EXHIBIT 10.3
COMPS INFOSYSTEMS, INC.
STOCK AND WARRANT PURCHASE AGREEMENT
THIS AGREEMENT (the "Agreement") is made as of February 9, 1998, by and
among, severally and not jointly, COMPS InfoSystems, Inc., a Delaware
corporation (the "Company"), Summit Ventures III, L.P., a Delaware limited
partnership ("Summit III"), Summit Investors II, L.P., a Delaware limited
partnership ("Summit II," and collectively with Summit III, "Summit"),
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇") and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇," and collectively with
Crane and Summit, the "Purchasers," and individually, a "Purchaser"). The
parties hereby agree as follows:
1. Sale and Issuance of the Shares and Warrants.
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1.1. Sale and Issuance of the Series B Preferred Shares. Subject to
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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 B Preferred Stock (the "Shares") specified opposite the Purchaser's name
as set forth in the Schedule of Purchasers attached hereto as Exhibit A. at a
price of $1.80310 per Share.
1.2. Issuance of Warrants. In consideration for the purchase by the
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Purchasers of the Shares, the Company will issue to each of Summit III, Summit
II and Oster a warrant in the form attached hereto as Exhibit B-1 and to Crane a
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warrant in the form attached hereto as Exhibit B-2 (individually, a "Warrant"
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and collectively, the "Warrants"), to purchase up to the number and type of
shares of the Company's Common Stock (the "Warrant Shares") set forth opposite
such Purchaser's name on Exhibit A at an exercise price of $.01 per share.
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2. Closing Date; Delivery.
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2.1. Closing Date.
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(a) Purchase and Sale. The closing of the purchase and sale of
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an aggregate of 637,790 Shares and of the issuance of the Warrants to purchase
306,097 shares of Class B Common Stock and 37,329 shares of Class A Common Stock
shall be held at the offices of ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Freidenrich LLP at 10: 00 a.m.
on February 9, 1998, 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
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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
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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 and Crane. The Company
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and Crane hereby represent and warrant to Summit and Oster that except as set
forth on a Schedule of Exceptions attached hereto as Exhibit C, which exceptions
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shall be deemed to be representations and warranties as if made hereunder:
3.1. Organization and Standing: Certificate and By-laws. The Company
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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 Restated
Certificate of Incorporation (as defined in Section 3.5), By-laws, 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
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Date, all requisite corporate power to enter into this Agreement, the Amended
and Restated Investor Rights Agreement, in the form attached hereto as Exhibit D
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(the "Amended and Restated Investor Rights Agreement"), the Amended and Restated
Right of First Refusal and Co-Sale Agreement attached hereto as Exhibit E (the
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"Amended and Restated Right of First Refusal and Co-Sale Agreement"), and the
Amended and Restated Voting Agreement attached hereto as Exhibit F (the "Amended
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and Restated 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
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indirectly, any other corporation, association or business entity.
3.4. Capitalization. As of the Closing, and after giving effect to
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the transactions contemplated in this Agreement, 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 and 637,790
shares are designated as Series B Preferred Stock. As of the Closing, and after
giving effect to the transactions contemplated in this Agreement, there are
issued and outstanding 4,773,860 shares of the Company's Class A Common Stock,
no shares of the Company's Class B Common Stock, 4,270,336 shares of the
Company's Series A Preferred Stock and 637,790 shares of the Company's Series B
Preferred 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. As of the Closing, and after giving effect to the transactions
contemplated in this Agreement, there are (i) 1,719,909 shares of Class B Common
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Stock reserved for issuance to the Company's officers, directors, employees and
consultants pursuant to Company compensation plans, of which 884,750 represent
shares subject to currently outstanding options, and (ii) 899,034 shares of
Class B Common Stock and 37,329 shares of Class A 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.
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(a) Corporate Action. All corporate action on the part of the
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Company, its officers, directors and stockholders necessary for the sale and
issuance of the 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 306,097 shares of Class B Common Stock and 37,329 shares of
Class A Common Stock for issuance upon exercise of the Warrants, and 637,790
shares of Class A Common Stock for issuance upon conversion of the Shares.
(b) Valid Issuance. The Shares and Warrants, when issued in
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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 Restated
Certificate of Incorporation, will be validly issued, My 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 B 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 of Incorporation").
