EXHIBIT 10.1
AMENDED AND RESTATED
INVESTOR RIGHTS AGREEMENT
THIS AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT is made and entered
into as of February 9, 1998 by and among COMPS Infosystems, Inc., a Delaware
corporation (the "Company") and the undersigned holders of the Company's stock
and Robert C. Beasley (together, the "Stockholders") and amends and restates in
its entirety that certain Investor Rights Agreement dated as of October 14, 1994
(the "1994 Agreement") by and among the Company and the Stockholders.
RECITALS:
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WHEREAS, as a condition to purchasing the Company's Series B Preferred
Stock and Class B Common Stock Warrants, Summit Ventures III, L.P., Summit
Investors II, L.P., Christopher A. Crane and Merrill Oster, (the "Purchasers")
have requested that the Company extend to them registration rights, a right of
first refusal, repurchase rights and certain other rights as set forth below.
WHEREAS, certain of the Stockholders are holders of the Company's Series A
Preferred Stock and possess registration rights, rights of first refusal
repurchase rights and certain other rights pursuant to the 1994 Agreement.
WHEREAS, Stockholders holding a sufficient number of Securities (as defined
in the 1994 Agreement) desire to amend the 1994 Agreement, and the Company
desires to amend and restate the 1994 Agreement as set forth below.
AGREEMENT:
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NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth herein, (i) the Company and
Stockholders hereby agree that the 1994 Agreement shall be superseded and deemed
null and void and replaced in its entirety by this Agreement, (ii) the
Stockholders hereby waive the provisions of Article III of the 1994 Agreement
with respect to the issuance to the Purchasers of up to 637,790 shares of the
Company's Series B Preferred Stock and Warrants to purchase up to 306,097 shares
of the Company's Class B Common Stock and 37,329 shares of the Company's Class A
Common Stock pursuant to that certain Stock and Warrant Purchase Agreement of
even date herewith among the Company and the Purchasers, and the Company hereby
consents to such waiver and (iii) the parties hereto further agree as follows:
I. GENERAL
A. Definitions. As used herein:
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1. The terms "register", "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act of 1933, as amended (the "Securities Act"),
and the declaration or ordering of the effectiveness of such registration
statement.
2. For the purposes hereof, the term "Registrable Securities" means
shares of (i) any and all Common Stock of the Company issued or issuable upon
conversion of shares of the Series A Preferred Stock of the Company or Series B
Preferred Stock of the Company and any and all Common Stock issued as of or upon
the date hereof to the Purchasers; (ii) any and all Common Stock issued or
issuable upon exercise of Class B Common Stock Warrants and Class A Common Stock
Warrants issued to the Purchasers on or prior to the date hereof, (iii) any and
all Common Stock issued or issuable upon exercise of the Director Options (as
defined in subsection 6, below); (iv) stock issued with respect to or in any
exchange for or in replacement of stock included in subparagraph (i), (ii), or
(iii) above; (iv) stock issued in respect of the stock referred to in (i), (ii),
(iii) and (iv) above as a result of a stock split, stock dividend,
recapitalization or similar event or the like.
3. The terms "Holder" or "Holders" mean any person or persons to whom
Registrable Securities were originally issued and who execute this Agreement and
qualifying transferees under Section II(J) hereof who hold Registrable
Securities.
4. The term "Initiating Holders" means any Holder or Holders of not
less than 50% of the aggregate of Registrable Securities.
5. The term "Form S-3" means such form under the Securities Act as in
effect on the date hereof or any successor registration form under the
Securities Act subsequently adopted by the SEC which permits inclusion or
incorporation of substantial information by reference to other documents filed
by the Company with the SEC.
