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LOCK-UP AND VOTING AGREEMENT

Voting Agreement

LOCK-UP AND VOTING AGREEMENT | Document Parties: FRONT PORCH DIGITAL INC | EQUITY PIER LLC,  | THOMAS P. SWEENEY III You are currently viewing:
This Voting Agreement involves

FRONT PORCH DIGITAL INC | EQUITY PIER LLC, | THOMAS P. SWEENEY III

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Title: LOCK-UP AND VOTING AGREEMENT
Governing Law: Delaware     Date: 8/20/2004
Industry: Software and Programming     Law Firm: Pryor Cashman Sherman & Flynn LLP; Hogan & Hartson, LLP     Sector: Technology

LOCK-UP AND VOTING AGREEMENT, Parties: front porch digital inc , equity pier llc   , thomas p. sweeney iii
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                          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"), THOMAS P. SWEENEY III ("Sweeney"), EQUITY PIER LLC, a Colorado

limited liability company ("EP" and collectively with Sweeney, 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 Sweeney, Sweeney

will become the Chief Executive Officer of the Company upon the consummation of

the transactions contemplated by the Merger Agreement; and

 

        WHEREAS, Sweeney 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:

 

<PAGE>

 

 

                                    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.

 

<PAGE>

 

 

                                    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 D


 
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