Exhibit 10.2
COMPS INFOSYSTEMS, INC.
STOCK AND WARRANT PURCHASE AGREEMENT
THIS AGREEMENT is made as of October 14, 1994, by and among COMPS
Infosystems, Inc., a Delaware corporation (the "Company"), those entities,
severally and not jointly, whose names are set forth on the Schedule of
Purchasers attached hereto as Exhibit A (collectively, "Purchasers," and
---------
individually, a "Purchaser") and ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (the
"Stockholders"). The parties hereby agree as follows:
1. Sale and Issuance of the Shares and Warrants.
--------------------------------------------
1.1 Sale and Issuance of the Series A Preferred Shares. Subject to
--------------------------------------------------
the terms and conditions hereof, the Company will issue and sell to each
Purchaser and each Purchaser will purchase the number of shares of the Company's
Series A Preferred Stock (the "Shares") specified opposite the Purchaser's name
on Exhibit A, at a price of $1.17087 per Share.
---------
1.2 Issuance of Warrants. In consideration for the purchase by the
--------------------
Purchasers of the Shares, the Company will issue to each Purchaser a warrant in
the form attached hereto as Exhibit B (individually, a "Warrant" and
collectively, the "Warrants"), to purchase up to the number of shares of the
Company's non-voting Class B Common Stock (the "Warrant Shares") set forth
opposite such Purchaser's name on Exhibit A at an exercise price of $.01 per
---------
share.
2. Closing Date; Delivery.
----------------------
2.1 Closing Date.
------------
(a) Purchase and Sale. The closing of the purchase and sale of
-----------------
an aggregate of 4,270,336 Shares and of the issuance of the Warrants to purchase
379,869 shares of Class B Common Stock shall be held at the offices of ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, ▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ at 1:00 p.m. on October
14, 1994, or at such other time and place as the Company and the Purchasers may
agree in writing.
(b) Closing. The closing referred to in Subsection (a) above is
-------
hereinafter referred to as the "Closing" and the date of the Closing is
hereinafter referred to as the "Closing Date".
2.2 Delivery. Subject to the terms of this Agreement, at the Closing
--------
the Company will deliver to each Purchaser a certificate representing the Shares
to be purchased by and the Warrant to be issued to such Purchaser from the
Company, against payment of the purchase price for the Shares by a check or
checks payable to the order of the Company, or by wire transfer.
3. Representations and Warranties of the Company. The Company and the
---------------------------------------------
Stockholders hereby represent and warrant to the Purchasers that except as set
forth on a Schedule of Exceptions attached hereto as Exhibit C, which exceptions
---------
shall be deemed to be representations and warranties as if made hereunder:
-1-
3.1 Organization and Standing; Articles and By-Laws. The Company is
-----------------------------------------------
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to carry on its businesses as now conducted and as proposed to be
conducted. The Company is qualified or licensed to do business as a foreign
corporation in all jurisdictions where such qualification or licensing is
required, except where the failure to so qualify would not have a material
adverse effect upon the Company. Complete copies of the Company's Certificate of
Incorporation, Bylaws, minutes and consents of stockholders and of the Board of
Directors are available for inspection at the Company's offices and have been
previously provided to special counsel for the Purchasers.
3.2 Corporate Power. The Company has now, or will have at the
---------------
Closing Date, all requisite corporate power to enter into this Agreement, the
Investor Rights Agreement (the "Investor Rights Agreement") in the form attached
hereto as Exhibit D, the Right of First Refusal and Co-Sale Agreement attached
---------
hereto as Exhibit E (the "Co-Sale Agreement"), and the Shareholder Buy-Out and
---------
Voting Agreement attached hereto as Exhibit F (the "Shareholder Buy-Out and
---------
Voting Agreement") (together, the "Collateral Agreements") and to sell and issue
the Shares and Warrants and the Warrant Shares upon exercise of the Warrants and
to issue the Company's Class A Common Stock upon conversion of the Shares. This
Agreement and each of the Collateral Agreements is a valid and binding
obligation of the Company enforceable in accordance with its terms, except as
the same may be limited by bankruptcy, insolvency, moratorium, and other laws of
general application affecting the enforcement of creditors' rights.
3.3 Subsidiaries. The Company does not control, directly or
indirectly, any other corporation, association or business entity.
3.4 Capitalization. The authorized capital stock of the Company is
--------------
25,000,000 shares of Common Stock of which 22,500,000 shares are designated as
Class A Common Stock and 2,500,000 shares are designated as Class B Common Stock
and 5,000,000 shares of preferred stock ("Preferred Stock") of which 4,270,336
shares are designated as Series A Preferred Stock. There are issued and
outstanding 6,482,000 shares of the Company's Class A Common Stock. All issued
and outstanding shares have been duly authorized and validly issued, are fully
paid and nonassessable, and were issued in compliance with all applicable state
and federal laws concerning the issuance of securities. There are 811,160 shares
of Class B Common Stock reserved for issuance to the Company's officers,
directors, employees and consultants pursuant to Company compensation plans, and
379,869 shares of Class B Common Stock reserved for issuance to holders of the
Warrants upon exercise of the Warrants. The Company has provided the Purchasers
with a complete and accurate list, as of immediately prior to the Closing, of
all holders of any and all rights, options, warrants or conversion rights to
purchase or acquire from the Company any of its capital stock, along with the
number of shares of capital stock issuable upon exercise of such rights. Except
for such rights, there are no outstanding rights, options, warrants, conversion
rights or agreements for the purchase or acquisition from the Company of any
shares of its capital stock.
3.5 Authorization.
-------------
(a) Corporate Action. All corporate action on the part of the
----------------
Company, its officers, directors and stockholders necessary for the sale and
issuance of the
-2-
Shares and Warrants pursuant hereto, the issuance of the Warrant Shares upon the
exercise of the Warrants, the issuance of the Class A Common Stock issuable upon
conversion of the Shares and the performance of the Company's obligations
hereunder and under each of the Collateral Agreements has been taken or will be
taken prior to the Closing. The Company has duly reserved an aggregate of
379,869 shares of Class B Common Stock for issuance upon exercise of the
Warrants, and 4,270,336 shares of Class A Common Stock for issuance upon
conversion of the Shares.
(b) Valid Issuance. The Shares and Warrants, when issued in
--------------
compliance with the provisions of this Agreement, the Warrant Shares, when
issued in accordance with the terms of the Warrants and each of the Collateral
Agreements, and the shares of Class A Common Stock issued upon conversion of the
Shares when issued in accordance with the provisions of the Company's
Certificate of Incorporation, will be validly issued, fully paid and
nonassessable and will be free of any liens or encumbrances other than those
created by the Purchasers; provided, however, that all such shares may be
subject to restrictions on transfer under state and/or federal securities laws
as set forth herein, and as may be required by future changes in such laws. The
rights, preferences, privileges and restrictions of the Series A Preferred Stock
are as set forth in the Restated Certificate of Incorporation, the form of which
is attached hereto as Exhibit G (the "Restated Certificate").
(c) No Preemptive Rights. No person has any right of first
--------------------
refusal or any preemptive rights in connection with the issuance of the Shares
or Warrants, the issuance of the Warrant Shares upon exercise of the Warrants,
the issuance of the Class A Common Stock upon conversion of the Shares or any
future issuances of securities by the Company other than those held by the
Purchasers or those contemplated by the Collateral Agreements.
3.6 Patents, Trademarks, etc. The Company owns and possesses or is
------------------------
licensed under all patents, patent applications, licenses, trademarks, trade
names, brand names, inventions and copyrights employed in the operation of its
business as now conducted and as proposed to be conducted, with no infringement
of or conflict with the rights of others respecting any of the same. The
operation of the Company's business as now conducted or as proposed to be
conducted does not and will not infringe any patent or other proprietary rights
of others respecting any of the same. The Company is not obligated to make any
payments by way of royalties, fees or otherwise to any owner, licensor of, or
other claimant to any patent, trademark, trade name, copyright or other
intangible asset, with respect to the use thereof or in connection with the
conduct of its business, or otherwise. The Company has not received any
communications alleging that it has violated or, by conducting its business as
proposed, would violate any of the patents, trademarks, service marks, trade
names, copyrights or trade secrets or other proprietary rights of any other
person or entity, nor is the Company aware of any basis for the foregoing.
3.7 Compliance with Other Instruments, None Burdensome, Etc. The
-------------------------------------------------------
Company is not in violation of any term of its Restated Certificate or Bylaws,
nor is the Company in violation of or in default in any material respect under
the terms of any mortgage, indenture, contract, agreement, instrument, judgment
or decree, the violation of which would have a material adverse effect on the
Company as a whole, and is not in violation of any order, statute, rule or
regulation applicable to the Company, the violation of which would have a
-3-
material adverse effect on the Company. The execution, delivery and performance
of and compliance with this Agreement and each of the Collateral Agreements, and
the issuance and sale of the Shares and Warrants pursuant hereto or of the
Warrant Shares pursuant to the terms of the Warrants, will not (a) result in any
such violation, or (b) be in conflict with or constitute a default under any
such term, or (c) result in the creation of any mortgage, pledge, lien,
encumbrance or charge upon any of the properties or assets of the Company
pursuant to any such term. To the best knowledge of the Company, there is no
such term which materially adversely affects, or in the future may materially
adversely affect, the business, prospects, condition, affairs or operations of
the Company or any of its properties or assets.
3.8 Proprietary Agreements; Employees. Each employee of the Company
---------------------------------
has executed an agreement regarding confidentiality and proprietary information,
the form of which has been provided to special counsel to the Purchasers. The
Company is not aware that any of its employees is in violation thereof and will
use its best efforts to prevent any such violation. The Company is not aware
that any of its employees is obligated under any contract (including licenses,
covenants or commitments of any nature) or other agreement, or subject to any
judgment, decree or order of any court or administrative agency, that would
interfere with the use of his or her best efforts to promote the interests of
the Company or that would conflict with the Company's business as conducted or
as proposed to be conducted or that would prevent any such employee from
assigning inventions to the Company. Neither the execution nor delivery of this
Agreement or the Collateral Agreements, nor the carrying on of the Company's
business as proposed, will, to the Company's knowledge, conflict with or result
in a breach of the terms, conditions or provisions of, or constitute a default
under, any contract, covenant or instrument under which any of such employees is
now obligated. The Company does not believe that it is or will be necessary for
the Company to utilize any inventions of any of its employees (or people it
currently intends to hire) made prior to their employment by the Company.
3.9 Litigation, Etc. There is no action, proceeding or investigation
---------------
pending against the Company or its officers, directors or stockholders, or to
the best of the Company's knowledge, against employees or consultants of the
Company (or, to the best of the Company's knowledge, any basis therefor or
threat thereof): (1) which might result, either individually or in the
aggregate, in (a) any material adverse change in the business, prospects,
conditions, affairs or operations of the Company or in any of its properties or
assets, or (b) any material impairment of the right or ability of the Company to
carry on its business as now conducted or as proposed to be conducted, or (c)
any material liability on the part of the Company; or (2) which questions the
validity of this Agreement, the Collateral Agreements or any action taken or to
be taken in connection herewith or thereunder, including in each case, without
limitation, actions pending or threatened involving the prior employment of any
of the Company's employees, the use in connection with the Company's business of
any information or techniques allegedly proprietary to any of its former
employees, or their obligations under any agreements with prior employers. The
Company is not a party to or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or investigation by the
Company currently pending or which the Company currently intends to initiate.
3.10 Governmental Consent, Etc. No consent, approval or authorization
-------------------------
of or designation, declaration or filing with any governmental authority on the
part of the Company is
-4-
required in connection with: (a) the valid execution and delivery of this
Agreement or either of the Collateral Agreements; or (b) the offer, sale or
issuance of the Shares and Warrants, the issuance of the Warrant Shares upon
exercise of the Warrants, or the issuance of the shares of Common Stock issuable
upon conversion of the Preferred Stock or (c) the obtaining of the consents,
permits and waivers specified in Subsection 5.1(b) hereof, except the filing of
the Restated Articles and, if required, filings or qualifications under the
California Corporate Securities Law of 1968, as amended (the "California Law"),
or other applicable blue sky laws, which filings or qualifications, if required,
will have been timely filed or obtained after the sale of the Shares and
Warrants.
3.11 Offering. In reliance in part on the representations and
--------
warranties of the Purchasers in Section 4 hereof, the offer, sale and issuance
of the Shares and Warrants in conformity with the terms of this Agreement will
not result in a violation of the requirements of Section 5 of the Securities Act
of 1933, as amended (the "Securities Act") or the qualification or registration
requirements of the California Law or other applicable blue sky laws.
3.12 Taxes. The Company has filed all tax returns that are required
-----
to have been filed with appropriate federal, state, county and local
governmental agencies or instrumentalities, except where the failure to do so
would not have a material adverse effect upon the Company, taken as a whole. The
Company has paid or established reserves for all income, franchise and other
taxes, assessments, governmental charges, penalties, interest and fines due and
payable by them on or before the Closing. There is no pending dispute with any
taxing authority relating to any of such returns and the Company has no
knowledge of any proposed liability for any tax to be imposed upon the
properties or assets of the Company for which there is not an adequate reserve
reflected in the Financial Statements (as defined below).
3.13 Title. The Company owns its property and assets, including the
-----
properties and assets reflected in the Financial Statements, free and clear of
all liens, mortgages, loans or encumbrances except liens for current taxes, and
such encumbrances and liens which arise in the ordinary course of business and
do not materially impair the Company's ownership or use of such property or
assets. With respect to the property and assets leased by the Company, the
Company is in compliance with such leases and, to the best of the Company's
knowledge, holds valid leasehold interests free and clear of any liens, claims
or encumbrances.
3.14 Material Contracts and Commitments. All of the contracts,
----------------------------------
mortgages, indentures, agreements, instruments and transactions to which the
Company is a party or by which it is bound (including purchase orders to the
Company or placed by the Company) which involve obligations of, or payments to,
the Company in excess of Twenty-Five Thousand Dollars ($25,000) and all
agreements between the Company and its stockholders, officers, directors,
consultants and employees are either (i) attached as exhibits to this Agreement,
or (ii) set forth on the list attached hereto as Exhibit H (the "Contracts"),
---------
copies of which have been delivered to special counsel to the Purchasers. All of
the Contracts are valid, binding and in full force and effect and enforceable by
the Company in accordance with their respective terms in all material respects,
subject to the effect of applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application relating to or affecting
enforcement of creditors' rights and rules or laws concerning equitable
remedies. The Company is not in material default under any
-5-
of such Contracts. To the best of the Company's knowledge, no other party to any
of the Contracts is in material default thereunder.
3.15 Financial Statements. The Company has delivered to each
--------------------
Purchaser its audited balance sheets as of December 31, 1992 and December 31,
1993 and its unaudited balance sheet as of August 31, 1994, (the "Balance
Sheets") and its audited consolidated income statements and cash flow statements
for the five month period ended December 31, 1992 and the twelve month period
ended December 31, 1993 and its unaudited consolidated income statement and cash
flow statement for the period ended August 31, 1994 (the above financial
statements are hereinafter collectively referred to as the "Financial
Statements"). The Financial Statements are complete and correct in all material
respects and have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the relevant period. The
Financial Statements accurately set out and describe the financial condition and
operating results of the Company as of the date, and during the period,
indicated therein. Except as set forth in the Financial Statements, the Company
has no liabilities of any nature (matured or unmatured, fixed or contingent),
other than (i) liabilities incurred in the ordinary course of business
subsequent to August 31, 1994, and (ii) obligations under contracts and
commitments incurred in the ordinary course of business and not required under
generally accepted accounting principles to be reflected in the Financial
Statements, which, individually or in the aggregate, are not material to the
financial condition or operating results of the Company. The Company maintains
and will continue to maintain a standard system of accounting established and
administered in accordance with generally accepted accounting principles.
3.16 Absence of Changes. Since December 31, 1993: (a) the Company has
------------------
not entered into any transaction which was not in the ordinary course of
business, (b) there has been no material adverse change in the condition
(financial or otherwise) of the business, property, assets or liabilities of the
Company other than changes in the ordinary course of its business, none of
which, individually or in the aggregate, has been materially adverse, (c) there
has been no damage to, destruction of or loss of physical property (whether or
not covered by insurance) materially and adversely affecting the assets,
prospects, financial condition, operating results. business or operations of the
Company, (d) the Company has not declared or paid any dividend or made any
distribution on its stock, or redeemed, purchased or otherwise acquired any of
its stock, (e) the Company has not materially changed any compensation
arrangement or agreement with any of its key employees or executive officers, or
materially changed the rate of pay of its employees as a group, (f) the Company
has not received notice that there has been a cancellation of an order for the
Company's products or a loss of a customer of the Company, the cancellation or
loss of which would materially adversely affect the business of the Company, (g)
the Company has not changed or amended any material contract by which the
Company or any of its assets are bound or subject, except as contemplated by
this Agreement, (h) there has been no resignation or termination of employment
of any key officer or employee of the Company and the Company does not know of
any impending resignation or termination of employment of any such officer or
employee that if consummated would have a material adverse effect on the
business of the Company, (i) there has been no labor dispute involving the
Company or its employees and none is pending or, to the best of the Company's
knowledge, threatened, (j) there has been no change, except in the ordinary
course of business, in the material contingent obligations of the Company (nor
in any continent obligation of the Company regarding any
-6-
director, shareholder or key employee or officer of the Company) by way of
guaranty, endorsement, indemnity, warranty or otherwise, (k) there have been no
loans made by the Company to any of its employees, officers or directors other
than travel advances and other advances made in the ordinary course of business,
(1) there has been no waiver by the Company of a valuable right or of a material
debt owing to it, (m) there has not been any satisfaction or discharge of any
lien, claims or encumbrance or any payment of any obligation by the Company,
except in the ordinary course of business and which is not material to the
assets, properties, financial condition, operating results or business of the
Company, and (n) to the best of the knowledge of the Company, there has been no
other event or condition of any character pertaining to and materially adversely
affecting the assets or business of the Company.
3.17 Outstanding Indebtedness. Except as disclosed in the Balance
------------------------
Sheets, the Company has no indebtedness for borrowed money which it has directly
or indirectly created, incurred, assumed or guaranteed, or with respect to which
it has otherwise become liable, directly or indirectly.
3.18 Registration Rights. Other than as granted pursuant to the
-------------------
Investor Rights Agreement, the Company has not granted or agreed to grant any
rights to register, as that term is defined in the Investor Rights Agreement of
the Company's presently outstanding securities or any of its securities that may
hereafter be issued.
3.19 Certain Transactions. The Company is not indebted, directly or
--------------------
indirectly, to any of its officers, directors or stockholders or to their
spouses or children, in any amount whatsoever; and none of said officers,
directors or, to the best of the Company's knowledge, stockholders, or any
member of their immediate families, are indebted to the Company or have any
direct or indirect ownership interest in any firm or corporation with which the
Company is affiliated or with which the Company has a business relationship
(except as a holder of securities of a corporation whose securities are publicly
traded and which is subject to the reporting requirements of the Securities
Exchange Act of 1934, to the extent of owning not more than two percent (2%) of
the issued and outstanding securities of such corporation). No such officer,
director or stockholder, or any member of their immediate families, is, directly
or indirectly, interested in any material contract with the Company. The Company
is not guarantor or indemnitor of any indebtedness of any other person, firm or
corporation.
3.20 Corporate Documents. Minute Books. Except for amendments
-------------------
necessary to satisfy representations and warranties or conditions contained
herein (the form of which amendments has been approved by the Purchaser), the
Certificate of Incorporation and Bylaws of the Company are in the form
previously provided to special counsel to the Purchaser. The minute books of the
Company previously provided to special counsel to the Purchasers contain a
complete summary of all meetings and corporate actions of directors and
shareholders since the time of incorporation of the Company.
3.21 Employee Benefit Plans. With the exception of a 401(k) plan, the
----------------------
Company does not have any "employee benefit plan" as defined in the Employee
Retirement Income Security Act of 1974, as amended.
-7-
3.22 Real Property Holding Corporation. The Company is not a "real
---------------------------------
property holding corporation" within the meaning of Section 897(c)(2) of the
United States Internal Revenue Code of 1986, as amended.
3.23 Qualified Small Business. The Company is a "qualified small
------------------------
business" within the meaning of Section 1202(d) of the Internal Revenue Code of
1986, as amended, as of the date of issuance of the Shares. The Company will use
reasonable efforts to comply with the reporting and recordkeeping, requirements
of Section 1202 and any regulations promulgated thereunder if and for so long as
it appears to the Company that the Purchasers may be able to obtain the benefits
of Section 1202 and any such regulations.
3.24 Disclosure. No representation or warranty by the Company in this
----------
Agreement, or in any document or certificate furnished or to be furnished to the
Purchasers pursuant hereto or in connection with the transactions contemplated
hereby, when taken together, contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements made herein and therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that with regard to the
operating projections which have been delivered to the Purchaser, the Company
represents only that such projections were prepared in good faith and that the
Company reasonably believes there is a reasonable basis for such projections.
4. Representations and Warranties of Purchasers and Restrictions on
----------------------------------------------------------------
Transfer Imposed by the Securities Act.
--------------------------------------
4.1 Representations and Warranties by the Purchaser. Each Purchaser
-----------------------------------------------
represents and warrants to the Company as of the date hereof and as of the
Closing Date as follows:
(a) Investment Intent. This Agreement is made with the
-----------------
Purchasers in reliance upon their representation to the Company, evidenced by
each Purchaser's execution of this Agreement, that each Purchaser is acquiring
the Shares and Warrants, and will acquire the Warrant Shares issuable upon
exercise of the Warrants and the Class A Common Stock issuable upon conversion
of Shares (collectively the "Securities") for investment for such Purchaser's
own account, not as nominee or agent, for investment and not with a view to, or
for resale in connection with, any distribution or public offering thereof
within the meaning of the Securities Act and the California Law. Each Purchaser
has the full right, power and authority to enter into and perform this Agreement
and the Collateral Agreements and this Agreement and each of the Collateral
Agreements constitute valid and binding obligations upon it.
(b) Shares Not Registered. Each Purchaser understands and
---------------------
acknowledges that the offering of the Securities pursuant to this Agreement will
not be registered under the Securities Act or qualified under the California Law
on the grounds that the offering and sale of securities contemplated by this
Agreement are exempt from registration under the Securities Act and exempt from
qualification pursuant to Section 25102(f) of the California Law, and that the
Company's reliance upon such exemptions is predicated upon such Purchaser's
representations set forth in this Agreement.
-8-
(c) No Transfer. Each Purchaser covenants that in no event will
-----------
such Purchaser dispose of any of the Securities (other than in conjunction with
an effective registration statement for the Securities under the Securities Act
or in compliance with Rule 144 promulgated under the Securities Act) unless and
until (i) such Purchaser shall have notified the Company of the proposed
disposition and shall have furnished the Company with a statement of the
circumstances surrounding the proposed disposition, and (ii) if reasonably
requested by the Company, such Purchaser shall have furnished the Company with
an opinion of counsel satisfactory in form and substance to the Company to the
effect that (x) such disposition will not require registration under the
Securities Act and (y) appropriate action necessary for compliance with the
Securities Act, the California Law and any other applicable state, local or
foreign law has been taken. It is agreed that the Company will not require
opinions of counsel for transactions made pursuant to Rule 144, other than
opinions with regard to sales under Rule 144(k) as stated in Section 4.3 of this
Agreement.
(d) Permitted Transfers. Notwithstanding the provisions of
-------------------
Subsection (c) above, no registration statement or opinion of counsel shall be
necessary for a transfer by a Purchaser which is a partnership to a partner of
such partnership or a former partner of such partnership who leaves such
partnership after the date hereof, or to the estate of any such partner or
former partner or the transfer by gift, will or intestate succession of any
partner to his spouse or lineal descendants or ancestors, if the transferee
agrees in writing to be bound by the terms of this Agreement to the same extent
as if he were an original Purchaser hereunder.
(e) Knowledge and Experience. Each Purchaser represents that it
------------------------
(i) has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of such Purchaser's prospective
investment in the Securities; (ii) has the ability to bear the economic risks of
such Purchaser's prospective investment; (iii) has been furnished with and has
had access to such information as such Purchaser has considered necessary to
make a determination as to the purchase of the Securities; (iv) has had all
questions which have been asked by such Purchaser satisfactorily answered by the
Company; and (v) has not been offered the Securities by any form of
advertisement, article, notice or other communication published in any
newspaper, magazine, or similar media or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any such media.
(f) Accredited Investor. Each Purchaser is an "accredited
-------------------
investor" within the meaning of Securities and Exchange Commission ("SEC") Rule
501 of Regulation D, as presently in effect.
(g) Not Organized to Purchase. The Purchaser has not been
-------------------------
organized for the purpose of purchasing the Securities.
(h) Holding Requirements. Each Purchaser understands that if the
--------------------
Company does not (i) register its Common Stock with the SEC pursuant to Section
12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), (ii)
become subject to Section 15(d) of the Exchange Act, (iii) supply information
pursuant to Rule 15c2-11 thereunder, or (iv) have a registration statement
covering the Securities (or a filing pursuant to the exemption from registration
under Regulation A of the Securities Act covering the Securities) under the
-9-
Securities Act in effect when it desires to sell the Securities, such Purchaser
may be required to hold the Securities for an indeterminate period. Each
Purchaser also understands that any sale of the Securities that might be made by
such Purchaser in reliance upon Rule 144 under the Securities Act may be made
only in limited amounts in accordance with the terms and conditions of that
rule.
4.2 Legends. Each certificate representing the Securities may be
-------
endorsed with the following legends:
(a) Federal Legend. THE SECURITIES REPRESENTED BY THIS
--------------
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") AND ARE "RESTRICTED SECURITIES" AS DEFINED IN RULE 144
PROMULGATED UNDER THE ACT. THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE OR
OTHERWISE DISTRIBUTED EXCEPT (i) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SHARES UNDER THE ACT OR (ii) IN COMPLIANCE WITH RULE 144, OR
(iii) PURSUANT TO AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION OR COMPLIANCE IS NOT REQUIRED AS TO SAID SALE, OFFER OR
DISTRIBUTION.
(b) Other Legends. Any other legends required by the Law or
-------------
other applicable state blue sky laws.
The Company need not register a transfer of legended Securities, and may also
instruct its transfer agent not to register the transfer of the Securities,
unless the conditions specified in each of the foregoing legends are satisfied.
4.3 Removal of Legend and Transfer Restrictions. Any legend endorsed
-------------------------------------------
on a certificate pursuant to Subsection 4.2(a) and the stop transfer
instructions with respect to such legended Securities shall be removed, and the
Company shall issue a certificate without such legend to the holder of such
Securities if such Securities are registered under the Securities Act and a
prospectus meeting the requirements of Section 10 of the Securities Act is
available or if such holder satisfies the requirements of Rule 144(k) and, where
reasonably deemed necessary by the Company, provides the Company with an opinion
of counsel for such holder of the Securities, reasonably satisfactory to the
Company, to the effect that (i) such holder, meets the requirements of Rule
144(k) or (ii) a public sale, transfer or assignment of such Securities may be
made without registration.
4.4 Rule 144. Each Purchaser is aware of the adoption of Rule 144 by
--------
the SEC promulgated under the Securities Act, which permits limited public
resales of securities acquired in a nonpublic offering, subject to the
satisfaction of certain conditions. Each Purchaser understands that under Rule
144, the conditions include, among other things: the availability of certain
current public information about the issuer and the resale occurring not less
than two years after the party has purchased and paid for the securities to be
sold.
-10-
5. Conditions to Closing.
---------------------
5.1 Conditions to Purchasers' Obligations. The obligation of each
------------------------
Purchaser to purchase the Shares at the Closing is subject to the fulfillment to
its satisfaction, on or prior to the Closing Date, of the following conditions,
any of which may be waived in accordance with the provisions of Subsection 8.1
hereof:
(a) Representations and Warranties Correct; Performance of
------------------------------------------------------
Obligations. The representations and warranties made by the Company in Section 3
-----------
hereof shall be true and correct when made, and shall be true and correct in all
material respects on the Closing Date with the same force and effect as if they
had been made on and as of said date. The Company's business and assets shall
not have been adversely affected in any material way prior to the Closing Date.