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(c) No Preemptive Rights. No person has any right of first
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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
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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
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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
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Company is not in violation of any term of its Restated Certificate of
Incorporation or By-laws, 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 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
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has executed an agreement regarding confidentiality and proprietary information,
the current 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
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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
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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
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authorization of or designation, declaration or filing with any governmental
authority on the part of the Company is 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. I (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
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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
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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
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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
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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,
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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), excluding
subscription and license agreements entered into in the ordinary course of the
Company's business, 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 ail 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 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
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Purchaser its audited balance sheets as of December 31, 1995 and December 31,
1996 and its unaudited balance sheet as of November 30, 1997 (the "Balance
Sheets") and its audited consolidated income statements and cash flow statements
for the years ended December 31, 1995 and December 31, 1996 and its unaudited
consolidated income statement and cash flow statement for the eleven month
period ended November 30, 1997 (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 November 30, 1997,
except for the equipment leasing for an amount equal to $303,000 from Venture
Lending & Leasing, Inc., 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, 1996: (a) the Company
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has not entered into any transaction which was not in the ordinary course of
business, however, the Company notes that it did enter into an equipment leasing
agreement with Venture Lending & Leasing, Inc. for $746,000, which agreement the
Company considers to be 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
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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 contingent obligation of the
Company regarding any 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
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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
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Amended and Restated Investor Rights Agreement and the Venture Lending and
Leasing, Inc. warrant dated September 24, 1996, the Company has not granted or
agreed to grant any rights to register, as that term is defined in the Amended
and Restated Investor Rights Agreement, any of the Company's presently
outstanding securities or any of its securities that may hereafter be issued.
3.19. Certain Transactions. Except the Company's leasing of space in
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the building currently occupied by the Company at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ from COMPS Plaza Associates, a California limited partnership,
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
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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
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necessary to satisfy representations and warranties or conditions contained
herein (the form of which amendments has been approved by the Purchaser), the
Restated Certificate of Incorporation and By-laws 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,
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the Company does not have any "employee benefit plan" as defined in the Employee
Retirement Income Security Act of 1974, as amended.
3.22. Real Property Holding Corporation. The Company is not a "real
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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
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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
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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, the
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.
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4. Representations and Warranties of Purchasers and Restrictions on
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Transfer Imposed by the Securities Act.
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4.1. Representations and Warranties by the Purchaser. Each Purchaser
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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
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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
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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.
(c) No Transfer. Each Purchaser covenants that in no event will
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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
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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.
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(e) Knowledge and Experience. Each Purchaser represents that it
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(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 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
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.
(i) Legends. Each certificate representing the Securities may be
-------
endorsed with the following legends:
(i) 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.
(ii) Other Legends. Any other legends required by the Law or
-------------
other applicable state blue sky laws.
10
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.
4.2. 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.
4.3. 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.
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) Filing of the Restated Certificate of Incorporation. The
---------------------------------------------------
Restated Certificate of Incorporation shall have been filed with the Delaware
Secretary of State.
(d) Amended and Restated Investor Rights Agreement. The Company
----------------------------------------------
and each Purchaser shall have executed and delivered the Amended and Restated
Investor Rights Agreement in the form attached as Exhibit D hereto.
---------
11
(e) Amended and Restated Right of First Refusal and Co-Sale
-------------------------------------------------------
Agreement. The Company, the Purchasers and the Stockholders shall have executed
---------
and delivered the Amended and Restated Right of First Refusal and Co-Sale
Agreement in the form attached as Exhibit E hereto.
---------
(f) Amended and Restated Voting Agreement. The Purchasers and
-------------------------------------
the Company shall have executed and delivered the Amended and Restated Voting
Agreement in the form attached as Exhibit F.
---------
(g) 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) and (c) of this section 5. 1.
(h) Opinion of Counsel. The Purchasers shall have received an
------------------
opinion from the Company's counsel in substantially the form attached hereto as
Exhibit I.
---------
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 (c) 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:
(a) 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
12
(b) 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
(c) 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 circumstances
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 fulltime 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 while employed by the Company.
6.3. 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.
6.4. 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, consultant or equipment lessor (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, consultants or equipment lessors to
exceed 1,719,909; provided further that no
----------------
13
more than 225,000 shares of Common Stock (or options, warrants or other rights
to purchase the same) may be granted to employees, officers, directors or
consultants or equipment lessors 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.
6.5. Use of Proceeds. The proceeds shall be used for working capital
---------------
purposes.
6.6. 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 6.6 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.
6.7. 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.
6.8. Dealings with Affiliates and Others. Except the Company's
-----------------------------------
leasing of space in the building currently occupied by the Company at ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ from COMPS Plaza Associates, a
California limited partnership, 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.
6.9. 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.
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
14
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.
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.
15
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.
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 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 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.
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.
16
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.,
its General Partner
By: Stamps, ▇▇▇▇▇▇▇ & Co., III
its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, General Partner
SUMMIT INVESTORS II, L.P.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, General Partner
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
EXHIBIT A
Schedule of Purchasers
Series B Preferred Shares Subject to
------------------ -----------------
Stock Warrants Purchase Price
----- -------- --------------
Summit Ventures III, L.P. 543,508 292,658 shares of $ 980,000
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇ Class B (non-voting)
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Common Stock
Attention: ▇▇▇▇ ▇▇▇▇
--------------------
Summit Investors II, L.P. 11,092 5,973 shares of $ 20,000
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇ Class B (non-voting)
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Common Stock
Attention: ▇▇▇▇ ▇▇▇▇
--------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 69,325 37,329 shares of $ 125,000
c/o COMPS InfoSystems, Inc. Class A (voting)
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ 13,865 7,466 shares of $ 25,000
c/o COMPS InfoSystems, Inc. Class B (non-voting)
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Totals: 637,790 $1,150,000.00
EXHIBIT B-1
Form of Summit/Oster 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-5
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"), 292,658 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 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
1
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 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
2
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 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, February 6, 2008,
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 of is such exercise, a representation in writing that the
Shares being issued upon such exercise are
3
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 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,
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.
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.
4
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: February __ 1998
COMPS INFOSYSTEMS, INC.
By: ____________________________
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
5
EXHIBIT B-2
Form of Crane 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-A1
CLASS A COMMON STOCK WARRANT
OF
COMPS INFOSYSTEMS, INC.
-----------------------
THIS CERTIFIES THAT, for value received, ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (the
"Holder") is entitled to subscribe for and to purchase from COMPS INFOSYSTEMS
INC., a Delaware corporation (the "Company"), 37,329 shares of the voting Class
A 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 date 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 A Common Stock shall be increased (by stock
split, stock dividend or otherwise), into a greater number of shares of Class A
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 A Common Stock shall be decreased, by
reclassification or otherwise, into a lesser number of shares of Class A 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 A 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 A 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 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 A Common
Stock of the Company (other than as a result of a subdivision, combination or
stock dividend provided for in Section
1
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, 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 A 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. 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. The Holder may exercise this Warrant in whole or
-------------------
in part by its surrender to the Company 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 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.
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 property 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 A Common Stock computed using the following formula:
Y(A-B)
------
X = A
Where X = the number of shares of Class A Common Stock to be issued to the
Holder,
Y = the number of shares of Class A 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),
2
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
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, February 6, 2008, 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 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 Wanant,
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 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.
3
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 Common Stock 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,
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.
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.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
duly authorized officer.
Dated: February ___, 1998
COMPS INFOSYSTEMS, INC.
By: ____________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Secretary
4
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, Colorado, Florida,
Georgia, Illinois, Maryland, Massachusetts, Nevada, New York, Texas, Virginia,
Washington and Washington, D.C. The Company believes that its failure to qualify
in such states 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 ▇▇▇▇▇▇▇, ▇▇▇▇▇ and Summit, Crane
and Summit have certain rights of first refusal with respect to ▇▇▇▇▇▇▇'▇ shares
of Series A Common Stock. Pursuant to the terms of a Stockholder Voting
Agreement among ▇▇▇▇▇▇▇ ▇▇▇▇▇ and Crane, Crane has certain rights of first
refusal with respect to ▇▇. ▇▇▇▇▇'▇ shares of the Company's Stock. The Company
has a right of first refusal with respect to the shares of Common Stock issuable
upon the exercise of options under the Company's Stock Option Plan.
3.6 Patents, Trademarks.
-------------------
3.6.1. 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.
3.6.2 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."
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. There is no existing or threatened litigation .
