a copy of which shall be given to the
Former MSI Stockholders. Any such notice shall specify the number of Shares
subject to such proposed disposition, identify the proposed transferee and state
the relationship between such Restricted Party and the proposed transferee.
ARTICLE III
VOTING AGREEMENT
Each of the Restricted Parties hereby agrees to vote all of his
or its Shares in favor of the resolutions hereafter proposed by the Board of
Directors of the Company and submitted to a vote of the stockholders of the
Company within ninety (90) days following the date hereof, the purpose of which
are to cause the number of authorized but unissued shares of Common Stock to be
sufficient to issue the maximum number of such shares issuable upon the
conversion of the Series A Preferred Stock into Common Stock pursuant to the
terms of the Certificate of Designations.
ARTICLE IV
MISCELLANEOUS
4.1 LEGEND. The Company may cause each certificate representing
Shares that are subject to this Agreement to have stamped, printed or typed
thereon the following legend:
The securities represented by this certificate are subject to a
Lock-Up and Voting Agreement, dated as of August 18, 2004, among
Front Porch Digital Inc. (the "Company") and certain of its
stockholders, a copy of which may be examined at the principal
office of the Company.
4.2 NOTICE. Any notice or document required or permitted by this
Agreement to be given to a party hereto shall be in writing and is sufficiently
given if delivered personally, or if sent by prepaid certified mail, return
receipt requested, to the Company, the Restricted Parties or to the Former MSI
Stockholders addressed as follows:
the Company: Front Porch Digital Inc.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
with a copy to: Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, X.X. 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Xxxxxxx or EP To the address of the Company set forth above.
with a copy to: Xxxxx & Xxxxxxx, LLP
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx, Esq.
Former MSI Stockholders: To the address of each Former MSI Stockholder
set forth A attached hereto or at such other
address as may have been furnished the Company
in writing.
Notice so mailed shall be deemed to have been given upon receipt if delivered
personally or on the fifth business day next following the date of the returned
receipt. Any notice delivered to the party to whom it is addressed shall be
deemed to have been given and received on the day it is delivered. Any party may
from time to time notify the others in the manner provided herein of any change
of address which thereafter, until changed by like notice, shall be the address
of such party for all purposes hereof.
4.3 TERM OF AGREEMENT.
(a) The provisions of this Agreement shall terminate as
provided in Articles II and III or on such earlier date as is mutually agreed in
writing by the Company, Xxxxxxx, XX and the Former MSI Stockholders holding a
majority of the then outstanding Shares.
(b) Nothing contained in this Section 4.3 shall affect or
impair any rights or obligations arising prior to the time of the termination of
this Agreement, or which may arise by an event causing the termination of this
Agreement.
4.4 SEVERABILITY. If in any jurisdiction, any provision of this
Agreement or its application to any party or circumstance is restricted,
prohibited or unenforceable, such provision shall, as to such jurisdiction, be
ineffective only to the extent of such restriction, prohibition or
unenforceability without invalidating the remaining provisions hereof and
without affecting the validity or enforceability of such provision in any other
jurisdiction or its application to other parties or circumstances.
4.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and together shall
constitute one document.
4.6 ENTIRE AGREEMENT; ETC. This Agreement sets forth the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, among the parties hereto and there are no warranties,
representations and other agreements between the parties hereto in connection
with the subject matter hereof except as specifically set forth herein or
therein. No supplement, modification, waiver or termination of this Agreement
shall be binding unless executed in writing by the Company, Xxxxxxx, XX and the
Former MSI Stockholders holding a majority of the then outstanding Shares. No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provisions nor shall such waiver constitute a
continuing waiver unless otherwise expressly provided.
4.7 TRANSFEREES BOUND. Each Disposition otherwise permitted by
Article II hereof shall not become effective unless and until the transferee
executes and delivers to the Company a counterpart to this Agreement, agreeing
to be treated in the same manner as the Restricted Parties. Upon such
Disposition and such execution and delivery, the transferee shall be bound by,
and entitled to the benefits of, this Agreement with respect to the transferred
Shares in the same manner as the transferring Restricted Party.