The Company shall have performed in all material respects all obligations and
conditions herein required to be performed or observed by it on or prior to the
Closing Date.
(b) Consents and Waivers. The Company shall have obtained in a
--------------------
timely fashion any and all consents, permits and waivers necessary or
appropriate for consummation of the transactions contemplated by this Agreement.
(c) Amendment of Bylaws; Board of Directors. On or prior to the
---------------------------------------
Closing Date the Company shall have amended its Bylaws to provide for a fixed
Board of Directors set at four (4). Effective upon the Closing, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ shall have been appointed to the Company's Board of Directors. The
Company and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ shall have entered into an indemnification
agreement reasonably acceptable to special counsel to the Purchasers. The
Compensation Committee of the Board of Directors shall consist, effective upon
the Closing, of those persons described in Section 6.7 hereof.
(d) Filing of the Restated Certificate; Effectiveness of Merger.
-----------------------------------------------------------
The Restated Certificate shall have been filed with the Delaware Secretary of
State, and the merger of Business Real Estate Information Corporation, a
California corporation, with and into the Company, shall be effective in each of
Delaware and California.
(e) Investor Rights Agreement. The Company and each Purchaser
-------------------------
shall have executed and delivered the Investor Rights Agreement in the form
attached as Exhibit E hereto.
---------
(f) Co-Sale Agreement. The Company, the Purchasers and the
-----------------
Stockholders shall have executed and delivered the Co-Sale Agreement in the form
attached as Exhibit G hereto.
---------
(g) Shareholder Buy-Out and Voting Agreement. The Purchasers,
----------------------------------------
the Company, ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall have executed and
delivered the Shareholder Buy-Out and Voting Agreement.
(h) Compliance Certificate. The Company shall have delivered a
----------------------
Certificate, executed by the President of the Company, dated the Closing Date,
certifying to the fulfillment of the conditions specified in Subsections (a),
(b), (c) and (d) of this section 5.1.
-11-
(i) Opinion of Counsel. The Purchasers shall have received an
------------------
opinion from the Company's counsel, in substantially the form attached hereto as
Exhibit J.
---------
(j) Employment Agreement. The Company shall have entered into an
--------------------
Employment Agreement with ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ in a form reasonably acceptable
to the Purchasers.
5.2 Conditions to Obligations of the Company. The Company's
----------------------------------------
obligation to sell and issue the Shares and Warrants at the Closing is subject
to the fulfillment to the satisfaction of the Company on or prior to the Closing
Date of the following conditions, any of which may be waived by the Company:
(a) Representations and Warranties Correct. The representations
--------------------------------------
and warranties made by each Purchaser in Section 4 hereof shall be true and
correct when made, and shall be true and correct on the Closing Date with the
same force and effect as if they had been made on and as of said date.
(b) Conditions Fulfilled. The conditions set forth in
--------------------
Subsections (b) and (d) of Section 5.1 shall have been fulfilled.
6. Covenants of the Company. The Company hereby covenants and agrees as
------------------------
follows:
6.1 Financial Information. Until the first to occur of (a) the date
---------------------
on which the Company is required to file a report with the SEC pursuant to
Section 13(a) of the Exchange Act, by reason of the Company having registered
any of its securities pursuant to Section 12(g) of the Exchange Act or (b)
quotations for the Common Stock of the Company are reported by the automated
quotations system operated by the National Association of Securities Dealers,
Inc. or by an equivalent quotations system or (c) shares of the Common Stock of
the Company are listed on a national securities exchange registered under
Section 6 of the Exchange Act, the Company will furnish to each Purchaser:
(i) as soon as practicable after the end of each fiscal year,
and in any event within 150 days thereafter, consolidated balance sheets of the
Company and its subsidiaries, if any, as at the end of such fiscal year, and
consolidated statements of operations and consolidated statements of cash flow
of the Company and its subsidiaries, if any, for such year, prepared in
accordance with generally accepted accounting principles, all in reasonable
detail and certified by a "Big Six" accounting firm selected by the Board of
Directors, and
(ii) as soon as practicable after the end of each month, and in
any event within 30 days thereafter, consolidated balance sheets of the Company
and its subsidiaries, if any, as of the end of such month; and consolidated
statements of income and consolidated cash flow statements, for such month and
for the current fiscal year to date, prepared in accordance with generally
accepted accounting principles (except for required footnotes), all in
reasonable detail and signed, subject to changes resulting from year-end audit
adjustments, by the principal financial officer or chief executive officer of
the Company, and
-12-
(iii) as soon as practicable after its adoption or approval by the
Company's Board of Directors, but not later than the commencement of such fiscal
year, an annual budget and operating plan for each fiscal year which shall
include monthly capital and operating expense budgets, cash flow statements,
projected balance sheets and profit and loss projections for each such month and
for the end of the year, itemized in such detail as the Board of Directors may
reasonably determine.
Each Purchaser agrees not to disclose the information provided it pursuant
to this Section to any person, real or legal, except as provided or authorized
herein. The Purchasers may disclose such information to persons who have a need
to know, such as limited partners, directors, trustees, management employees,
witnesses, experts, investors, attorneys, lenders, and insurers. Notwithstanding
the foregoing, the Purchasers may disclose such information pursuant to the
requirement of a governmental agency or operation of law, provided that the
Purchasers are obligated to use reasonable efforts to prevent disclosure under
such circumstance.
6.2 Conflicts of Interests. The Company shall use its best efforts to
----------------------
ensure that the Company's employees, during the term of their employment with
the Company, do not engage in activities which would result in a conflict of
interest with the Company. The Company's obligations hereunder include, but are
not limited to, requiring that the Company's full-time employees devote their
primary productive time, ability and attention to the business of the Company
(provided, however, the Company's employees may engage in other professional
activity if such activity does not materially interfere with their obligations
to the Company), requiring that the Company's employees enter into agreements
regarding proprietary information and confidentiality and preventing the
Company's employees from engaging or participating in any business that is in
competition with the business of the Company.
6.3 Key-Man and D&O Insurance. The Company shall use ts best efforts
-------------------------
to obtain within thirty (30) days of the Closing and maintain in force, until
canceled or modified with the written consent of Purchasers holding more than
fifty percent (50%) of the Securities or their transferees, an insurance policy
on the life of ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, in the amount of $1,000,000, naming the
Company as holder and beneficiary. The Company will use its best efforts to
obtain Directors and Officers insurance provided that such insurance is
available at a reasonable cost.
6.4 Proprietary Agreements. The Company will use its best efforts to
----------------------
prevent any employee from violating the confidentiality and proprietary
information agreement entered into between the Company and each of its
employees.
6.5 Future Stock Issuances. The Company will not issue any shares of
----------------------
Common Stock (or grant any options, warrants or other rights to purchase the
same) to any employee, officer, director or consultant (i) except pursuant to
written agreements which provide for vesting over a period of at least forty-
eight (48) months (with the initial vesting date to occur at least after twelve
(12) months) and a right of first refusal in favor of the Company in the event
of any proposed transfer, or (ii) if such issuance or grant causes the aggregate
number of shares of Common Stock issued and granted to the Company's employees,
officers, directors or consultants to exceed 811,160; provided further that no
----------------
more than 341,159 shares of Common Stock (or options, warrants or other rights
to purchase the same) may be granted to employees,
-13-
officers, directors or consultants of the Company who are employed, elected or
retained by the Company as of the date of this Agreement, unless such issuance
or grant is approved by the Purchasers holding a majority of the Shares.
6.6 Use of Proceeds. The Company may use up to $2,000,000 of the
---------------
proceeds hereunder to repurchase shares of the Company's Common Stock held by
existing shareholders of the Company. The remaining proceeds shall be used for
working capital purposes.
6.7 Compensation Committee. The compensation for the Company's
----------------------
officers shall be determined by a Compensation Committee of the Board of
Directors. The Compensation Committee shall initially consist of (a) ▇▇▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇, Chairman (b) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ or such other director as is elected
by the holders of the Shares, and (c) the director elected pursuant to the
Voting Agreement attached hereto as Exhibit I. The director elected by the
---------
holders of the Shares shall not be removed from the Compensation Committee
without the prior written consent of the Purchasers.
6.8 Inspection Rights. Each Purchaser shall have the right to visit
-----------------
and inspect any of the properties of the Company or any of its subsidiaries, and
to discuss the affairs, finances and accounts of the Company or any of its
subsidiaries with its officers, all at such reasonable times and as often as may
be reasonably requested; provided, however, that the Company shall not be
obligated under this Section 6.8 with respect to a competitor of the Company or
with respect to information which the Board of Directors determines in good
faith is confidential and should not, therefore, be disclosed.
6.9 Reservation of Common Stock. The Company will at all times
---------------------------
reserve and keep available, solely for issuance and delivery upon the conversion
of the Shares and exercise of the Warrants, all Class A and Class B Common Stock
issuable from time to time upon such conversion or exercise.
6.10 Dealings with Affiliates and Others. The Company will not enter
-----------------------------------
into any transaction, including, without limitation, any loans or extensions of
credit or royalty agreements, with any officer or director of the Company or any
subsidiary or holder of any class of capital stock of the Company, or any member
of their respective immediate families or any corporation or other entity
directly or indirectly controlled by one or more of such officers, directors or
stockholders or members of their immediate families (other than any such
transactions in the ordinary course of business which are in an amount not in
excess of $25,000) unless such transaction is approved in advance by a majority
of the members of the Board of Directors who are disinterested with respect to
that transaction.
6.11 Termination of Covenants. All covenants of the Company contained
------------------------
in Section 6 of this Agreement shall expire and terminate as to each Purchaser
after the time of effectiveness of the Company's first underwritten public
offering registered under the Securities Act.
-14-
7. Dispute Resolution.
------------------
7.1 Arbitration. The parties acknowledge and agree that time is of
-----------
the essence in resolving any dispute that may arise in connection with this
Agreement. Except as set forth herein, any controversy or claim arising out of
or relating to this Agreement, or the breach thereof, that cannot be resolved
between the parties in a timely manner shall be settled by binding arbitration
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association ("AAA"). The expenses of the arbitration, including the arbitrator's
fees, expert witness fees. and attorney's fees, may be awarded to the prevailing
party, in the discretion of the arbitrator, or may be apportioned between the
parties in any manner deemed appropriate by the arbitrator. Unless and until the
arbitrator decides that one party is to pay for all (or a share) of such
expenses, the Company shall pay all reasonable expenses, including legal and
accounting fees and costs arising in connection with enforcement of this
Agreement or the Collateral Agreements. The parties shall keep confidential the
decision of the arbitrator. Notwithstanding the foregoing, the parties may
disclose information about such decision to persons who have a need to know,
such as limited partners, directors, trustees, management employees, witnesses,
experts, investors, attorneys, lenders, insurers, and others who may be
affected. Additionally, if a party has stock which is publicly traded, the party
may make such disclosures as are required by applicable securities laws. Once
the arbitration award has become final, if the arbitration award is not promptly
satisfied, then these confidentiality provisions shall no longer be applicable.
7.2 Specific Performance. Notwithstanding Section 7.1 hereof, the
--------------------
parties will be entitled to enforce their rights under this Agreement
specifically (without posting a bond or other security). The parties hereto
agree and acknowledge that money damages may not be an adequate remedy for any
breach of the provisions of this Agreement and any party may in its sole
discretion apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive relief in order to enforce or prevent any
violation of the provisions of this Agreement.
8. Miscellaneous.
-------------
8.1 Waivers and Amendments. With the written consent of the Company
----------------------
and the record holders of at least a majority of the Shares, the obligations of
the Company and Purchasers under this Agreement may be waived or amended (either
generally or in a particular instance). Upon the effectuation of each such
waiver or amendment, the Company shall promptly give written notice thereof to
the record holders of the Shares who have not previously consented thereto in
writing. Except to the extent provided in this Subsection 8.1, this Agreement or
any provision hereof may be amended, waived, discharged or terminated only by a
statement in writing signed by the party against which enforcement of the
amendment, waiver, discharge or termination is sought.
8.2 Governing Law. This Agreement shall be governed in all respects
-------------
by the laws of the State of California as such laws are applied to agreements
between California residents entered into and to be performed entirely within
California.
-15-
8.3 Survival. The representations, warranties, covenants and
--------
agreements made herein shall survive the Closing, notwithstanding any
investigation made by the Purchaser. All statements as to factual matters
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant hereto or in connection with the transactions contemplated
hereby shall be deemed to be representations and warranties by the Company
hereunder as of the date of such certificate or instrument.
8.4 Successors and Assigns. Except as otherwise expressly provided
----------------------
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
8.5 Entire Agreement. This Agreement and the Collateral Agreements
----------------
and other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof and they supersede, merge and render void every other prior
written and/or oral understanding or agreement among or between the parties
hereto. Notwithstanding the foregoing, the obligation set forth in the third
sentence of Section X(B) of that certain Letter of Intent between the parses
dated as of August 8, 1994, shall not be merged with this Agreement and shall
survive until the Closing.
8.6 Notices, Etc. All notices and other communications required or
------------
permitted hereunder shall be in writing and shall be delivered personally,
mailed by first class mail, postage prepaid, or delivered by courier or
overnight delivery, addressed (a) if to a Purchaser, at such Purchaser's address
set forth in the Schedule of Purchasers, or at such other address as such
Purchaser shall have furnished to the Company in writing or (b) if to the
Company, at its address set forth at the beginning of this Agreement, or at such
other address as the Company shall have furnished to each Purchaser in writing.
Notices that are mailed shall be deemed received five (5) days after deposit in
the United States mail.
8.7 Severability. In case any provision of this Agreement shall be
------------
found by a court of law to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not in any way be affected or impaired thereby.
8.8 Finder's Fees and Other Fees.
----------------------------
(a) The Company (i) represents and warrants that it has retained
no finder or broker in connection with the transactions contemplated by this
Agreement and, (ii) hereby agrees to indemnify and to hold Purchasers harmless
from and against any liability for commission or compensate on in the nature of
a finder's fee to any broker or other person or firm (and the costs and expenses
of defending against such liability or asserted liability) for which the
Company, or any of its employees or representatives, is responsible.
(b) Each Purchaser (i) represents and warrants that it has
retained no finder or broker in connection with the transactions contemplated by
this Agreement and (ii) hereby agrees to indemnify and to hold the Company
harmless from and against any liability for any commission or compensation in
the nature of a finder's fee to any broker or other person or firm (and the
costs and expenses of defending against such liability or asserted liability)
for which Purchaser, or any of its employees or representatives, are
responsible.
-16-
8.9 Expenses. The Company and the Purchasers shall each bear their
--------
own expenses and legal fees in connection with the consummation of this
transaction; provided, however, that the Company will pay the reasonable fees of
one special counsel for the Purchaser, together with disbursements and expenses
incurred by special counsel in connection with all transactions leading up to
and including the Closing. Upon and following the Closing, and subject to the
provisions of Section 7 hereof, the Company shall pay all reasonable expenses,
including legal and accounting fees and costs arising in connection with
enforcement of this Agreement or the Collateral Agreements.
8.10 Titles and Subtitles. The titles of the sections and subsections
--------------------
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
8.11 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
8.12 Delays or Omissions. No delay or omission to exercise any right,
-------------------
power or remedy accruing to the Company or to any holder of any securities
issued or to be issued hereunder shall impair any such right, power or remedy of
the Company or such holder, nor shall it be construed to be a waiver of any
breach or default under this Agreement, or an acquiescence therein, or of or in
any similar breach or default thereafter occurring; nor shall any delay or
omission to exercise any right, power or remedy or any waiver of any single
breach or default be deemed a waiver of any other right, power or remedy or
breach or default theretofore or thereafter occurring. All remedies, either
under this Agreement, or by law otherwise afforded to the Company or any holder,
shall be cumulative and not alternative.
8.13 Publicity. The Company and each of the Purchasers agree that they
---------
will not issue any press release or other public announcement regarding the
execution of this Agreement and the closing of the transactions contemplated
hereunder, without the prior written consent of the other parties to this
Agreement.
-17-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
COMPS INFOSYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
SUMMIT VENTURES III, L.P.
By: Summit Partners III, L.P.
General Partner
By: Stamps, ▇▇▇▇▇▇▇ & Co. III,
General Partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
General Partner
SUMMIT INVESTORS II, L.P.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------
General Partner
STOCKHOLDERS:
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-18-
Exhibit A
---------
COMPS INFOSYSTEMS, INC.
STOCK AND WARRANT PURCHASE AGREEMENT
October __, 1994
Schedule of Purchasers
----------------------
Series A Warrants Purchase Price
-------- -------- --------------
Summit Ventures III, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 4,184,929 372,272 $4,900,000
----------------------------
Summit Investors, II, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 85,407 7,597 $ 100,000
---------------------------- ---------- -------- ----------
Totals 4,270,336 379,869 $5,000,000
EXHIBIT B
Warrant
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT") AND ARE "RESTRICTED SECURITIES" AS DEFINED IN RULE
144 PROMULGATED UNDER THE ACT. THE SECURITIES MAY NOT BE
SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT (i)
IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SHARES UNDER THE ACT OR (ii) IN COMPLIANCE WITH RULE
144, OR (iii) PURSUANT TO AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION OR
COMPLIANCE IS NOT REQUIRED AS TO SAID SALE, OFFER OR
DISTRIBUTION.
Warrant No. W-1
CLASS B COMMON STOCK WARRANT
OF
COMPS INFOSYSTEMS, INC.
-----------------------
THIS CERTIFIES THAT, for value received, Summit Ventures III, L.P.
(the "Holder") is entitled to subscribe for and to purchase from COMPS
INFOSYSTEMS INC., a Delaware corporation (the "Company"), 372,272 shares of the
non-voting Class B Common Stock of the Company, at the price per share set forth
in Section 1 hereof, payable in cash or check (such price being referred to
herein as the "Exercise Price" and subject to adjustment as set forth Section 2
below), at any time or from time to time following the occurrence of any of the
events described in Section 3 hereof and during the term as set forth below.
1. Exercise Price. The Exercise Price shall be $.01 per share.
--------------
2. Adjustments for Subdivisions, Dividends, Combinations or
--------------------------------------------------------
Consolidation of Common Stock.
-----------------------------
a. Subdivisions, Dividends, Consolidations. In the event (i) the
---------------------------------------
outstanding shares of the Class B Common Stock shall be increased (by stock
split, stock dividend or otherwise), into a greater number of shares of Class B
Common Stock, the Exercise Price then in effect shall, concurrently with the
effectiveness of such increase, be proportionately decreased; and (ii) the
outstanding shares of Class B Common Stock shall be decreased, by
reclassification or otherwise, into a lesser number of shares of Class B Common
Stock, the Exercise Price then in effect shall, concurrently with the
effectiveness of such decrease, be proportionately increased. In the event that
the Exercise Price is adjusted pursuant to this Subsection, the number of shares
of Class B Common Stock issuable pursuant to this Warrant shall be increased or
decreased to a number determined by multiplying (1) the number of shares of
Class B Common Stock issuable pursuant to this Warrant immediately prior to the
adjustment by (2) a fraction, the numerator of which shall equal the Exercise
Price in effect immediately
-1-
prior to the adjustment and the denominator of which shall equal the Exercise
Price in effect immediately after the adjustment.
b. Reclassification, Reorganization and Consolidation. In case of
--------------------------------------------------
any reclassification, capital reorganization or change in the Class B Common
Stock of the Company (other than as a result of a subdivision, combination or
stock dividend provided for in Section 2(a) above), then, as a condition of such
reclassification, reorganization or change, lawful provision shall be made, and
duly executed documents evidencing the same from the Company or its successor
shall be delivered to the holder of this Warrant, so that the holder of this
Warrant shall have the right, commencing upon the times set forth in Section 3,
and prior to the expiration of this Warrant, to purchase, at a total price equal
to that payable upon the exercise of this Warrant, the kind and amount of shares
of stock and other securities and property receivable in connection with such
reclassification, reorganization or change by a holder of the same number of
shares of Class B Common Stock as were subject to this Warrant immediately prior
to such reclassification, reorganization or change. In any such, case
appropriate provisions shall be made with respect to the rights and interests of
the holder of this Warrant so that the provisions hereof shall thereafter be
applicable with respect to any shares of stock or other securities and property
deliverable upon exercise hereof, and appropriate adjustments shall be made to
the purchase price per share payable hereunder, provided the aggregate purchase
price shall remain the same.
c. Conversion of Class B Common Stock. If at any time prior to the
----------------------------------
expiration of this Warrant, all of the Company's then outstanding Class B Common
Stock is converted into shares of the Company's Class A Common Stock, then this
Warrant shall immediately become exercisable for that number of shares of Class
A Common Stock receivable upon conversion by a holder of the same number of
shares of Class B Common Stock as were subject to this Warrant immediately prior
to such conversion, and the Exercise Price shall be immediately adjusted to
equal the quotient obtained by dividing (x) the aggregate Exercise Price of the
maximum number of shares of Class B Common Stock for which this Warrant was
exercisable immediately prior to such conversion, by (y) the number of shares of
Class A Common Stock for which this Warrant is exercisable immediately after
such conversion. After any such conversion, all references herein to Class B
Common Stock shall be deemed to be references to Common Stock.
d. Notice of Adjustment. When any adjustment is required to be made
--------------------
in the number or kind of shares purchasable upon exercise of the Warrant, or in
the Exercise Price, the Company shall promptly notify the Holder of such event
and of the number of shares of Common Stock or other securities or property
thereafter purchasable upon exercise of the Warrant.
3. Exercise of Warrant. This Warrant may be exercised in whole or in
-------------------
part, commencing (i) one day prior to the earlier of the closing or the
effective time of a "Liquidity Event," as defined herein; or, (ii) if earlier,
October 14, 2001, by the surrender of this Warrant and payment to the Company by
cash or check of the Exercise Price for all of the Shares purchased. The
Company shall, within ten (10) days after such delivery, (a) prepare and issue a
certificate for the Shares purchased in the name of the Holder of this Warrant,
or as such Holder may direct (subject to the restrictions upon transfer
contained herein and upon payment by such
-2-
Holder hereof of any applicable transfer taxes) and (b) prepare and issue a new
warrant of like terms if this Warrant is exercised for less than all of the
Shares subject hereto. "Liquidity Event" shall mean (i) an acquisition,
consolidation or merger of the Company with or into any other corporation or
corporations unless the stockholders of the Company prior to such transaction
directly or indirectly own more than fifty percent (50%) of the voting stock of
the surviving or accruing corporation or corporations; (ii) the sale, transfer
or other disposition of all or substantially all of the assets of the Company to
a person other than a corporation or partnership controlled by the Company or
its stockholders; (iii) the effectuation by the Company of a transaction or
series of related transactions in which more than fifty percent (50%) of the
outstanding voting power of the Company prior to such transaction or series of
related transactions, is disposed of; and (iv) the closing of the sale of the
Company's securities pursuant to an underwritten public offering.
a. Net Issue Exercise. Notwithstanding any provisions herein to the
------------------
contrary, in lieu of exercising this Warrant for cash, the Holder may elect to
receive shares equal to the value (as determined below) of this Warrant (or the
portion thereof being canceled) by surrender of this Warrant at the principal
office of the Company together with a properly endorsed notice of exercise and
notice of such election in which event the Company shall issue to the Holder a
number of shares of Clm B Common Stock computed using the following formula:
Y (A - B)
X = ---------
A
Where X = the number of shares of Class B Common Stock to be issued to the
Holder,
Y = the number of shares of Class B Common Stock purchasable under
the Warrant or, if only a portion of the Warrant is being
exercised, the portion of the Warrant being canceled (at the date
of such calculation),
A = the fair market value of one share of the Company's Class A
Common Stock (at the date of such calculation), and
B = the Exercise Price (as adjusted to the date of such calculation).
For purposes of the above calculation, fair market value of one
share of Class A Common Stock shall be determined by the Company's Board of
Directors in good faith; provided, however, that where there exists a public
market for the Company's Class A Common Stock at the time of such exercise, fair
market value shall mean the average over the preceding twenty (20) trading days
(or such fewer number of days as such public market has existed) of the mean of
the high closing bid and asked prices on the over-the-counter market as reported
by Nasdaq, or if then traded on a national securities exchange or the Nasdaq
National Market, the average over the preceding twenty (20) trading days (or
such fewer number of days as the Class A Common Stock has been so traded) of the
mean of the high and low prices on the principal national securities exchange or
the National Market on which it is so traded. Notwithstanding the foregoing, in
the event the Warrant is exercised in connection with the Company's initial
-3-
public offering of Common Stock, the fair market value per share shall be the
per share offering price to the public of the Company's initial public offering.
4. Term of Warrant. This Warrant expires and shall no longer be
---------------
exercisable as of 11:59 p.m. Pacific standard time, October 14, 2004, and shall
be void thereafter.
5. Conditions to Exercise of Warrant or Transfer of the Shares. It
-----------------------------------------------------------
shall be a condition to any exercise of this Warrant that the Company shall have
received, at the time Shares being issued upon such exercise of such exercise, a
representation in writing that the are being acquired for investment and not
with a view to any sale or distribution thereof, or a statement of the pertinent
facts covering any proposed distribution thereof. It shall be a condition to
any transfer of any or all of the Shares issued upon exercise of this Warrant,
other than a transfer registered under the Securities Act of 1933, as amended
(the "Act"), that the Company shall have received a legal opinion, in form and
substance reasonably satisfactory to the Company and its counsel, reciting the
pertinent circumstances surrounding the proposed transfer and stating that such
transfer is exempt from the prospectus and the registration requirement of the
Act Each certificate evidencing the Shares issued upon exercise of this Warrant,
or upon any transfer of such shares (other than a transfer registered under the
Act or any subsequent transfer of shares so registered) shall, at the option of
the Company, contains a legend, in form and substance satisfactory to the
Company and its counsel, restricting the transfer of such shares to sales or
other dispositions exempt from the requirements of the Act. It is agreed that
the Company will not require opinions of counsel for transactions made pursuant
to Rule 144, other than opinions with regard to sales under Rule 144(k).
6. Fractional Shares. This Warrant shall in no event be exercisable
-----------------
for fractional shares, and in lieu thereof, the number of shares which would
otherwise be purchased under this Warrant shall be rounded up to the nearest
whole share of Common Stock.
7. Miscellaneous.
-------------
a. The Company covenants that it will at all times reserve and
keep available, solely for the purpose of issuance upon the exercise hereof, a
sufficient number of shares of Class A or Class B Common Stock, as applicable,
to permit the exercise hereof in full. Such shares when issued in compliance
with the provisions of this Warrant and the Certificate of Incorporation, as
amended, will be duly authorized, validly issued, fully paid and nonassessable.
b. The terms of this Warrant shall be binding upon and shall
inure to the benefit of any successors or assigns of the Holder hereof and of
the Shares issued or issuable upon the exercise hereto.
c. The Holder, as such, shall not be entitled to vote or receive
dividends or be deemed to be a shareholder of the Company for any purpose, nor
shall anything contained in this Warrant be construed to confer upon the Holder,
is such, any rights of a shareholder of the Company or any right to vote, give
or withhold consent to any corporate action, receive notice of meetings, receive
dividends or subscription rights, or otherwise.
d. Receipt of this Warrant by the Holder shall constitute
acceptance of and agreement to the foregoing terms and conditions.
-4-
e. Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in
the case of any such loss, theft or destruction, upon delivery of an indemnity
agreement reasonably satisfactory in form valid amount to the Company or, in the
case of any such mutilation, upon surrender and cancellation of such Warrant,
the Company at its expense will execute and deliver, in lieu thereof, a new
Warrant of like date and tenor.
f. This Warrant shall be governed by the internal laws of the
State of California.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer.
Dated: October 14, 1994
COMPS INFOSYSTEMS, INC.
By:_____________________________
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
-5-
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
("THE ACT") AND ARE "RESTRICTED SECURITIES" AS DEFINED IN
RULE 144 PROMULGATED UNDER THE ACT. THE SECURITIES MAY NOT
BE SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT
(i) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SHARES UNDER THE ACT OR (ii) IN COMPLIANCE WITH RULE
144, OR (iii) PURSUANT TO AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION OR
COMPLIANCE IS NOT REQUIRED AS TO SAID SALE, OFFER OR
DISTRIBUTION.
Warrant No. W-2
CLASS B COMMON STOCK WARRANT
OF
COMPS INFOSYSTEMS, INC.