---------------
3.13 Title. Venture Lending and Leasing, Inc. holds a first lien on all
-----
assets as a result of a $3.0 million loan agreement the Company entered into in
September 1996 in the ordinary course of business.
3.16 Absence of Changes
------------------
3.16.1 Employees and Compensation. Employment agreements have been
--------------------------
executed by all officers. The Company has entered into indemnification
agreements with each of its officers and directors. See Exhibit "H" to Purchase
Agreement.
3.16.2 Resignations, Terminations. The Company terminated three
--------------------------
vice presidents - one in August 1996, one in September 1996, and one in January
1997.
3.17 Outstanding Indebtedness. Pursuant to that certain Loan Agreement
-------------------------
dated September 24, 1996, the Company is indebted to Venture Lending & Leasing,
Inc. in the amount of approximately $2,158,000 as of the Closing.
3.19 Certain Transactions.
--------------------
3.19.1 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-1997 projections delivered to Purchaser.
2
Exhibit 3.8
-----------
COMPS InfoSystems, Inc.
Employees with Whom the Company Does Not Have Confidentiality and Proprietary
Information Agreements:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇*
August, ▇▇▇▇▇▇▇▇*
▇▇▇▇▇▇, ▇▇▇▇▇*
▇▇▇▇▇▇▇▇, ▇▇▇▇▇*
▇▇▇▇▇▇, ▇▇▇▇*
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇*
▇▇▇▇▇, ▇▇▇▇*
▇▇▇▇▇▇, ▇▇▇*
▇▇▇▇▇▇, ▇▇▇▇*
▇▇▇▇▇▇, ▇▇▇▇*
▇▇▇▇▇, ▇▇▇*
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇*
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇*
Range1, ▇▇▇▇▇▇▇*
▇▇▇▇▇▇▇▇▇, ▇▇▇▇*
▇▇▇▇▇▇, ▇▇▇▇▇*
▇▇▇▇, ▇▇▇▇▇*
▇▇▇▇, ▇▇▇▇▇▇▇*
▇▇▇▇▇▇▇, ▇▇▇▇*
▇▇▇▇▇▇, ▇▇▇▇▇*
▇▇▇▇▇▇, ▇▇▇▇▇*
________________
* Form of the agreement has been provided to Summit. It is anticipated that the
actual agreements will be executed shortly after the closing.
3
EXHIBIT D
Amended and Restated Investor Rights Agreement
See Exhibit 10.1 to Registration Statement on Form S-1
EXHIBIT E
Amended and Restated Right of First Refusal and Co-Sale Agreement
AMENDED AND RESTATED
RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT
This Amended and Restated Right of First Refusal and Co-Sale Agreement (the
"Agreement") is made and entered into as of February 9, 1998, by and among COMPS
Infosystems, Inc., a Delaware corporation (the "Company"), ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
in his individual capacity ("Crane"), Summit Ventures III, L.P., a Delaware
limited partnership ("Summit III") and Summit Investors II, L.P., a Delaware
limited partnership ("Summit II," and collectively with Summit III, the
"Purchasers"), and amends and restates in its entirety that certain Right of
First Refusal and Co-Sale Agreement dated as of October 14, 1994 between the
Purchasers, Crane and the Company (the "1994 Agreement").
RECITALS
--------
WHEREAS, the Purchasers possess certain rights of first refusal and co-sale
rights pursuant to the 1994 Agreement.
WHEREAS, the Purchasers, Crane and the Company desire to amend and restate,
in its entirety, the 1994 Agreement as set forth below.
WHEREAS, Crane currently owns shares of the Company's Common Stock (the
"Common Stock"), and intends to purchase shares of the Company's Series B
Preferred Stock and warrants to purchase shares of the Company's Class A Common
Stock 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").
WHEREAS, the Purchasers currently own shares of the Company's Series A
Preferred Stock and warrants to purchase shares of the Company's Class B Common
Stock and intend to purchase from the Company shares of its Series B Preferred
Stock and warrants to purchase additional shares of the Company's Class B Common
Stock pursuant to the Stock and Warrant Purchase Agreement.
WHEREAS, 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.
WHEREAS, the signatories hereto include holders of a majority of the Stock
(as defined herein) held by the Purchasers immediately prior to the closing
under the Stock and Warrant Purchase Agreement.
