EX-99.5 6 c33598_ex99-5.txt Exhibit 99.5 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. (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. (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 paragraph, such Former MSI Stockholder shall give at least 15 days prior written notice of such proposed Disposition to the Company (except in respect of a Disposition pursuant to clauses (v) or (vi) above). Any such notice shall specify the number of Shares subject to such proposed Disposition, identify the proposed transferee and state the relationship between such Former MSI Stockholder and the proposed transferee. ARTICLE III VOTING AGREEMENT Each of the Former MSI Stockholders 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, 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 or to a Former MSI Stockholder addressed as follows: the Company: Front Porch Digital Inc. 1140 Pearl Street Boulder, Colorado 80302 Attention: Chief Financial Officer with a copy to: Pryor Cashman Sherman & Flynn LLP 410 Park Avenue New York, N.Y. 10022 Attention: Eric M. Hellige, Esq. Former MSI Stockholder: To the address of such Former MSI Stockholder set forth on SCHEDULE 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 upon the consummation of a Sale Transaction, at such time as provided in Articles II and III, respectively, or on such earlier date as is mutually agreed in writing by the Company 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 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. Except in connection with a Disposition pursuant to Section 2.1(b)(v) or (vi) hereof, 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 a Former MSI Stockholder. 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 Former MSI Stockholder. 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. [remainder of page left intentionally blank] 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. FRONT PORCH DIGITAL INC. By: /s/ Michael Knaisch ----------------------------------- Name: Michael Knaisch Title: Chief Executive Officer 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/ Christopher S. Gaffney ----------------------------------- Name: Christopher S. Gaffney Title: Manager GREAT HILL INVESTORS, LLC By: /s/ Christopher S. Gaffney ----------------------------------- Name: Christopher S. Gaffney 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 J.P. MORGAN DIRECT VENTURE CAPITAL INSTITUTIONAL INVESTORS, LLC By: /s/ Robert E. Kiss ----------------------------------- Name: Robert E. Kiss Title: Portfolio Manager J.P. MORGAN INVESTMENT MANAGEMENT INC., as Investment Advisor for J.P. MORGAN DIRECT VENTURE CAPITAL PRIVATE INVESTORS, LLC By: /s/ Robert E. Kiss ----------------------------------- Name: Robert E. Kiss Title: Portfolio Manager J.P. MORGAN INVESTMENT MANAGEMENT INC., as Investment Advisor for 522 FIFTH AVENUE FUND, L.P. By: /s/ Robert E. Kiss ----------------------------------- Name: Robert E. 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/ Carmen J. Scarpa ----------------------------------- Name: Carmen J. Scarpa Title: Managing Director, Tudor Ventures Group LLC THE RAPTOR GLOBAL PORTFOLIO LTD. By: Tudor Investment Corporation as Investment Adviser By: /s/ Carmen J. Scarpa ----------------------------------- Name: Carmen J. Scarpa Title: Managing Director THE ALTAR ROCK FUND L.P. By: Tudor Investment Corporation as General Partner By: /s/ Carmen J. Scarpa ----------------------------------- Name: Carmen J. Scarpa 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 One Liberty Square Boston, Massachusetts 02109 Attention: Mr. Pat Curran JPMORGAN CHASE BANK, AS INVESTMENT ADVISOR FOR J.P. MORGAN DIRECT VENTURE CAPITAL INSTITUTIONAL INVESTORS, LLC J.P. MORGAN INVESTMENT MANAGEMENT, AS INVESTMENT ADVISOR FOR J.P. MORGAN DIRECT VENTURE CAPITAL PRIVATE INVESTORS, LLC J.P. MORGAN INVESTMENT MANAGEMENT INC., AS INVESTMENT ADVISOR FOR 522 FIFTH AVENUE FUND, LLC c/o JP Morgan 522 Fifth Avenue New York, New York 10036 Attention: Mr. Robert E. Kiss TUDOR VENTURES II L.P. THE RAPTOR GLOBAL PORTFOLIO LTD. THE ALTAR ROCK FUND L.P. c/o Tudor Ventures 50 Rowes Wharf, 6th Floor Boston, Massachusetts 02110 Attention: Mr. Carmen J. Scarpa