-----------------------
THIS CERTIFIES THAT, for value received, Summit Investors II, L.P.
(the "Holder") is entitled to subscribe for and to purchase from COMPS
INFOSYSTEMS INC., a Delaware corporation (the "Company"), 7,597 shares of the
non-voting Class B Common Stock of the Company, at the price per share set forth
in Section 1 hereof, payable in cash or check (such price being referred to
herein as the "Exercise Price" and subject to adjustment as set forth Section 2
below), at any time or from time to time following the occurrence of any of the
events described in Section 3 hereof and during the term as set forth below.
1. Exercise Price. The Exercise Price shall be $.0l per share.
--------------
2. Adjustments for Subdivisions, Dividends, Combinations or
--------------------------------------------------------
Consolidation of Common Stock.
-----------------------------
a. Subdivisions, Dividends, Consolidations. In the event (i)
---------------------------------------
the outstanding shares of the Class B Common Stock shall be increased (by stock
split, stock dividend or otherwise), into a greater number of shares of Class B
Common Stock, the Exercise Price then in effect shall, concurrently with the
effectiveness of such increase, be proportionately decreased; and (ii) the
outstanding shares of Class B Common Stock shall be decreased, by
reclassification or otherwise, into a lesser number of shares of Class B Common
Stock, the Exercise Price then in effect shall, concurrently with the
effectiveness of such decrease, be proportionately increased. In the event that
the Exercise Price is adjusted pursuant to this Subsection, the number of shares
of Class B Common Stock issuable pursuant to this Warrant shall be increased or
decreased to a number determined by multiplying (1) the number of shares of
Class B Common Stock issuable pursuant to this Warrant immediately prior to the
adjustment
-1-
by (2) a fraction, the numerator of which shall equal the Exercise Price in
effect immediately prior to the adjustment and the denominator of which shall
equal the Exercise Price in effect immediately after the adjustment.
b. Reclassification, Reorganization and Consolidation. In case of
--------------------------------------------------
any reclassification, capital reorganization or change in the Class B Common
Stock of the Company (other than as a result of a subdivision, combination or
stock dividend provided for in Section 2(a) above), then, as a condition of such
reclassification, reorganization or change, lawful provision shall be made, and
duly executed documents evidencing the same from the Company or its successor
shall be delivered to the holder of this Warrant, so that the holder of this
Warrant shall have the right, commencing upon the times set forth in Section 3,
and prior to the expiration of this Warrant, to purchase, at a total price equal
to that payable upon the exercise of this Warrant, the kind and amount of shares
of stock and other securities and property receivable in connection with such
reclassification, reorganization or change by a holder of the same number of
shares of Class B Common Stock as were subject to this Warrant immediately prior
to such reclassification, reorganization or change. In any such case
appropriate provisions shall be made with respect to the rights and interests of
the holder of this Warrant so that the provisions hereof shall thereafter be
applicable with respect to any shares of stock or other securities and property
deliverable upon exercise hereof, and appropriate adjustments shall be made to
the purchase price per share payable hereunder, provided the aggregate purchase
price shall remain the same.
c. Conversion of Class B Common Stock. If at any time prior to the
----------------------------------
expiration of this Warrant, all of the Company's then outstanding Class B Common
Stock is converted into shares of the Company's Class A Common Stock, then this
Warrant shall immediately become exercisable for that number of shares of Class
A Common Stock receivable upon conversion by a holder of the same number of
shares of Class B Common Stock as were subject to this Warrant immediately prior
to such conversion, and the Exercise Price shall be immediately adjusted to
equal the quotient obtained by dividing (x) the aggregate Exercise Price of the
maximum number of shares of Class B Common Stock for which this Warrant was
exercisable immediately prior to such conversion, by (y) the number of shares of
Class A Common Stock for which this Warrant is exercisable immediately after
such conversion. After any such conversion, all references herein to Class B
Common Stock shall be deemed to be references to Common Stock.
d. Notice of Adjustment. When any adjustment is required to be made
--------------------
in the number or kind of shares purchasable upon exercise of the Warrant, or in
the Exercise Price, the Company shall promptly notify the Holder of such event
and of the number of shares of Common Stock or other securities or property
thereafter purchasable upon exercise of the Warrant.
3. Exercise of Warrant. This Warrant may be exercised in whole or in
-------------------
part, commencing (i) one day prior to the earlier of the closing or the
effective time of a "Liquidity Event," as defined herein; or, (ii) if earlier,
October 14, 2001, by the surrender of this Warrant and payment to the Company by
cash or check of the Exercise Price for all of the Shares purchased. The Company
shall, within ten (10) days after such delivery, (a) prepare and issue a
certificate for the Shares purchased in the name of the Holder of this Warrant,
or as such Holder may direct (subject to the restrictions upon transfer
contained herein and upon payment by such
-2-
Holder hereof of any applicable transfer taxes and (b) prepare and issue a new
warrant of like terms if this Warrant is exercised for less than all of the
Shares subject hereto. "Liquidity Event" shall mean (i) an acquisition,
consolidation or merger of the Company with or into any other corporation or
corporations unless the stockholders of the Company prior to such transaction
directly or indirectly own more than fifty percent (50%) of the voting stock of
the surviving or acquiring corporation or corporations; (ii) the sale, transfer
or other disposition of all or substantially all of the assets of the Company to
a person other than a corporation or partnership controlled by the Company or
its stockholders; (iii) the effectuation by the Company of a transaction or
series of related transactions in which more than fifty percent (50%) of the
outstanding voting power of the Company prior to such transaction or series of
related transactions, is disposed of; and (iv) the closing of the sale of the
Company's securities pursuant to an underwritten public offering.
a. Net Issue Exercise. Notwithstanding any provisions herein to the
------------------
contrary, in lieu of exercising this Warrant for cash, the Holder may elect to
receive shares equal to the value (as determined below) of this Warrant (or the
portion thereof being canceled) by surrender of this Warrant at the principal
office of the Company together with a properly endorsed notice of exercise and
notice of such election in which event the Company shall issue to the Holder a
number of shares of Class B Common Stock computed using the following formula:
Y (A - B)
X = ---------
A
Where X = the number of shares of Class B Common Stock to be issued to the
Holder,
Y = the number of shares of Class B Common Stock purchasable under
the Warrant or, if only a portion of the Warrant is being
exercised , the portion of the Warrant being canceled (at the
date of such calculation),
A = the fair market value of one share of the Company's Class A
Common Stock (at the date of such calculation), and
B = the Exercise Price (as adjusted to the date of such calculation).
For purposes of the above calculation, fair market value of one
share of Class A Common Stock shall be determined by the Company's Board of
Directors in good faith; provided, however, that where there exists a public
market for the Company's Class A Common Stock at the time of such exercise, fair
market value shall mean the average over the preceding twenty (20) trading days
(or such fewer number of days as such public market has existed) of the mean of
the high closing bid and asked prices on the over-the-counter market as reported
by Nasdaq, or if then traded on a national securities exchange or the Nasdaq
National Market, the average over the preceding twenty (20) trading days (or
such fewer number of days as the Class A Common Stock has been so traded) of the
mean of the high and low prices on the principal national securities exchange or
the National Market on which it is so traded. Notwithstanding
-3-
the foregoing, in the event the Warrant is exercised in connection with the
Company's initial public offering of Common Stock, the fair market value per
share shall be the per share offering price to the public of the Company's
initial public offering.
4. Term of Warrant. This Warrant expires and shall no longer be
---------------
exercisable as of 11:59 p.m. Pacific standard time, October 14, 2004, and shall
be void thereafter.
5. Conditions to Exercise of Warrant of Transfer of Shares. It
-------------------------------------------------------
shall be a condition to any exercise of this Warrant that the Company shall have
received, at the time of such exercise, a representation in writing that the
Shares being issued upon such exercise are being acquired for investment and not
with a view to any sale or distribution thereof, or a statement of the pertinent
facts covering any proposed distribution thereof. It shall be a condition to
any transfer of any or all of the Shares issued upon exercise of this Warrant,
other than a transfer registered under the Securities Act of 1933, as amended
(the "Act"), that the Company shall have received a legal opinion, in form and
substance reasonably satisfactory to the Company and its counsel, reciting the
pertinent circumstances surrounding the proposed transfer and stating that such
transfer is exempt from the prospectus and the registration requirement of the
Act. Each certificate evidencing the Shares issued upon exercise of this
Warrant, or upon any transfer of such shares (other than a transfer registered
under the Act or any subsequent transfer of shares so registered) shall, at the
option of the Company, contain a legend, in form and substance satisfactory to
the Company and its counsel, restricting the transfer of such shares to sales or
other dispositions exempt from the requirements of the Act. It is agreed that
the Company will not require opinions of counsel for transactions made pursuant
to Rule 144, other dm opinions with regard to sales under Rule 144(k).
6. Fractional Shares. This Warrant shall in no event be exercisable
-----------------
for fractional shares, and in lieu thereof, the number of shares which would
otherwise be purchased under this Warrant shall be rounded up to the nearest
whole share of Common Stock.
7. Miscellaneous.
-------------
a. The Company covenants that it will at all times reserve and
keep available, solely for the purpose of issuance upon the exercise hereof, a
sufficient number of shares of Class A or Class B Common Stock, as applicable,
to permit the exercise hereof in full. Such shares when issued in compliance
with the provisions of this Warrant and the Certificate of Incorporation, as
amended, win be duly authorized, validly issued, fully paid and nonassessable.
b. The terms of this Warrant shall be binding upon and shall
inure to the benefit of any successors or assigns of the Holder hereof and of
the Shares issued or issuable upon the exercise hereto.
c. The Holder, as such, shall not be entitled to vote or receive
dividends or be deemed to be a shareholder of the Company for any purpose, nor
shall anything contained in this Warrant be construed to confer upon the Holder,
as such, any rights of a shareholder of the Company or any right to vote, give
or withhold consent to any corporate action, receive notice of meetings, receive
dividends or subscription rights, or otherwise.
-4-
d. Receipt of this Warrant by the Holder shall constitute
acceptance of and agreement to the foregoing terms and conditions.
e. Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in
the case of any such loss, theft or destruction, upon delivery of an indemnity
agreement reasonably satisfactory in form and amount to the Company or, in the
case of any such mutilation, upon surrender and cancellation of such Warrant,
the Company at its expense will execute and deliver, in lieu thereof, a new
Warrant of like date and tenor.
f. This Warrant shall be governed by the internal laws of the
State of California.
-5-
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer.
Dated: October 14, 1994
COMPS INFOSYSTEMS, INC.
By: __________________________________
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
-6-
EXHIBIT C
Schedule of Exceptions
EXHIBIT C TO PURCHASE AGREEMENT
-------------------------------
3.1. Organization and Standing; Articles and Bylaws. The Company is
----------------------------------------------
intentionally not qualified to do business in Arizona, due to that state's
policy of requiring and publishing full financial statements. Based on advice
received from Arizona legal counsel, the Company believes that its failure to
qualify in Arizona does not have a material adverse effect upon the Company.
The Company intends to qualify the Delaware corporation to do business in such
states as it deems necessary.
3.5 Authorization; Pre-emptive Right. Pursuant to the terms of a
--------------------------------
Stockholder Buyout and Voting Agreement among ▇▇▇▇▇▇▇, Crane and Summit, Crane
and Summit have certain rights of first refusal with respect to ▇▇▇▇▇▇▇'▇ shares
of Series A Common Stock. The Company has a right of first refusal with respect
to shares of Common Stock issuable upon the exercise of options under the
Company's Stock Option Plan.
3.6 Patents, Trademarks.
-------------------
3.6.1. Royalty Payments: The Company purchased a customer list
----------------
and database from a competitor (Pathways Commercial Data Services, Inc.) in
September, 1993. Under the terms of the Purchase and Sale Agreement, the Company
pays a 50% royalty on actual cash receipts from certain customers to the former
owners of Pathways. The payments continue until September 30, 1997.
3.6.2 Infringement: The Company occasionally discovers minor
------------
infringement on its copyright (i.e.. persons photocopying reports). Confronting
infringers generally has been successful in causing them to cease. The Company
has not had to file any suits in this regard.
3.6.3 Trademark Protection. The Company has trademark
--------------------
protection on the name "COMPS," but has not obtained such protection on its full
corporate name, "COMPS InfoSystems, Inc." Post-Closing, the Company will
investigate the feasibility of obtaining such protection on its corporate name.
3.8 Proprietary Agreements; Employees: A list of the employees that
---------------------------------
have not executed non-disclosure/confidentiality agreements is attached hereto
as Exhibit 3.8.
3.9 Litigation, etc.
----------------
3.9.1 Crane is on the board of two publicly traded companies
which have been sued in connection with a recent tender offer. Corporate counsel
to such companies has indicated that the plaintiff's case has little merit.
Board members are indemnified by the corporations, which have more than adequate
net worth to adequately indemnify the directors.
3.6.2 The Company recently settled for a nominal amount
litigation by an employee who was terminated.
3.6.3 The Company recently terminated a vice president who was
employed less than 3 months and had been a consultant for 3 1/2 months prior to
that time. The employee believes the Company should buy his business from him
and has asked $150,000 for it. The Company has offered $50,000. The employee has
not threatened litigation, and has specifically stated he wishes to avoid it.
Negotiations are underway. The Company does not believe that this situation will
have a material adverse effect. The Employee has recently expressed flexibility
in arriving at a compromise in the near future.
3.6.3 A Company salesman has said he will request arbitration
over a claim for approximately $12,000 in pay. While acknowledging the Company's
right to change his compensation, the salesman claims he did not receive notice
of an April, 1994 change in his compensation. Other Company employees have
verified in writing that they delivered the new commission structure to the
salesman. The Company does not believe that this situation will have a material
adverse effect.
3.13. Title. Union Bank holds a first lien on all assets as a result
-----
of the line of credit and term loan facility Union Bank has provided to the
Company in the ordinary course of business.
3.15 Financial Statements.
--------------------
3.15.1 ▇▇▇▇▇▇▇ Loan. The Financial Statements reflect notes
------------
from stockholder ▇▇▇▇▇▇▇ of approximately $190,000. Such loans will be forgiven
immediately after closing.
3.15.2. ▇▇▇▇▇▇▇ Non-Compete. ▇▇▇▇▇▇▇ will be paid $4,336 per
-------------------
month in no-compete payments through May of 1996.
3.16 Absence of Changes
------------------
3.16.1. Dividends, Redemptions. In June 1994, the Company
----------------------
declared a dividend of $7,000 which was paid in September, 1994. The Company has
redeemed stock on a monthly basis from ▇▇▇▇▇▇▇ in exchange for payments of
$5,800. Such redemption and payments will stop at closing.
3.16.2 Employees and Compensation. Summit and Crane have agreed
--------------------------
on changed compensation for him after closing. Certain employment agreements
with four vice presidents expired in July 1994. New employment agreements have
been or will be executed by all officers. The Company will enter into
indemnification agreements with each of its officers and directors. See attached
Exhibit "H'.
3.16.3 Resignations, Terminations. The Company terminated a
--------------------------
vice president in August, 1994 (see 3.6.3 above). In January, 1994, the Company
terminated the position of Vice President -- Electronic Sales.
2
3.16.4 Loans to Employees, Officers, Directors.
---------------------------------------
a. The Company has loaned $4,336 per month since May
1993 to ▇▇▇▇▇▇▇ (this amount is included in the $190,000 loan referenced in
Section 3.15.1 above).
b. In September, 1994 the Company loaned ▇▇▇▇▇▇▇
$79,294.04. The principal amount of such loans are due in October, 1994, and it
is anticipated that ▇▇. ▇▇▇▇▇▇▇ will repay the Company with proceeds he receives
when the Company repurchases certain of his shares shortly after the Closing.
3.16.5 Waiver of material debt. Following the closing the
-----------------------
Company will forgive a loan to ▇▇▇▇▇▇▇ in the amount of approximately $190,000.
See 3.15.1 above.
3.16.6 Payment of finder's Fee. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and Associates
-----------------------
has requested a $25,000 finder's fee in connection with the transaction, which
the Company will pay upon the closing.
No higher amount will be paid to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ without Summit's
express permission. In addition, the Company paid consultant's fees to ▇▇▇▇▇
▇▇▇▇▇ of approximately $18,000 ($150 per hour) for advice given in connection
with the transaction.
3.19 Certain Transactions.
--------------------
3.19.1 Loans to ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ is indebted to the Company
----------------
for approximately $190,000, which amount will be forgiven following the closing.
See 3.15.1 above. In addition, in September, 1994 the Company loaned ▇▇▇▇▇▇▇
$79,294. The principal amount of such loan is due in October, 1994, and it is
anticipated that ▇▇. ▇▇▇▇▇▇▇ will repay the Company with proceeds he receives
when the Company repurchases certain of his shares shortly after the Closing.
See 3.16.4 above.
3.19.2 COMPS Plaza. ▇▇▇▇▇▇▇ has a 5 % interest and Crane has
-----------
a 55 % ownership interest in COMPS Plaza Associates, L.P., which owns the
building in which the Company leases space. Crane is the President of Alden
Properties, Inc., the corporate general partner of COMPS Plaza Associates, L.P.
The limited partnership purchased the building on September 16, 1994. Neither
the Company nor ▇▇▇▇▇▇▇ nor ▇▇▇▇▇ are guarantors on the debt on the building.
3.24 Disclosure; Projections. This representation does not apply to
-----------------------
any post-1995 projections delivered to Purchaser.
3.25 Other. With Summit's consent, (i) ▇▇▇▇▇ ▇▇▇▇▇ will be appointed
-----
to the Board as of the Closing as "Crane's designated director," (ii) ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ will be appointed to the Board as of the Closing as "Summit's
designated director," and (iii) the fourth Board member, (the "Mutual Director")
will be appointed to the Board of Directors post-closing. The Compensation
Committee will be comprised of Crane, Kortschak and, when appointed, the Mutual
Director.
3
"Exhibit 3.8"
Following is a list of current employees without signed Non-Disclosure,
--------------
Confidentiality Agreements on file.
▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇
August, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇
DeMonsco, ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇
10/5/94
EXHIBIT D
Investor Rights Agreement
INVESTOR RIGHTS AGREEMENT
-------------------------
THIS INVESTOR RIGHTS AGREEMENT is made and entered into as of October 14,
1994 by and among COMPS Infosystems, Inc., a Delaware corporation (the
"Company") and the undersigned purchasers (the "Purchasers") of the Company's
Series A Preferred Stock and Class B Common Stock Warrants (the "Purchased
Securities'), and ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (the "Founders").
RECITALS:
--------
WHEREAS, as a condition to purchasing the Purchased Securities, the
Purchasers have requested that the Company extend to them registration rights, a
right of first refusal, repurchase rights and certain other rights as set forth
below.
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement and in the
Stock and Warrant Purchase Agreement of even date herewith among the Company and
the Purchasers (the "Purchase Agreement"), the parties mutually agree as
follows:
I GENERAL
A. Definitions. As used herein:
-----------
1. The terms "register", "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act of 1933, as amended (the "Securities Act"),
and the declaration or ordering of the effectiveness of such registration
statement.
2. For the purposes hereof, the term "Registrable Securities" means
shares of (i) any and all Common Stock of the Company issued or issuable upon
conversion of shares of the Series A Preferred Stock of the Company and any and
all Common Stock issued as of or upon the date hereof to the Purchasers; (ii)
any and all Common Stock issued or issuable upon exercise of Class B Common
Stock Warrants issued to the Purchasers as of the date hereof; (iii) any and all
Common Stock issued or issuable upon exercise of the Director options (as
defined in subsection 6. below); (iv) stock issued with respect to or in any
exchange for or in replacement of stock included in subparagraph (i), (ii), or
(iii) above; (iv) stock issued in respect of the stock referred to in (i), (ii),
(iii) and (iv) above as a result of a stock split, stock dividend,
recapitalization or similar event or the like.
3. The terms "Holder" or "Holders" mean any person or persons to
whom Registrable Securities were originally issued and who execute this
Agreement or qualifying transferees under Section II(J) hereof who hold
Registrable Securities.
4. The term "Initiating Holders" means any Holder or Holders of not
less than 50% of the aggregate of Registrable Securities.
-1-
5. The term "Form S-3" means such form under the Securities Act as
in effect on the date hereof or any successor registration form under the
Securities Act subsequently adopted by the SEC which permits inclusion or
incorporation of substantial information by reference to other documents filed
by the Company with the SEC.
6. The term "Securities" shall mean the Company's Series A Preferred
Stock, Class B Common Stock Warrants, any options to purchase shares of the
Company's equity securities issued to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (or his successor as
representative of the Purchasers) in his role as outside director ("Director
Options"), and the Class A Common Stock issuable upon conversion of the Series A
Preferred Stock, the Class B Common Stock issuable upon exercise of the Class B
Common Stock Warrants, the Class A Common Stock issuable upon conversion of the
Class B Common Stock and any equity securities issuable upon exercise of the
Director Options.
7. The term "Securities Act" shall mean the Securities Act of 1933,
as amended.
8. The term "SEC" or "Commission" means the Securities and Exchange
Commission.
II REGISTRATION
A. Demand Registration.
-------------------
1. Request for Registration. In case the Company shall receive from
------------------------
the Initiating Holders a written request that the Company effect any
registration with respect to all or part of the Registrable Securities, the
Company will:
a. within ten (10) days after its receipt thereof give written
notice of the proposed registration to all other Holders; and
b. as soon as practicable, use its best efforts to effect such
registration (including, without limitation, the execution of an undertaking to
file post-effective amendments, appropriate qualifications under the applicable
blue sky or other state securities laws and appropriate compliance with
exemptive regulations issued under the Securities Act and any other governmental
requirements or regulations) as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's or
Holders' Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any Holder or Holders
joining in such request as are specified in a written request given within 20
days after receipt of such written notice from the Company; provided, that the
Company shall not be obligated to take any action to effect such registration
pursuant to this Section II(A)(1):
i. Prior to 180 days following the effective date of the
Company's first registered offering to the general public of its securities for
its own account; or
-2-
ii. In any particular jurisdiction in which the Company
would be required to qualify to do business or execute a general consent to
service of process in effecting such registration; or
iii. After the Company has effected two (2) such
registrations pursuant to this Subsection II(A)(1) and such registrations have
been declared or ordered effective; or
iv. If the Company qualifies to register the Registrable
Securities pursuant to Form S-3.
Subject to the foregoing clauses (i) through (iv), the Company shall file a
registration statement covering the Registrable Securities so requested to be
registered as soon as practical, but in any event within ninety (90) days after
receipt of the request or requests of the Initiating Holders; provided, however,
that if the Company shall furnish to such Holders a certificate signed by the
President or Chief Executive Officer of the Company stating that in the
reasonable judgment of the Board of Directors it would be seriously detrimental
to the Company and its shareholders for such registration statement to be filed
at the date filing would be required and it is therefore essential to defer the
filing of such registration statement, the Company shall be entitled to delay
the filing of such registration statement not more than once in any twelve month
period for an additional period of up to sixty (60) days.
2. Underwriting. If the Initiating Holders intend to distribute the
------------
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
Section II(A)(1) and the Company shall include such information in the written
notice referred to in Subsection II(A)(1)(a). The right of any Holder to
registration pursuant to Section II(A)(1) shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder) to the extent
provided herein. The Company shall (together with all Holders proposing to
distribute their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by a majority in interest of the Initiating
Holders. Notwithstanding any other provision of this Section 2, if the
underwriter advises the Initiating Holders in writing that marketing factors
require a limitation of the number of shares to be underwritten, the Initiating
Holders shall so advise all Holders of Registrable Securities who have elected
to participate in such offering, and the number of shares of Registrable
Securities that may be included in the registration and underwriting shall be
allocated among all such Holders thereof in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities held by such
Holders. If any Holder of Registrable Securities disapproves of the terms of the
underwriting, he may elect to withdraw therefrom by written notice to the
Company, the underwriter and the Initiating Holders. Any Registrable Securities
which are excluded from the underwriting by reason of the underwriter's
marketing limitation or withdrawn from such underwriting shall be withdrawn from
such registration. If the underwriter has not limited the number of Registrable
Securities to be underwritten, the Company, employees of the Company and other
holders of the Company's Common Stock may include securities for its (or their)
own account in such registration if the
-3-
underwriter so agrees and if the number of Registrable Securities which would
otherwise have been included in such registration and underwriting will not
thereby be limited.
B. Company Registration.
--------------------
1. Registration. If at any time or from time to time, the Company
------------
shall determine to register any of its securities, for its own account or the
account of any of its stockholders, other than a registration on Form S-8
relating solely to employee stock option or purchase plans, or a registration on
Form S-4 relating solely to an SEC Rule 145 transaction, or a registration on
any other form (other than Form ▇-▇, ▇-▇ or S-3 or SB-2, or their successor
forms), or any successor to such form which does not include substantially the
same information as would be required to be included in a registration statement
covering the sale of Registrable Securities, the Company will:
a. promptly give to each Holder written notice thereof; and
b. include in such registration (and any related qualification
under blue sky laws or other compliance with applicable taws), and in any
underwriting involved therein, all the Registrable Securities specified in a
written request or requests, made within 70 days after receipt of such written
notice from the Company, by any Holder or Holders to be included in any such
registration, except as set forth in Subsection II(B)(2) below.
2. Underwriting. If the registration of which the Company gives
------------
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Subsection II(B)(1)(a). In such event the right of any Holder to
registration pursuant to Section II(B) shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company and the other holders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such underwriting by the
Company. Notwithstanding any other provision of this Section II(B), if the
underwriter determines that marketing factors require a limitation of the number
of shares to be underwritten, the underwriter may limit the number of
Registrable Securities to be included in the registration and underwriting.
Notwithstanding the foregoing, in no event shall the amount of securities of the
selling Holders included in the offering be reduced below thirty percent (30%)
of the total amount of the securities included in such offering, unless such
offering is the initial public offering of the Company's securities, in which
case the selling Holders may be excluded if the underwriters make the
determination described above and no other shareholders' securities are
included. In the event of a cutback by the underwriters of the number of
Registrable Securities to be included in the registration and underwriting, the
Company shall advise all Holders of Registrable Securities which would otherwise
be registered and underwritten pursuant hereto, and the number of shares of
Registrable Securities that may be included in the registration and underwriting
shall be allocated among all of such Holders in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities held by such
Holders. If any Holder disapproves of the terms of any such underwriting, he may
elect to withdraw therefrom by
-4-
written notice to the Company and the underwriter. Any Registrable Securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
C. Form S-3. After the Company has qualified for the use of Form S-3, or
--------
its successor form, Holders of at least ten percent (10%) of the outstanding
Registrable Securities shall have the right to request an unlimited number of
registrations on Form S-3 (such requests shall be in writing and shall state the
number of shares of Registrable Securities to be disposed of and the intended
method of disposition of shares by such Holders), subject only to the following:
1. The Company shall not be required to effect a registration
pursuant to this Section II(C) within 180 days of the effective date of any
registration referred to in Sections II(A) or II(B) above.
2. The Company shall not be required to effect more than one such
registration in any consecutive 6-month period.
3. The Company shall not be required to effect a registration unless
the anticipated aggregate gross proceeds from the requested registration will
equal or exceed one hundred thousand dollars ($100,000).
The Company shall promptly give written notice to all Holders of
Registrable Securities of the receipt of a request for registration pursuant to
this Section II(C) and shall provide a reasonable opportunity for other Holders
to participate in the registration, provided that if the registration is for an
underwritten offering, the terms of Subsection II(A)(2) shall apply to all
participants in such offering. Subject to the foregoing, the Company will use
its best efforts to effect promptly the registration of all shares of
Registrable Securities on Form S-3 to the extent requested by the Holder or
Holders thereof for purposes of disposition; provided, however, that if the
Company shall furnish to such Holders a certificate signed by the President or
Chief Executive Officer of the Company stating that in the good faith judgement
of the Board of Directors it would be seriously detrimental to the Company for
such registration statement to be filed at the date filing would be required and
it is therefore essential to defer the filing of such registration statement,
the Company shall be entitled to delay the filing of such registration statement
not more than once in any 12 month period for an additional period of up to
sixty (60) days. Any registration pursuant to this Section II(C) shall not be
counted as a registration pursuant to Section II(A).