AGREEMENT
---------
NOW, THEREFORE. in consideration of the mutual promises and covenants set
forth herein and further other consideration, the receipt and sufficiency of
which hereby is
1
acknowledged, the Purchasers, Crane and the Company hereby agree that the 1994
Agreement shall be amended and restated in its entirety 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.
(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;
2
(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;
or
(iv) any bona fide gift to not-for-profit organizations.
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.
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 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
3
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 (7) 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.
(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 all 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 ▇▇ ▇▇▇▇▇'▇ Notice in consummation of the
transfer of the Offered Stock pursuant to the terms and conditions specified in
such notice, and
4
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
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 Stop-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:
5
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RIGHTS OF FIRST REFUSAL AND RIGHTS OF CO-SALE AS SET
FORTH IN AN AMENDED AND RESTATED RIGHT OF FIRST REFUSAL AND CO-
SALE AGREEMENT DATED FEBRUARY 6,1998, 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.
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 deliver 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
6
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 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
7
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 Certificate of Incorporation, or its By-laws, the
terms of the Company's Certificate 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
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.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
9
PURCHASERS:
SUMMIT VENTURES III, L.P.
By: Summit Partners III, L.P.
its General Partner
By: Stamps, ▇▇▇▇▇▇▇ & Co. III,
its General Partner
By: _________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, General Partner
SUMMIT INVESTORS II, L.P.
By: _________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, General Partner
Address
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
10
EXHIBIT F
Amended and Restated Voting Agreement
AMENDED AND RESTATED
VOTING AGREEMENT
THIS AMENDED AND RESTATED VOTING AGREEMENT (the "Agreement") is entered
into as of February 9, 1998, by and among COMPS InfoSystems, Inc., a Delaware
corporation (the "Company"), ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇"), and the purchasers
listed on the signature page attached hereto (the "Purchasers").
RECITALS
--------
WHEREAS, the Purchasers, Crane and the Company are parties to a Voting
Agreement dated as of October 14. 1994 (the " 1994 Agreement").
WHEREAS, the Purchasers, Crane and the Company desire to amend and restate,
in its entirety, the 1994 Agreement as set forth below.
WHEREAS, Crane is a holder of a majority of the Company's Common Stock and
the Purchasers are the holders of all of the Company's Series A Preferred Stock.
WHEREAS, as an inducement to the Purchasers to purchase the Series B
Preferred Stock of the Company, Crane is executing this Agreement and as an
inducement to Crane to execute this Agreement, the Purchasers are executing this
Agreement.
AGREEMENT
---------
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the Purchasers, Crane and the Company hereby agree that the 1994
Agreement shall be amended and restated as follows:
1. Voting of Shares. Until the termination of this Agreement in
----------------
accordance with Section 4 below, Crane will vote all shares then within his
control of the equity securities of the Company with rights to vote in the
election of the Company's directors, 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 and Series B Preferred
Stock voting together as a single class. 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 an Amended and Restated
Voting Agreement dated February 9, 1998, on file with the Company."
1
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 $3.73 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 equity securities 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 each of
----------------------
Crane, the Company and the holders of a majority of the Series A Preferred Stock
and Series B Preferred Stock, voting together as a single class, 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.
2
(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.
(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 a (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
3
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 enforcement of the
terms of this Agreement pursuant to Section 7(g) hereof in any court of
competent jurisdiction.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
COMPS INFOSYSTEMS, INC.
By: _____________________________________
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
_________________________________________
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
in his individual capacity
PURCHASERS:
SUMMIT VENTURES III, L.P.
By: Summit Partners III, L.P.
its General Partner
By: Stamps, ▇▇▇▇▇▇▇ & Co. III,
its General Partner
By: _____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, General Partner
SUMMIT INVESTORS II, L.P.
By: _____________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, General Partner
4
EXHIBIT G
Restated Certificate of Incorporation
See Exhibit 3.1 to Registration Statement on Form S-1
EXHIBIT H
Schedule of Contracts
EXHIBIT H
COMPS INFOSYSTEMS, INC.
