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EXHIBIT 99.5
TITLE SOURCE INC. AFFILIATE AGREEMENT
This Title Source, Inc. Affiliate Agreement (this "AGREEMENT") is made
and entered into as of October 6, 1999 (the "EFFECTIVE DATE") by and among
Intuit Inc., a Delaware corporation ("INTUIT"), Title Source, Inc., a Michigan
corporation ("COMPANY") and _____________________ ("AFFILIATE").
R E C I T A L S
A. This Agreement is entered into pursuant to that certain Agreement
and Plan of Merger dated as of October 6, 1999 (the "PLAN") by and among Intuit,
Company, Rock Financial Corporation, a Michigan corporation ("ROCK"), Merger Sub
1, Inc., a Michigan corporation that is a wholly owned subsidiary of Intuit
("MERGER SUB 1") and Merger Sub 2, Inc., a Michigan corporation that is a wholly
owned subsidiary of Intuit ("MERGER SUB 2"). The Plan provides for, among other
things, the statutory merger of Merger Sub 2 with and into Company (the
"MERGER") with Company being the surviving corporation of the Merger, all
pursuant to the terms and conditions of the Plan. Capitalized terms used herein
and not defined herein shall have the same meanings that such terms have in the
Plan.
B. The Plan provides that, upon the Effective Time of the Merger, the
shares of Company Common Stock that are issued and outstanding immediately prior
to the Effective Time of the Merger will be converted into shares of Intuit
Common Stock, and the options to purchase shares of Company Common Stock that
are outstanding immediately prior to the Effective Time will be converted into
options to purchase shares of Intuit Common Stock, all as more particularly set
forth in the Plan.
C. Affiliate understands that because the Merger is intended by the
parties to qualify for "pooling-of-interests" accounting treatment and because
Affiliate may be deemed to be an "affiliate" of Company within the meaning of
Rule 145 ("RULE 145") promulgated under the Securities Act of 1933, as amended
(the "1933 ACT"), the shares of Company capital stock that Affiliate owns and
any shares of Company's capital stock which Affiliate may hereafter acquire (and
any shares of Intuit Common Stock issued to Affiliate in the Merger or upon the
exercise of Intuit Options issued to Affiliate in the Merger) may be disposed of
only in conformity with the limitations contained in this Agreement. Affiliate
has been informed that the treatment of the Merger as a "pooling-of-interests"
for accounting and financial reporting purposes, and as a "reorganization" for
federal income tax purposes, is dependent upon the accuracy of certain of the
representations and warranties of Affiliate in this Agreement, and Affiliate's
compliance with certain agreements of Affiliate in this Agreement.
1. TAX TREATMENT. Affiliate understands and agrees that it is intended
that the Merger will be treated as a reorganization for federal income tax
purposes. Affiliate will rely on Affiliate's own tax advisers as to the tax
attributes of the Merger to Affiliate, and Affiliate understands that none of
Intuit, Intuit's legal counsel, Intuit's accountants or Company, Company's legal
counsel or Company's accountants or ROCK or ROCK'S counsel or ROCK'S
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accountants has guaranteed nor will guarantee to Affiliate that the Merger will
be a tax-free reorganization. Affiliate understands that legal counsel to Intuit
(Fenwick & West LLP) has not acted and is not acting as counsel for Affiliate
with respect to any matters related to the Merger, and that Affiliate has relied
on neither Company nor Company's legal counsel, nor ROCK nor ROCK'S legal
counsel nor on Intuit or Intuit's legal counsel, with respect to any legal
matter related to the Merger or its tax consequences, including, without
limitation, any U.S. federal income tax consequences.
2. RELIANCE UPON REPRESENTATIONS, WARRANTIES AND COVENANTS. Affiliate
has been informed that a reorganization for federal income tax purposes requires
that the former shareholders of Company have no plan to dispose of or transfer
the shares of Intuit Common Stock to be issued in the Merger to certain parties,
as defined below, related to Intuit after the Merger. Affiliate understands that
the representations and warranties and covenants of Affiliate set forth herein
will be relied upon by Company, Intuit, ROCK and their respective legal counsel
and accounting firms, the other shareholders of Company and the shareholders of
ROCK.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF AFFILIATE. Affiliate
hereby represents, warrants and covenants with Company and Intuit as follows:
(a) Authority; Affiliate Status. Affiliate has full power and
authority to enter into, execute, deliver and perform Affiliate's obligations
under this Agreement, to make the representations, warranties and covenants
herein contained and to perform Affiliate's obligations under this Agreement.