D. Expenses of Registration. All expenses incurred in connection with any
------------------------
registration, qualification or compliance pursuant to this Agreement, including
without limitation, all registration, filing and qualification fees, printing
expenses, fees and disbursements of counsel for the Company and expenses of any
special audits incidental to or required by such registration, shall be borne by
the Company except as follows:
1. The Company shall not be required to pay for expenses of any
registration proceeding begun pursuant to Sections II(A) or II(C), the request
for which has been subsequently withdrawn by the Initiating Holders, in which
case, such expenses shall be borne by the Holders requesting such withdrawal;
provided, however, that in lieu of paying such expenses a majority in interest
of the Initiating Holders may elect to forfeit the right of the
-5-
holders of Registrable Securities to request one registration pursuant to
Section II(A) or II(C). Notwithstanding the foregoing, if at the time of such
withdrawal (i) the Holder has learned of a material adverse change in the
condition, business or prospects of the Company from that known to the Holder at
the time of its request, and (ii) the Company knew or had reason to know of the
likelihood of such material adverse change at the time of its request and did
not inform the Holder thereof, then the Company shall be required to pay such
expenses and the Holder shall retain its rights pursuant to Section II(A) or
II(C).
2. The Company shall not be required to pay reasonable fees of legal
counsel of a Holder except for a single counsel acting on behalf of all selling
Holders.
3. The Company shall not be required to pay underwriters' fees,
discounts or commissions relating to the Registrable Securities.
E. Registration Procedures. In the case of each registration,
-----------------------
qualification or compliance effected by the Company pursuant to this Agreement,
the Company will keep each Holder participating therein advised in writing as to
the initiation of each registration, qualification and compliance and as to the
completion thereof. At its expense the Company will:
1. Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the Holders
of a majority of the Registrable Securities registered thereunder, keep such
registration statement effective for up to one hundred twenty (120) days.
2. Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.
3. Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
4. Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders,
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
5. In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Each Holder participating
in such underwriting shall also enter into and use best efforts to perform its
obligations under such an agreement.
6. Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the
-6-
Securities Act of the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing.
7. Furnish, at the request of any Holder, on the date that the
securities are delivered to the underwriters for sale in connection with a
registration being sold through underwriters, (i) an opinion, if any, dated such
date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to the underwriters
in an underwritten public offering, addressed to the underwriters and to the
Holders and (ii) a letter dated such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to the Holders
requesting of Registrable Securities.
F. Indemnification.
---------------
1. The Company will indemnify and hold harmless each Holder of
Registrable Securities, each of its officers, directors and partners, and each
person controlling such Holder within the meaning of Section 15 of the
Securities Act, with respect to which such registration, qualification or
compliance has been effected pursuant to this Agreement, and each underwriter,
if any, and each person who controls any underwriter of the Registrable
Securities held by or issuable to such Holder, against all claims, losses,
expenses, damages and liabilities (or actions in respect thereto) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any registration statement, preliminary or final prospectus,
or any amendment or supplement thereto, offering circular or other document
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any violation or alleged violation by the Company relating to action or inaction
required of the Company in connection with any rule or regulation promulgated
under the Securities Act or any state securities law applicable to the Company
and will reimburse each such Holder within the meaning of Section 15 of the
Securities Act, each of its officers, directors and partners, and each person
controlling such Holder, each such underwriter and each person who controls any
such underwriter, for any reasonable legal and any other expenses, as incurred,
in connection with investigating, defending or settling any such claim, loss,
damage, liability or action; provided, however, that the Company will not be
liable in any such case to the extent that any such claim, loss, damage or
liability arises out of or is based on any untrue statement or omission based
upon written information furnished to the Company in an instrument duly executed
by such Holder or underwriter specifically for use therein, and provided further
that the agreement of the Company to indemnify any underwriter and any person
who controls such underwriter contained herein with respect to any such
preliminary prospectus shall not inure to the benefit of any underwriter, from
whom the person asserting any such claim, loss, damage, liability or action
purchased the stock which is the subject thereof, if at or prior to the written
confirmation of the sale of such stock, a copy of the prospectus (or the
prospectus as amended or supplemented) was not sent or delivered to such person,
excluding the documents incorporated therein by reference, and the untrue
statement or omission of a material fact contained in such
-7-
preliminary prospectus was corrected in the prospectus (or the prospectus as
amended or supplemented).
2. Each Holder will, if Registrable Securities held by or issuable
to such Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify and hold harmless the
Company, each of its directors and officers, each underwriter, if any, of the
Company's securities covered by such a registration statement, each person who
controls the Company within the meaning of the Securities Act, and each other
such Holder, each of its officers, directors and partners and each person
controlling such Holder, against all claims, losses, expenses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any preliminary or final prospectus, offering circular or other document
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse the Company, such Holders, such directors, officers, partners,
persons or underwriters for any reasonable legal or any other expenses incurred
in connection with investigating, defending or settling any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company in an instrument duly executed by such Holder
specifically for use therein, and provided further that the agreement of the
Holder to indemnify any underwriter and any person who controls such underwriter
contained herein with respect to any such preliminary prospectus shall not inure
to the benefit of any underwriter, from whom the person asserting any such
claim, loss, damage, liability or action purchased the stock which is the
subject thereof, if at or prior to the written confirmation of the sale of such
stock, a copy of the prospectus (or the prospectus as amended or supplemented)
was not sent or delivered to such person, excluding the documents incorporated
therein by reference, and the untrue statement or omission of a material fact
contained in such preliminary prospectus was corrected in the prospectus (or the
prospectus as amended or supplemented). Notwithstanding the foregoing, in no
event shall the indemnification provided by any Holder hereunder exceed the
gross proceeds received by such Holder for the sale of such Holder's securities
pursuant to such registration.
3. Each party entitled to indemnification under this Section II(F)
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought. The
Indemnified Party shall promptly permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense of such claim
or litigation, shall be approved by the Indemnified Party (whose approval shall
not be unreasonably be withheld). The Indemnified Party may participate in such
defense and hire counsel at such party's own expense. The failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations hereunder, unless such failure is
materially prejudicial to an Indemnifying Party's ability to defend such action.
No Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of the Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not
-8-
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect to such
claim or litigation. Any Indemnified Party shall cooperate with the Indemnifying
Party in the defense of any claim or litigation brought against such Indemnified
Party.
G. Lock-Up Provision. Upon receipt of a written request by the Company or
-----------------
by its underwriters, the Holders shall not sell, sell short, grant an option to
buy, or otherwise dispose of shares of the Company's Common Stock or other
securities (except for any such shares included in the registration) for a
period of one hundred and eighty (180) days following the effective date of the
initial registration of the Company's securities; provided, however, that such
Holder shall have no obligation to enter into the agreement described in this
Section II(G) unless all executive officers, directors and holders of three
percent (3%) or more of the outstanding voting securities of the Company and all
other Holders and holders of other registration rights from the Company enter
into similar agreements. The Company may impose stop-transfer instructions with
respect to the shares (or securities) subject to the foregoing restriction until
the end of said 120-day period.
H. Information by Holder. The Holder or Holders of Registrable Securities
---------------------
included in any registration shall promptly furnish to the Company such
information regarding such Holder or Holders and the distribution proposed by
such Holder or Holders as the Company may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to herein.
I. Rule 144 Reporting. With a view to making available to Holders of
------------------
Registrable Securities the benefits of certain rules and regulations of the SEC
which may permit the sale of the Registrable Securities to the public without
registration, at all times after 90 days after the effective date of the first
registration filed by the Company for an offering of its securities to the
general public the Company agrees to:
1. Make and keep public information available, as those terms are
understood and defined in SEC Rule 144.
2. File with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
3. So long as a Holder owns any Registrable Securities, to furnish
to such Holder forthwith upon such Holder's request a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144
(at any time after 90 days after the effective date of the first registration
statement filed by the Company for an offering of its securities to the public)
and of the Securities Act and the Exchange Act (at any time after it has become
subject to such reporting requirements), a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so filed
by the Company as such Holder may reasonably request in availing itself of any
rule or regulation of the SEC allowing such Holder to sell any such securities
without registration.
-9-
J. Transfer of Registration Rights. A Holder's rights under Sections
-------------------------------
II(A), II(B), II(C) and II(l) may be assigned by any Holder to a transferee or
assignee of at least 10% of a Holder's Registrable Securities (as adjusted for
stock splits, stock dividends. recapitalizations and the like) not sold to the
public or a transferee or assignee of any shares of its Registrable Securities
not sold to the public that is a partner or affiliate of such Holder, provided,
that the Company is given written notice by the Holder at the time of or within
thirty (30) days after said transfer, stating the name and address of said
transferee or assignee and identifying the securities with respect to which such
registration rights are being assigned. No such transfer or assignment shall be
effective until such transferee or assignee agrees in writing to become subject
to the obligations of the transferring Holder hereunder.
K. Limitations on Subsequent Registration Rights. From and after the date
---------------------------------------------
of this Agreement, the Company shall not, without the prior written consent of
the Holders of a majority of the outstanding Registrable Securities, enter into
any agreement with any holder or prospective holder of any securities of the
Company which would allow such holder or prospective holder (a) to include such
securities in any registration filed under Section II(A), II(B) or II(C) hereof,
unless under the terms of such agreement, such holder or prospective holder may
include such securities in any such registration only to the extent that the
inclusion of its securities will not reduce the number of amount of the
Registrable Securities of the Holders which are included or (b) to make a demand
registration which could result in such registration statement being declared
effective prior to the earlier of either of the dates set forth in Subsection
II(A)(1)(b)(i).
L. Termination. The rights of all Holders under this Agreement shall
-----------
terminate on the fifth anniversary of the closing of the Company's first
registered public offering of its securities; provided however, that the
--------
Company's reporting obligations under SEC Rule 144 as set forth in Section 10
above, shall survive the termination of this Agreement.
III RIGHT OF FIRST REFUSAL
If, at any time prior to the expiration of the period set forth in Section
IV(B) below, the Company should desire to issue in any transaction not
registered under the Securities Act in reliance upon a claimed exemption
thereunder, any Equity Securities (as defined in Subsection (E) below), it shall
give each Purchaser and each Founder (together, the Purchasers and Founders
shall be referred to in this Section III as "Stockholders") a first right of
refusal to purchase such Stockholder's pro rata share (or any part thereof) of
all of such privately offered Equity Securities on the same terms as the Company
is willing to sell such Equity Securities to any other person. The Stockholder's
pro rata share of the Equity Securities shall be equal to the percentage that
the Equity Securities of the Company held by the Stockholder on an as-converted
basis on the date of the Company's written notification referred to in
subparagraph (A) below, bears to all outstanding Equity Securities of the
Company on the date of such written notification.
A. Notices. Prior to any sale or issuance by the Company of any Equity
-------
Securities, the Company shall notify each Stockholder, in writing, of its bona
fide intention to sell and issue such Equity Securities, setting forth any
material terms under which it proposes to make such sale. Within fifteen (15)
days after receipt of such notice, each Stockholder shall notify the
-10-
Company whether the Stockholder exercises its option and elects to purchase the
Stockholder's pro rata share (or any part hereof) of the Equity Securities so
offered.
B. Procedure. If any Stockholder has failed to exercise its option to
---------
purchase all of its pro rata portion of the Equity Securities upon the terms and
conditions set forth in the Subsection (A) notice, the Company may, during the
period of ninety (90) days following the expiration of such option period, sell
and issue such securities as to which such Stockholder has not exercised its
option to any other person upon the same terms and conditions as those set forth
in the notice to the Stockholders. In the event the Company has not sold the
Equity Securities within said ninety (90) day period, the Company shall not
thereafter issue or sell any Equity Securities without first offering such
securities to the Stockholders in the manner provided above.
C. Closing. If a Stockholder gives the Company notice that it desires to
-------
purchase any of the Equity Securities offered by the Company, payment for the
Equity Securities shall be by check, or wire transfer, against delivery of the
securities at the executive offices of the Company within ten (10) days after
giving the Company such notice, or, if later, the closing date for the sale of
such Equity Securities to third parties. The Company shall take all such action
as may be required by any regulatory authority in connection with the exercise
by the Stockholder of the right to purchase Equity Securities as set forth in
this Section III.
D. Exceptions. The right of first refusal contained in this Section III
----------
shall not apply to (i) the issuance by the Company of Equity Securities
exclusively to employees or directors of, or consultants to the Company pursuant
to the approval of the Board of Directors, (ii) the issuance of Common Stock of
the Company upon conversion of Preferred Stock, (iii) the issuance of Class A
Common Stock upon conversion of Class B Common Stock, or (iv) any Equity
Securities issued in connection with an acquisition or SEC Rule 145 transaction.
E. "Equity Securities". The term "Equity Securities" shall mean (i)
-----------------
Common Stock, rights, options or warrants to purchase Common Stock; (ii) any
other instrument convertible into Common Stock; (iii) any security convertible
into or exchangeable for any of the foregoing.
F. Assignment. A Purchaser's right to purchase any Equity Securities
----------
pursuant to this Section III may be assigned by the Purchaser to an affiliate of
the Purchaser. For the purposes of this subparagraph (F), an "affiliate" shall
mean any partner or shareholder of the Purchaser, any person or entity that
director or indirectly through one or more intermediaries controls or is
controlled by or is under common control with a Purchaser. A Founder's right to
purchase any Equity Securities pursuant to this Section III shall not be
assignable.
IV REPURCHASE
A. Put Option.
----------
1. Exercise of Option. In the event that upon the earlier to occur
------------------
of (i) October 14, 2001, (ii) a liquidation, dissolution, winding-up or (iii)
the closing of an acquisition, merger. exchange of securities, sale of all or
substantially all of the assets of Company, reorganization in which the Company
is not the surviving entity or a stock issuance or "reverse merger" in which the
Company is the surviving entity but under which the holders of the
-11-
Company's securities prior to such stock issuance or reverse merger do not hold
more than fifty percent (50%) of the voting securities of the Company following
such stock issuance or reverse merger, the Purchasers continue to hold any
Securities, any Purchaser may notify the Company that it intends to offer to the
Company any or all of the Securities then held by it for purchase by the
Company, and the Company shall be required to repurchase the Securities so
offered under this Agreement as provided below.
2. Price. The price to be paid by the Company for the Securities to
-----
be sold hereunder shall be the greater of (i) the Purchaser's original purchase
price of such Securities (as set forth in the Purchase Agreement) plus all
accrued and unpaid dividends through the date of the repurchase, and (ii) the
fair market value of the Securities as of the date of such proposed repurchase
as agreed upon by the Company and the Purchaser. If the Common Stock is publicly
traded, fair market value, with respect to the Common Stock, shall mean the
average over the preceding twenty (20) trading days of the mean of the closing
bid and asked prices on the over-the-counter market as reported by Nasdaq, or if
then traded on a national securities exchange or the Nasdaq National Market, the
average over the preceding twenty (20) trading days of the mean of the high and
low prices on the principal national securities exchange or the Nasdaq National
Market on which it is so traded (or, in either event, such fewer number of days
as such Common Stock has been so traded). If no such agreement is reached within
thirty (30) days, the fair market value shall be determined by appraisal as set
forth below.
All appraisals shall be undertaken by two appraisers, one selected by the
Company and one selected by the Purchasers of a majority of the Securities. The
fair market value shall be the fair market value arrived at by those appraisers
within sixty (60) days following the appointment of the last appraiser to be
appointed. In the event that the two appraisers cannot agree on such fair
market value within such a period of time, (i) if the appraisers' valuations are
within 10% of each other the fair market value shall be the mean of the two
valuations and (ii) if the differences in the valuations are greater, the
appraisers shall elect a third appraiser who will calculate fair market value
independently, and, except as provided in the next sentence, the fair market
value of the Securities shall in each case be the average of the two fair market
values arrived at by the appraisers who are closest in amount. If one
appraiser's valuation is the mean of the other two valuations, the mean
valuation shall be the fair market value. In the event that the two original
appraisers cannot agree upon a third appraiser within thirty (30) days following
the end of the sixty (60) day period referred to above, then the third appraiser
shall be appointed by the American Arbitration Association upon the request of
either party. If, following the conclusion of any appraisal referred to above, a
Purchaser shall choose not to sell any or all of its Securities, then it shall
so notify the Company, within twenty (20) days following receipt of the
appraisal. If the Purchaser chooses not to sell any or all of its Securities and
after the initiation of the procedures outlined in Section IV(A), then its
rights hereunder shall terminate with respect to all such securities not offered
to the Company. The expenses of the appraiser chosen by the Company will be
borne by it, the expenses of the appraiser chosen by the Purchasers will be
borne by the Purchasers and the expenses of the third appraiser will be borne
50% by the Company and 50% by the Purchasers.
3. Payment. The Company shall, within sixty (60) days following
-------
either the agreement, as provided above, with the Purchasers concerning the fair
market value of the Securities or the receipt of the results of the appraisal
referred to above, to the extent permitted
-12-
by applicable law (the "Repurchase Date"), purchase the Securities tendered to
it at the price established by the agreement or the appraisal and the Purchasers
shall deliver to the Company, upon receipt of payment therefor, the certificates
for the Securities duly endorsed by them. Payment shall be made by certified
check or wire transfer of funds to such bank account or accounts as the
Purchaser shall direct.
B. Termination of Option. The obligation of the Company to purchase the
---------------------
Purchased Common Stock as provided in this Agreement shall terminate upon (i)
the closing of a Qualified Public Offering (as defined below); (ii) the closing
of an acquisition, merger, exchange of securities, sale of all or substantially
all of the assets of Company, reorganization in which the Company is not the
surviving entity or a stock issuance or "reverse merger" in which the Company is
the surviving entity but under which the holders of the Company's securities
prior to such stock issuance or reverse merger do not hold more than fifty
percent (50%) of the voting securities of the Company following such stock
issuance or reverse merger; provided, however, that the Purchaser shall have the
right to exercise the option granted pursuant to Section IV(A) hereof
concurrently with such closing by delivering written notice of their intention
to so exercise at least ten (10) days prior to the date of closing, and,
provided further, that the Company shall provide the Holders not less than 30
days written notice of the closing of a transaction contemplated by this Section
IV(B); or (iii) the liquidation of the Company. For purposes of this Agreement,
a "Qualified Public Offering" shall mean an underwritten public offering in
which the Company receives gross proceeds of not less than $10 million at a
purchase price per share of not less than $3.52 (as adjusted for stock splits,
dividends, recapitalization and the like).
V MISCELLANEOUS
A. Notices. All notices or other communications required or permitted to
-------
be delivered hereunder shall be in writing signed by the party giving the notice
to the Company at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇,
Attn: President, and to the Purchasers at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇, ▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇. Any Purchaser may at any time change the address to which notice
shall be mailed by giving notice of such chance to the Company and to the other
parties and such notice shall be deemed given when received by the other party
hereto.
B. Amendment. This Agreement may be amended with the written consent of
---------
the Company and the written consent of the holders of a majority of the
Securities held by the Purchasers.
C. Entire Agreement. This Agreement constitutes the entire agreement of
----------------
the parties with respect to the matters contemplated herein. This Agreement
supersedes any and all prior understandings as to the subject matter of this
Agreement.
D. Binding Effect; Assignment. This Agreement shall be binding upon and
--------------------------
inure to the benefit of the successors and assigns of the respective parties
hereto, except that the Company shall not have the right to assign its rights
hereunder or any interest herein, and the rights and interests of the Purchasers
shall be assignable, without the consent of the Company, to any assignee.
-13-
E. General. The headings contained in this Agreement are for reference
-------
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement. In this Agreement the singular includes the plural, the plural
the singular, the masculine gender includes the neuter, masculine and feminine
genders. This Agreement shall be governed by and construed under the laws of the
State of California.
F. Severability. If any provision of this Agreement shall be found by any
------------
court of competent jurisdiction to be invalid or unenforceable, the parties
hereby waive such provision to the extent that it is found to be invalid or
unenforceable. Such provision shall, to the maximum extent allowable by law, be
modified by such court so that it becomes enforceable, and, as modified, shall
be enforced as any other provision hereof, all the other provisions hereof
continuing in full force and effect.
G. Counterparts. This Agreement may be executed in counterparts, all of
------------
which together shall constitute one and the same instrument.
H. Dispute Resolution. The parties acknowledge and agree that time is of
------------------
the essence in resolving any dispute that may arise in connection with this
Agreement. Except as provided herein, any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, that cannot be resolved
between the parties in a timely manner shall be settled by binding arbitration
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association ("AAA"). The expenses of the arbitration, including the arbitrator's
fees, expert witness fees, and attorneys' fees, may be awarded to the prevailing
party, in the discretion of the arbitrator, or may be apportioned between the
parties in any manner deemed appropriate by the arbitrator. Unless and until the
arbitrator decides that one party is to pay for all (or a share) of such
expenses, the Company shall pay all reasonable expenses, including legal and
accounting fees and costs arising in connection with enforcement of this
Agreement or the Collateral Agreements. The parties shall keep confidential the
decision of the arbitrator. Notwithstanding the foregoing, the parties may
disclose information about such decision to persons who have a need to know,
such as limited partners, directors, trustees, management employees, witnesses,
experts, investors, attorneys, lenders, insurers, and others who may be
affected. Once the arbitration award has become final, if the arbitration award
is not promptly satisfied, then these confidentiality provisions shall no longer
be applicable. Notwithstanding the foregoing, the parties will be entitled to
enforce their rights under this Agreement specifically (without posting a bond
or other security). The parties hereto agree and acknowledge that money damages
may not be an adequate remedy for any breach of the provisions of this Agreement
and any party may in its sole discretion apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive relief in
order to enforce or prevent any violation of the provisions of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
COMPS INFOSYSTEMS, INC.
By:______________________________________
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
SUMMIT VENTURES III, L.P.
By: Summit Partners III, L.P.
General Partner
By: Stamps, ▇▇▇▇▇▇▇ & Co. III,
General Partner
By:_________________________________
General Partner
SUMMIT INVESTORS II, L.P.
By:_____________________________________
General Partner
________________________________________
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
in his individual capacity
________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
in his individual capacity
-15-
EXHIBIT E
Co-Sale Agreement
RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT
--------------------------------------------
This Agreement is made as of October 14, 1994, by and among COMPS
Infosystems, Inc., a Delaware corporation (the "Company"), ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
in his individual capacity ("Crane"), and the Purchasers listed on Exhibit A
---------
hereto.
RECITALS
--------
▇. ▇▇▇▇▇ currently owns shares of the Company's Common Stock (the "Common
Stock"), as set forth on Exhibit B.
---------
B. The Purchasers intend to purchase from the Company shares of its
Series A Preferred Stock and warrants to purchase shares of the Company's Class
B Common Stock ("Warrants"), pursuant to that certain Stock and Warrant Purchase
Agreement entered into by and among the Company and the Purchasers dated of even
date herewith (the "Stock and Warrant Purchase Agreement").
C. To induce the Purchasers to purchase such shares of stock and Warrants
from the Company, Crane has agreed to grant the Purchasers certain rights of
first refusal and co-sale with respect to Common Stock currently owned by Crane
and any other stock of the Company hereafter owned or acquired by Crane, all on
the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises herein contained,
and other consideration, the receipt and adequacy of which hereby is
acknowledged, the parties hereto agree as follows:
1. Certain Definitions. For purposes of this Agreement, the following
-------------------
terms have the following meanings:
(a) "IPO" means the first underwritten sale of Company securities to
---
the public pursuant to registration statement under the Securities Act of 1933,
as amended, in which the gross proceeds to the Company equal or exceed
$10,000,000.
(b) "Purchasers' Share" means as to the Right of Co-Sale, the ratio
-----------------
determined by dividing (A) the number of shares of Stock (as defined below) held
by a Purchaser by (B) the number of shares of Stock held by all Purchasers plus
the number of shares of Stock held by Crane.
(c) "Offered Stock" means all Stock proposed to be Transferred by
-------------
Crane.
(d) "Right of Co-Sale" means the right of co-sale provided to the
----------------
Purchasers in Section 4 of this Agreement.
(e) "Right of First Refusal" means the right of first refusal
----------------------
provided to the Purchasers in Section 3 of this Agreement.
-1-
(f) "Stock" means and includes all shares of Common Stock issued and
-----
outstanding at the relevant time plus (i) all shares of Common Stock that may be
issued upon exercise of any options, warrants and other rights of any kind that
are then exercisable, and (ii) all shares of Common Stock that may be issued
upon conversion of (A) any convertible securities, including, without
limitation, preferred stock and debt securities then outstanding, which are by
their terms then convertible into or exchangeable for Common Stock or (B) any
such convertible securities issuable upon exercise of options, warrants or other
rights that are then exercisable.
(g) "Transfer" means and includes any sale, assignment, encumbrance,
--------
hypothecation, pledge, conveyance in trust, gift, transfer by bequest, devise or
descent, or other transfer or disposition of any kind, including but not limited
to transfers to receivers, levying creditors, trustees or receivers in
bankruptcy proceedings or general assignees for the benefit of creditors,
whether voluntary or by operation of law, directly or indirectly, except:
(i) any bona fide pledge if the pledgee executes a counterpart
copy of this Agreement and becomes bound thereby in the same manner as Crane;
(ii) any transfers of Stock by Crane to Crane's spouse, lineal
descendant or antecedent, father, mother, brother or sister of Crane, the
adopted child or adopted grandchild of Crane, or the spouse of any child,
adopted child, grandchild or adopted grandchild of Crane, or to a trust or
trusts for the exclusive benefit of Crane or Crane's family members as described
in this Section, or transfers of Stock by Crane by devise or descent, in all
cases if the transferee or other recipient executes a counterpart copy of this
Agreement and becomes bound thereby in the same manner as Crane;
(iii) any transfer of Stock by Crane made: (A) pursuant to a
merger or consolidation of the Company with or into another corporation or
corporations; (B) pursuant to the winding up and dissolution of the Company; (C)
at, and pursuant to, the IPO; or (D) to a Purchaser pursuant to this Agreement;
(iv) any bona fide gift to not-for-profit organizations; or
(v) any transfer of Stock by Crane to the Company pursuant to
the repurchase of such Stock by the Company as permitted by Section 6.6 of the
Stock and Warrant Purchase Agreement.
2. Notice of Proposed Transfer. Before Crane may effect any Transfer of
---------------------------
any Stock, Crane must give at the same time to the Company and the Purchasers a
written notice signed by Crane ("Crane's Notice") stating (a) Crane's bona fide
intention to transfer such Offered Stock; (b) the number of shares of the
Offered Stock; (c) the name, address and relationship, if any, to Crane of each
proposed purchaser or other transferee; and (d) the bona fide cash price or, in
reasonable detail, other consideration, per share for which Crane proposes to
transfer such Offered Stock (the "Offered Price"). Upon the request of a
Purchaser, Crane will promptly furnish such information, to the Purchasers, as
may be reasonably requested to establish that the offer and proposed transferee
are bona fide.
-2-
3. Right of First Refusal.
----------------------
(a) Purchasers' Right. With respect to any Transfer by Crane, the
-----------------
Purchasers shall have the right of first refusal to purchase all or any part of
the Offered Stock, exercisable as set forth in Subsection (b) hereof.
(b) Exercise of Purchasers' Right of First Refusal. The Purchasers'
----------------------------------------------
Right of First Refusal may be exercised as follows:
(i) Each Purchaser shall have the opportunity to purchase all
or any part of its pro rata share of Offered Stock. A Purchaser's pro-rata share
shall be determined by dividing the number of shares of Stock held by a
Purchaser by the total number of shares of Stock held by all Purchasers. The
Purchasers shall be entitled to apportion Offered Stock to be purchased among
its partners and affiliates, provided that such Purchaser notifies Crane of such
allocation, and provided that such allocation does not threaten the Company's
ability to rely upon an exemption from the registration provisions of the Act or
the qualification provisions of applicable blue-sky laws. In addition, a
Purchaser shall be entitled to assign its rights under this Section 3 to the
Company.
(ii) If any Purchaser or its assignees desires to purchase all
or any part of the Offered Stock, such Purchaser must, within the twenty (20)
day period (the "Purchaser Refusal Period") commencing on the date of Crane's
Notice, give written notice to Crane and to the Company of such Purchaser's
election to purchase the Offered Stock. In the event that any Purchaser elects
not to purchase its pro-rata share of the Offered Stock, such shares may be
purchased by the other Purchasers.