SCHEDULE OF LEASES, LOANS, CONTRACTS
------------------------------------
As of December 31, 1997
EQUIPMENT LEASES
----------------
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
G.E. Capital
Lease No. 6519146-002
Term: 48 Months
Start: 9/23/97
Equipment: Executone Telephone Equipment
Lease Payment: $808.05/month
Original Loan: $30,806.45
Avnet/AT&T Capital Corporation
Lease No. 424755
Term: 60 months
Start: 07/25/94
Equipment: HP 9000 Computer
Lease Payment: $744.57/month
Original Loan: $32,121.40
Sybase Financial Services, Inc.
Agreement # 515973
Term: 36 months
Start: 10/21/94
Equipment: Sybase Software
Lease Payment: $1,025.39/month
Original Loan: $29,255.00
EQUIPMENT LEASES (CON'T)
------------------------
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
Canon Financial Service
Lease No. ▇▇▇-▇▇▇▇▇▇▇-▇▇▇
Term: 60 Months
Start: 09/20/94
Equipment: 1 Canon Copier
Lease Payment: $130.40/month
Original Loan: $7,824.00
Tokai Financial
Lease No. 24150393
Term: 60 Months
Start: 01/10/95
Equipment: ▇▇▇▇▇▇▇ Systems Furniture
Lease Payment: $2,421.22/month
Original Loan: $111,576.68
Orix USA Corporation
Lease No. 33938
Terms: 36 Months
Start: 01/15/95
Equipment: Gupta Software
Loan Payment: $2,102.80/month
Original Loan: $80,296.96
EQUIPMENT AND WORKING CAPITAL LOANS
-----------------------------------
Venture Lending & Leasing Inc.
Loan No. ▇▇-▇▇▇
▇▇▇▇: 48 months
Start: 09/30/96
Type of Loan: Equipment
Loan Payment: $21,005.66/month
Final Interest Payment: $125,531.83
Original Loan: $836,878.88
Venture Lending & Leasing Inc.
Loan No. ▇▇-▇▇▇
▇▇▇▇: 36 months
Start: 09/30/96
Type of Loan: Working Capital
Loan Payment: $18,457.50/month
Final Interest Payment: $86,250.00
Original Loan: $575,000.00
Venture Lending & Leasing Inc.
Loan No. ▇▇-▇▇▇
▇▇▇▇: 48 months
Start: 03/31/97
Type of Loan: Equipment
Loan Payment: $8,557.36/month
Final Interest Payment: $51,139.59
Original Loan: $340,930.58
Venture Lending & Leasing Inc.
Loan No. ▇▇-▇▇▇
▇▇▇▇: 48 months
Start: 11/18/97
Type of loan: Equipment
Loan Payment: $2,554.87/month
Final Interest Payment: $15,268.12
Original Loan: $101,787.49
Venture Lending & Leasing Inc.
Loan No. ▇▇-▇▇▇
▇▇▇▇: 48 months
Start: 12/01/97
Type of Loan: Equipment
Loan Payment: $2,594.52/month
Final Interest Payment: $15,505.10
Original Loan: $103,367.33
EQUIPMENT AND WORKING CAPITAL LOANS (CON'T)
-------------------------------------------
Venture Lending & Leasing Inc.
Loan ▇▇. ▇▇ ▇▇▇
▇▇▇▇: 48 months
Start: 12/11/97
Type of Loan: Equipment
Loan Payment: $2,930.63/month
Final Interest Payment: $17,513.72
Original Loan: $116,758.10
Venture Lending & Leasing Inc.
Loan No. ▇▇-▇▇▇
▇▇▇▇: 36 months
Start: 12/11/97
Type of Loan: Working Capital
Loan Payment: $2,672.06/month
Final Interest Payment: $ 12,486.29
Original Loan: $ 83,241.90
NOTES PAYABLE
-------------
Experian RES
Total Note Payable Amount: $750,000.00
Amount Due as of 12/31/97: $655,800.00
Payment Schedule:
Date Due Amount
-------- ------
12/31/99 $405,800.00
12/31/00 $125,000.00 (plus accrued interest)
12/31/01 $125,000.00 (plus accrued interest)
OFFICE LEASES
-------------
Lessor: Mutual Benefit Life Insurance Co.
c/o Vestar Property Management
Lease Address: ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Start: 11/15/93
Term: 48 months
Effective Rent: $2,116.44/month
Lessor: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ as Trustee for the
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Trust
c/o Hanford, ▇▇▇▇▇▇ & Company
Lease Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Start: 05/05/95
Term: 60 months
Effective Rent: $2,966.56/month
Lessor: COMPS Plaza Associates, Ltd.
c/▇ ▇▇▇▇▇▇▇▇ Properties
Lease Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Start: 07/01/94
Term: 96 months
Effective Rent/Month: $20,508.86/month
Lessor: 8500 CDC L.P.
