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EXHIBIT 10.16
STOCK PURCHASE AGREEMENT dated as
of June 25, 1998 (this "Agreement"), among
EXCHANGE APPLICATIONS, INC., a Delaware
corporation ("Exchange Applications"),
INSIGHT CAPITAL PARTNERS II, L.P., a Delaware
limited partnership (the "Seller"), and
XXXXXXX X. XXXXXXX (the "Purchaser").
WHEREAS, the Purchaser, the Seller, Exchange Applications, and certain
other persons are parties to an Amended and Restated Stockholders Agreement, as
amended, dated as of December 4, 1997 (the "Stockholders Agreement"); and
WHEREAS, the Seller is the owner of 30,000 shares of Series C
Convertible Preferred Stock of Exchange Applications $.001 par value (the
"Shares"). Upon the terms and subject to the conditions of this Agreement, the
Purchaser will purchase a total of 30,000 Shares from the Purchasers for a
Purchase Price of $3.268 per Share and an aggregate purchase price of
Ninety-eight thousand, forty dollars and no cents $98,040.00 (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. Exchange Applications waives its rights under
Section 6(c) 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 the
Purchaser, and the Purchaser shall purchase and acquire from the Seller, 30,000
shares for the cash consideration of $98,040.00.
3. DELIVERY.
(a) The Seller shall deliver to Exchange Applications for
cancellation, against delivery to the Seller by the Purchaser of the
aggregate purchase price therefor, a stock certificate representing the
aggregate number of Shares to be purchased by the Purchaser (the "Stock
Certificates") from the Seller, with all necessary documentary or
transfer tax stamps affixed (the "Document"), free an 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,
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understandings or obligations (collectively, "Liens"), whether written
or oral and whether or not relating in any way to credit or the
borrowing of money.
(b) upon receipt of an executed Agreement, Exchange
Applications shall cause to be issued to the Purchaser, or such other
individual or entity as the Purchaser has designated in a written
request submitted to the Company and the Seller, a certificate
representing the number of Shares to be purchased by the Purchaser from
the Seller, free and clear of all Liens.
(c) Exchange Applications shall also cause a certificate, free
and clear of all Liens, to be issued to the Seller representing the
difference between the number of Shares delivered by the Seller to
Exchange Applications under subsection (a) of this Section 3 and the
number of Shares sold, transferred and conveyed by the Seller to the
Purchaser under Section 2 of this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller
represents and warrants to the Purchaser as follows:
(a) the Seller has full legal 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 action on the part of the Seller;
(c) this Agreement constitutes a legal, valid and binding
obligation to 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
(d) Seller has good and marketable title to all of the Shares,
free and clear of all Liens; and
(e) 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)
after giving effect to the waiver Agreement dated June 25, 1998 will
not conflict with any provision of any agreement, certificate of
incorporation, 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
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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.
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER. The Purchaser
represents and warrants to the Seller as follows:
(a) the execution and delivery by the Purchaser of this
Agreement and the consummation by the Purchaser of the transactions
contemplated hereby (i) will not violate any law, statute, rule or
regulation, (ii) will not conflict with any provision of any agreement,
certificate of incorporation, or other organizational or constitutive
instrument, if any, of the 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 the Purchaser is a party or by which
it, or any of its assets or properties, is bound; and
(b) this Agreement constitutes a legal, valid and binding
obligation of the 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;
(c) the Purchaser confirms that:
(i) he is an "accredited investor" as such term is defined in
Rule 501(a) of Regulation D promulgated under the
Securities Act;
(ii) he understands that his 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) he understands that his 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;
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(iv) he is acquiring the Shares for his own account for
investment purposes only and not with a 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) he 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 his investment in Exchange
Applications;
(vi) he is able to bear the substantial economic risks of an
investment in such Shares and can afford a complete loss of
such investment;
(vii) he has such knowledge and experience in financial,
investment and business matters so as to enable him, to use
the information made available to him 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) he has carefully considered and has, to the extent he
believes such discussions necessary, discussed with his
professional legal, tax, accounting and financial advisors
the suitability of his purchase of such Shares;
(ix) he 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) he has had the opportunity to review any documents relating
to Exchange Applications requested by him and to conduct
due diligence, and such due diligence review has been fully
satisfactory to him; and
(xi) he 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
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medium or broadcast over radio or television, or any
seminar or meeting whose attendees have been invited by any
general solicitation or general advertising.
6. REGISTRATION RIGHTS AGREEMENT JOINDER. By execution and delivering
this Agreement to the Corporation, the Purchaser hereby agrees to become a party
to, to be bound by, and to comply with the provisions of the Amended and
Restated Registration Rights Agreement dated as of December 4, 1997 among
Exchange Applications and the Investors named therein as an Insight II Investor
thereunder (as such term is defined and used therein), in the same manner as if
the undersigned were an original signatory to the Registration Rights Agreement.