(iii) Within ten (10) days after expiration of the Purchaser
Refusal Period, the Company will give written notice (the "Purchasers'
Expiration Notice") to Crane and to the Purchasers specifying either (A) that
Offered Stock was subscribed by the Purchasers exercising their Rights of First
Refusal or (B) that the Purchasers do not have the right to purchase any of the
Offered Stock because the Purchasers did not timely exercise their Right of
First Refusal to purchase Offered Stock, in which case the Purchasers'
Expiration Notice will specify each Purchaser's Share of the Offered Stock with
respect to the Right of Co-Sale.
(c) Purchase Price. The purchase price for the Offered Stock to be
--------------
purchased by the Purchasers exercising their Right of First Refusal under this
Agreement will be the Offered Price, but will be payable as set forth in Section
3(d) hereof. If the Offered Price includes consideration other than cash, the
cash equivalent value of the non-cash consideration will be determined by the
Board of Directors of the Company in good faith, which determination will be
binding upon the Purchasers and Crane absent fraud or error.
(d) Payment. Payment of the purchase price for the Offered Stock
-------
purchased by a Purchaser exercising its Right of First Refusal will be made
within seven days after the date of the Purchaser's Expiration Notice. Payment
of the purchase price will be made by the exercising Purchaser (i) in cash (by
check), (ii) by cancellation of all or a portion of any outstanding indebtedness
of Crane to the Purchaser or (iii) by any combination of the foregoing.
-3-
(e) Rights as a Stockholder. If the Purchasers exercise their Rights
-----------------------
of First Refusal to Purchase the Offered Stock, then, upon the date the notice
of such exercise is given by the Company, Crane will have no further rights as a
holder of the Offered Stock except the right to receive payment for the Offered
Stock from the Purchasers in accordance with the terms of this Agreement, and
Crane will forthwith cause ail certificate(s) evidencing such Offered Stock to
be surrendered to the Company for transfer to the Purchasers.
(f) Crane's Right To Transfer. If the Purchasers have not elected to
-------------------------
purchase all of the Offered Stock, then, subject to the Right of Co-Sale, Crane
may transfer that portion of the Offered Stock permitted to be sold by Crane, to
any person named as a purchaser or other transferee in Crane's Notice, at the
Offered Price or at a higher price, provided that such transfer (i) is
consummated within ninety (90) days after the date of Crane's Notice and (ii) is
in accordance with all the terms of this Agreement. If the Offered Stock is not
so transferred during such 90 day period, then Crane may not transfer any of
such Offered Stock without complying again in full with the provisions of this
Agreement.
4. Right of Co-Sale.
----------------
(a) Right of Co-Sale. If the Purchasers have waived or failed to
----------------
timely exercise their Rights of First Refusal, a Purchaser may transfer to the
transferee proposed in Crane's Notice the Purchaser's Share of the Offered
Stock, as such Share is specified in the Purchaser's Expiration Notice, by
giving written notice to Crane, within ten (10) days after the date of the
Purchaser's Expiration Notice, specifying the number of shares and type of Stock
that the Purchaser desires to transfer to the transferee.
(b) Consummation of Co-Sale. A Purchaser may exercise the Right of
-----------------------
Co-Sale by delivering to Crane at the closing of the transfer of Offered Stock
to such transferee (the "Closing") one or more certificates, properly endorsed
for Transfer, representing such Stock to be Transferred by the Purchaser. At the
Closing, such certificates or other instruments will be transferred and
delivered to the transferee set forth in Crane's Notice in consummation of the
transfer of the Offered Stock pursuant to the terms and conditions specified in
such notice, and Crane will remit, or will cause to be remitted, to the
Purchaser within seven (7) days after such Closing that portion of the proceeds
of the Transfer to which the Purchaser is entitled by reason of the Purchaser's
participation in such transfer pursuant to the Right of Co-Sale.
5. Multiple Series, Class or Type of Stock. If the Offered Stock consists
---------------------------------------
of more than one series or class or type of Stock, the Purchaser has the right
to purchase or transfer hereunder, as the case may be, each such series, class
or type; provided, however, that if, as to the Right of Co-Sale, the Purchaser
does not hold any of such series, class, or type, and the proposed transferee is
not willing, at the Closing, to purchase some other series, class or type of
Stock from the Purchaser, or is unwilling to purchase any Stock from the
Purchaser at the Closing, then the Purchaser will have the put right (the "Put
Right") set forth in Section 6(b) hereof.
-4-
6. Refusal to Transfer; Put Right.
------------------------------
(a) Refusal to Transfer. Any attempt by Crane to transfer any Stock
-------------------
in violation of any provision of this Agreement will be void. The Company will
not be required (i) to transfer on its books any Stock that has been sold,
gifted or otherwise transferred in violation of this Agreement, or (ii) to treat
as owner of such Stock, or to accord the right to vote or pay dividends to any
purchaser, donee or other transferee to whom such Stock may have been so
transferred.
(b) Put Right. If Crane transfers any Stock in contravention of the
---------
Purchasers' Right of Co-Sale under this Agreement (a "Prohibited Transfer"), or
if the proposed transferee of Offered Stock desires to purchase only the class,
series or type of stock offered by Crane or is unwilling to purchase any Stock
from the Purchaser and the provisions of Section 5 hereof apply, the Purchaser
may, by delivery of written notice to Crane (a "Put Notice") within ten (10)
days after (i) the Closing as defined in Subsection 4(b) above, or (ii) the date
on which the Purchaser becomes aware of the Prohibited Transfer or the terms
thereof require Crane to purchase from the Purchaser for cash or such other
consideration as Crane received in the Prohibited Transfer or at the Closing
that number of shares of Stock (of the same class, series or type as transferred
in the Prohibited Transfer or at the Closing if the Purchaser then owns Stock of
such class, series or type; otherwise of Common Stock) having a purchase price
equal to the aggregate purchase price the Purchaser would have received in the
closing of such Prohibited Transfer if the Purchaser had elected to exercise its
right of Co-Sale with respect thereto or in the Closing if the proposed
transferee had been willing to purchase the Stock of the Purchaser. The closing
of such sale to Crane will occur within seven (7) days after the date of the
Purchaser's Put Notice to Crane.
7. Restrictive Legend and Stock-Transfer Orders.
--------------------------------------------
(a) Right of First Refusal and Co-Sale Legend. Crane understands and
-----------------------------------------
agrees that the Company will cause the legend set forth below, or a legend
substantially equivalent thereto, to be placed upon any certificate(s) or other
documents or instruments evidencing ownership of Stock by Crane:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RIGHTS OF FIRST REFUSAL AND RIGHTS OF CO-SALE AS SET FORTH IN A
RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT DATED OCTOBER 14,
1994, ENTERED INTO BY THE HOLDER OF THESE SHARES, THE COMPANY AND
CERTAIN STOCKHOLDERS OF THE COMPANY. A COPY OF SUCH AGREEMENT IS
ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY. SUCH RIGHTS OF
FIRST REFUSAL AND RIGHTS OF CO-SALE ARE BINDING ON CERTAIN
TRANSFEREES OF THESE SHARES.
(b) Stop Transfer Instructions. Crane agrees, to ensure compliance
--------------------------
with the restrictions referred to herein, that the Company may issue appropriate
"stop transfer" certificates or instructions and that, if the Company transfers
its own securities, it may make appropriate notations to the same effect in its
records.
-5-
8. Termination and Waiver.
----------------------
(a) Termination. The Purchasers' Right of First Refusal and the Right
-----------
of Co-Sale will terminate upon the earliest to occur of (i) the IPO, (ii) the
dissolution of the Company, or (iii) the effective date of a consolidation or
merger with or into another corporation as a result of which the stockholders of
the Company prior to such transaction own less than 50% of the outstanding stock
of the surviving corporation.
(b) Waiver. The application of the Purchasers' Right of First Refusal
------
and/or the Right of Co-Sale as to any proposed Transfer by Crane of any Stock
may be waived in advance of or after such transfer by the written agreement of
the Purchasers. The Purchasers will have the absolute right to exercise or
refrain from exercising any right or rights that such party may have by reason
of this Agreement, including without limitation the right to purchase or
participate in the sale of Offered Stock, and the Purchasers will not incur any
liability to any other party hereto with respect to exercising or refraining
from exercising any such right or rights. Any waiver by a party of its rights
hereunder will be effective only if evidenced by a written instrument executed
by such party or its authorized representative.
9. Miscellaneous Provisions.
------------------------
(a) Notice. Any notice required or permitted to be given to a party
------
pursuant to the provisions of this Agreement will be in writing and will be
effective and deemed given under this Agreement on the earliest of (i) the date
of personal delivery, or (ii) the date of delivery by facsimile, or (iii) the
business day after deposit with a nationally-recognized courier or overnight
service, including Express Mail, for United States deliveries or three (3)
business days after such deposit for deliveries outside of the United States, or
(iv) five (5) business days after deposit in the United States mail by
registered or certified mail for United States deliveries. All notices not
delivered personally or by facsimile will be sent with postage and other charges
prepaid and properly addressed to the party to be notified at the address set
forth below such party's signature on this Agreement or at such other address as
such party may designate by ten (10) days advance written notice to the other
parties hereto. All notices for delivery outside the United States will be sent
by facsimile, or by nationally recognized courier or overnight service,
including Express Mail. Any notice given hereunder to more than one person will
be deemed to have been given, for purposes of counting time periods hereunder.
on the date given to the last party required to be given such notice. Notices to
the Company will be marked to the attention of the President.
(b) Binding on Successors and Assigns; Inclusion Within Certain
-----------------------------------------------------------
Definitions. This Agreement, and the rights and obligations of the parties
-----------
hereunder, will inure to the benefit of, and be binding upon, their respective
successors, assigns, heirs, executors, administrators and legal representatives.
Any permitted transferee of Crane who is required to become a party hereto will
be considered "Crane" for purposes of this Agreement and any permitted
transferee of Stock held by a Purchaser will be considered a "Purchaser" for
purposes of this Agreement.
(c) Severability. If any provision of this Agreement is held to be
------------
invalid, illegal or unenforceable in any respect, such provision will be
enforced to the maximum extent possible and such invalidity, illegality or
unenforceability will not affect any other provision of
-6-
this Agreement, and this Agreement will be construed as if such invalid, illegal
or unenforceable provision had (to the extent not enforceable) never been
contained herein.
(d) Amendment. This Agreement may be amended only by a written
---------
instrument executed by the Company, the Purchasers holding a majority of the
Stock then held by all Purchasers and Crane.
(e) Continuity of Other Restrictions. Any Stock not purchased by a
--------------------------------
Purchaser under their Right of First Refusal hereunder will continue to be
subject to all other restrictions imposed upon such Stock by law, including any
restrictions imposed under the Company's Articles of Incorporation or By-laws,
or by agreement.
(f) Governing Law. This Agreement will be governed by and construed
-------------
in accordance with the laws of the State of California, excluding that body of
law pertaining to conflict of laws.
(g) Obligation of Company; Binding Nature of Exercise. The Company
-------------------------------------------------
agrees to use its best efforts to enforce the terms of this Agreement, to inform
Crane and the Purchasers of any breach hereof (to the extent the Company has
knowledge thereof) and to use reasonable efforts to assist Crane and the
Purchasers in the exercise of their rights and the performance of their
obligations hereunder. Any exercise of the Right of First Refusal or Right of
Co-Sale will be binding upon the party so exercising, and may not be withdrawn
without the written consent of Crane, except that such exercise may be withdrawn
unilaterally by the exercising party if there is any legal prohibition as to a
party's consummation of its purchase or sale hereunder.
(h) Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which when so executed and delivered will be deemed an
original, and all such counterparts together will constitute one and the same
instrument.
(i) Entire Agreement. This Agreement constitutes the entire agreement
----------------
of the parties with respect to the specific subject matter hereof and supersedes
in their entirety all other agreements or understandings between or among the
parties hereto with respect to such specific subject matter.
(j) Conflict. In the event of any conflict between the terms of this
--------
Agreement and the Company's Articles of Incorporation, or its By-laws, the terms
of the Company's Articles of Incorporation. or its By-laws, as the case may be,
will control. In the event of any conflict between the terms of this Agreement
and any other agreement to which Crane is a party or by which Crane is bound,
the terms of this Agreement will control. In the event of any conflict between
the Company's books and records and this Agreement or any notice delivered
hereunder, the Company's books and records will control absent fraud or error.
(k) Dispute Resolution. The parties acknowledge and agree that time
------------------
is of the essence in resolving any dispute that may arise in connection with
this Agreement. Except as set forth herein, any controversy or claim arising out
of or relating to this Agreement, or the breach thereof, that cannot be resolved
between the parties in a timely manner shall be settled by binding arbitration
in accordance with the Commercial Arbitration Rules of the American
-7-
Arbitration Association ("AAA"). The expenses of the arbitration, including the
arbitrator's fees, expert witness fees, and attorney's fees, may be awarded to
the prevailing party, in the discretion of the arbitrator, or may be apportioned
between the parties in any manner deemed appropriate by the arbitrator. Unless
and until the arbitrator decides that one party is to pay for all (or a share)
of such expenses, the Company shall pay reasonable expenses, including legal and
accounting fees and costs arising in connection with enforcement of this
Agreement or the Collateral Agreements. The parties shall keep confidential the
decision of the arbitrator; however, the parties may disclose information about
such decision to persons who have a need to know, such as limited partners,
directors, trustees, management employees, witnesses, experts, investors,
attorneys, lenders, insurers, and others who may be directly affected. Once the
arbitration award has become final, if the arbitration award is not promptly
satisfied, then these confidentiality provisions shall no longer be applicable.
Notwithstanding the foregoing, the parties will be entitled to enforce their
rights under this Agreement specifically (without posting a bond or other
security). The parties hereto agree and acknowledge that money damages may not
be an adequate remedy for any breach of the provisions of this Agreement and any
party may in its sole discretion apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive relief in
order to enforce or prevent any violation of the provisions of this Agreement.
-8-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
COMPS INFOSYSTEMS, INC.
By:________________________________________
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Address:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇. ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
___________________________________________
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, in his
individual capacity
Address:
c/o COMPS Infosystems, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
PURCHASERS:
SUMMIT VENTURES III, L.P.
By: Summit Partners III, L.P.
General Partner
By: Stamps, ▇▇▇▇▇▇▇ & Co. III,
General Partner
By:___________________________________
General Partner
-9-
SUMMIT INVESTORS II, L.P.
By:________________________________________
General Partner
Address:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
-10-
EXHIBIT F
Shareholder Buy-Out and Voting Agreement
SHAREHOLDERS BUY-OUT AND VOTING AGREEMENT
-----------------------------------------
This Shareholders Buy-Out and Voting Agreement (the "Agreement") is made as
of October 14, 1994 by and between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, an individual ("▇▇▇▇▇▇▇"),
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, an individual ("Crane"), COMPS InfoSystems, Inc., a Delaware
corporation (the "Company"), Summit Ventures III, L.P. and Summit Investors II.
L.P. (together, "Summit"). ▇▇▇▇▇▇▇ and ▇▇▇▇▇ own all of the Company's
outstanding shares of Series A Common Stock, par value $.01 per share as
follows:
Shareholder Total Number of Shares Percentage
----------- ---------------------- ----------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,620,500 25%
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 4,861,500 75%
IT IS HEREBY AGREED:
ARTICLE I
---------
DEFINITIONS
-----------
As used herein, the terms set forth below shall have the following
definitions:
1.1 Shareholders shall mean Beasley, Crane, any future holder of Shares
------------
issued by the Company hereafter who joins as a party to this Agreement, and any
transferee of Shares pursuant to Section 3.3 of this Agreement. At such time as
a person sells all of his Shares in accordance with the terms and conditions of
this Agreement, that person shall no longer be deemed to be a Shareholder for
purposes of this Agreement.
1.2 Shares shall mean all of the equity securities of the Company now
------
owned or hereafter acquired by any Shareholder or a Permitted Transferee.
1.3 Permitted Transferee shall mean any transferee to whom transfer of
--------------------
Shares is permitted pursuant to Section 2.2.
1.4 Purchase Price and Payment Terms shall mean the Purchase Price, as
--------------------------------
defined in Section 8.1.1, and the Payment Terms, as defined in Section 8.2, for
the purchase by Crane of Shares referenced in Articles 3, 4, and 6.
1.5 Option Event shall mean any one or more of the events giving rise to
------------
the option to purchase Shares set forth in Article 6.
A-1
ARTICLE 2
---------
RESTRICTION ON TRANSFER OF SHARES
---------------------------------
2.1
2.1.1 Restriction on Transfer. No Shareholder or Permitted
-----------------------
Transferee shall transfer, encumber or in any way dispose of any of his Shares,
or any right or interest therein, except in accordance with the provisions of
this Agreement or unless such Shareholder has obtained the prior written consent
of the Company and of the holders of a majority of the outstanding Shares. In
the event any Shareholder or Permitted Transferee shall attempt to transfer any
or all of his Shares in violation of this Agreement, such transfer shall be null
and void and of no effect.
2.1.2 Put Right. If a transferring shareholder (as defined in
---------
Section 3.1) transfers any Shares in contravention of the Right of Co-Sale
described in Section 3.6 under this Agreement (a "Prohibited Transfer"), or if
the proposed transferee of Offered Stock (as defined in Section 3.6) desires to
purchase only the class, series or type of stock offered by the transferring
shareholder or is unwilling to purchase any Shares from Summit and the
provisions of Section 3.6 apply, Summit may, by delivery of written notice to
the transferring shareholder (a "Put Notice") within ten (10) days after (i) the
Closing as defined in Section 3.6 or (ii) the date on which Summit becomes aware
of the Prohibited Transfer or the terms thereof, require the transferring
shareholder to purchase from Summit for cash or such other consideration as the
transferring shareholder received in the Prohibited Transfer or at the Closing
that number of Shares of Stock held by Summit (of the same class, series or type
as transferred in the Prohibited Transfer or at the Closing if Summit then owns
stock of such class, series or type; otherwise, of shares of Series A Common
Stock, par value $.01 per share), having a purchase price equal to the aggregate
purchase price that Summit would have received in the closing of such Prohibited
Transfer if Summit had elected to exercise its right of Co-Sale with respect
thereto or in the Closing if the proposed transferee had been willing to
purchase Shares held by Summit. The closing of such sale to the transferring
shareholder will occur within seven (7) days after the date of Summit's Put
Notice to the transferring shareholder.
2.2 Permitted Transfers. Notwithstanding anything herein to the contrary,
-------------------
any Shareholder may make a gift or gifts of any or all of his Shares to the
Shareholder's spouse, children or grandchildren, or the spouse of any one of
them or to any organization described in Section 170(c) of the Internal Revenue
Code of 1986, as amended, provided, that nothing herein shall be construed as
permitting a transfer not otherwise in compliance with provisions of Section 9.2
and provided further, that each such Permitted Transferee subscribes to this
Agreement. In the event any transfer permitted by this Section 2.2 is
consummated, each Permitted Transferee shall be bound by and subject to the
terms of this Agreement.
2.3 Repurchase by Company. Notwithstanding any other provision herein,
---------------------
the parties agree that the provisions of this Agreement shall not apply to (i)
the repurchase by the Company, on or before October 31, 1994, of up to 725,960
Shares held by ▇▇▇▇▇▇▇ or (ii) the transfer by ▇▇▇▇▇▇▇, on or before October 31,
1994, of up to 154,000 Shares held by ▇▇▇▇▇▇▇, to a non-profit organization.
A-2
ARTICLE 3
---------
RIGHTS OF FIRST REFUSAL
-----------------------
3.1 Crane's Right of First Refusal. In the event that ▇▇▇▇▇▇▇ or any
------------------------------
other Shareholder other than Crane desires to transfer any or all of his Shares
of the Company to other than a Permitted Transferee (sometimes referred to
hereinafter as the "transferring Shareholder"), he shall first provide notice in
writing to the Secretary of the Company (sometimes referred to hereinafter as
"notice of intended transfer"). The notice shall name the proposed transferee
and specify the number of Shares to be transferred, the price per share, and the
terms of payment of the purchase price. Promptly upon receipt of said notice,
the Secretary of the Company shall notify Crane of said proposed sale or
transfer (sometimes referred to herein as the "notice to Crane.") Said notice
to Crane shall contain (i) the same information concerning the proposed sale or
transfer as received by the Company in the notice of intended transfer and (ii)
the Purchase Price and Payment Terms. Crane shall have twenty (20) days from
the date of receipt of said notice within which to exercise the option to
acquire such shares at a purchase price equal to (a) if the transferring
Shareholder is ▇▇▇▇▇▇▇, the same price per share and upon the same terms set
forth in the notice of intended transfer, or (b) if the transferring Shareholder
is someone other than ▇▇▇▇▇▇▇, at the lower of (i) the same price per share and
upon the same terms set forth in the notice of intended transfer filed, or (ii)
the Purchase Price and Payment Terms. Within twenty (20) days after the date of
mailing of said notice to Crane, if Crane desires to acquire any or all of the
Shares referred to in said notice, Crane shall deliver to the Secretary a
written offer to purchase (sometimes hereinafter referred to as "Crane offer to
purchase") said Shares or a specified number thereof, at Crane's discretion. In
the event Crane exercises said option within the twenty (20) day period, the
Secretary of the Company shall give notice of the exercise to the transferring
Shareholder.
3.2 Summit Right of First Refusal. If any such Shares shall not be
-----------------------------
purchased by Crane, the Secretary shall notify Summit of said proposed sale or
transfer (sometimes hereinafter referred to as "notice to Summit"). Said notice
to Summit shall contain (i) the same information concerning the proposed sale or
transfer as received by the Secretary of the Company in the notice of intended
transfer, (ii) the number of Shares, if any, which Crane has elected to
purchase. The Secretary shall notify Summit of said notice promptly upon
receipt by the Secretary of notification from Crane that Crane will not purchase
any or all of said Shares, and in no event later than thirty (30) days after
receipt by the Company of the notice of intended transfer. Summit shall have
twenty (20) days from the date of receipt of said notice within which to
exercise the option to purchase any or all of the remaining Shares at the
purchase price and on the terms stated in the notice.
3.3 Permitted Transfer Upon Failure to Buy All Shares. Subject to the
-------------------------------------------------
provisions of Section 3.6, if some or all the Shares mentioned in the notice of
intended transfer are not purchased by Crane or Summit, or both, such Shares may
be sold or transferred, at any time within six (6) months from the date of
receipt by the Company of the notice of intended transfer, to the person at the
price and terms specified therein or at a price and terms more favorable to the
transferring Shareholder, provided, that each such purchaser or transferee
subscribes to this Agreement. Each such purchaser or transferee shall receive
and hold said Shares as a Shareholder subject to all of the provisions and
restrictions herein contained and the transferring
A-3
Shareholder shall no longer be deemed a Shareholder as to such Shares for
purposes of this Agreement.
3.4 Nonmonetary Consideration. Notwithstanding anything to the contrary
-------------------------
in this Agreement, in the event that part or all of the purchase price specified
in the notice of intended transfer is payable other than in money, such notice
shall also specify the fair market value in monetary terms of the property other
than money to be transferred in partial or full satisfaction of the purchase
price; and Crane and Summit, or either of them, shall have the right to exercise
their respective options to purchase said Shares by delivery of a written Offer
specifying a per share purchase price equal to the per share purchase price
specified in the notice of intended transfer, which price shall have taken into
account the fair market value of any such property to be transferred. With
regard to the term of the offer of Crane or Summit, the fair market value of
consideration other than money shall be paid in cash. As used in this
Agreement, "consideration other than money" shall not mean the proposed
purchaser's promissory note or other evidence of indebtedness where such note or
indebtedness has a fair maker value at least equal to its principal amount.
3.5 Appraisal to Determine Value of Nonmonetary Consideration. In the
---------------------------------------------------------
event Crane objects to the amount specified in the notice of intended transfer
as the fair market value of consideration other than money, Crane may give,
within twenty (20) days from the date that the Secretary gives the notice to
Crane, written notice to the Secretary of Crane's intention to submit the matter
to an appraiser for a determination of the fair market value of the
consideration Other than money. In the event Summit objects to the amount
specified in the notice of intended transfer as the fair market value of
consideration other than money, Summit may give, within thirty (30) days of the
receipt of the notice to Summit, written notice to the Secretary of Summit's
intention to submit the matter to an appraiser for a determination of the fair
market value of the consideration other than money. Pending such determination,
the time for exercising options to purchase shall be stayed. Within fifteen
(15) days from the date of delivery of such notice of submission to an
appraiser, the objector and the transferring Shareholder shall select a single,
mutually satisfactory neutral appraiser. In the event the parties are unable to
agree on the selection of such an appraiser, then (i) the transferring
Shareholder, Permitted Transferee or personal representative thereof shall
select a single neutral appraiser, on the one hand, and (ii) Crane or Summit, on
the other hand, shall select a single neutral appraiser, and the two (2)
appraisers so selected shall meet and select a single, mutually satisfactory
neutral appraiser. The third appraiser so selected shall determine the fair
market value of the consideration other than money. The decision of the
appraiser shall be final and binding upon the objector and the holder of the
Shares to be sold. As soon as the fair market value of the consideration other
than money has been determined, the appraiser shall give written notice thereof
to the objector, the holder of the Shares to be sold, and to the Secretary. All
expenses of appraisal and proceedings to appoint an appraiser shall be borne
equally by the parties who exercise their option to purchase Shares (who shall
share such expenses between themselves in proportion to the number of Shares
each elects to purchase), on the one hand, and the holder of Shares to be sold
on the other, unless Crane and Summit thereafter fails to exercise his or its
option, in which case the objector shall bear all such expenses. In the event
the objector is Summit, and the appraisal reduces the purchase price specified
in the notice of intended transfer, Crane and, if Crane does not elect to
purchase all the Shares, then Summit shall again be
A-4
provided the notices pursuant to Sections 3.1 and 3.2 and the notice periods
shall commence again.
3.6 Right of Co-Sale. If Summit has waived or failed to timely exercise
----------------
its right of first refusal pursuant to Section 3.2, Summit may transfer to the
transferee proposed in notice of intended transfer Summit's Share (as defined in
the next sentence) of the shares subject to the notice of intended transfer (the
"Offered Stock"), by giving written notice to the transferring shareholder,
within ten (10) days after the date that Summit's right of first refusal
specified in Section 3.2 expires, specifying the number of Shares that Summit
desires to transfer to the transferee. For purposes of this Section 3.6,
"Summit's Share" shall mean: the ratio determined by dividing (A) the number of
Shares held by Summit by (B) the number of Shares held by Summit plus the number
of Shares held by the transferring shareholder. Summit may exercise its right
of co-sale by delivering to the transferring shareholder at the closing of the
transfer of Offered Stock to such transferee (the "Closing") one or more
certificates, properly endorsed for transfer, representing such Shares to be
transferred by Summit. At the Closing, such certificates or other instruments
will be transferred and delivered to the transferee set forth in the notice of
entitled transfer in consummation of the transfer of the Offered Stock pursuant
to the terms or conditions specified in such notice, and the transferring
shareholder will remit, or will cause to be remitted, to Summit within seven (7)
days after such Closing that portion of the proceeds of the Transfer to which
Summit is entitled by reason of Summit's participation in such transfer pursuant
to the right of co-sale.
3.7 Multiple Series, Class or Type. If the Offered Stock consists of more
------------------------------
than one series or type of the Company's stock, Crane and Summit have the right
to purchase or transfer hereunder, as the case may be, each such series, class
or type; provided, however, that if, as to the Right of Co-Sale, Summit does not
hold any of such series, class or type, and the proposed transferee is not
willing, at the Closing, to purchase some other series, class or from Summit, or
is unwilling to purchase any Shares from Summit at the Closing, then Summit will
have the put right (the "Put Right") set forth in Section 2.1.2 hereof.
ARTICLE 4
---------
PURCHASE ON DEATH
-----------------
4.1 Crane Purchase on Death of ▇▇▇▇▇▇▇ or a Permitted Transferee. Within
------------------------------------------------------------
a period commencing with the death of ▇▇▇▇▇▇▇ or a Permitted Transferee and
ending 180 days following the death of the ▇▇▇▇▇▇▇ or a Permitted Transferee,
but in no event sooner than ninety (90) days following written notice of such
death delivered to the Company, Crane shall have the option to purchase all or a
portion of the Shares owned by the decedent and his Permitted Transferees at the
Purchase Price and Payment Terms.