Affiliate further understands and agrees that Affiliate may be deemed to be an
"affiliate" of Company within the meaning of Rule 145.
(b) Company Securities Owned. As used herein, the term "COMPANY
SECURITIES" means, collectively, all shares of Company's capital stock and any
other securities of Company owned by Affiliate as of the Effective Date (whether
owned directly or indirectly, beneficially or of record), including all
securities of Company as to which Affiliate has sole or shared voting or
investment power, and all rights, options and warrants to acquire shares of
capital stock or other securities of Company. Attachment "1" hereto sets forth
all of Affiliate's Company Securities. Except as otherwise disclosed in the
TITLE Schedules, on the Effective Date, all Company Securities owned by
Affiliate are, and at all times until and through the Expiration Date (as
hereinafter defined) all Company Securities owned by Affiliate will be, free and
clear of any rights of first refusal, co-sale rights, mortgages, security
interests, collateral assignments, title retention devices, liens, pledges,
claims, options, charges or any other encumbrances.
(c) New Company Securities. As used herein, the term "NEW COMPANY
SECURITIES" means, collectively, any and all shares of Company's capital stock,
other securities of Company and rights, options and warrants to acquire shares
of Company's capital stock and other securities of Company that Affiliate may
purchase or otherwise acquire any interest in (whether directly or indirectly,
of record or beneficially), on and after the Effective Date of this Agreement
and prior to the Expiration Date (as defined below). All New Company Securities
will be subject to the terms of this Agreement to the same extent and in the
same manner as if they were Company Securities. Except as otherwise disclosed in
the Company Schedules, at all times until and through the Expiration Date, all
the New Company Securities will be free and clear of any
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rights of first refusal, co-sale rights, mortgages, security interests,
collateral assignments, title retention devices, liens, pledges, claims,
options, charges or any other encumbrances. As used herein, the term "EXPIRATION
DATE" means the earlier to occur of (i) the closing, consummation and
effectiveness of the Merger, or (ii) such time as the Plan may be terminated in
accordance with the provisions of Article 8 of the Plan.
(d) Transfer Restrictions on Company Securities and New Company
Securities. Affiliate agrees with Intuit not to sell, transfer, encumber or
dispose of, or to offer or agree to sell, transfer, encumber or dispose of (i)
any of Company Securities or (ii) any New Company Securities at any time during
the period beginning on the thirtieth (30th) day prior to the Effective Time and
ending on the Expiration Date.
(e) No Solicitation or Encouragement. During the period from the
Effective Date through the Expiration Date Affiliate agrees with Intuit not to,
directly or indirectly, solicit, facilitate or encourage any offer from any
person or entity concerning the possible disposition of all or any portion of
Company's business, assets or capital stock by merger, sale of stock, sale of
assets or other means, or any Alternative Transaction in contravention of the
Plan.
(f) Consents and Waivers. Affiliate hereby waives, effective as of
the Effective Time, any registration rights, information rights, preemptive
rights, rights of first refusal, co-sale rights or other similar rights under
the terms of the Articles of Incorporation or bylaws of Company or any agreement
with Company or its security holders that is in effect immediately prior to the
Effective Time.
(g) Securities Law Transfer Restrictions on Merger Securities.
