Exhibit 2.5
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NON-EMPLOYEE INVESTMENT REPRESENTATION
AND LOCKUP AGREEMENT
CMG Information Services, Inc.
000 Xxxxxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxx, XX 00000
Re: Proposed issuance of shares (the "Shares") of CMG Information
Services, Inc. (the "Buyer") Common Stock, $0.01 par value per share
(the "Common Stock"), in connection with the merger (the "Merger") of
Accipiter, Inc. (the "Seller") and CMGI Acquisition Corporation
("Acquisition")
Ladies and Gentlemen:
In connection with the proposed issuance of the Shares in the Merger, the
undersigned (the "Investor") hereby represents, warrants and agrees as follows:
1. The Investor has received and has had the opportunity to review
certain information relating to the Buyer and the Merger, including,
without limitation, copies of the following agreements and exhibits
related to the Merger and the following statements and reports filed
by the Buyer with the Securities and Exchange Commission (the
"Commission"):
(a) Form of Agreement and Plan of Merger dated [April 8], 1998, among
the Buyer, Acquisition, the Seller and certain stockholders of
the Seller (the "Merger Agreement"), including the exhibits and
schedules attached thereto;
(b) The Buyer's Annual Report to Stockholders for the year ended July
31, 1997;
(c) The Buyer's Quarterly Report on Form 10-Q for the quarter ended
January 31, 1998;
(d) The Buyer's Current Report on Form 8-K filed with the Commission
on December 29, 1997;
(e) The Buyer's Proxy Statement, as filed with the Commission on
November 12, 1997, for its Annual Meeting of Stockholders held on
December 18, 1997.
2. The Investor has checked the box below if he, she or it is an
"Accredited Investor," as such term is defined in Section 501(a) or
Regulation D
("Regulation D") of the rules and regulations promulgated under the
Securities Act of 1933, as amended (the "Securities Act"). If the
Investor is not an Accredited Investor, he, she or it represents and
warrants that either alone or with his, her or its purchaser
representative(s) (as such term is defined in Section 501(h) of
Regulation D) has such knowledge and experience in financial and
business matters that he, she or it is capable of evaluating the
merits and risks of the Merger and a prospective investment in the
Shares.
"Accredited Investor shall mean any person who comes within any of the
following categories,
(a) Any bank as defined in Section 3(a)(2) of the Securities Act, or
any savings and loan association or other institution as defined
in Section 3(a)(5)(A) of the Securities Act whether acting in its
individual or fiduciary capacity; any broker or dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934, as
amended; any insurance company as defined in Section 2(13) of the
Securities Act; any investment company registered under the
Investment Company Act of 1940, as amended, or a business
development company as defined in Section 2(a)(48) of the
Securities Act; any Small Business Investment Company licensed by
the U.S. Small Business Administration under Section 301(c) or
(d) of the Small Business Investment Act of 1958, as amended; any
plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such
plan has total assets in excess of $5,000,000; any employee
benefit plan within the meaning of the Employee Retirement Income
Security Act of 1974, as amended, if the investment decision is
made by a plan fiduciary, as defined in Section 3(21) of such
Act, which is either a bank, savings and loan association,
insurance company, or registered investment advisor, or if the
employee benefit plan has total assets in excess of $5,000,000,
or, if a self-directed plan, with investment decisions made
solely by persons that are Accredited Investors;
(b) Any private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940, as amended;
(c) Any organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended, corporation, Massachusetts or
similar business trust, or partnership, not formed for the
specific purpose of acquiring the securities offered, with total
assets in excess of $5,000,000;
(d) Any director, executive officer, or general partner of the issuer
of the securities being offered or sold, or any director,
executive officer, or general partner of a general partner of
that issuer;
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(e) Any natural person whose individual net worth, or joint net worth
with that person's spouse, at the time of his purchase exceeds
$1,000,000;
(f) Any natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income
with that person's spouse in excess of $300,000 in each of those
years and has a reasonable expectation of reaching the same
income level in the current year;
(g) Any trust with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the securities offered,
whose purchase is directed by a sophisticated person who meets
the definition of a "purchaser representative" found in Rule
501(h) of Regulation D; and
(h) Any entity in which all of the equity owners are Accredited
Investors.