4.2 Summit Purchase Upon Crane Restriction. In the event that Crane does
--------------------------------------
not elect to repurchase any or all of the Shares owned by a decedent and his
Permitted Transferees, as referenced in Section 4.1, Crane shall purchase as
many Shares as he elects to purchase, and Summit shall have the option to
purchase the remainder of the Shares of the decedent and his Permitted
Transferees at the Purchase Price and Payment Terms.
A-5
4.3 Failure to Buy All Shares. If all of the Shares of ▇▇▇▇▇▇▇ or a
-------------------------
Permitted Transferee that are available for purchase by Crane or Summit, or
both, pursuant to this Article 4 are not purchased by Crane or Summit, or both,
the personal representative of ▇▇▇▇▇▇▇ or a Permitted Transferee shall continue
to hold the Shares subject to the provisions or this Agreement.
ARTICLE 5
---------
[INTENTIONALLY DELETED]
ARTICLE 6
---------
OPTION TO PURCHASE ON OTHER EVENTS
----------------------------------
6.1 Option Events. The occurrence of any one or more of the following
-------------
Option Events shall give rise to the options to purchase Shares set forth in
Sections 6.2 and 6.3 herein:
6.1.1 The adjudication as a bankrupt (in voluntary or involuntary
proceedings) of ▇▇▇▇▇▇▇ or Permitted Transferee; or
6.1.2 The filing by ▇▇▇▇▇▇▇ or Permitted Transferee of a petition
under the Federal Bankruptcy Code or comparable state laws for a reorganization,
arrangement or other judicial protection upon insolvency; or
6.1.3 The assignment by ▇▇▇▇▇▇▇ or Permitted Transferee for the
benefit of creditors; or
6.1.4 The Shares owned by ▇▇▇▇▇▇▇ or Permitted Transferee become the
subject of a judgment, lien. assignment by operation of law, or writ of
attachment, which is not released within thirty (30) days (unless a supersede
bond is filed).
6.2 Crane Option to Purchase. Upon the occurrence of any one or more of
------------------------
the Option Events, Crane shall have an option to purchase the Shares owned by
the affected Permitted Transferee or ▇▇▇▇▇▇▇ and his Permitted Transferees, if
any, as the case may be. Promptly upon the occurrence of an Option Event, the
affected Permitted Transferee or ▇▇▇▇▇▇▇ and his Permitted Transferees shall
provide the Secretary of the Company with notice of the occurrence of such event
(sometimes hereinafter referred to as "notice of Option Event"), with an
informational copy for Crane. Promptly on receipt of said notice, the Secretary
of the Company shall forward a copy of the notice to Crane. Crane shall have
thirty (30) days from the date of receipt of said notice by the Secretary within
which to exercise the option to purchase the Shares at the Purchase Price and
Payment Terms. In the event that Crane exercises said option within the thirty
(30) day period, the Secretary of the Company shall give notice of the fact to
the affected Permitted Transferee or ▇▇▇▇▇▇▇ and his Permitted Transferees, if
any.
6.3 Summit Option to Purchase. If any such Shares shall not be purchased
-------------------------
by Crane, the Secretary shall notify Summit of the occurrence of an Option Event
(sometimes referred to as "Summit notice of Option Event"). The Summit notice
of Option Event shall contain (i) the
A-6
statement that an Option Event has occurred, (ii) the Purchase Price and (iii)
the number of Shares, if any, which Crane has elected to purchase. The Secretary
shall mail to Summit said notice promptly upon receipt by the Secretary of
notification from Crane that Crane will not purchase any or all of said Shares,
and in no event later than forty (40) days after receipt by the Secretary of the
notice of Option Event. Summit shall have twenty (20) days from the date of
receipt of such notice within which to purchase any or all of said Shares at the
Purchase Price and Payment Terms.
6.4 Failure to Buy All Shares. If all the Shares of the affected
-------------------------
Permitted Transferee or ▇▇▇▇▇▇▇ and his permitted Transferees, if any, as the
case may be, are not purchased by Crane or Summit, or both, ▇▇▇▇▇▇▇, Permitted
Transferees, or his personal representative, if any, shall continue to hold the
Shares subject to the provisions of this Agreement.
ARTICLE 7
---------
CRANE OPTIONS
-------------
TO PURCHASE UPON CERTAIN EVENTS
-------------------------------
7.1 Events Triggering Crane's Options. The occurrence of any one or more
---------------------------------
of the following events commencing with the date of this Agreement will give
rise to the options to purchase Shares set forth in Section 7.2:
7.1.1 The Company enters into a definitive agreement for the sale of
all or substantially all of its assets; or
7.1.2 The holders of a majority in interest of the Company's
outstanding capital stock enter into a definitive agreement for the sale of such
stock to a party other than a Shareholder.
7.2 Crane's Options to Purchase. Upon the occurrence of any one or more
---------------------------
of the events set forth in Section 7.1, Crane, for as long as he is a
Shareholder, shall have the option to purchase the Shares owned by each of the
other Shareholders and their Permitted Transferees at a purchase price equal to
the same price per share and upon the same term as those of the transaction
involving the sale of the Company's assets or stock. The options arising by
reason of Section 7.1.1 or 7.1.2 shall be exercisable immediately before the
closing of the transaction involving the sale of the Company's assets or stock.
ARTICLE 8
---------
PURCHASE PRICE, PAYMENT TERMS AND TRANSFER OF SHARES
----------------------------------------------------
8.1 Purchase Price. The purchase price on the purchase of Shares, whereby
--------------
the price is the Purchase Price, shall be determined as follows:
8.1.1 Value. The Purchase Price to be paid for each of the Shares
-----
shall be equal to the "Fair Market Value" of the Company, divided by the total
number of Shares outstanding as of the date the Purchase Price is to be
determined. As used herein, prior to the time when the Company's equity
securities are publicly held, the "Fair Market Value" shall be the highest of
(i)
A-7
the "Earnings Price" (ii) the "Book Value Price" or (iii) $3,000,000. The
"Earnings Price" shall be a value determined by multiplying the Company's
average earnings (defined as net income before taxes) for the preceding three
(3) fiscal years by five (5); provided, however, that in determining net income
for such three (3) fiscal years, any amounts paid as total compensation to
▇▇▇▇▇▇▇ and ▇▇▇▇▇ in any such year which exceeds an aggregate of $300,000 (which
amount shall be adjusted each year to reflect changes in the Consumer Price
Index for San Diego County) shall be added back to earnings for such year (with
a concurrent adjustment for any expense deduction taken by the Company on
account of the payment thereof). The "Book Value Price" shall be the book value
of the Company, determined in accordance with generally accepted accounting
principals, as of the end of the immediately preceding fiscal year. For
purposes of calculating "Fair Market Value" under this section, any insurance
proceeds received by the Company on account of the death or disability of a
Shareholder or Permitted Transferee to the extent of any such proceeds which
must be paid as a cash down payment for the purchase of Shareholders pursuant to
Section 8.2.1, shall not be included in the calculation of "Fair Market Value."
As used herein, after the time when the Company's equity securities are publicly
held, the "Fair Market Value" shall be the mean 30-day price of the Shares for
the period ending 5 days prior to the proposed transfer or sale of Shares, based
upon the following: (i) the 30 day average closing price of the Shares on the
principal exchange on which the Shares are then trading; or (ii) if the Shares
are not traded on an exchange but are quoted on Nasdaq or a successor quotation
system, the 30 day average of (1) the last sales price (if the Shares are then
used as a National Market Issue under the NASD National Market System) or (2)
the mean between the closing representative bid and asked prices (in all other
cases) for the Shares as reported by Nasdaq or such successor quotation system;
or (iii) if not publicly traded on an exchange and not quoted on Nasdaq or a
successor quotation system, the 30-day mean between the closing bid and asked
prices for the Shares, as determined in good faith by the Company's Board of
Directors.
8.1.2 Disputes. In the event of any disputes in the computation of
--------
the Company's Fair Market Value pursuant to the terms of Section 8.1.1, a
statement prepared by the Company's accountants as to the Fair Market Value (as
determined pursuant to Section 8.1.1 shall be conclusive and binding on the
parties. At such time the parties shall sign a statement agreeing to hold such
accountants harmless for their role in the preparation of such valuation.
8.2 Payment Terms. The Payment Terms on the purchase of Shares, whereby
-------------
the purchase price is the Purchase Price and this Agreement provides that the
Shares may be purchased pursuant to the Payment Term, shall be as follows:
8.2.1 Downpayment. A cash downpayment in the amount of 20% of the
-----------
Purchase Price; provided, that in the event the purchaser's option to purchase
arises by virtue of the death or disability of a Shareholder or Permitted
Transferee, the greater of (i) 20% of the Purchase Price or (ii) the full amount
of any insurance proceeds received by such purchaser as a lump sum payment on
account of such death or disability (up to a maximum of the total Purchase
Price) shall be paid as a cash downpayment hereunder. The cash downpayment
shall be payable upon delivery by the transferring Shareholder, Permitted
Transferee, or the estate, as the case may be, of (i) an appropriate receipt,
(ii) certified copy of a court order confirming the sale and the consent of the
inheritance tax appraiser to such transfer, if applicable, (iii) the consent of
any
A-8
state or federal authorities, if required, and (iv) any other documents the
purchaser or purchaser's counsel may reasonably require to effect a lawful and
valid transfer of the Shares.
8.2.2 Promissory Note. Any unpaid balance of the Purchase Price
---------------
shall be evidenced by a negotiable promissory note in the form of Exhibit "A"
attached hereto, and, in the event the Company is the transferee, the promissory
note shall contain on its face a legend in the form Set forth on the top of
Exhibit "A."
8.2.3 Pledge of Shares. The promissory note delivered pursuant to
----------------
Section 8.2.2 herein shall be secured by a Security Agreement in the form
attached hereto as Exhibit "B," and the purchaser shall execute and deliver such
agreement with the consideration for the sale.
8.3 Transfer. On the occurrence of any event that leads to the purchase
--------
of Shares under this Agreement, the consideration to be paid for the Shares
shall be forthwith paid to the transferring Shareholder or Permitted Transferee,
or his estate, as the case may be. If the event that leads to the purchase is
the death of any Shareholder or Permitted Transferee, the decedent's personal
representative shall apply for and obtain any necessary court approval or
confirmation of the sale of the decedent's Shares pursuant to this Agreement.
In all events, consideration for the Shares purchased shall be delivered as soon
as practicable to the person entitled to it, and the Secretary shall cause the
certificates representing the purchased Shares to be properly endorsed and shall
issue new certificate(s) in the names of the purchaser or purchasers.
ARTICLE 9
---------
SUMMIT'S ASSIGNMENT TO THE COMPANY;
-----------------------------------
COMPANY RESTRICTIONS
--------------------
9.1 Assignment by Summit. Summit shall be entitled to assign its rights
--------------------
to purchase Shares under Sections 3. 4 and 6 to the Company.
9.2 Limitation on Repurchase of Shares. In the event that, pursuant to
----------------------------------
the terms of Section 9.1, Summit assigns its right to purchase Shares to the
Company, the right of the Company to exercise the option and to purchase such
Shares is subject to and conditioned upon compliance with the restrictions, if
any, governing the right of a corporation to purchase its own shares or make
distributions to shareholders, contained in such applicable governmental or
judicial restrictions as may from time to time be effective.
9.3 Order of Combined Purchase. In the event that some but less than all
--------------------------
of Shares to be purchased pursuant to the terms of this Agreement are to be
purchased by the Company, with the remaining Shares owned by the transferring
Shareholder to be purchased by Crane or Summit or both, the parties shall
consummate the purchase of Shares by Crane or Summit or both prior to or
simultaneously with the purchase of Shares by the Company. The prior or
simultaneous purchase by Crane or Summit or both, as applicable, shall be a
condition to the consummation of the purchase by the Company.
A-9
ARTICLE 10
-----------
SHARE CERTIFICATES
------------------
10.1 Share Certificates. Upon execution of this Agreement, each
------------------
Shareholder except Crane (and thereafter, each Permitted Transferee) shall have
placed on the certificates representing his Shares, the following legend:
"Sale, transfer or hypothecation of the shares
represented by this certificate is restricted by the
provisions of a Buy-Out and Voting Agreement among the
Shareholders and the Company dated October 14, 1994, a
copy of which may be inspected at the principal office of
the Company, and all of the provisions of which are
incorporated by reference in this certificate."
A copy of this Agreement shall be delivered to the Secretary of the Company and
shall be shown by the Secretary to any interested person making proper inquiry
about it. Subject to the terms of Article II of this Agreement, each
Shareholder and Permitted Transferee of record shall have the right to vote his
Shares and receive any distributions with respect to them until his Shares are
sold or transferred as provided in this Agreement.
10.2 Restrictions on New Certificates. Any new certificates issued by the
--------------------------------
Company upon cancellation of Shares or any newly issued Shares shall be likewise
issued subject to the terms of this Agreement. Such certificates shall bear the
endorsement set forth in Section 10.1 hereof, and as a condition of issuance of
such new certificates the Secretary of the Company shall first obtain a written
acceptance of the terms of this Agreement from the proposed transferee or new
issue.
10.3 Warranty of Title. Each Shareholder hereby warrants and represents
-----------------
that he has good and marketable title to his Shares and that his Shares may be
transferred free and clear of any lien, encumbrance or restriction, except those
imposed by the terms of this Agreement, and if applicable, any lien, encumbrance
or restriction imposed by applicable governmental or judicial entities provided,
however, that the parties acknowledge that Crane's Shares are subject to certain
transfer restrictions pursuant to that certain Right of First Refusal and Co-
sale Agreement between Crane, Summit and the Company dated as of October 14,
1994.
ARTICLE 11
----------
VOTING AGREEMENT
----------------
11.1 Crane's Right to Vote ▇▇▇▇▇▇▇'▇ Shares. Until the termination of
--------------------------------------
this Agreement in accordance with Section 12.1 below, Crane or Crane's designee
shall have the exclusive right to vote all Shares held by (i) ▇▇▇▇▇▇▇. (ii)
▇▇▇▇▇▇▇'▇ Permitted Transferees, or (iii) any transferee of the Shares held by
▇▇▇▇▇▇▇ as of the date of this Agreement, (collectively, the "▇▇▇▇▇▇▇ Shares")
in person or by proxy at all shareholder meetings and in all proceedings in
which the vote or consent of the shareholders may be required or authorized, and
shall have all the rights, privileges and powers of a shareholder except as,
otherwise provided in this Section 11.
A-10
11.2 No Sale of ▇▇▇▇▇▇▇ Shares. Crane shall not have authority to sell or
-------------------------
otherwise dispose of the ▇▇▇▇▇▇▇ Shares.
11.3 Dividends; Distributions. Crane shall have no right to receive
------------------------
dividends or other distributions on the ▇▇▇▇▇▇▇ Shares.
11.4 Application of Voting Agreement to After-Acquired Shares. After the
--------------------------------------------------------
date of this Agreement, the provisions of this Section 11 shall apply to all
Shares issued to ▇▇▇▇▇▇▇, his Permitted Transferees, or any other transferee of
the Shares, and all securities issued as a replacement for the ▇▇▇▇▇▇▇ Shares or
with respect to the ▇▇▇▇▇▇▇ Shares as a result of any stock dividend, stock
split or other similar event.
ARTICLE 12
----------
MISCELLANEOUS
-------------
12.1 Termination of Agreement. This Agreement shall terminate on any of
------------------------
the following events:
12.1.1 The written agreement of all the then Shareholders; or
12.1.2 The dissolution, bankruptcy or insolvency of the Company; or
12.1.3 At such time as only one Shareholder remains; or
12.1.4 October 1, 2004.
provided, however, that all rights of Summit under this Agreement shall
terminate upon the earliest to occur of (i) the completion by the Company of an
underwritten sale of Company securities to the public pursuant to a registration
statement under the Securities Act of 1933, as amended, in which the gross
proceeds to the Company equal or exceed $10,000,000; (ii) the dissolution of the
Company; or (iii) the effective date of a consolidation or merger with or into
another corporation as a result of which the stockholders of the Company prior
to such transaction own less dm 50% of the outstanding stock of the surviving
corporation.
12.2 Necessary Acts. Each party to this Agreement agrees to perform any
--------------
further acts and execute and deliver any documents that may be reasonably
necessary to carry out the provisions of this Agreement.
12.3 Amendments. The provisions of this Agreement may be waived, altered,
----------
amended or repealed in whole or in part only upon the written consent of all the
parties to this Agreement provided, however, that the provisions of Article 7
and Article11 may be waived, altered, amended, or repealed in whole or in part
upon the written consent of all the parties to this Agreement except for Summit.
12.4 Successors and Assigns. This Agreement shall be binding on and shall
----------------------
inure to the benefit of the parties to it and their respective heirs, legal
representatives, successors and assigns.
12.5 Validity of Agreement. Each provision of this Agreement shall be
---------------------
viewed as separate and divisible, and in the event that any such provisions
shall be held to be invalid, the remaining provisions shall continue to be in
full force and effect.
12.6 Notices. All notices, requests, demands and other communications
-------
under this Agreement shall be in writing and shall be deemed to have been duly
given and received on the date of service if personally served on the party to
whom notice is to be given, or seventy-two (72) hours after mailing, if mailed
to the party to whom notice is to be given by first class mail, postage prepaid,
and properly addressed to the party at his address set forth on the signature
pages of this Agreement, or any other address that any party may designate by
written notice to the other parties.
12.7 Governing Law. This Agreement shall be construed in accordance with
-------------
and governed by the laws of the State of Delaware.
12.8 Timing. Time is of the essence in the performance of all provisions
------
under this Agreement.
12.9 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one and the same instrument.
12.10 Arbitration. The parties acknowledge and agree that time is of the
-----------
essence in resolving any dispute that may arise in connection with this
Agreement. Except as set forth herein, any controversy or claim arising out of
or relating to this Agreement, or the breach thereof, that cannot be resolved
between the parties in a timely manner shall be settled by binding arbitration
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association ("AAA"). The expenses of the arbitration, including the
arbitrators' fees, expert witness fees, and attorneys' fees, may be awarded to
the prevailing party, in the discretion of the arbitrator, or may be apportioned
among the parties in any manner deemed appropriate by the arbitrator. Unless
and until the arbitrator decides that one party is to pay for all (or a share)
of such expenses, each party to the dispute shall bear its own fees and costs
arising in connection with enforcement of the Agreement. Not withstanding the
foregoing, any parry may seek equitable enforcement of the term of this
Agreement in any court of competent jurisdiction.
12.11 Legal Expenses. In the event that any party institutes a
--------------
negotiation or proceeding to enforce the provisions of this Agreement, the
prevailing party or parties in such negotiation or proceeding, whether such
party or parties shall have instituted the negotiation or proceeding, shall be
entitled to reasonable attorneys' fees in addition to costs and necessary
disbursements.
12.12 Specific Performance. The parties hereby declare that it is
--------------------
impossible to measure in money the damage which will accrue to a party hereto,
or to the personal representative of a deceased Shareholder or Permitted
Transferee by reason of a failure to perform any of the obligations provided for
in this Agreement. If any party hereto or the personal representative of a
deceased Shareholder or Permitted Transferee shall institute any negotiation or
proceeding to enforce the provisions hereof, any person (including the Company)
against whom such
A-12
negotiation or proceeding is brought hereby waives any claim of defense therein
based on an allegation that such party or such personal representative has or
had an adequate remedy at law, and such person shall not urge in any such
negotiation or proceeding the claim or defense that such remedy at law exists.
12.13 Confidentiality. The parties shall keep the terms of this Agreement
---------------
confidential until a mutual agreement is reached regarding publicity or as
otherwise required by law.
12.14 Shareholder ▇▇▇▇▇. Each Shareholder and Permitted Transferee agrees
-----------------
to prepare and execute his last will and testament, and to include in such will
or living trust a direction and authorization to the personal representative or
trustee to comply with the provisions of this Agreement and to sell his Shares
in accordance with this Agreement; however, the failure of any Shareholder or
Permitted Transferee to do so shall not affect the validity or enforceability of
this Agreement.
12.15 Effect of Headings; Constructions Exhibits. The subject headings of
------------------------------------------
the sections of this Agreement are included for purposes of convenience only,
and shall not affect the construction or interpretation of any of its
provisions. The parties acknowledge that each party and its counsel have
reviewed and revised this Agreement, and the rule of construction to the effect
that any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement, any exhibits hereto, or any
documents executed in connection herewith. All exhibits to this Agreement are
incorporated herein in their entirety.
A-13
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first shown above.
SHAREHOLDERS: COMPANY:
COMPS InfoSystems, Inc.
______________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
______________________________________ By:_______________________________
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Its: President
------------------------------
SUMMIT
SUMMIT VENTURES III, L.P.
By: Summit Partners III, L.P.
General Partner
By: Stamps, ▇▇▇▇▇▇▇ & Co. III,
General Partner
By:______________________________
General Partner
SUMMIT INVESTORS II, L.P.
By:______________________________
General Partner
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Additional Shareholders
Agreeing to Join This Agreement
______________________________________
______________________________________
______________________________________
A-14
EXHIBIT "A"
THIS NOTE HAS BEEN ISSUED IN PARTIAL PAYMENT OF THE PURCHASE BY THE UNDERSIGNED
OF SHARES OF COMPS INFOSYSTEMS, INC., AND THE VALIDITY OF THIS NOTE MAY BE
CONTROLLED BY, AND ENFORCEMENT AND PAYMENT PURSUANT TO THE TERMS HEREOF MAY BE
AFFECTED BY, CHAPTER V OF THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE,
OR THE LIMITATION SET FORTH IN THAT CERTAIN SHAREHOLDERS BUY-OUT AND VOTING
AGREEMENT, DATED OCTOBER __-, 1994, OR BOTH. (For use only for Company
repurchase.)
PROMISSORY NOTE
$________________ _______________, 19____
San Diego, California
1. FOR VALUE RECEIVED, ____________________ ("Payor") promises to
pay to the order of ____________________, the principal sum of ________________
dollars ($_________________), with interest on the unpaid principal amount owing
from time to time at the rate of ___________ percent (__%) per annum,
compounded annually, commencing with the date hereof and continuing on the
unpaid principal until paid. Principal shall be payable in 60 equal monthly
installments commencing on the first day of the month next succeeding the date
hereof. All accrued interest shall be payable with each principal payment.
2. All payments of interest and principal shall be in lawful money
of the United States of America, payable on the due date by wire transfer or
funds which are good and fully collectible at a bank or other financial
institution in San Diego County, California. The holder of this Note shall
specify the manner and place in San Diego County at which such payments are to
be made. All payments shall be applied first to accrued interest, and
thereafter to principal. Any delinquent installment of interest shall bear
interest at the same rate as principal bears interest. Notwithstanding anything
to the contrary contained in this Note, in no event shall the interest payable
hereunder exceed the maximum amount of interest permissible under applicable
law.
3. Upon receiving written approval of the holder of this Note, Payor
may prepay this Note in whole or in part at any time or from time to time,
without penalty or additional fees.
4. If any payment of principal or interest is not paid when due and
continues unpaid for a period of five days after its scheduled due date, then at
the option of the holder of this Note, this Note shall become due and payable in
full upon the holder of this Note so notifying the Payor.
5. In the event of any default hereunder, Payor shall pay all
reasonable attorneys' fees and court costs incurred by holder in enforcing and
collecting this Note.
6. This note is secured in part by a Security Agreement of even date
herewith. This Note remains a full recourse obligation of Payor.
_____________________________
_____________________________
▇-▇
▇▇▇▇▇▇▇ "▇"
SECURITY AGREEMENT
------------------
This Security Agreement is entered into as of the ___ day of
__________, 19__, by and between ____________ ("Debtor"), ______________
("Creditor"), with respect to the following facts:
A. Contemporaneously with the entering into of this Security
Agreement, Debtor has purchased from Creditor _________ shares ("Shares") of the
stock of COMPS InfoSystems, Inc., a Delaware corporation ("Corporation") for a
total purchase price of $_________, of which $__________ has been paid in cash
and the balance of $_________ is evidenced by a Promissory Note-("Note")
executed by Debtor to Creditor of even date herewith.
B. The parties hereto desire to secure the repayment of said Note
with a pledge of said Shares.
WHEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
1. Grant of Security Interest. Debtor hereby grants to Creditor
-------------------------
a security interest pursuant to the Delaware Uniform Commercial Code in all of
said Shares to secure the repayment of said Note and any and all obligations
under this Security Agreement.
2. Perfecting Security Interest. Upon full payment of all
----------------------------
obligations of said Note and this Security Agreement, Pledgeholder shall
immediately deliver the certificate or certificates representing said Shares to
Debtor, or as Debtor otherwise instructs. There shall be no partial release of
any of said Shares on account of part payment on said Note.
3. Default by Debtor. In the event of any default by Debtor
-----------------
under said Note or this Security Agreement, if said default is not cured within
ten (10) days after Creditor has delivered written notice of such default to
Debtor, Creditor shall be entitled to declare the full amount of unpaid
principal and interest owed by Debtor immediately due and payable, to take legal
action to collect such amounts, and to exercise any and all rights and remedies
available to Creditor as the secured party under the Delaware Commercial Code,
including without limitation, the right to take said Shares in full repayment of
said Note, the right to sell said Shares at public or private sale, and the
right to recover from Debtor any deficiency if the net proceeds from such sale
are less than the unpaid balance owed under said Note.
4. Recapitalization of the Corporation. In the event of any
-----------------------------------
recapitalization of the Corporation, whether by stock split, merger,
consolidation, sale of assets, exchange of stock, or any other manner
whatsoever, Creditor's security interest as set forth herein shall automatically
without need of any further action attach to the stock or property into which
said Shares have been converted.
5. Rights of Shareholder. So long as no default occurs under
---------------------
said Note or this Security Agreement, Debtor shall be entitled to receive all
dividends paid on said Shares, to vote said Shares in all matters, and to
otherwise be entitled to all rights of ownership of said Shares; provided,
however, notwithstanding the foregoing, that Creditor shall retain
B-1
possession of said Shares and any transfer or grant of a security interest in
said Shares by Debtor shall at all times remain subject and subordinate to
Creditor's prior security interest, and provided further, that Debtor shall not
vote said Shares for any plan to terminate, liquidate, dissolve, merge,
consolidate, reorganize, or otherwise alter the form of the Corporation, or to
authorize any stock dividends or to alter or amend the Articles of
Incorporation, without first receiving prior written consent from Creditor.
6. Expenses of Litigation. In the event of any default under
----------------------
said Note or this Security Agreement, Debtor agrees to pay to Creditor all of
Creditor's costs, including the reasonable attorneys' fees and court costs
incurring in enforcing this Security Agreement and collecting said Note.
7. Securities Laws. The Debtor acknowledges that the various
---------------
federal and state securities laws may prohibit or prevent the advertising for
sale of the Shares as required by a public sale as described in Paragraph 3
hereof. Therefore, the Debtor consents to a private sale by the Creditor upon
the occurrence of an event of default and expressly acknowledges that such a
private sale is commercially reasonable, given the nature and circumstances of
the transaction contemplated by this Agreement.
8. Miscellaneous. The rights of the Creditor hereunder shall
-------------
inure to the benefit of its successors and assigns, and the obligations of the
Debtor hereunder shall bind its successors and assigns.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as
of the date set forth above.
___________________________________
DEBTOR
___________________________________
CREDITOR
B-2
EXHIBIT G
Restated Certificate
RESTATED
CERTIFICATE OF INCORPORATION
OF
COMPS INFOSYSTEMS, INC.
The undersigned, ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, hereby certify
that:
A. They are the duly elected and acting President and Secretary,
respectively, of COMPS InfoSystems, Inc., a Delaware corporation (the
"Corporation").
B. The original Certificate of Incorporation of the Corporation was filed
with the Secretary of State on September 1, 1994.
C. The Certificate of Incorporation is restated to read in full as
follows:
FIRST: The name of the Corporation is COMPS InfoSystems, Inc. (hereinafter
-----
sometimes referred to as the "Corporation").
SECOND: The address of the registered office of the Corporation in the
------
State of Delaware is ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇-▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
The name of the registered agent at that address is The ▇▇▇▇▇▇▇▇-▇▇▇▇
Corporation System, Inc.