Lease Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Start: 3/01/95
Term: 60 months
Effective Rent/Month: $2,735.16/month
CONTRACTS
---------
DataQuick Information Systems
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, President
Insurance Services Office, Inc. (ISO)
▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Senior Vice President
CONTRACTS (CON'T)
-----------------
Qualitative Marketing Software, Inc.
▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇. ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇, President
BLR Data
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇, VP of Sales
Venture Lending & Leasing Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
Experian RES
▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, General Manager
BANKING RELATIONSHIPS
---------------------
Bank: Silicon Valley Bank
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Vice President
(▇▇▇) ▇▇▇-▇▇▇▇
Bank: Union Bank
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Vice President
(▇▇▇) ▇▇▇-▇▇▇▇
EXHIBIT H
---------
Agreements with Officers, Directors, Stockholders, Consultants, Employees
1. Employment Agreements with each of the following:
a. ▇▇▇▇▇ ▇▇▇▇▇
b. ▇▇▇▇▇ ▇▇▇▇▇▇▇
c. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
d. ▇▇▇▇▇ ▇▇▇▇▇▇
e. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
2. Confidentiality and Proprietary Information Agreements with all
employees, except those employees listed on Exhibit 3.8 to
Exhibit C to Purchase Agreement. Please see Exhibit 3.8 to
Exhibit C.
3. Indemnification Agreements with all Directors and the following
officers:
a. ▇▇▇▇▇ ▇▇▇▇▇
b. ▇▇▇▇▇ ▇▇▇▇▇▇▇
c. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
d. ▇▇▇▇▇ ▇▇▇▇▇▇
e. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
e. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
4
EXHIBIT I
Form of Opinion of Counsel
[▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LETTERHEAD]
February 9, 1998
Summit Ventures III, L.P.
Summit investors II, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: COMPS InfoSystems. Inc.: 554,600 Shares of Series B Preferred Stock
-------------------------------------------------------------------
and 298,631 Warrants to Purchase Shares of Class B Common Stock issued
----------------------------------------------------------------------
to Summit
---------
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 an aggregate of 554,600 shares (the "Summit Shares") of Series B
Preferred Stock of the Company, par value $.01 per share (the "Series B
Preferred Stock"), and warrants (the "Summit Warrants") to purchase 298,631
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 February 6, 1998 (the "Agreement")' among Summit,
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇") and the Company.
Pursuant to the Agreement, (i) the Company will sell to Crane on the date hereof
69,325 shares (the "Crane Shares") of Series B Preferred Stock, and warrants
(the "Crane Warrants") to purchase 37,329 shares of the Class A Common Stock of
the Company, par value $.0l per share (the "Class A Common Stock"), and (ii) the
Company will sell to Oster on the date hereof 13,865 shares (the "Oster Shares")
of Series B Preferred Stock, and warrants (the "Oster Warrants") to purchase
7,466 shares of the Class B Common Stock (the Summit Shares, the Crane Shares
and the Oster Shares being collectively referred to as the "Shares", and the
Summit Warrants, the Crane Warrants and the Oster Warrants being collectively
referred to as the "Warrants"). This opinion is being rendered to you pursuant
to Section 5.1(h) of the Agreement. Capitalized terms 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;
1
(b) The Amended and Restated Voting Agreement between Summit,
Crane and the Company, the Summit Warrants between Summit and the Company,
the Amended and Restated Right of First Refusal and Co-Sale Agreement
between Summit, Crane and the Company, and the Amended and Restated
Investors Rights Agreement between Summit, Crane, Oster and the Company,
the Crane Warrant between the Company and Crane, and the Oster Warrant
between the Company and Oster, each dated February 6, 1998;
(c) The notes, loan agreements, mortgages, deeds of mm, 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 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 for the Company from the
Secretary of State of Delaware,
(i) A certificate of good standing for the Company from the
Secretary of State of California; and
(j) Certificates from certain of the Company's officers as of
the date hereof
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 Purchaser is an
2
"accredited investor" as defined under Regulation D pursuant to the Securities
Act of 1933, as amended (the "Act").