As used herein, the term "MERGER SECURITIES" means, collectively, all shares of
Intuit Common Stock that are or may be issued by Intuit in connection with the
Merger or pursuant to the Plan or any securities that may be paid as a dividend
or otherwise distributed thereon or with respect thereto or issued or delivered
in exchange or substitution therefor or upon conversion thereof. Affiliate
agrees not to sell, transfer, exchange, pledge, or otherwise dispose of, or make
any offer or agreement relating to, any of the Merger Securities and/or any
option, right or other interest with respect to any Merger Securities that
Affiliate may acquire, unless such transaction may be lawfully consummated under
applicable state "blue sky" securities law and unless: (i) such Merger
Securities were issued pursuant to registration on Form S-4 under the 1933 Act
and such transaction is permitted pursuant to Rules 145(c) and 145(d) under the
1933 Act (as described in Section 4 below) or pursuant to Rule 144 under the
1933 Act; or (ii) counsel representing Affiliate, which counsel is reasonably
satisfactory to Intuit, shall have advised Intuit in a written opinion letter
reasonably satisfactory to Intuit and Intuit's legal counsel, and upon which
Intuit and its legal counsel may rely, that no registration under the 1933 Act
would be required in connection with the proposed sale, transfer, exchange,
pledge or other disposition of Merger Securities by Affiliate; or (iii) a
registration statement under the 1933 Act covering the Merger Securities
proposed to be sold, transferred, exchanged, pledged or otherwise disposed of,
describing the manner and terms of the proposed sale, transfer, exchange, pledge
or other disposition, and containing a current prospectus, shall have been filed
with the Securities and Exchange Commission ("SEC") and been declared effective
by the SEC under the 1933 Act; or (iv) an authorized representative of the SEC
shall have rendered written advice to Affiliate
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(sought by Affiliate or counsel to Affiliate, with a copy thereof and all other
related communications delivered to Intuit and its legal counsel) to the effect
that the SEC would take no action, or that the staff of the SEC would not
recommend that the SEC take enforcement action, with respect to the proposed
disposition of Merger Securities if consummated; or (v) in the event Affiliate
is a partnership, such sale, transfer, exchange, pledge or other disposition is
a pro-rata distribution to the partners of such partnership in accordance with
their beneficial interest in such Merger Securities (and if such partners are
partnerships or closely-held corporations, such partners may in turn make
pro-rata distributions to their partners/stockholders in accordance with their
beneficial interest in such Merger Securities), provided that each such
transferee agrees in writing with Intuit that such securities remain subject to
the restrictions of this Section 3(g).
(h) Pooling Lock-Up Covenant. Notwithstanding any other provision of
this Agreement to the contrary, Affiliate will not sell, transfer, exchange,
pledge, distribute or otherwise dispose of, or in any other way reduce
Affiliate's risk of ownership or investment in, or make any offer or agreement
relating to any of the foregoing with respect to, any Company Securities or New
Company Securities or any rights, options or warrants to purchase Company
Securities or New Company Securities, or any Merger Securities or other
securities of Intuit (i) during the thirty (30) day period immediately preceding
the Effective Time or (ii) until such time after the Effective Time as Intuit
has publicly released a report including the combined financial results of
Intuit and Company for a period of at least thirty (30) days of post-Merger
combined operations of Intuit and Company. Intuit agrees to publish such
financial results in a manner consistent with its prior practices. Affiliate
acknowledges that Affiliate's compliance with the foregoing restrictions is
necessary in order to account for the Merger as a "pooling of interests"
transaction.
(i) Intent. Affiliate has no plan or intention, and is not aware of
any such plan or intention on the part of any other securityholder of Company,
to engage in a sale, exchange, transfer, distribution, pledge, disposition or
any other transfer to Intuit or any related party (as defined below) of any
shares of Intuit Common Stock to be issued in the Merger. For the purposes of
this subparagraph, "RELATED PARTIES" include (A) corporations which are members
of the same affiliated group as defined in Section 1504 of the Code (determined
without regard to Section 1504(b) of the Internal Revenue Code of 1986, as
amended (the "CODE")) or (B) two corporations if the first corporation purchased
the stock of the second corporation in a transaction which would be treated as a
distribution in redemption of the stock of the first corporation under Section
304(a)(2) of the Code (determined without regard to Treas. Reg. 1.1502-80(b)). A
corporation will be treated as a related party to another corporation if such
relationship exists immediately before or immediately after the acquisition of
the stock involved or, with the exception of Company or a person related to
Company, will be treated as related to Intuit if the relationship is created in
connection with the Merger.
(j) Further Assurances. Affiliate agrees to execute and deliver any
additional documents reasonably necessary or desirable, in the opinion of
Company or Intuit, to carry out the purposes and intent of this Agreement.