THIRD: The purpose of the Corporation is to engage in any lawful act or
-----
activity for which a corporation may be organized under the General Corporation
Law of Delaware.
FOURTH: The Corporation is authorized to issue two classes of shares to be
------
designated respectively "Preferred Stock" and "Common Stock." The total number
of shares of Preferred Stock, par value $.01 per share, which are authorized is
5,000,000. The total number of shares of Common Stock, par value $.01 per
share, which are authorized is 25,000,000. Upon the filing of this Restated
Certificate of Incorporation, each of this Corporation's outstanding shares is
split up and converted into one hundred (100) shares of Class A Common Stock, as
herein defined.
A. Common Stock. The first series of Common Stock shall be comprised of
------------
22,500,000 shares designated "Class A Common Stock." The second series of Common
Stock shall be comprised of 2,500,000 shares of Common Stock designated "Class B
Common Stock." The Class A and Class B Common Stock shall have the same rights
and privileges except as provided below:
1. Voting. The Class B Common Stock shall not have any right to
------
vote unless otherwise required by law.
2. Conversion. Each share of Class B Common Stock shall
----------
automatically convert into one share of Class A Common Stock upon the earlier to
occur of (i) the time the
-1-
consent of at least 66 2/3% of the outstanding Class A Common Stock to such
conversion is obtained, or (ii) closing of the sale of the Corporation's
securities pursuant to an underwritten public offering. Upon conversion of the
Class B Common Stock, the Class A Common Stock shall be renamed "Common Stock."
(a) In case the Corporation shall at any time (i) subdivide the
outstanding Class A Common Stock, or (ii) issue a stock dividend on its
outstanding Class A Common Stock, the number of shares of Class B Common Stock
issuable upon conversion of the Class B Common Stock immediately prior to such
subdivision or the issuance of such stock dividend shall be proportionately
increased by the same ratio as the subdivision or dividend. In case the
Corporation shall at any time combine its outstanding Class A Common Stock, the
number of shares of Class B Common Stock issuable upon conversion of the Class B
Common Stock immediately prior to such combination shall be proportionately
decreased by the same ratio as the combination. All such adjustments described
herein shall be effective at the close of business on the date of such
subdivision, stock dividend or combination, as the case may be.
(b) In case of any capital reorganization (other than in
connection with a merger or other reorganization which the Corporation is not
the continuing or surviving entity) or any reclassification of the Common Stock
of the Corporation, the Class B Common Stock shall thereafter be convertible
into that number of shares of stock or other securities or property to which a
holder of the number of shares of Class A Common Stock of the Corporation
deliverable upon conversion of the shares of Class B Common Stock immediately
prior to such reorganization or recapitalization would have been entitled upon
such reorganization or reclassification.
B. Preferred Stock. The first series of Preferred Stock shall be
---------------
comprised of 4,270,336 shares designated as "Series A Preferred Stock." The
relative rights, preferences, restrictions and other matters relating to the
Series A Preferred Stock are as follows:
1. Dividend Rights of Preferred. The holders of Preferred Stock
----------------------------
shall be entitled to receive, out of any assets at the time legally available
therefore, cumulative noncompounded dividends from the date of issuance at the
rate per annum of $0.07025 per share (subject to adjustments for stock splits,
dividends, recapitalization and the like) of Series A Preferred Stock, payable
immediately prior to the effective time of (i) any repurchase of the Series A
Preferred Stock; (ii) any liquidation pursuant to Section B(2)(b) of this
Article FOURTH; or (iii) any sale of the Corporation's securities pursuant to an
underwritten public offering; provided, however, that the right to receive such
-------- -------
accrued and unpaid dividends shall be forfeited in the event of (x) a repurchase
of all of the outstanding Series A Preferred stock or a liquidation pursuant to
Section B(2)(b) of this Article FOURTH, if the aggregate amount to be received
by the holders of the Series A Preferred Stock prior to the payment of such
accrued and unpaid dividends would exceed $3.52 per share (as adjusted for
stock-splits, combinations, reorganizations and the like) or (y) an underwritten
public offering of the Corporation's securities if the Corporation receives
gross proceeds of not less than $10,000,000 at a purchase price of not less than
$3.52 per share (as adjusted for stock splits, stock dividends, reorganizations
and the like). Upon conversion of the Series A Preferred Stock any accrued but
unpaid dividends shall remain accrued and shall remain payable pursuant to this
Section B(l) of this Article FOURTH. In addition to the cumulative dividends
specified above, no cash
-2-
dividends shall be paid on any Common Stock unless an equal dividend is paid
with respect to all outstanding shares of Preferred Stock in an amount for each
such share of Preferred Stock equal to the aggregate amount of such dividends
for all Common Stock into which each such share of Preferred Stock could then be
converted.
2. Preference on Liquidation.
-------------------------
(a) In the event of any liquidation, dissolution or winding up
of the Corporation, distributions to the stockholders of the Corporation shall
be made in the following manner:
(i) The holders of the Preferred Stock shall be entitled
to receive, prior and in preference to any distribution of any of the assets or
surplus funds of the Corporation to the holders of the Common Stock by reason of
their ownership of such stock, the amount of (A) $1.17087 per share for each
share of Series A Preferred Stock then held by them, adjusted for any stock
split, combination, consolidation, or stock distributions or stock dividends
with respect to such shares, and (B) an amount equal to all accumulated but
unpaid dividends on the Preferred Stock as provided in Subsection 1 above. If
the assets and funds thus distributed among the holders of the Preferred Stock
shall be insufficient to permit the payment to such holders of the full
aforesaid preferential amount, then the entire assets and funds of the
Corporation legally available for distribution shall be distributed ratably
among the holders of the Preferred Stock in proportion to their aggregate
preferential amounts.
(ii) The remaining assets of the Corporation, after payment
in full to the holders of Preferred Stock of all amounts exclusively payable on
or with respect to said shares, shall be distributed ratably among the holders
of the Common Stock.
(b) The following shall be deemed to be a liquidation,
dissolution or winding up within the meaning of this Subsection: (i) an
acquisition, consolidation or merger of this Corporation with or into any other
corporation or corporations unless the stockholders of the Corporation prior to
such transaction directly or indirectly own more than fifty percent (50%) of the
voting stock of the surviving or acquiring corporation or corporations; (ii) the
sale, transfer or other disposition of all or substantially all of the assets of
this Corporation to a person other than a corporation or partnership controlled
by the Corporation or its stockholders; and (iii) the effectuation by the
Corporation of a transaction or series of related transactions in which more
than 50% of the outstanding voting power of the Corporation prior to such
transaction or series of related transactions is disposed of.
(c) In the event the Corporation shall propose to take any
action of the type described in subsection (a) or (b) of this Subsection 2, the
Corporation shall, within ten (10) days after the date the Board of Directors
approves such action or twenty (20) days prior to any stockholders' meeting
called to approve such action, whichever is earlier, give each holder of shares
of the Preferred Stock written notice of the proposed action. Such written
notice shall describe the material terms and conditions of such proposed action,
including a description of the stock, cash and property to be received by the
holders of shares of the Preferred Stock upon consummation of the proposed
action and the proposed date of delivery thereof. If any material
-3-
change in the facts set forth in the notice shall occur, the Corporation shall
promptly give written notice to each holder of shares of the Preferred Stock of
such material change.
(d) The Corporation shall not consummate any proposed action of
the type described in subsection (a) or (b) of this Subsection 2 before the
expiration of thirty (30) days after the mailing of the initial written notice
or ten (10) days after the mailing of any subsequent written notice, whichever
is later; provided, however, that any such 30-day or 10-day period may be
shortened upon the written consent of the holders of a majority of the
outstanding shares of the Preferred Stock.
(e) If the Corporation shall propose to take any action of the
type described in subsection (a) or (b) of this Subsection 2 which will involve
the distribution of assets other than cash, the Corporation shall, if requested
by the holders of a majority of the Preferred Stock, promptly engage independent
competent appraisers to determine the value of the assets to be distributed to
the holders of shares of the Preferred Stock and the Common Stock. The
Corporation shall, upon receipt of such appraiser's valuation, give prompt
written notice of the appraiser's valuation to each holder of shares of the
Preferred Stock.
3. Voting.
------
(a) Except as set forth in paragraph (b) of this Subsection 3
and in Subsection 6 hereof, or as otherwise required by law, the shares of the
Preferred Stock shall be voted together with the Corporation's Class A Common
Stock at any annual or special meeting of the stockholders of the Corporation,
or may act by written consent in the same manner as the Corporation's Class A
Common Stock, and shall have the voting rights and powers equal to the voting
rights of the Class A Common Stock, upon the following basis: each holder of
shares of Preferred Stock shall be entitled to such number of votes for the
Preferred Stock held by him on the record date fixed for such meeting, or, if no
record date is established, at the date such vote is taken or on the effective
date of any such written consent, as shall be equal to the nearest whole number
of shares of the Corporation's Common Stock into which his shares of Preferred
Stock are convertible immediately after the close of business on the record date
fixed for such meeting, the date of such vote or the effective date of such
written consent.
(b) The holders of Series A Preferred Stock, voting as a
separate class, shall be entitled to elect one director. The election of a
director by the Series A Preferred Stock shall occur at the annual meeting of
holders of Common Stock or at any special meeting of holders of Series A
Preferred Stock called by holders of a majority of the outstanding shares of
Series A Preferred Stock or by the written consent of all such holders. If the
person elected by the holders of Series A Preferred Stock should cease to be a
director for any reason, the vacancy shall only be filled by the vote or written
consent of holders of a majority of the outstanding shares of Series A Preferred
Stock. The holders of the Common Stock shall be entitled to elect the remaining
directors.
4. Status of Converted or Redeemed Stock. In the event that any
-------------------------------------
shares of Preferred Stock shall be converted pursuant to Subsection 5 hereof or
shall be repurchased or otherwise acquired by the Corporation in any manner
whatsoever, such shares shall be retired and canceled promptly after the
acquisition thereof. Such shares shall not be reissued as shares
-4-
of Series A Preferred Stock or shares of any other series of Preferred Stock.
Upon such cancellation, and upon the filing of any certificates required or
appropriate under applicable law, the number of authorized shares of Preferred
Stock as set forth in Article FOURTH, shall be reduced by the number of such
shares so canceled.
5. Conversion Rights. The holders of Preferred Stock shall have
-----------------
conversion rights as follows:
(a) Each share of Preferred Stock shall be convertible, at the
option of the holder thereof, at any time at the principal office of the
Corporation or any transfer agent for such shares, into fully paid and
nonassessable shares of Class A Common Stock of the Corporation. The number of
shares of Class A Common Stock into which each share of Preferred Stock may be
converted shall be determined by dividing $1.17087 for the Series A Preferred
Stock by the Conversion Price determined as hereinafter provided in effect at
the time of the conversion. The Conversion Price per share at which shares of
Class A Common Stock shall be initially issuable upon conversion of any shares
of Preferred Stock shall be $1.17087 for the Series A Preferred Stock, subject
to adjustment as provided herein.
(b) Each share of Preferred Stock shall be converted into Class
A Common Stock automatically in the manner provided herein upon the earlier to
occur of (i) the time the consent of at least 66-2/3% of the outstanding
Preferred Stock to such conversion is obtained, or (ii) the closing of the sale
of the Corporation's securities pursuant to an underwritten public offering from
which the Corporation receives gross proceeds of not less than $10,000,000 at a
purchase price of not less than $3.52 per share (as adjusted for stock splits,
stock dividends, reorganizations and the like).
(c) Before any holder of Preferred Stock shall be entitled to
convert the same into Common Stock, such holder shall surrender the certificate
or certificates therefor, duly endorsed in blank or accompanied by proper
instruments of transfer, at the principal office of the Corporation or of any
transfer agent for the Preferred Stock, and shall give written notice to the
Corporation at such office that such holder elects to convert the same and shall
state in writing therein the name or names in which such holder wishes the
certificate or certificates for Common Stock to be issued. As soon as
practicable thereafter, the Corporation shall issue and deliver at such office
to such holder's nominee or nominees, certificates for the number of whole
shares of Common Stock to which such holder shall be entitled. No fractional
shares of Common Stock shall be issued by the Corporation and all such
fractional shares shall be disregarded. In lieu thereof, the corporation shall
pay in cash the fair market value of such fractional share as determined by the
Board of Directors of the Corporation. Such conversion shall be deemed to have
been made as of the date of such surrender of the Preferred Stock to be
converted, and the person or persons entitled to receive the Common Stock
issuable upon such conversion shall be treated for all purposes as the record
holder or holders of such Common Stock on said date.
(d) In case the Corporation shall at any time (i) subdivide the
outstanding Common Stock, or (ii) issue a stock dividend on its outstanding
Common Stock, the number of shares of Common Stock issuable upon conversion of
the Preferred Stock immediately prior to such subdivision or the issuance of
such stock dividend shall be
-5-
proportionately increased by the same ratio as the subdivision or dividend (with
appropriate adjustments in the Conversion Price of the Preferred Stock). In case
the Corporation shall at any time combine its outstanding Common Stock, the
number of shares of Common Stock issuable upon conversion of the Preferred Stock
immediately prior to such combination shall be proportionately decreased by the
same ratio as the combination (with appropriate adjustments in the Conversion
Price of the Preferred Stock). All such adjustments described herein shall be
effective at the close of business on the date of such subdivision, stock
dividend or combination, as the case may be.
(e) In case of any capital reorganization (other than in
connection with a merger or other reorganization in which the Corporation is not
the continuing or surviving entity) or any reclassification of the Common Stock
of the Corporation, the Preferred Stock shall thereafter be convertible into
that number of shares of stock or other securities or property to which a holder
of the number of shares of Common Stock of the Corporation deliverable upon
conversion of the shares of Preferred Stock immediately prior to such
reorganization or recapitalization would have been entitled upon such
reorganization or reclassification. In any such case, appropriate adjustment (as
determined by the Board of Directors) shall be made in the application of the
provisions herein set forth with respect to the rights and interests thereafter
of the holders of Preferred Stock, such that the provisions set forth herein
shall thereafter be applicable, as nearly as reasonably may be, in relation to
any share of stock or other property thereafter deliverable upon the conversion.
(f) In case:
(i) the Corporation shall take a record of the holders of
its Common Stock for the purpose of entitling them to receive a dividend, or any
other distribution, payable otherwise than in cash; or
(ii) the Corporation shall take a record of the holders of
its Common Stock for the purpose of entitling them to subscribe for or purchase
any shares of stock of any class or to receive any other rights; or
(iii) the Corporation shall effect a capital reorganization
of the Corporation, reclassification of the capital stock of the Corporation
(other than a subdivision or combination of its outstanding Common Stock),
consolidation or merger of the Corporation (other than a merger or other
reorganization in which the Corporation is not the continuing or surviving
entity); then, and in any case, the Corporation shall cause to be mailed to the
holders of its Preferred Stock, at least twenty (20) days prior to the date
hereinafter specified, a notice stating the date on which a record is to be
taken for the purpose of such dividend, distribution or rights, or such action
is to be taken in connection with such reorganization, reclassification, merger
or consolidation.
(g) The Corporation shall at all times reserve and keep
available, out of its authorized but unissued Common Stock, solely for the
purpose of effecting the conversion of the Preferred Stock, the full number of
shares of Common Stock deliverable upon the conversion of all Preferred Stock
from time to time outstanding. The Corporation shall from time to time (subject
to obtaining necessary director and stockholder action), in accordance with
-6-
the laws of the State of Delaware, increase the authorized amount of its Common
Stock if at any time the authorized number of shares of Common Stock remaining
unissued shall not be sufficient to permit the conversion of all of the shares
of Preferred Stock at the time outstanding.
(h) Upon the issuance by the Corporation of Common Stock, or any
right or option to purchase Common Stock, or any obligation or any shares of
stock convertible into or exchangeable for Common Stock for a consideration per
share less than the Conversion Price of the Series A Preferred Stock in effect
immediately prior to the time of such issue or sale other than the issuance of
shares of Common Stock upon conversion of any Series A Preferred Stock, then
forthwith upon such issue or sale, the Conversion Price of the Series A
Preferred Stock shall be reduced to a price (calculated to nearest cent) by
dividing:
(i) an amount equal to the sum of (x) the number of shares
of Common Stock outstanding immediately prior to such issue or sale multiplied
by the then existing Conversion Price of the Series A Preferred Stock, (y) the
number of shares of Common Stock issuable upon conversion of any shares of stock
of the Corporation outstanding immediately prior to such issue or sale
multiplied by the then existing Conversion Price of the Series A Preferred
Stock, and (z) an amount equal to the aggregate consideration received by the
Corporation upon such issue or sale by,
(ii) the sum of the number of shares of Common Stock
outstanding immediately after such issue or sale and the number of shares of
Common Stock (without taking into account any adjustment in such number
resulting from such issue or sale) issuable upon conversion of any shares of
stock of the Corporation outstanding immediately after such issue or sale.
For purposes of this subsection (h) the following provisions shall be
applicable:
(1) In the case of an issue or sale for cash of
shares of Common Stock, the consideration received by the Corporation therefor
shall be deemed to be the amount of cash received, before deducting therefrom
any commissions or expenses paid or incurred by the Corporation.
(2) In case of the issuance (otherwise than upon
conversion or exchange of obligations or shares of stock of the Corporation) of
additional shares of Common Stock for a consideration other than cash or a
consideration partly other than cash, the amount of the consideration other than
cash received by the Corporation for such shares shall be deemed to be the value
of such consideration as reasonably determined by the Board of Directors.
(3) In case of the issuance by the Corporation in
any manner of any rights to subscribe for or to purchase shares of Common Stock,
at a consideration per share (as computed below) less than the Conversion Price
in effect for the Series A Preferred Stock immediately prior to the date of the
offering of such rights or the granting of such options, as the case may be, the
maximum number of shares of Common Stock to which the holders of such rights or
options shall be entitled to subscribe for or purchase pursuant to such rights
or options shall be deemed to be issued or sold as of the date of the offering
of such rights or the
-7-
granting of such options, as the case may be, and the minimum aggregate
consideration named in such rights or options for the shares of Common Stock
covered thereby, plus the consideration, if any, received by the Corporation for
such rights or options, shall be deemed to be the consideration actually
received by the Corporation (as of the date of the offering of such rights or
the granting of such options, as the case may be) for the issuance of such
shares.
(4) In case of the issuance or issuances by the
Corporation in any manner of any obligations or of any shares of stock of the
Corporation that shall be convertible into or exchangeable for Common Stock, at
a consideration per share (as computed below) less than the Conversion Price in
effect for the Series A Preferred Stock immediately prior to the date such
obligation or shares are issued, the maximum number of shares of Common Stock
issuable upon the conversion or exchange of such obligations or shares shall be
deemed issued as of the date such obligations or shares are issued, and the
amount of the consideration received by the Corporation for such additional
shares of Common Stock shall be deemed to be the total of the amount of
consideration received by the Corporation upon the issuance of such obligations
or shares, as the case may be, plus the minimum aggregate consideration, if any,
other than such obligations or shares, receivable by the Corporation upon such
conversion or exchange, except in adjustment of dividends.
(5) The amount of the consideration received by the
Corporation upon the issuance of any rights or options referred to in subsection
(3) above or upon the issuance of any obligations or shares which are
convertible or exchangeable as described in subsection (4) above, and the amount
of the consideration, if any, other than such obligations or shares so
convertible or exchangeable, receivable by the Corporation upon the exercise,
conversion or exchange thereof shall be determined in the same manner provided
in subsections (h)(1) and (2) above with respect to the consideration received
by the Corporation in case of the issuance of additional shares of Common Stock.
On the expiration of any rights or options referred to in subsection (3), or the
termination of any right of conversion or exchange referred to in subsection
(4), the Conversion Price then in effect for the Series A Preferred Stock shall
forthwith be readjusted to such Conversion Price as would have obtained had the
adjustments made upon the issuance of such option, right or convertible or
exchangeable securities been made upon the basis of the delivery of only the
number of shares of Common Stock actually delivered upon the exercise of such
rights or options or upon the conversion or exchange of such securities.
(6) Anything herein to the contrary notwithstanding,
the Corporation shall not be required to make any adjustment of the Conversion
Price in the case of (A) the sale and issuance by the Corporation of up to
811,160 shares of Common Stock or rights or options to purchase shares of Common
Stock, net of repurchases and expired or canceled options, (as adjusted for
stock splits, stock dividends, reorganizations and the like) to officers,
directors, employees and consultants of the Corporation; (B) the issuance of
Common Stock upon the conversion of outstanding Series A Preferred Stock; or (C)
the issuance of up to 379,869 shares of Common Stock upon the exercise of
Warrants issued to the holders of Series A Preferred Stock.
(i) Upon the occurrence of each adjustment or readjustment of
the Conversion Price for any series of Preferred Stock pursuant to this
Subsection 5, the Corporation
-8-
at its expense shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and prepare and furnish to each holder of
Preferred Stock a certificate setting forth such adjustment or readjustment
showing in detail the facts upon which such adjustment or readjustment is based.
The Corporation shall, upon the reasonable written request at any time of any
holder of Preferred Stock, furnish or cause to be furnished to such holder a
like certificate setting forth (i) such adjustments and readjustments, and (ii)
the number of shares of Common Stock and the amount, if any, of other property
which at the time would be received upon the conversion of the Preferred Stock.
(j) In the event the Corporation at any time or from time to
time makes, or fixes a record date for the determination of holders of Common
Stock entitled to receive any distribution payable in securities or other
property of the Corporation other than Common Stock and other than as otherwise
adjusted in this Subsection 5, then and in each such event provision shall be
made so that the holders of Preferred Stock shall receive upon conversion
thereof, in addition to the number of shares of Common Stock receivable
thereupon, the amount of securities and other property of the Corporation which
they would have received had their shares of Preferred Stock been converted into
shares of Common Stock on the date of such event and had they thereafter, during
the period from the date of such event to and including the date of conversion,
retained such securities and other property receivable by them as aforesaid
during such period, subject to all other adjustments called for during such
period under this Subsection 5 with respect to the rights of the holders of
Preferred Stock.
(k) Any notices required by the provisions of this Subsection 5
to be given to the holders of shares of Preferred Stock shall be deemed given if
deposited in the United States mail, first class, postage prepaid and addressed
to each holder of record at its address appearing on the books of the
Corporation.
6. Changes. So long as shares of Series A Preferred Stock are
-------
outstanding, the Corporation shall not, without first obtaining the approval by
vote or written consent, in the manner provided by law, of the holders of at
least a majority of the total number of shares of Series A Preferred Stock
outstanding, voting separately as a class: (1) alter or change any of the
powers, preferences, privileges or rights of the Series A Preferred Stock; (2)
increase the authorized number of shares of Preferred Stock; (3) amend the
provisions of this Section 6; (4) undertake or effect any consolidation or
merger of the Corporation with or into another corporation or any acquisition by
or the conveyance of all or substantially all of the assets of the Corporation
to another person; (5) create any new series of Preferred Stock; (6) amend this
Certificate of Incorporation of the Corporation; (7) declare or pay any
dividends on the Corporation's capital stock; (8) redeem or repurchase any
outstanding stock other than (i) from employees, consultants or directors upon
the termination of their employment or services pursuant to agreements providing
for such repurchases; and (ii) up to 1,708,140 shares of Common Stock to be
repurchased on or before October 31, 1994; or (9) increase the size of the Board
of Directors to more than four directors.
FIFTH: The following provisions are inserted for the management of the
-----
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
-9-
A. The business and affairs of the Corporation shall be managed by
or under the direction of the Board of Directors. In addition to the powers and
authority expressly conferred upon them by statute or by this Certificate of
Incorporation or the By-Laws of the Corporation, the directors are hereby
empowered to exercise all such powers and do all such acts and things as may be
exercised or done by the Corporation.
B. The directors of the Corporation need not be elected by written
ballot unless the By-Laws so provide.
SIXTH:
-----
A. The number of directors shall initially be four (4) and,
thereafter, subject to the rights of the holders of any outstanding series of
Preferred Stock, shall be fixed from time to time exclusively by the Board of
Directors pursuant to a resolution adopted by a majority of the total number of
authorized directors (whether or not there exist any vacancies in previously
authorized directorships at the time any such resolution is presented to the
Board for adoption). Subject to the rights of the holders of any series of
Preferred Stock then outstanding, a vacancy resulting from the removal of a
director by the stockholders as provided in Article SIXTH, Section C below may
be filled at a special meeting of the stockholders held for that purpose. All
directors shall hold office until the expiration of the term for which elected,
and until their respective successors are elected, except in the case of the
death, resignation, or removal of any director.
B. Subject to the rights of the holders of any series of Preferred
Stock then outstanding, newly created directorships resulting from any increase
in the authorized number of directors or any vacancies in the Board of Directors
resulting from death, resignation or other cause (other than removal from office
by a vote of the stockholders) may be filled only by a majority vote of the
directors then in office, though less than a quorum, and directors so chosen
shall hold office for a term expiring at the next annual meeting of stockholders
at which the term of office of the class to which they have been elected
expires, and until their respective successors are elected, except in the case
of the death, resignation, or removal of any director. No decrease in the
number of directors constituting the Board of Directors shall shorten the term
of any incumbent director.
C. Subject to the rights of the holders of any series of Preferred
Stock then outstanding, any directors, or the entire Board of Directors, may be
removed from office at any time, with or without cause, but only by the
affirmative vote of the holders of at least a majority of the voting power of
all of the then outstanding shares of capital stock of the Corporation entitled
to vote generally in the election of directors, voting together as a single
class. Vacancies in the Board of Directors resulting from such removal may be
filled by a majority of the directors then in office, though less than a quorum,
or by the stockholders as provided in Article SIXTH, Section A above. Directors
so chosen shall hold office for a term expiring at the next annual meeting of
stockholders at which the term of office of the class to which they have been
elected expires, and until their respective successors are elected, except in
the case of the death, resignation, or removal of any director.
-10-
SEVENTH: The Board of Directors is expressly empowered to adopt, amend or
-------
repeal By-Laws of the Corporation. Any adoption, amendment or repeal of By-Laws
of the Corporation by the Board of Directors shall require the approval of a
majority of the total number of authorized directors (whether or not there exist
any vacancies in previously authorized directorships at the time any resolution
providing for adoption, amendment or repeal is presented to the Board). The
stockholders shall also have power to adopt, amend or repeal the By-Laws of the
Corporation. Any adoption, amendment or repeal of By-Laws of the Corporation by
the stockholders shall require, in addition to any vote of the holders of any
class or series of stock of the Corporation required by law or by this
Certificate of Incorporation, the affirmative vote of the holders of at least
sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the
then outstanding shares of the capital stock of the Corporation entitled to vote
generally in the election of directors, voting together as a single class.
EIGHTH: A director of the Corporation shall not be personally liable to
------
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involved intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit.
If the Delaware General Corporation Law is hereafter amended to
authorize the further elimination or limitation of the liability of a director,
then the liability of a director of the Corporation shall be eliminated or
limited to the fullest extent permitted by the Delaware General Corporation Law,
as so amended.
Any repeal or modification of the foregoing provisions of this Article
EIGHTH by the stockholders of the Corporation shall not adversely affect any
right or protection of a director of the Corporation existing at the time of
such repeal or modification.
NINTH: The Corporation shall, to the fullest extent permitted by Section
-----
145 of the General Corporation Law of the State of Delaware, as the same may be
amended and supplemented, indemnify any and all persons whom it shall have power
to indemnify under said section from and against any and all of the expenses,
liabilities or other matters referred to in or covered by said section, and the
indemnification provided for herein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under by bylaw, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such person.
TENTH: The Corporation reserves the right to amend or repeal any provision
-----
contained in this Certificate of Incorporation in the manner prescribed by the
laws of the State of Delaware and all rights conferred upon stockholders are
granted subject to this reservation; provided, however, that, notwithstanding
-------- -------
any other provision of this Certificate of Incorporation or any provision of law
which might otherwise permit a lesser vote or no vote, but in addition to any
vote of the holders of any class or series of the stock of this Corporation
required by law or by this Certificate of Incorporation, the affirmative vote of
the holders of at least 66-2/3% of the
-11-
voting power of all of the then outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class, shall be required to amend or repeal this Article
TENTH, Article FIFTH, Article SIXTH, Article SEVENTH, Article EIGHTH, or Article
NINTH.
