EXECUTION COPY
LOCK-UP AND VOTING AGREEMENT
LOCK-UP AND VOTING AGREEMENT (the "Agreement") dated as of August
18,
2004, by and among FRONT PORCH DIGITAL
INC., a Nevada corporation (the
"Company"), and each Person whose name
appears on SCHEDULE A attached hereto
(each a "Former MSI Stockholder").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, pursuant to the terms of an Agreement and Plan of Merger
dated
as of August 16, 2004 (the "Merger
Agreement") between the Company,
ManagedStorage International, Inc., a
Delaware corporation ("MSI"), and Front
Porch Merger Corp., a Delaware corporation,
on the date hereof, the Company has
agreed to issue to each Former MSI
Stockholder such number of shares of Common
Stock, $.001 par value, of the Company (the
"Common Stock") or Series A
Convertible Preferred Stock, $.001 par
value, of the Company (the "Series A
Preferred Stock") as determined pursuant to
the Merger Agreement; and
WHEREAS, as a condition precedent to the consummation of the
transactions contemplated by the Merger
Agreement, the Company and the Former
MSI Stockholders desire to provide for
certain restrictions on the transfer of
such shares by the Former MSI Stockholders
and the voting agreement by the
Former MSI Stockholders as to certain
corporate action by the Company;
NOW THEREFORE, in consideration of the premises and the mutual
covenants
of the parties hereto, it is hereby agreed
as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1
DEFINITIONS. Whenever used in this Agreement, unless otherwise
defined or the subject matter or context
dictates, the following terms shall
have these respective meanings:
(a)
"Affiliate" shall have the meaning ascribed to it in
Rule 12(b)(2) promulgated under the Securities Exchange Act of
1934, as
amended.
(b)
"Agreement" means this Lock-up Agreement, any agreement
which is supplementary to or in amendment
or confirmation of this Agreement, and
any schedules hereto or thereto.
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(c)
"Certificate of Designations" means the Certificate of
Designations, Preferences and Rights of the
Series A Preferred Stock.
(d)
"Disposition" shall have the meaning assigned in Section
2.1.
(e)
"Person" means any individual, estate, trust,
partnership, joint venture, limited
liability company, association, firm,
corporation, company or other entity.
(f)
"Shares" mean the shares of Common Stock issued to the
Former MSI Stockholders pursuant to the
Merger Agreement, as well as: (i) any
shares into which such shares may be
converted, reclassified, redesignated,
subdivided, consolidated or otherwise
changed; (ii) any shares of the Company or
any successor or other body corporate which
may be received by the holders of
such shares on a merger, amalgamation or
other reorganization of or including
the Company; and (iii) any securities which
may now or hereinafter be
convertible or exercisable into such
shares, including without limitation,
shares of Series A Preferred Stock.
(g)
"Transfer" shall have the meaning assigned in Section
2.1.
1.2
EXTENDED MEANINGS. Words importing the singular number include
the plural and vice versa and words
importing gender include all genders.
ARTICLE II
DISPOSITION OF SHARES
2.1
RESTRICTION ON TRANSFER OF SHARES.
(a)
Except as provided in Section 2.1(b), prior to February 18,
2006, no Former MSI Stockholder may sell,
assign, transfer, mortgage, alienate,
pledge, hypothecate, create or permit to
exist a security interest in or lien
on, place in trust or in any other way
encumber or otherwise dispose of (any of
the foregoing shall constitute a
"Transfer," and the consummation of such being
a "Disposition") any Shares now owned or
any interest therein except as
expressly permitted by the terms and
provisions of this Agreement. The Company
shall have no obligation to recognize or
accede to any Disposition or to
register any Transfer of Shares on its
books unless such Disposition is effected
in accordance with the terms and provisions
of this Agreement. No Person who
purports to be a holder of Shares acquired
in violation of the terms and
provisions of this Agreement shall be
entitled to any rights with respect to
such Shares, including any rights to vote
such Shares, to receive any dividends
declared thereon, or to receive any notice
with respect thereto under this
Agreement or otherwise. The sale or
transfer of outstanding equity securities
of, or the issuance of equity securities
of, a Former MSI Stockholder shall not
be deemed a `Transfer' for the purposes of
this Agreement.
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(b)
Any Former MSI Stockholder may Transfer all or a portion of
his,
her or its Shares to (i) any Person to
which such Former MSI Stockholder shall
sell, assign or transfer all or
substantially all of its assets; (ii) any
Affiliate of such Former MSI Stockholder,
including, any funds affiliated with
such Former MSI Stockholder, (iii) any
member, partner or stockholder of such
Former MSI Stockholder; provided, however,
that no Transfer of shares of Series
A Preferred Stock shall be permitted
pursuant to this clause (b)(iii), (iv) any
other Former MSI Stockholder, (v) in
connection with any sale of all or
substantially all of the Company's assets,
any Transfer of at least a majority
of the Company's outstanding voting
securities (as of immediately prior to such
transfer) or any merger or consolidation in
which the Company is not the
surviving entity or any other transaction
(or series of related transactions)
following which the holders of the
Company's outstanding capital stock prior to
such transaction(s) do not own a majority
of the outstanding capital stock of
the Company (or any successor entity)
immediately after such transaction (any
such transaction, a "Sale Transaction"), or
(vi) in connection with its exercise
of any "piggy-back" or similar registration
rights. If any Former MSI
Stockholder intends to make a Disposition
of all or a portion of his, her or its
Shares pursuant to this par