6. The term "Securities" shall mean the Company's Series A Preferred
Stock, Series B Preferred Stock, Class B Common Stock Warrants, Class A Common
Stock Warrants, any options to purchase shares of the Company's equity
securities issued to Gregory M. Avis (or his predecessor or successor as
representative of the Purchasers) in his role as outside director ("Director
Options"), and the Class A Common Stock issuable upon conversion of the Series A
Preferred Stock and Series B Preferred Stock, the Class B Common Stock issuable
upon exercise of the Class B Common Stock Warrants, the Class A Common Stock
issuable upon exercise of the Class A Common Stock Warrants and upon conversion
of the Class B Common Stock and any equity securities issuable upon exercise of
the Director Options.
7. The term "Securities Act" shall mean the Securities Act of 1933,
as amended.
8. The term "SEC" or "Commission" means the Securities and Exchange
Commission.
II. REGISTRATION
A. Demand Registration.
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1. Request for Registration. In case the Company shall receive from
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the Initiating Holders a written request that the Company effect any
registration with respect to all or part of the Registrable Securities, the
Company will:
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a. within ten (10) days after its receipt thereof give written
notice of the proposed registration to all other Holders; and
b. as soon as practicable, use its best efforts to effect such
registration (including, without limitation, the execution of an undertaking to
file post-effective amendments, appropriate qualifications under the applicable
blue sky or other state securities laws and appropriate compliance with
exemptive regulations issued under the Securities Act and any other governmental
requirements or regulations) as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's or
Holders' Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any Holder or Holders
joining in such request as are specified in a written request given within 20
days after receipt of such written notice from the Company; provided, that the
Company shall not be obligated to take any action to effect such registration
pursuant to this Section II(A)(1):
(i) Prior to 180 days following the effective date of the
Company's first registered offering to the general public of its securities for
its own account; or
(ii) In any particular jurisdiction in which the Company
would be required to qualify to do business or execute a general consent to
service of process in effecting such registration; or
(iii) After the Company has effected two (2) such
registrations pursuant to this Subsection II(A)(1) and such registrations have
been declared or ordered effective; or
(iv) If the Company qualifies to register the Registrable
Securities pursuant to Form S-3.
Subject to the foregoing clauses (i) through (iv), the Company shall file a
registration statement covering the Registrable Securities so requested to be
registered as soon as practical, but in any event within ninety (90) days after
receipt of the request or requests of the Initiating Holders; provided, however,
that if the Company shall furnish to such Holders a certificate signed by the
President or Chief Executive Officer of the Company stating that in the
reasonable judgment of the Board of Directors it would be seriously detrimental
to the Company and its shareholders for such registration statement to be filed
at the date filing would be required and it is therefore essential to defer the
filing of such registration statement, the Company shall be entitled to delay
the filing of such registration statement not more than once in any twelve month
period for an additional period of up to sixty (60) days.
2. Underwriting. If the Initiating Holders intend to distribute the
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Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
Section II(A)(1) and the Company shall include such information in the written
notice referred to in Subsection II(A)(1)(a). The right of any Holder to
registration pursuant to Section II(A)(1) shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating
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Holders and such Holder) to the extent provided herein. The Company shall
(together with all Holders proposing to distribute their securities through such
underwriting) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by a majority in
interest of the Initiating Holders. Notwithstanding any other provision of this
Section 2, if the underwriter advises the Initiating Holders in writing that
marketing factors require a limitation of the number of shares to be
underwritten, the Initiating Holders shall so advise all Holders of Registrable
Securities who have elected to participate in such offering, and the number of
shares of Registrable Securities that may be included in the registration and
underwriting shall be allocated among all such Holders thereof in proportion, as
nearly as practicable, to the respective amounts of Registrable Securities held
by such Holders. If any Holder of Registrable Securities disapproves of the
terms of the underwriting, he may elect to withdraw therefrom by written notice
to the Company, the underwriter and the Initiating Holders. Any Registrable
Securities which are excluded from the underwriting by reason of the
underwriter's marketing limitation or withdrawn from such underwriting shall be
withdrawn from such registration. If the underwriter has not limited the number
of Registrable Securities to be underwritten, the Company, employees of the
Company and other holders of the Company's Common Stock may include securities
for its (or their) own account in such registration if the underwriter so agrees
and if the number of Registrable Securities which would otherwise have been
included in such registration and underwriting will not thereby be limited.