The foregoing Restated Certificate of Incorporation has been approved by
the Board of Directors of the Corporation.
The foregoing Restated Certificate of Incorporation has been approved by
the outstanding shares of the Corporation in accordance with Sections 242 and
245 of the Delaware General Corporation Law.
-12-
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, its President, and attested to by ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, its secretary, on October ___, 1994.
_____________________________________________
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
ATTEST: _____________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Secretary
-13-
EXHIBIT H
Schedule of Contracts
SCHEDULE H
----------
Material Contracts
Attached
Agreements with Officers, Directors, Stockholders, Consultants, Employees.
1. Employment Agreements with each of the following:
a. ▇▇▇▇▇ ▇▇▇▇▇
b. ▇▇▇▇▇ ▇▇▇▇▇▇▇*
c. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇*
d. ▇▇▇▇▇ ▇▇▇▇▇▇*
e. ▇▇▇▇▇ ▇▇▇▇*
f. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇*
g. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇*
2. Confidentiality and Proprietary Information Agreements with all
employees, except those employees listed on Exhibit 3.8 to
Exhibit B.
3. Indemnification Agreements with all Directors and the following
officers:
a. ▇▇▇▇▇ ▇▇▇▇▇*
b. ▇▇▇▇▇ ▇▇▇▇▇▇▇*
c. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇*
d. ▇▇▇▇▇ ▇▇▇▇▇▇*
e. ▇▇▇▇▇ ▇▇▇▇*
f. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇*
g. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇*
4. Stockholder Buy-out and Voting Rights Agreement dated as of
October 14, 1994 among the Company, ▇▇▇▇▇▇▇, Crane and Summit.
5. $79,294 loans from the Company to ▇▇▇▇▇▇▇, which are payable
October, 1994 and are expected to be repaid by ▇▇▇▇▇▇▇ with
proceeds he receives when the Company repurchases certain of his
Shares.
6. $190,000 loan from the Company to ▇▇▇▇▇▇▇, which is expected to
be forgiven immediately after the Closing.
7. Non-compete Agreement between the Company and ▇▇▇▇▇▇▇.
_____________
* Form of agreement has been provided to Summit. It is anticipated that the
actual agreements will be executed shortly after the closing.
4
Business Real Estate Information Corp.
Leases, Contracts, Commitments
Page 2
EQUIPMENT LEASES (Cont')
----------------
Ford Motor Corp.
Acct. No. FN A321 335R
Term: 48 months
Start: 01/26/94
Vehicle: FORD Escort 1993
Lease Payment: $277.30/month
Original Loan: $12,305.65
G.E. Capital
Lease No. 6519146-001
Term: 60 Months
Start: 5/16/94
Equipment: Executone Telephone Equipment
Lease Payment: $1,521.89/month
Original Loan: $64,805.00
Avnet/AT&T Capital Corporation
Lease No.
Term: 60 months
Start: 07/25/94
Equipment: HP 9000 Computer
Lease Payment: $744.57/ month
Original Loan: $32.121.40
Sybuse Financial Services, Inc.
Agreement # 509662
Term: 36 months
Start: 7/15/94
Equipment: Sybase Software
Lease Payment: $916.91/month
Original Loan: $26,120.00
Sybase Financial Services, Inc.
Agreement #
Term: 36 months
Start: 10/21/94
Equipment: Sybuse Software
Term Payment: $1,025.39/month
Original Loan: $29,255.00
Business Real Estate Information Corp.
Leases, Contracts, Commitments
Page 3
EQUIPMENT LEASES (Cont')
----------------
Canon Financial Service
Lease No. ▇▇▇-▇▇▇▇▇▇▇-▇▇▇
Term: 60 Months
Start: 09/20/94
Equipment: 3 Canon Copiers
Lease Payment: $457.18/month
Original Loan: $20,628.00
OFFICE LEASES
-------------
Lessor: Mutual Benefit Life Insurance Co.
c/o Vestar Property Management
Lease Address: ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ #▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Start: 11/15/93
Term: 49 months
Effective Rent: $1,109.63/month
Lessor: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ as Trustee for the
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Trust
c/o Hanford, ▇▇▇▇▇▇ & Company
Lease Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Start: 05/01/94
Term: 64 months
Effective Rent: $2,967.00/month
Lessor: COMPS Plaza Associates, Ltd.
c/▇ ▇▇▇▇▇▇▇▇ Properties
Lease Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Start: 07/01/94
Term: 96 months
Effective Rent/Month: $22,287.00*
*Reflects $4.00/sf tenant improvement expense; TI expense above that amount will
be amortized over the life of the lease at an additional amount or approximately
$1,800 - $2,000 per month.
Business Real Estate Information Corp.
Leases, Contracts, Commitments
Page 4
OFFICE LEASES (Cont')
-------------
Lessor: ▇▇▇▇▇ ▇▇▇ Associates
Lease Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Start: 11/01/94
Term: 6 months
Effective Rent/Month: $825.00
NOTES RECEIVABLE
----------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇-▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
$75,294.04
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇-▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
$83,837.15
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇-▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
$116,038.00
CONTRACTS
---------
DataQuick Information Systems
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, President
(▇▇▇) ▇▇▇-▇▇▇▇
Insurance Services Office, Inc. (ISO)
▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Senior Vice President
Business Real Estate Information Corp.
Leases, Contracts, Commitments
Page 5
CONTRACTS (Con't)
---------
▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., #▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Contact: ▇▇▇▇ ▇▇▇▇▇
Contract Amount: $25,000.00
BANKING RELATIONSHIPS
---------------------
Bank: Union Bank
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Commercial Loan Officer
(▇▇▇) ▇▇▇-▇▇▇▇
Current Facility
----------------
Current Line of Credit: Renews 11/01/94
Total Amount: $ 90,000.00
Total Available $ 90,000.00
Term Loan:
Total Amount $175,000.00
Advances: $134,076.87
Amount Available: $ 40,923.13
Requested Facility
------------------
Line of Credit: $300,000.00
Term Loan: $460,000.00
EXHIBIT I
Voting Agreement
VOTING AGREEMENT
----------------
THIS VOTING AGREEMENT (the "Agreement") is entered into as of October 14,
1994, by and among COMPS InfoSystems, Inc., a Delaware corporation (the
"Company"), ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇"), and the purchasers (the
"Purchasers") of Series A Preferred Stock of the Company pursuant to the Stock
and Warrant Purchase Agreement dated as of even date herewith (the "Stock and
Warrant Purchase Agreement").
RECITALS
--------
1. Crane is the holder of a majority of the Company's Common Stock. The
Purchasers are the holders of all of the Company's Series A Preferred Stock.
2. As an inducement to the Purchasers to purchase the Series A Preferred
Stock of the Company, Crane is executing this Agreement. As an inducement to
Crane to execute this Agreement, the Purchasers are executing this Agreement.
AGREEMENT
---------
NOW, THEREFORE, the parties hereto agree as follows:
1. Voting of Shares. Until the termination of this Agreement in
----------------
accordance with Section 4 below, Crane will vote all shares of Common Stock of
the Company then within his control, at any annual or special meeting of the
stockholders of the Company, or in any action by written consent of the
stockholders of the Company in order to cause and maintain the election to the
Board of Directors of one director to be elected by the holders of the Company's
Common Stock who is mutually acceptable to Crane and the Purchasers holding a
majority of the outstanding Series A Preferred Stock. A nominee shall be deemed
to be acceptable to the Purchasers if they have consented in writing to his or
her election.
2. Legends on Stock Certificates. The certificates representing shares
-----------------------------
held by Crane shall bear the following legend:
"The shares represented by this certificate are subject to the
limitations, restrictions and other terms and conditions of a
Voting Agreement dated October 14, 1994, on file with the
Company."
3. Application of Agreement to After-Acquired Shares. All of the
-------------------------------------------------
provisions of this Agreement shall apply to, and the term "Shares" as used
herein shall include, all of the shares of Common Stock and Preferred Stock of
the Company, whether issued before or after the Closing Date (as defined in the
Stock and Warrant Purchase Agreement) and all securities issued as a replacement
for the Shares or with respect to the Shares as a result of any stock dividend,
stock split or other similar event.
4. Term of the Agreement. This Agreement shall terminate on the earlier
---------------------
of (a) the consummation by the Company of any underwritten public offering of
the Company's securities in which the gross proceeds to the Company equal or
exceed $10,000,000 at a purchase price of
1
$3.52 per share (as adjusted for stock splits, stock dividends, reorganizations
and the like), (b) the sale of the Company (through a merger, consolidation,
sale of all or substantially all of its assets or stock), or (c) the effective
time of the liquidation of the Company.
5. Binding Effect on Transferees. This Agreement and all of the terms,
-----------------------------
covenants, and conditions herein contained, shall be binding upon and inure to
the benefit of all of the parties hereto and their respective transferees,
successors, heirs, executors, administrators and assigns. A condition precedent
to the transfer of any of the Common Stock of the Company to any third party by
Crane is that the transferee shall become a party to this Agreement and shall
execute any and all instruments, and take all other actions, necessary to carry
out the purposes of this Agreement. Notwithstanding the foregoing, this
Agreement shall not bind any transferee of Crane that is a not-for-profit
charitable organization, provided, however, that the foregoing exception shall
-------- -------
no longer apply following the transfer by Crane of an aggregate of up to 257,000
of the Company's common stock by Crane to not-for-profit charitable
organizations.
6. Severability. Wherever there is any conflict between any provision of
------------
this Agreement and statute, law, regulation or judicial precedent, the latter
shall prevail, but in such event the provisions of this Agreement thus affected
shall be curtailed and limited only to the extent necessary to bring it within
the requirement of the law. In the event that any part, section, paragraph, or
clause of this Agreement shall be held by a court of proper jurisdiction to be
indefinite, invalid or otherwise unenforceable, the entire Agreement shall not
fail on account thereof, but the balance of the Agreement shall continue in full
force and effect unless such construction would clearly be contrary to the
intentions of the parties.
7. Miscellaneous.
-------------
(a) Waivers and Amendments. With the written consent of Crane, the
----------------------
holders of a majority of the Series A Preferred Stock purchased by the
Purchasers and the Company, this Agreement may be amended and the obligations of
Crane under this Agreement may be waived (either generally or in a particular
instance, either retroactively or prospectively, and either for a specified
period of time or indefinitely).
(b) Governing Law. This Agreement shall be executed and entered into
-------------
in the State of Delaware and is to be governed by and interpreted under the laws
of the that state.
(c) Entire Agreement. This Agreement constitutes the entire
----------------
agreement between the parties with respect to the matters referred to herein,
and no prior or contemporaneous agreement or understanding shall be effective
for any purpose.
(d) Heading. The paragraph headings herein have been inserted for
-------
convenience only, and are not intended to restrict, construe, or modify in any
manner any of the terms and provisions hereof.
(e) Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
2
(f) Delays or Omissions. It is agreed that no delay or omission to
-------------------
exercise any right, power or remedy accruing to any party hereto, upon any
breach or default of any other party hereto shall impair such right, power or
remedy, nor shall it be construed to be a waiver of any such breach or default,
or any acquiescence herein, or of or in any similar breach or default thereafter
occurring. It is further agreed that any waiver, permit, consent or approval of
any kind or character on the part of the party hereto of any breach or default
under this Agreement, or any waiver of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing and that all remedies, either under this
Agreement, or by law or otherwise afforded to such party, shall be cumulative
and not alternative.
(g) Specific Performance. The parties will be entitled to enforce
--------------------
their rights under this Agreement specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provision of this
agreement and to exercise all other rights existing in their favor. The parties
hereto agree and acknowledge that money damages may not be an adequate remedy
for any breach of the provisions of this Agreement and any party may in its sole
discretion apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive relief in order to enforce or prevent any
violation of the provisions of this Agreement.
(h) Dispute Resolution. The parties acknowledge and agree that time
------------------
is of the essence in resolving any dispute that may arise in connection with
this Agreement. Except as set forth herein, any controversy or claim arising
out of or relating to this Agreement, or the breach thereof, that cannot be
resolved between the parties in a timely manner shall be settled by binding
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association ("AAA"). The expenses of the arbitration, including the
arbitrator's fees, expert witness fees, and attorneys' fees, may be awarded to
the prevailing party, in the discretion of the arbitrator, or may be apportioned
between the parties in any manner deemed appropriate by the arbitrator. Unless
and until the arbitrator decides that one party is to pay for all (or a share)
of such expenses, the Company shall pay all reasonable expenses, including legal
and accounting fees and costs arising in connection with enforcement of this
Agreement or the Collateral Agreements. The parties shall keep confidential the
decision of the arbitrator. Notwithstanding the foregoing, the parties may
disclose information about such decision to persons who have a need to know,
such as directors, trustees, management employees, witnesses, experts,
investors, attorneys, lenders, insurers, and others who may be affected. Once
the arbitration award has become final, if the arbitration award is not promptly
satisfied, then these confidentiality provisions shall no longer be applicable.
Notwithstanding the foregoing, any party may seek equitable
3
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
COMPS INFOSYSTEMS, INC.
By:__________________________________________
Title:_______________________________________
_____________________________________________
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, in his individual capacity
PURCHASERS:
SUMMIT VENTURES III, L.P.
By: Summit Partners III, L.P.
General Partner
By: Stamps, ▇▇▇▇▇▇▇ & Co. III,
General Partner
By:_____________________________________
General Partner
SUMMIT INVESTORS II, L.P.
By:__________________________________________
General Partner
4
EXHIBIT J
Form of Opinion of Counsel
October 14, 1994
Summit Ventures III, L.P.
Summit Investors II, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: COMPS InfoSystems, Inc.: 4,270,336 Shares of Series A Preferred
----------------------------------------------------------------
Stock and 379,869 Warrants to Purchase Shares of Class B Common
---------------------------------------------------------------
Stock
-----
Ladies and Gentlemen:
We have acted as counsel to COMPS InfoSystems, Inc., a Delaware
corporation (the "Company"), in connection with the sale to Summit Ventures III,
L.P. and Summit Investors II, L.P. (together, "Summit") on the date hereof by
the Company of 4,270,336 shares (the "Shares"), of Series A Preferred Stock of
the Company, par value $.01 per share (the "Preferred Stock"), and warrants (the
`Warrants'), to purchase 379,869 shares of the Class B Common Stock of the
Company, par value $.01 per share (the "Class B Common Stock"), pursuant to that
certain Stock and Warrant Purchase Agreement dated as of October 14, 1994 (the
"Agreement") among Summit and the Company. This opinion is being rendered to
you pursuant to Section 5.1(i) of the Agreement. Capitalized terms used in the
Agreement, used herein, and not otherwise defined herein shall have the meanings
given them in the Agreement.
As such counsel, we have made such legal and factual examinations and
inquiries as we have deemed necessary or appropriate for purposes of this
opinion, except where a statement is qualified as to knowledge or awareness, in
which case we have made no or limited inquiry as specified below. We have
examined, among other things, the following:
(a) The Agreement;
(b) The Voting Agreement, the Warrants, the Right of First Refusal
and Co-Sale Agreement, and the Investors Right Agreement, each between
Summit and the Company and each dated as of October 14, 1994 and the
Shareholders' Buy-out and Voting Agreement among Summit, the Company and
the Shareholders named therein, dated as of October 14, 1994;
(c) The notes, loan agreements, mortgages, deeds of trust, security
agreements and other written agreements and instruments creating,
evidencing or securing indebtedness of the Company for borrowed money,
identified to us by an officer of the
Summit Ventures III, L.P.
Summit Investors II, L.P.
October 14, 1994
Page 2
Company as material to the Company, and the other agreements listed on
Exhibit H to the Agreement (the "Material Agreements");
(d) The Restated Certificate of Incorporation (the "Restated
Certificate") and Bylaws of the Company (together, the "Governing
Documents");
(e) Court and administrative orders, writs, judgments, injunctions
and decrees specifically directed to the Company and identified to us by an
officer of the Company as material to the Company (the "Court Orders");
(f) Records of the Company with respect to the issuance and transfer
of capital stock and options;
(g) Minutes of the meetings of the Board of Directors and
Stockholders of the Company and various written consents provided to us by
the officers of the Company;
(h) A certificate of good standing from the Secretary of State of
Delaware;
(i) A certificate of good standing from the Secretary of State of
California; and
(j) A certificate from certain of the Company's officers as of the
date hereof.
(k) The Agreement and Plan of Merger between the Company and Business
Real Estate Information Corp.. a California corporation ("BREIC"), dated as
of September 29, 1994 (the "Merger Agreement"), relating to the statutory
merger of BREIC with the Company on the terms and conditions set forth in
the Merger Agreement (the "Merger"); and
(l) The Certificate of Ownership and Merger of BREIC into the
Company, dated September 29, 1994 (the "Merger Certificate").
The documents described in subsections (a) - (b) above are referred to
herein collectively as the "Documents." In such examination, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, and the conformity to authentic original documents of all
documents submitted to us as copies. In rendering this opinion, we have relied
on and assumed the correctness and completeness of certificates of government
officials and reports of professional filing service companies. As to questions
of fact, we have been furnished with, and with your consent have exclusively
relied upon, certificates of officers and representatives of the Company. In
addition, we assumed that the representations and warranties of Summit set forth
in the Documents are true and correct as of the date hereof, including without
limitation the representation that each of the Purchasers is an "accredited
investor" as defined under Regulation D pursuant to the Securities Act of 1933,
as amended (the "Act").
Summit Ventures III, L.P.
Summit Investors II, L.P.
October 14, 1994
Page 3
To the extent that the obligations of the Company may be dependent
upon such matters, we assume for purposes of this opinion that: all parties to
the Documents other than the Company have complied with any applicable
requirement to file returns and pay taxes under the Franchise Tax Law of the
State of California; all parties to the Documents other than the Company are
duly organized, validly existing and in good standing under the laws of their
respective jurisdictions of organization; all parties to the Documents other
than the Company have the requisite power and authority to execute and deliver
the Documents and to perform their respective obligations under the Documents to
which they are a party; and the Documents to which such parties other than the
Company are a party have been duly authorized, executed and delivered by such
parties and constitute their legally valid and binding obligations, enforceable
against them in accordance with their terms. We express no opinion as to
compliance by all parties to the Documents other than the Company with any state
or federal laws or regulations applicable to the subject transactions because of
the nature of their business.
Where statements in our opinion are qualified by the term "material,"
those statements involve judgments and opinions as to the materiality or lack of
materiality of any matter to the Company or its business, prospects, assets or
financial condition, which are entirely those of the Company and its officers,
after having been advised by us as to the legal effect of such matters; however,
such opinions and judgments are not known by us to be incorrect.
Whenever a statement herein is qualified by `to the best of our
knowledge" or a similar phrase, it is intended to indicate that those attorneys
in this firm who have rendered legal services in connection with the sale of the
Shares and the Warrants do not have current actual knowledge of the inaccuracy
of such statement. However, except as otherwise expressly indicated, we have
not undertaken any independent investigation to determine the accuracy of any
such statement, and no inference that we have any knowledge of any matters
pertaining to such statement should be drawn from our representation of the
Company.
The opinions hereinafter expressed below are subject to the following
qualifications:
(a) Our opinion is qualified and no opinion is given to the extent
that the enforceability of any agreement entered into by the Company, including
the Documents, may be limited by, or such agreements and the transactions
contemplated thereby may be subject to or affected by, the effect of general
principles of equity, including without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible unavailability of
specific performance or injunctive relief (regardless of whether considered in a
proceeding in equity or at law), or that may otherwise contravene public policy;
(b) Our opinion is qualified and no opinion is given to the extent
that the enforceability of any agreement entered into by the Company, including
the Documents, may be limited by, or such agreements and the transactions
contemplated thereby may be subject to or affected by: (i) the effect of
bankruptcy, reorganization, insolvency, liquidation, readjustment of debt,
arrangement, moratorium or other similar laws now or hereinafter in effect
relating to or
Summit Ventures III, L.P.
Summit Investors II, L.P.
October 14, 1994
Page 4
affecting the rights of creditors or (ii) any other laws or statutes which
modify, affect or invalidate any remedial, contribution or indemnification
provisions set forth in such agreements;
(c) We express no opinion with respect to the enforceability of
Section II(F) of the Investors Rights Agreement;
(d) Our opinion is qualified and no opinion is given to the extent
that certain rights, remedies and waivers contained in the Documents may be
limited or rendered ineffective by applicable California laws or judicial
decisions governing such provisions, but such laws or judicial decisions do not
render the Documents invalid or unenforceable as a whole;
(e) We express no opinion as to the Company's compliance with the
securities laws, rules and regulations of any state other than California, or
with the antifraud provisions of state (including California) and federal laws,
rules and regulations concerning the issuance of securities;
(f) We express no opinion as to the enforceability of any of the
agreements (other than the Documents) attached as exhibits to the Agreement;
(g) We are opining herein as to the effect on the subject transaction
only of the federal laws of the United States, the internal laws of the State of
California and the General Corporation Law of Delaware, and we express no
opinion with respect to the applicability thereto, or the effect thereon, of the
laws of any other jurisdiction or in the case of Delaware, any other laws, or as
to any matters of municipal law or the laws of any other local agency within any
state;
(h) Our opinion is limited by the effect of and subject to any
disclosures or exceptions contained in or referred to in the Documents,
including, without limitation, those contained in the Officer's Certificate
delivered by the Company at the Closing pursuant to the Agreement;
(i) We express no opinion as to matters concerning intellectual
property, (including, without limitation, patents, trademarks, maskworks, trade
secrets and copyrights), real estate or employment matters;
(j) We have assumed that there are no agreements, contracts,
understandings or negotiations among the parties to any agreement as to which we
are required to opine, that would modify the terms of such agreements or the
respective rights or obligations of the parties thereunder;
(k) We express no opinion as to compliance with the antitrust
provisions of federal or state statutory or common law;
(1) With respect to our opinion in paragraph 1, we have relied solely
upon certificates (or the verbal acknowledgement) of the Secretary of State of
Delaware to the effect that the Company is duly incorporated and in good
standing under the laws of the Delaware.
Summit Ventures III, L.P.
Summit Investors II, L.P.
October 14, 1994
Page 5
Based upon and subject to the foregoing, it is our opinion that, as of
the date hereof:
1. The Company has been duly incorporated and is validly existing
and in good standing under the laws of the State of Delaware with corporate
power and authority to own its properties and to conduct its business. Based
solely on certificates from public officials, we confirm that the Company is
qualified to do business in California.
2. To our knowledge, the Company does not control, directly or
indirectly, any other corporation, partnership, joint venture or business
entity.
3. The Company has the corporate power to execute and deliver the
Documents and to consummate the transactions contemplated thereby. The
execution and delivery by the Company of the Documents and the consummation of
the transactions contemplated thereby have been duly authorized by all necessary
corporate action on the part of the Company, including all necessary stockholder
approvals. Each of the Documents has been duly executed and delivered by the
Company, and constitutes a legally valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
4. The authorized capital stock of the Company is 25,000,000 shares
of Common Stock, par value $.01 per share (the "Common Stock") and 5,000,000
shares of Preferred Stock. The first series of common stock is comprised of
22,500,000 shares designated "Clan A Common Stock". The second series of common
stock is comprised of 2,500,000 shares designated "Class B Common Stock".
Immediately prior to the Closing (but after the filing of the Restated
Certificate), there were issued and outstanding 6,482,000 shares of Class A
Common Stock, no shares of Class B Common Stock, and no shares of Preferred
Stock. The rights of the Class A Common Stock are as set forth in the Restated
Certificate. All issued and outstanding shares of Class A Common Stock have
been duly authorized and validly issued are fully paid and nonassessable and, to
our knowledge, are free of any preemptive rights contained in the Governing
Documents of the Company. The issuance of the outstanding shares of Class A
Common Stock did not, to our knowledge, require any consents, approvals,
authorizations, registrations or filings by the Company under any Federal,
California or Delaware statute, rule or regulation applicable to the Company,
except such as have been or will be obtained or made. To our knowledge, except
for (i) the rights, preferences and privileges of the Class B Common Stock and
the Preferred Stock as set forth in the Restated Certificate of Incorporation, a
certified copy of which is being provided to you at the Closing, (ii) the rights
set forth in the Agreement and the exhibits thereto, (iii) the shares of Class B
Common Stock issuable upon the exercise of outstanding stock options under the
Company's Stock Option Plan, and (iv) the Warrants issued to you, there are no
outstanding rights, options, warrants, conversion rights or agreements for the
purchase or acquisition from the Company of any shares of its capital stock.
5. The Class A Common Stock issuable upon conversion of the Shares
and conversion of the Class B Common Stock (including the Class B Common Stock
issuable upon exercise of the Warrants) has been duly and validly reserved. The
Class B Common Stock issuable upon exercise of the Warrants has been duly and
validly reserved. The Shares, the Class
Summit Ventures III, L.P.
Summit Investors II, L.P.
October 14, 1994
Page 6
A Common Stock issuable upon conversion of the Shares and upon conversion of the
Class B Common Stock, and the Class B Common Stock issuable upon exercise of the
Warrants, when issued in compliance with the provisions of the Company's
Restated Certificate or the provisions of the Warrants, will be validly issued,
fully paid and nonassessable. To our knowledge, (i) upon the issuance and
delivery by the Company of the Shares and payment by the Purchasers therefor in
accordance with the terms of the Agreement, the Purchasers will acquire such
Shares free of any lien, encumbrance or restriction on transfer (except for any
transfer restrictions arising under federal or state securities laws or any
lien, encumbrance or transfer restrictions created by the Purchasers) and (ii)
upon the issuance and delivery by the Company of the Warrants and payment by the
Purchasers therefor in accordance with the terms of the Agreement, the
Purchasers will acquire such Warrants free of any lien, encumbrance or
restriction on transfer (except for any transfer restrictions arising under
federal or state securities laws or any lien, encumbrance or transfer
restrictions created by the Purchasers). To our knowledge, except as set forth
in the Agreement and the exhibits thereto, no person has any preemptive rights
or any right of first refusal in connection with the issuance of the Shares or
any future issuances of securities by the Company other than those held by the
Purchasers.
6. The execution and delivery of the Documents do not: (i) to our
knowledge, violate any federal, California or Delaware statute, rule or
regulation applicable to the Company, (ii) violate the provisions of the
Governing Documents of the Company or, (iii) to our knowledge, conflict with or
constitute a material default under the Material Agreements or the Court Orders.
7. The execution and delivery of the Documents and the issuance and
sale of the Shares and the Warrants do not, to our knowledge, require any
consents, approvals, authorizations, registrations, declarations or filings by
the Company under any federal, California or Delaware statute, rule or
regulation applicable to the Company, except such as have been or will be
obtained.
8. To our knowledge, except as set forth in the Agreement or the
exhibits thereto, there are no actions, proceedings or investigations pending
against the Company, nor has the Company received any threat thereof, which
questions the validity of the Documents or the right of the Company to enter
into the Documents that, if adversely decided, would have a material adverse
effect upon the business or financial condition of the Company taken as a whole.
9. The offer, sale and issuance pursuant to the terms of the
Agreement of the Shares and the Warrants is exempt (i) from the registration
requirements of Section 5 of the Act, and (ii) from the qualification
requirements of the Corporate Securities Law of the State of California (the
"California Securities Law") pursuant to Section 25102 (f) of the California
Securities Law; and, under the Act and the California Securities Law as they
presently exist, the issuance of the Class A Common Stock issuable upon
conversion of the Shares and upon conversion of the Class B Common Stock, and of
the issuance of the Class B Common Stock issuable upon exercise of the Warrants,
when issued in conformity with the terms of the Restated Certificate, will be
exempt from such registration and qualification requirements.
Summit Ventures III, L.P.
Summit Investors II, L.P.
October 14, 1994
Page 7
10. Upon the filing of the Merger Certificate with the Secretary of
State of Delaware, the Merger shall have been duly consummated in accordance
with the General Corporation Law of the State of Delaware with the effect
provided therein and in Article I of the Merger Agreement.
This opinion is rendered only to you and is solely for your benefit in
connection with the transactions covered hereby. This opinion may not be relied
upon by you for any other purpose, or furnished to, quoted to or relied upon by
any other person, firm or corporation for any purpose, without our prior written
consent.
Very truly yours,