Exhibit 10.6
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-[_]
FORM OF CLASS B COMMON STOCK WARRANT
OF
COMPS INFOSYSTEMS, INC.
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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"), ________ 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.
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2. Adjustments for Subdivisions, Dividends, Combinations or Consolidation
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of Common Stock.
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a. Subdivisions, Dividends. Consolidations. In the event (i) the
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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
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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
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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
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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
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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,
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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
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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
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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)
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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
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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
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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
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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
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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.
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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.
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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:
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Christopher A. Crane
President
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Schedule to Exhibit 10.6
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Name Number of Warrants
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Summit Ventures III, L.P. 292,658
Summit Ventures II, L.P. 5,973
Merrill Oster 7,466