4.8 GOVERNING LAW. This Agreement shall be construed in accordance
with the internal laws of the State of Delaware applicable to agreements made
and to be performed in Delaware.
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IN WITNESS WHEREOF, this Agreement has been executed by or on behalf of
each of the parties hereto as of the date first above written.
FRONT PORCH DIGITAL INC.
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Chief Executive Officer
EQUITY PIER, LLC
By: /s/ Xxxxxx X. Xxxxxxx III
-----------------------------------
Name: Xxxxxx X. Xxxxxxx III
Title: Managing Member
/s/ Xxxxxx X. Xxxxxxx III
-----------------------------------
Xxxxxx X. Xxxxxxx III, Individually
IN WITNESS WHEREOF, this Lock Up and Voting Agreement has been executed
by or on behalf of each of the parties hereto as of the date first above
written.
FORMER MSI STOCKHOLDERS
GREAT HILL EQUITY PARTNERS
LIMITED PARTNERSHIP
By: Great Hill Partners GP, LLC,
its General Partner
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Manager
GREAT HILL INVESTORS, LLC
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Manager
IN WITNESS WHEREOF, this Lock Up and Voting Agreement has been executed
by or on behalf of each of the parties hereto as of the date first above
written.
JPMORGAN CHASE BANK, as Investment
Advisor for X.X. XXXXXX DIRECT VENTURE
CAPITAL INSTITUTIONAL INVESTORS, LLC
By: /s/ Xxxxxx X. Kiss
-----------------------------------
Name: Xxxxxx X. Kiss
Title: Portfolio Manager
X.X. XXXXXX INVESTMENT MANAGEMENT INC.,
as Investment Advisor for X.X. XXXXXX
DIRECT VENTURE CAPITAL PRIVATE
INVESTORS, LLC
By: /s/ Xxxxxx X. Kiss
-----------------------------------
Name: Xxxxxx X. Kiss
Title: Portfolio Manager
X.X. XXXXXX INVESTMENT MANAGEMENT INC.,
as Investment Advisor for
000 XXXXX XXXXXX FUND, L.P.
By: /s/ Xxxxxx X. Kiss
-----------------------------------
Name: Xxxxxx X. Kiss
Title: Portfolio Manager
IN WITNESS WHEREOF, this Lock Up and Voting Agreement has been executed
by or on behalf of each of the parties hereto as of the date first above
written.
TUDOR VENTURES II L.P.
By: Tudor Ventures Group, L.P.,
general partner
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director,
Tudor Ventures Group LLC
THE RAPTOR GLOBAL PORTFOLIO LTD.
By: Tudor Investment Corporation
as Investment Adviser
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
THE ALTAR ROCK FUND L.P.
By: Tudor Investment Corporation
as General Partner
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
SCHEDULE A
NAMES AND ADDRESSES OF FORMER MSI STOCKHOLDERS
GREAT HILL EQUITY PARTNERS LIMITED PARTNERSHIP
GREAT HILLS INVESTORS, LLC
c/o Great Hills Partners
Xxx Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Mr. Xxx Xxxxxx
JPMORGAN CHASE BANK, AS INVESTMENT ADVISOR FOR X.X. XXXXXX DIRECT VENTURE
CAPITAL INSTITUTIONAL INVESTORS, LLC
X.X. XXXXXX INVESTMENT MANAGEMENT, AS INVESTMENT ADVISOR FOR X.X. XXXXXX DIRECT
VENTURE CAPITAL PRIVATE INVESTORS, LLC
X.X. XXXXXX INVESTMENT MANAGEMENT INC., AS INVESTMENT ADVISOR FOR 000 XXXXX
XXXXXX FUND, LLC
c/o XX Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx X. Kiss
TUDOR VENTURES II L.P.
THE RAPTOR GLOBAL PORTFOLIO LTD.
THE ALTAR ROCK FUND L.P.
c/o Tudor Ventures
00 Xxxxx Xxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxx
