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EXHIBIT 10.11
STOCK PURCHASE AND WAIVER AGREEMENT
dated as of December 4, 1997 (this
"Agreement"), among Exchange Applications,
Inc., a Delaware corporation ("Exchange
Applications"), Insight Venture Partners I,
L.P., a Delaware limited partnership, Xxxxxxx
X. Xxxxx, Xxxxxxx X. Xxxxxxx, Xxxxx X.
Xxxxxx, Xxx X. Xxxxxxx, Xxxxx X. Xxxxxxxx,
Xxxxx X. Xxxxx, Xxxxxxx X. Xxxxxxx, Xxxxx X.
Xxxxxx, Xxxxx X. Xxxxx, Xxxxxx X. Xxxxxxx,
Xxxxxx Xxxxxxx, Xxxxx XxXxxxxxx, Xxxxxx Xxx,
Xxxxxxx XxXxxx, Xxxxxxx Xxxxxx and Xxxxxxx
XxXxxxxxx, (all collectively, the
"Purchasers") and GAP Coinvestment Partners,
L.P., a New York limited partnership (the
"Seller").
WHEREAS, certain of the Purchasers, the Seller and Exchange
Applications, are parties to the Stockholders Agreement dated as of March 18,
1997 (the "Stockholders Agreement"); and
WHEREAS, the Seller is the owner of 246,006 shares of Series B
Convertible Preferred Stock of Exchange Applications $.001 par value (the
"Shares"). Upon the terms and subject to the conditions of this Agreement, each
of the Purchasers will purchase that number of Shares listed on Schedule I
hereto from the Seller, in each case for a cash purchase price listed on
Schedule I hereto for an aggregate purchase price of Eight hundred three
thousand, nine hundred forty-seven dollars and fifty eight cents ($803,947.58)
(the "Purchase Price").
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, the parties agree
as follows:
1. WAIVER OF RIGHTS. Each of the undersigned which is a party to the
Stockholders Agreement hereby waives its rights under Section 3 of the
Stockholders Agreement with respect to the transaction contemplated hereby.
2. SALE AND PURCHASE OF SHARES. Upon the terms and subject to the
conditions of this Agreement, the Seller shall sell, transfer and convey to each
of the Purchasers, and each of the Purchasers shall purchase and acquire from
the Seller, that number of Shares listed on Schedule I hereto for the cash
consideration set forth herein.
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3. DELIVERY.
(a) The Seller shall deliver to Exchange Applications for
cancellation, against delivery to the Seller by the Purchasers of the
aggregate purchase price therefor, a stock certificate representing the
aggregate number of Shares to be purchased by the Purchasers (the "Stock
Certificate"), with all necessary documentary or transfer tax stamps
affixed (the "Document"), free and clear of all security interests, liens,
pledges, claims, charges, escrows, encumbrances, options, rights of first
refusal, mortgages, indentures, security agreements or other agreements,
arrangements, contracts, commitments, understandings or obligations
(collectively, "Liens"), whether written or oral and whether or not
relating in any way to credit or the borrowing of money. Transfer of the
Securities shall be deemed to have occurred upon cancellation of the Stock
Certificate.
(b) upon receipt of an executed Agreement and the Document,
Exchange Applications shall cause to be issued certificates to each
Purchaser representing the number of shares to be purchased by such
Purchaser, free and clear of all Liens.
4. PAYMENT. Concurrently with the receipt by Exchange Applications of
an executed Agreement and the Document, each of the Purchasers shall deliver to
the Seller the portion of the Purchase Price to be paid by such Purchaser, by a
certified or bank check payable to the Seller or a wire transfer of immediately
available funds to an account designated by the Seller.
5. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller
represents and warrants to each of the Purchasers as follows:
(a) the Seller has full partnership power and authority to
execute and deliver this Agreement and consummate the transactions
contemplated hereby;
(b) the execution and delivery by the Seller of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all requisite partnership action on the part of the Seller;
(c) this Agreement constitutes a legal, valid and binding
obligation of the Seller, enforceable in accordance with its terms, except
that such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the rights of
creditors generally or by general equitable principles;
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(d) the execution and delivery by the Seller of this Agreement
and the consummation by the Seller of the transactions contemplated hereby
(i) will not violate any law, statute, rule or regulation, (ii) will not
conflict with any provision of any partnership agreement, or other
organizational or constitutive instrument, if any, of the Seller, (iii)
will not require or make necessary any consent, approval or other action,
or notice to, any person, except for those that have been obtained or made,
and (iv) will not conflict with, or result in a violation of, any agreement
or other document or instrument to which the Seller is a party or by which
it, or any of its assets or properties, is bound; and
(e) the Seller has good and marketable title to all of the
Shares, free and clear of all Liens.
(f) the Seller has complied with, and shall continue to comply
with, the terms and conditions of the Investor Nondisclosure Agreement,
dated as of March 18, 1997 (the "NDA"), between the Seller and Exchange
Applications, provided that Exchange Application acknowledges that (i) the
Seller has not received any confidential information about Exchange
Application since not later than December 31, 1996 other than as set forth
in the Securities Purchase Agreement, dated as of March 18, 1997, among
Exchange Applications and the Investor, named therein, (ii) General
Atlantic Partners, LLC ("GAP LLC" an affiliate of the Seller), has, through
two of its affiliate, consummated an investment in Prime Response Group
Inc., a direct marketing enterprise software company, (iii) GAP LLC is in
the business of investing in companies in the software and information
technology industry and (iv) Exchange Application has not received notice
of and has no actual knowledge of any breach or violation of the NDA by the
Seller, GAP LLC or any partner, member or employee thereof.
6. REPRESENTATIONS AND WARRANTIES OF PURCHASERS. Each of the
Purchasers, severally and not jointly, represents and warrants to Seller as
follows:
(a) Such Purchaser has the full power and authority to execute
and deliver this Agreement and consummate the transactions contemplated
hereby (solely or to itself);
(b) the execution and delivery by such Purchaser of this
Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all requisite action on the part of such Purchaser;
(c) the execution and delivery by such Purchaser of this
Agreement and the consummation by such Purchaser of
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the transactions contemplated hereby (i) will not violate any law, statute,
rule or regulation, (ii) will not conflict with any provision of any
partnership agreement, certificate of incorporation, or other
organizational or constitutive instrument, if any, of such Purchaser, (iii)
will not require or make necessary any consent approval or other action, or
notice to, any person, except for those that have been obtained or made,
and (iv) will not conflict with, or result in a violation of, any agreement
or other document or instrument to which such Purchaser is a party or by
which it, or any of its assets or properties, is bound; and
(d) this Agreement constitutes a legal, valid and binding
obligation of such Purchaser, enforceable in accordance with its terms,
except that such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the rights of
creditors generally or by general equitable principles;
(e) this Agreement is made with each of the Purchasers in
reliance upon such Purchaser's representation to the Seller, which by
executing this Agreement each Seller hereby severally confirms, that:
(i) with respect to Xxxxxx X. Xxxxxxx, Xxxxx XxXxxxxxx, Xxxxxxx
XxXxxxxxx, Xxxxxxx X. Xxxxx, Xxxxxxx X. Xxxxxxx, Xxx X.
Xxxxxxx, Xxxxx X. Xxxxxxxx and Insight, it is an "accredited
investor" as such term is defined in Rule 501(a) of
Regulation D promulgated under the Securities Act;
(ii) it understands that its interest in Exchange Applications
will not be registered or qualified under any state
securities or blue sky laws and cannot be resold without
such registration or qualification or an exemption
therefrom.
(iii) it understands that its Shares have not been registered
under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance on an exemption from
registration thereunder for transactions not involving a
public offering, and that such Shares may not be sold,
transferred or otherwise disposed of except as permitted
under the Securities Act and applicable state securities
laws pursuant to registration or exemption therefrom;
(iv) it is acquiring its Shares for his own account for
investment purposes only and not with a
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view to resale, assignment or other distribution, in whole
or in part, and no other person has or will have a direct or
indirect beneficial interest in such Shares;
(v) it understands that the Shares are a speculative investment
and involve a high degree of risk, the transferability of
the Shares is substantially restricted, there will be no
public market for such Shares and it may not be possible for
such Purchaser to liquidate its investment in Exchange
Applications;
(vi) it is able to bear the substantial economic risks of an
investment in such Shares and can afford a complete loss of
such investment;
(vii) it has such knowledge and experience in financial,
investment and business matters so as to enable it, to use
the information made available to it in connection with the
purchase of such Shares, to evaluate the merits and risks of
such purchase, and to make an informed investment decision
with respect thereto;
(viii) it has carefully considered and has, to the extent it
believes such discussions necessary, discussed with its
professional legal, tax, accounting and financial advisors
he suitability of its purchase of such Shares;
(ix) it has had an opportunity to ask questions of, and receive
answers from, Exchange Applications, or a person or persons
acting on its behalf, concerning the terms and conditions of
his purchase of such Shares, and all such questions have
been answered to his full satisfaction;
(x) it has had the opportunity to review any documents relating
to Exchange Applications requested by it and to conduct due
diligence, and such due diligence review has been fully
satisfactory to it; and
(xi) it is not purchasing such Shares as a result of, or
subsequent to, any advertisement, article, notice or other
communication published in any newspaper, magazine or
similar medium or broadcast over radio or television, or any
seminar or meeting whose attendees have
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been invited by any general solicitation or general
advertising.
7. REPRESENTATION AND WARRANTY OF EXCHANGE APPLICATIONS. Exchange
Applications represents and warrants to the Seller that Exchange Applications
has not engaged, on behalf of the Seller, in any General Solicitation (as
defined under applicable Securities Laws), including, without limitation, acting
as underwriter, of the Shares.
8. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
9. ENTIRE AGREEMENT; INTERPRETATION. This Agreement, embodies the
complete agreement and understanding among the parties hereto with respect to
the subject matter hereof and thereof and supersedes and preempts any prior
understandings, agreements or representations by or among the Parties, written
or oral, which may have related to the subject matter hereof or thereof in any
way. Any terms defined in this Agreement shall apply to the singular and plural
forms of the terms defined. Whenever the context requires, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words
"include," "includes" and "including" shall be deemed to be followed by the
phrase "without limitation."
10. GOVERNING LAW. All questions concerning the construction,
interpretation and validity of this Agreement shall be governed by and construed
and enforced in accordance with the domestic laws of the State of New York,
without giving effect to any choice or conflict of law provision or rule
(whether in the State of New York or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of New
York. In furtherance of the foregoing, the internal law of the State of New York
will control the interpretation and construction of this Agreement, even if
under such jurisdiction's choice of law or conflict of law analysis, the
substantive law of some other jurisdiction would ordinarily apply.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered on the date first above written.
PURCHASERS:
/s/ Xxxxxx X. Xxxxxxx
-------------------------------
Xxxxxx X. Xxxxxxx
/s/ Xxxxx XxXxxxxxx
-------------------------------
Xxxxx XxXxxxxxx
/s/ Xxxxxxx XxXxxxxxx
-------------------------------
Xxxxxxx XxXxxxxxx
/s/ Xxxxxx Xxx
-------------------------------
Xxxxxx Xxx
/s/ Xxxxxxx XxXxxx
-------------------------------
Xxxxxxx XxXxxx
/s/ Xxxxxxx Xxxxxx
-------------------------------
Xxxxxxx Xxxxxx
/s/ Xxxxxx Xxxxxxx
-------------------------------
Xxxxxx Xxxxxxx
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxx
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/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
/s/ Xxx X. Xxxxxxx
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Xxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
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INSIGHT VENTURE PARTNERS I, L.P.
By: INSIGHT VENTURE ASSOCIATES, LLC
its general partner
By: /s/ Xxxxxxx Xxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxx
Title:
FOR PURPOSES OF SECTION 1 ONLY:
GRANT & PARTNERS LIMITED PARTNERSHIP
By: GRANT & PARTNERS, INC.,
its general partner
By: /s/ Xxxx X. X. Xxxxx
----------------------------------------
Name: Xxxx X. X. Xxxxx
Title: President
CYRK, INC.
By: /s/ Xxxxxxx Xxxxx
----------------------------------------
Name: Xxxxxxx Xxxxx
Title: President
WEXFORD INSIGHT LLC
By: WEXFORD MANAGEMENT LLC
its investment manager
By: /s/ Xxxxxx Xxxxx
----------------------------------------
Name: Xxxxxx Xxxxx
Title: Principal
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SELLER:
GAP COINVESTMENT PARTNERS, L.P.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: a general partner
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EXCHANGE APPLICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
President
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SCHEDULE I
Number of
Shares Purchase Price
Purchaser to be purchased to be paid Total
--------- --------------- -------------- -----------
EXCHANGE APPLICATIONS, INC. INVESTORS
Xxxxxx Xxxxxxx 38,249 shares $3.268 $124,997.73
Xxxxx XxXxxxxxx 26,009 shares $3.268 $ 84,997.41
Xxxxxx Xxx 17,000 shares $3.268 $ 55,556.00
Xxxxxxx XxXxxx 10,000 shares $3.268 $ 32,680.00
Xxxxxxx XxXxxxxxx 5,000 shares $3.268 $ 16,340.00
Xxxxxxx Xxxxxx 12,851 shares $3.268 $ 41,997.07
Xxxxxx Xxxxxxx 6,119 shares $3.268 $ 19,996.89
Subtotal: 115,228 shares $376,565.10
CYRK, INC. INVESTORS
Xxxxxxx X. Xxxxx 41,317 shares $3.268 $135,023.95
Xxxxxxx X. Xxxxxxx 15,299 shares $3.268 $ 49,997.13
Xxxxx X. Xxxxxx 4,589 shares $3.268 $ 14,996.85
Xxx X. Xxxxxxx 4,589 shares $3.268 $ 14,996.85
Xxxxx X. Xxxxxxxx 3,059 shares $3.268 $ 9,996.81
Xxxxx X. Xxxxx 3,059 shares $3.268 $ 9,996.81
Xxxxxxx X. Xxxxxxx 1,529 shares $3.268 $ 4,996.77
Xxxxx X. Xxxxxx 1,529 shares $3.268 $ 4,996.77
Xxxxx X. Xxxxx 1,529 shares $3.268 $ 4,996.77
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Subtotal: 76,499 shares $249,998.71
INSIGHT INVESTORS
Insight Venture 54,279 shares $3.268 $177,383.77
Partners I, L.P.
Total 246,006 $803,947.58