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
3
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 Amended and Restated 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 the State of Delaware (the
"DGCL"), 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.
Based upon and subject to the foregoing, it is our opinion that, as of the
date hereof:
4
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 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 $.0l per share (the "Common Stock") and
5,000,000 shares of Preferred Stock, par value $.01 per share (the "Preferred
Stock"). The first series of Common Stock is comprised of 22,500,000 shares
designated "Class A Common Stock". The second series of Common Stock is
comprised of 2,500,000 shares designated "Class B Common Stock". The first
series of Preferred Stock is comprised of 4,270,336 shares designated "Series A
Preferred Stock." The second series of Preferred Stock is comprised of 637,790
shares designated "Series B Preferred Stock." Immediately prior to the Closing
(but after the filing of the Restated Certificate), there were issued and
outstanding 4,773,860 shares of Class A Common Stock, no shares of Class B
Common Stock, 4,270,336 shares of Series A Preferred Stock and no shares of
Series B Preferred Stock. The rights of each series and class of the Company's
stock are as set forth in the Restated Certificate. All issued and outstanding
shares of Class A Common Stock and Series A Preferred 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 and Series A Preferred Stock did not, to our knowledge, require any
consents, approvals, authorizations, registrations or filings by the Company
under any Federal or California statute, rule or regulation applicable to the
Company, or under any provision of the DGCL 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 Common Stock and the Preferred
Stock as set forth in the Restated Certificate, 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 A Common Stock issuable upon
exercise of outstanding warrants issued to Crane and (iv) the shares of Class B
Common Stock issuable upon the exercise of outstanding (x) stock options under
the Company's Stock Option Plan, (y) warrants issued to Summit and Venture
Lending and Leasing, Inc., and (z) warrants issued to Oster, 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
5. The Class A Common Stock issuable (i) upon conversion of (a)
the Shares, and (b) the Class B Common Stock (including the Class B Common Stock
issuable upon exercise of the Summit Warrants, the Oster Warrants, and the
Venture Lending and Leasing, Inc. Warrant) and (ii) upon exercise of the Crane
Warrants, has been duly and validly reserved. The Class B Common Stock issuable
upon exercise of the Summit Warrants, the Oster Warrants and the Venture Lending
and Leasing Warrant has been duly and validly reserved. The (i) Shares, (ii)
Class A Common Stock issuable upon conversion of the Shares, upon exercise of
the Crane Warrant, and upon conversion of the Class B Common Stock, and (iii)
Class B Common Stock issuable upon exercise of the Summit Warrants, the Oster
Warrants, and the Venture Lending and Leasing Warrant, when issued in compliance
with the provisions of the Company's Restated Certificate and the provisions of
the applicable warrant agreements, will be validly issued, fully paid and
nonassessable. To our knowledge, (i) upon the issuance and delivery by the
Company of the Summit Shares and payment by Summit therefor in accordance with
the terms of the Agreement, Summit will acquire such Summit Shares free of any
lien, encumbrance or restriction on transfer (except for any transfer
restrictions arising under federal or state securities laws, any lien,
encumbrance or transfer restrictions created by Summit or any restrictions
contained in the Documents) and (ii) upon the issuance and delivery by the
Company of the Summit Warrants and payment by Summit therefor in accordance with
the terms of the Agreement, Summit 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 Summit). 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 Summit
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 or California statute, rule or regulation
applicable to the Company, or any provision of the DGCL 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 Summit Shares and the Series B Summit Warrants do not, to our
knowledge, require any consents, approvals, authorizations, registrations,
declarations or filings by the Company under any federal or California statute,
rule or regulation applicable to the Company, or under any provision of the DGCL
applicable to the Company, except such as have been or will be obtained or made.
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 Summit Shares and the Summit Warrants are exempt (i) from the
registration
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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 upon conversion of the
Summit Shares and upon conversion of the Class B Common Stock, and the issuance
of the Class B Common Stock upon exercise of the Summit Warrants and the Venture
Lending and Leasing Warrant, when issued in conformity with the terms of the
Restated Certificate, will be exempt from such registration and qualification
requirements.
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,
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