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.
PURCHASER:
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
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SELLER:
INSIGHT CAPITAL PARTNERS II, L.P.
By: INSIGHT VENTURE ASSOCIATES II, LLC
its general partner
By: /s/ ???????
----------------------------------
Name:
Title:
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FOR PURPOSES OF SECTIONS
1, 3 AND 7:
EXCHANGE APPLICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx
President
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the date first written above.
EXCHANGE APPLICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxx
President
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WAIVER AGREEMENT
RELATING TO THE AMENDED AND RESTATED
STOCKHOLDERS AGREEMENT
WAIVER AGREEMENT (this "Agreement") dated as June 25, 1998 RELATING TO
THE AMENDED AND RESTATED STOCKHOLDERS AGREEMENT dated as of December 4, 1997
among Exchange Applications, Inc., a Delaware corporation (the "Company") and
the Stockholders (as such term is defined therein).
PRELIMINARY STATEMENTS:
1. The Company, InSight Capital Partners II, L.P. ("InSight") and the
other Stockholders thereto have entered into the Stockholders Agreement, dated
as of December 4, 1997 (the "Stockholders Agreement"). Capitalized terms not
otherwise defined in this Amendment have the same meanings as specified in the
Stockholders Agreement.
2. InSight and Xxxxxxx X. Xxxxxxx have requested the Company and the
Stockholders to waive and amend certain provisions of the Stockholders Agreement
in order to permit InSight to complete the sale of 30,000 shares of the
Company's Series C Preferred Stock, $.001 par value (the "Series C Preferred")
to Xxxxxxx X. Xxxxxxx (this "Transaction") for an aggregate purchase price of
$98,040.00.
3. The Company and the Stockholders are, on the terms and conditions
stated below, willing to grant the requests of InSight, and the Company, InSight
and the Stockholders have agreed to waive the Stockholders Agreement as
hereinafter set forth.
Section 1. WAIVERS.
(a) The Company hereby waives any and all rights under
Section 6(c) of the Stockholders Agreement with respect to the Transaction.
(b) The Stockholders and the Company hereby agree that the
Transaction shall be deemed to be a "Permitted Transfer" under the Stockholders
Agreement and for all purposes of the Stockholders Agreement.
Section 2. REFERENCE TO AND EFFECT ON THE STOCKHOLDERS AGREEMENT
(a) On and after the effectiveness of this Agreement, each
reference in the Stockholders Agreement to the Stockholders Agreement shall mean
and be a reference to the Stockholders Agreement, as waived by this Agreement.
(b) The Stockholders Agreement, as specifically amended by
this Agreement, is and shall continue to be in full force and effect and is
hereby in all respect ratified and confirmed.
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(c) The execution, delivery and effectiveness of this
Agreement shall not operate as a waiver of any right, power or remedy of any
Stockholder under the Stockholders Agreement, nor constitute a waiver of any
provision of the Stockholders Agreement.
Section 3. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute but one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 4. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the Commonwealth of Massachusetts.
SECTION 5. EFFECTIVE TIME. This Agreement shall be effective upon (i)
written consent of the Board and (ii) execution and delivery of this Agreement
by (w) the Requisite Series B Stockholders, (x) the Requisite Series C
Stockholders, (y) the Requisite Common Stockholders and (z) the Requisite
Stockholders.
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STOCKHOLDERS:
INSIGHT VENTURE PARTNERS I, L.P.
BY: INSIGHT VENTURE ASSOCIATES, LLC,
its general partner
By: /s/ Xxxxxxx Xxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxx
Title:
INSIGHT CAPITAL PARTNERS II, L.P.
BY: INSIGHT VENTURE ASSOCIATES II, LLC
its general partner
By: /s/ Xxxxxxx Xxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxx
Title:
WEXFORD INSIGHT LLC
BY: WEXFORD MANAGEMENT LLC
its investment manager
By: /s/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
Title: Principal
CYRK, INC.
By: /s/ Xxx X. Xxxxxxx
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Name: Xxx X. Xxxxxxx
Title: Executive Vice President
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GRANT & PARTNERS LIMITED PARTNERSHIP
BY: GRANT & PARTNERS, INC.,
its general partner
By: /s/ Xxxx X. X. Xxxxx
-----------------------------------------
Name: Xxxx X. X. Xxxxx
Title: President, Grant & Partners, Inc.
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STOCKHOLDERS:
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
/s/ Xxxxxxx XxXxxxxxx
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Xxxxxxx XxXxxxxxx
/s/ Xxxxx XxXxxxxxx
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Xxxxx XxXxxxxxx
/s/ Xxxxxx Xxx
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Xxxxxx Xxx
/s/ Xxxxxxx XxXxxx
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Xxxxxxx XxXxxx
/s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
/s/ Xxxxxxx X. Schlopak
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Xxxxxxx X. Schlopak
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
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/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