4. RESTRICTIONS ON RESALES. Affiliate understands that if the Merger
Securities are issued pursuant to the Form S-4 (as defined in the Plan) then, in
addition to the restrictions
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imposed under Section 3 of this Agreement, the provisions of Rule 145 under the
1933 Act limit Affiliate's public resales of Merger Securities and Affiliate
agrees with Intuit to comply with such restrictions so long as they are
applicable. For Affiliate's convenience, the resale restrictions applicable to
the Merger Securities that are currently contained in Rule 145 under the 1933
Act are summarized in subsections (a), (b) and (c) below; however, Affiliate
acknowledges that Affiliate will be obligated to comply with the restrictions of
Rule 145 regardless of whether or not all such restrictions are described below
and regardless of whether any of such restrictions is inaccurately described
below or changes in any manner, and Affiliate is not relying on Intuit's counsel
for any advice in connection therewith:
(a) 145(d)(1). Unless and until the restriction "cut-off" provisions
of Rule 145(d)(2) or Rule 145(d)(3) set forth below become available, public
resales of Merger Securities may be made by Affiliate only in compliance with
the requirements of Rule 145(d)(1) under the 1933 Act. Rule 145(d)(1) permits
such resales only: (i) if Intuit has been a public corporation for at least 90
days and meets the public information requirements of Rule 144(c) under the ▇▇▇▇
▇▇▇); (ii) in brokers' transactions or in transactions with a market maker; and
(iii) where the aggregate number of Merger Securities sold at any time together
with all sales of restricted Intuit Common Stock sold by or for Affiliate's
account (and/or attributed to Affiliate by the provisions of Rule 144 under the
▇▇▇▇ ▇▇▇) during the preceding three-month period does not exceed the greater
of: (A) one percent (1%) of the shares of Intuit Common Stock outstanding as
shown by the most recent report or statement published by Intuit; or (B) the
average weekly volume of trading in Intuit Common Stock on all national
securities exchanges, or reported through the automated quotation system of a
registered securities association, during the four calendar weeks preceding the
date of receipt of the order to execute the sale.
(b) 145(d)(2). Affiliate may make unrestricted resales of Merger
Securities pursuant to Rule 145(d)(2) if: (i) Affiliate has beneficially owned
(within the meaning of Rule 144(d) under the ▇▇▇▇ ▇▇▇) the Merger Securities for
at least one (1) year after the Effective Time of the Merger; (ii) Affiliate is
not an affiliate of Intuit; and (iii) Intuit has been a public corporation for
at least 90 days and meets the public information requirements of Rule 144(c)
under the 1933 Act).
(c) 145(d)(3). Affiliate may make unrestricted resales of Merger
Securities pursuant to Rule 145(d)(3) if Affiliate has beneficially owned
(within the meaning of Rule 144(d) under the ▇▇▇▇ ▇▇▇) the Merger Securities for
at least two (2) years after the Effective Time of the Merger and is not, and
has not been for at least three months, an affiliate (or deemed affiliate) of
Intuit.
(d) Intuit acknowledges that the provisions of Section 3(g) of this
Agreement will be satisfied as to any sale by the undersigned of the Merger
Securities pursuant to Rule 145(d), by (i) a broker's letter and a letter from
Affiliate with respect to that sale stating that each of the above-described
requirements of Rule 145(d)(1) has been met or (ii) a letter from Affiliate with
respect to that sale stating that the sale is being made pursuant to Rule
145(d)(2) or Rule 145(d)(3) and each of the above-described requirements of Rule
145(d)(2) or Rule 145 (d)(3) (as applicable) has been met; provided, however,
that Intuit has no reasonable basis to believe such sales were not made in
compliance with such provisions of Rule 145(d).
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(e) In the event that, in the opinion of Intuit's counsel, the
resale of the Merger Securities is not governed by Rule 145 under the Securities
Act, then Affiliate agrees to resell the Merger Securities issued to Affiliate
only in compliance with such legal restrictions thereon as are applicable
thereto.
5. LEGEND. Affiliate also understands and agrees that stop transfer
instructions will be given to Intuit's transfer agent with respect to
certificates evidencing the Merger Securities issued to Affiliate and that there
will be placed on the certificates evidencing such Merger Securities legends
stating in substance:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED, SOLD,
PLEDGED, EXCHANGED, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN
ACCORDANCE WITH THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS
AMENDED, ANY APPLICABLE STATE SECURITIES LAWS, AND THE OTHER CONDITIONS
SPECIFIED IN THAT CERTAIN TITLE SOURCE, INC. AFFILIATE AGREEMENT DATED
AS OF OCTOBER 6, 1999 AMONG INTUIT, COMPANY AND THE HOLDER OF SUCH
SHARES, A COPY OF WHICH AFFILIATE AGREEMENT MAY BE INSPECTED BY THE
HOLDER OF THIS CERTIFICATE AT THE OFFICES OF INTUIT WHICH WILL FURNISH,
WITHOUT CHARGE, A COPY THEREOF TO THE HOLDER OF THIS CERTIFICATE, UPON
WRITTEN REQUEST THEREFOR.