[_] The Investor represents and warrants that he, she or it is an
"Accredited Investor."
If the Investor has engaged a purchaser representative, the Investor
has checked the following box and indicated the name of such purchaser
representative.
[_] __________________________
The Investor has also attached all disclosure materials provided by
such purchaser representative to the Investor describing any material
relationship between the purchaser representative or his affiliates
and the Buyer or its affiliates that then exists, that is mutually
understood to be contemplated or that has existed at any time during
the previous two years, and any compensation received or to be
received as a result of such relationship.
3. The Investor has had an opportunity for a reasonable period of time to
ask questions of and receive answers from the Buyer concerning the
Buyer, the Shares and the terms and conditions of the transactions
contemplated by the Merger, and the Investor has had an opportunity to
obtain any additional information he, she or it considered necessary
to verify the accuracy of the information furnished in the documents
listed in Section 1 above.
4. Any Shares issued in the Merger that are distributed to the Investor
will be so acquired by he, she or it for his, her or its own account
and not on behalf of any other person. The Investor will be so
acquiring the Shares for investment and not for distribution or with
the intent to divide his, her or its participation with others or of
selling, assigning, transferring or otherwise disposing of the Shares.
It is understood that the Investor may make bona fide gifts or
distributions (including, if the Investor is a partnership, to its
partners) without
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consideration or transfers by operation of law, so long as any donee
or transferee agrees not to sell, transfer or otherwise dispose of the
Shares except as provided herein.
5. The Investor understands that:
(a) The Shares have not been registered by the Buyer under the
Securities Act or any applicable state securities laws (the
"State Acts"), and, therefore, the Shares cannot be sold or
otherwise transferred unless either they are registered under the
Securities Act and any applicable State Acts or an exemption from
such registration is available.
The Buyer has not made any representations to me that it will
register the Shares under the Securities Act or the State Acts,
except in the Registration Rights Agreement dated the date
hereof.
(b) The certificates evidencing the Shares will include the legend
set forth below, which the Investor has read and understands:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. THESE SECURITIES
ARE ALSO SUBJECT TO AN INVESTMENT REPRESENTATION AND LOCKUP
AGREEMENT WITH THE CORPORATION WHICH RESTRICTS THE TRANSFER
THEREOF, A COPY OF WHICH CAN BE OBTAINED FROM THE CORPORATION AT
ITS EXECUTIVE OFFICES.
(c) By accepting the certificates bearing the aforesaid legend, the
Investor agrees, prior to any transfer of the Shares represented
by the Certificates, to give written notice to the Buyer
expressing his, her or its desire to effect such transfer and
describing briefly the proposed transfer. Upon receiving such
notice, the Buyer shall present copies thereof to its counsel and
the following provisions shall apply:
(i) if, in the reasonable opinion of counsel acceptable to
the Buyer, the proposed transfer of such Shares may be effected
without registration of such Shares under the Securities Act and
the State Acts, the Buyer shall promptly thereafter notify the
stockholder desiring to transfer such Shares, whereupon such
stockholder shall be entitled to transfer such Shares, all in
accordance with the terms of the notice delivered by such
stockholder to the Buyer and upon such further terms
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and conditions as shall be required by the Buyer to ensure
compliance with the Securities Act and the State Acts, and the
Buyer will deliver, upon surrender of the certificate evidencing
such Shares, in exchange therefor, a new certificate not bearing
a legend of the character set forth above if such counsel
reasonably believes that such legend is no longer required under
the Securities Act and the State Acts; and
(ii) if, in the reasonable opinion of such counsel, the
proposed transfer of such Shares may not be effected without
registration of such Shares under the Securities Act and the
State Acts, a copy of such opinion shall be promptly delivered to
the stockholder who has proposed such transfer, and such proposed
transfer shall not be made unless such registration is then in
effect.
(d) The Buyer may, from time to time, make stop transfer notations in
its records and deliver stop transfer instructions to its
transfer agent to the extent counsel for the Buyer considers it
necessary to ensure compliance with the Securities Act and the
State Acts.
6. The Investor has knowledge and experience in financial and business
matters, know of the high degree of risk associated with investments
generally, is capable of evaluating the merits and risks of an
investment in the Shares and is able to bear the economic risk of an
investment in the Shares in the amount contemplated. The Investor has
adequate means of providing for his, her or its current financial
needs and contingencies and will have no current or anticipated future
needs for liquidity which would be jeopardized by the investment in
the Shares. THE INVESTOR CAN AFFORD A COMPLETE LOSS OF HIS, HER OR
ITS INVESTMENT IN THE SHARES.
7. The Investor understands that an investment in the Shares involves a
substantial degree or risk, including, without limitation, matters
discussed under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Report on Form
10-Q for January 31, 1998. No representation has been made regarding
the future performance of the Buyer or the future market value of the
Shares.
8. In order to induce the Buyer to enter into the Merger Agreement, the
Investor hereby agrees that he, she or it will not, except with the
prior written approval of the Buyer, directly or indirectly offer to
sell, contract to sell or otherwise sell or dispose of any of the
Shares, or engage in any other transaction which reduces the risks of
ownership, for a period of twelve months from the date hereof
provided, however, arrangements designed to limit normal market risk
(such as a collar) are permitted so long as such arrangement does not
adversely affect the exemption from registration under the Securities
Act relied upon by the Buyer in connection with its issuing the Shares
in the Merger. The Investor agrees and consents to the entry of stop
transfer instructions with
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the Buyer's transfer agent against the transfer of Shares held by the
Investor except in compliance with the foregoing restrictions.
9. The Investor recognizes that the issuance of Shares will be based to a
material extent upon his, her or its representations, warranties and
agreements set forth in this Agreement, and the Investor agrees on
demand to indemnify and hold harmless the Buyer and each officer,
director, stockholder, employee and affiliate thereof from and against
any and all loss, damage, liability or expense, including costs and
reasonable attorneys' fees, to which they may be put or which they may
incur by reason of, or in connection with, any misrepresentation the
Investor has made in this Agreement, any breach by the Investor of any
agreement contained in this Agreement, or arising out of the
Investor's sale or distribution of any Shares in violation of the
Securities Act, the State Acts or this Agreement. All
representations, warranties and covenants and the indemnification
contained in this Agreement shall survive this Agreement and the
Investor's admission as a stockholder of the Buyer.
10. This Agreement, together with the Registration Rights Agreement dated
the date hereof, constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof, and this Agreement
supersedes all prior agreements, understandings and arrangements, if
any, whether oral or written, between the parties hereto with respect
to the subject mater hereof. The provisions of the Agreement shall be
deemed severable and the invalidity or unenforceability of any
provision shall not affect the validity or enforceability of the other
provisions hereof. No provisions of this Agreement shall be amended
without the express written consent of the parties hereto.
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[SIGNATURE PAGE TO NON-EMPLOYEE INVESTMENT REPRESENTATION
AND LOCKUP AGREEMENT]
11. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware without giving
effect to the conflict of laws principles thereof.
Sincerely,
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(Name of Investor)
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(Signature of Investor or Authorized Signatory)
__________________________________________________
(Print Name of Authorized Signatory, if
applicable)
__________________________________________________
(Authorized Signatory's Capacity, if applicable)
Date: April 8, 1998
The following persons have signed a Non-Employee Stockholder Investment
Representation and Lock-up Letter:
Aurora Ventures, LLC
Aurora Ventures II, LLC
Xxxxxxx Capital Partners, L.P. - Enhanced Appreciation
Fadel, Xxxxxx
Xxxx Ventures, Inc.
Intersouth Partners III, X.X.
Xxxxx, Xxxx
Xxxxxx, Xxx
Xxxxxxxxx, Xxxx
Xxxxx, Xxxxxx
Southeast Interactive Technology Fund I, L.L.C.
Xxxxxx, Xxxxxxxxx XX
Tri-State Investment Group II, LLC