The restrictions in Section 4 will no longer apply and the legends set forth in
this Section shall not apply, and Intuit shall cause them to be removed upon the
written request of the holder thereof, after such time as the shares of Intuit
Common Stock delivered pursuant to the Merger may be resold pursuant to the
provisions of Rule 145(d)(2) under the 1933 Act or during any time during which
such shares are registered for sale under the 1933 Act and are sold pursuant to
and in accordance with such registration.
6. TERMINATION. This Agreement shall be terminated and shall be of no
further force and effect upon the termination of the Plan pursuant to its terms.
7. GOVERNING LAW. The internal laws of the State of California
(irrespective of its choice of law principles) will govern the validity of this
Agreement, the construction of its terms, and the interpretation and enforcement
of the rights and duties of the parties hereto.
8. BINDING UPON SUCCESSORS AND ASSIGNS. This Agreement will be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, including, administrators, executors,
representatives, heirs, legatees and devisees of Affiliate and any pledgee
holding Merger Securities as collateral.
9. SEVERABILITY. If any provision of this Agreement, or the application
thereof, will for any reason and to any extent be invalid or unenforceable, then
the remainder of this Agreement and application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto.
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10. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be an original as regards any party whose
signature appears thereon and all of which together will constitute one and the
same instrument. This Agreement will become binding when one or more
counterparts hereof, individually or taken together, bear the signatures of all
parties reflected hereon as signatories.
11. AMENDMENT; WAIVER. This Agreement may be amended only by the
written agreement of all the parties hereto. No waiver by any party hereto of
any condition or of any breach of any provision of this Agreement will be
effective unless such waiver is set forth in a writing signed by such party. No
waiver by any party of any such condition or breach, in any one instance, will
be deemed to be a further or continuing waiver of any such condition or breach
or a waiver of any other condition or breach of any other provision contained
herein.
12. NOTICES. All notices and other communications required or permitted
under this Agreement will be in writing and will be deemed given (1) when
personally delivered, (2) on the date delivery is made if sent by commercial
delivery service, (3) five business days after being mailed if mailed by
registered or certified mail (postage prepaid, return receipt requested), or (4)
on the date sent if sent via facsimile, telegraph or telex (receipt confirmed)
to the following addresses or facsimile numbers, (or such other addresses or
facsimile numbers as any party may notify the other parties in accordance with
this Section):
If to Intuit:
If sent by registered or certified mail, to:
Intuit Inc.
Attn: General Counsel
▇▇▇▇▇ ▇▇▇▇.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
If personally delivered or delivered by commercial delivery service, to:
Intuit Inc.
Attn.: General Counsel
Legal Dept.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Fenwick & West LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Affiliate, at the address of such Affiliate next to such
Affiliate's signature on this Agreement;
or to such other address as Intuit or the Affiliate, as the case may be,
designates in a writing delivered to each of the other party hereto.
13. CONSTRUCTION. This Agreement has been negotiated by the respective
parties hereto and their attorneys and the language hereof will not be construed
for or against either party. Unless otherwise indicated herein, all references
in this Agreement to "Sections" refer to sections of this Agreement. The titles
and headings herein are for reference purposes only and will not in any manner
limit the construction of this Agreement which will be considered as a whole.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth above.
INTUIT INC. TITLE SOURCE, INC.
By: By:
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Name: Name:
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Title: Title:
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AFFILIATE
By:
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Name:
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Affiliate's Address for Notice:
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[SIGNATURE PAGE TO AFFILIATE AGREEMENT]
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ATTACHMENT "1"
COMPANY SECURITIES HELD
TYPE OF COMPANY SECURITIES NUMBER OF SHARES
Company Common Stock ----------------
Company Options for Common Stock ----------------