B. Company Registration.
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1. Registration. If at any time or from time to time, the Company
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shall determine to register any of its securities, for its own account or the
account of any of its stockholders, other than a registration on Form S-8
relating solely to employee stock option or purchase plans, or a registration on
Form S-4 relating solely to an SEC Rule 145 transaction, or a registration on
any other form (other than Form S-1, S-2 or S-3 or SB-2, or their successor
forms), or any successor to such form which does not include substantially the
same information as would be required to be included in a registration statement
covering the sale of Registrable Securities, the Company will:
a. promptly give to each Holder written notice thereof, and
b. include in such registration (and any related qualification
under blue sky laws or other compliance with applicable laws), and in any
underwriting involved therein, all the Registrable Securities specified in a
written request or requests, made within 20 days after receipt of such written
notice from the Company, by any Holder or Holders to be included in any such
registration, except as set forth in Subsection II(B)(2) below.
2. Underwriting. If the registration of which the Company gives
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notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Subsection II(B)(1)(a). In such event the right of any Holder to
registration pursuant to Section II(B) shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company and the other holders distributing their securities
through such underwriting) enter into an underwriting agreement in
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customary form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision of this Section
II(B), if the underwriter determines that marketing factors require a limitation
of the number of shares to be underwritten, the underwriter may limit the number
of Registrable Securities to be included in the registration and underwriting.
Notwithstanding the foregoing, in no event shall the amount of securities of the
selling Holders included in the offering be reduced below thirty percent (30%)
of the total amount of the securities included in such offering, unless such
offering is the initial public offering of the Company's securities, in which
case the selling Holders may be excluded if the underwriters make the
determination described above and no other shareholders' securities are
included. In the event of a cutback by the underwriters of the number of
Registrable Securities to be included in the registration and underwriting, the
Company shall advise all Holders of Registrable Securities which would otherwise
be registered and underwritten pursuant hereto, and the number of shares of
Registrable Securities that may be included in the registration and underwriting
shall be allocated among all of such Holders in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities held by such
Holders. If any Holder disapproves of the terms of any such underwriting, he may
elect to withdraw therefrom by written notice to the Company and the
underwriter. Any Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration.
C. Form S-3. After the Company has qualified for the use of Form S-3, or
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its successor form, Holders of at least ten percent (10%) of the outstanding
Registrable Securities shall have the night to request an unlimited number of
registrations on Form S-3 (such requests shall be in writing and shall state the
number of shares of Registrable Securities to be disposed of and the intended
method of disposition of shares by such Holders), subject only to the following:
1. The Company shall not be required to effect a registration
pursuant to this Section II(C) within 180 days of the effective date of any
registration referred to in Sections II(A) or II(B) above.
2. The Company shall not be required to effect more than one such
registration in any consecutive 6-month period.
3. The Company shall not be required to effect a registration unless
the anticipated aggregate gross proceeds from the requested registration will
equal or exceed one hundred thousand dollars ($100,000).
The Company shall promptly give written notice to all Holders of
Registrable Securities of the receipt of a request for registration pursuant to
this Section II(C) and shall provide a reasonable opportunity for other Holders
to participate in the registration, provided that if the registration is for an
underwritten offering, the terms of Subsection II(A)(2) shall apply to all
participants in such offering. Subject to the foregoing, the Company will use
its best efforts to effect promptly the registration of all shares of
Registrable Securities on Form S-3 to the extent requested by the Holder or
Holders thereof for purposes of disposition; provided, however, that if the
Company shall furnish to such Holders a certificate signed by the President or
Chief Executive Officer of the Company stating that in the good faith judgment
of the Board of Directors it would be seriously detrimental to the Company for
such registration statement to be filed at the date filing would be required and
it is therefore essential to defer the filing of such
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registration statement, the Company shall be entitled to delay the filing of
such registration statement not more than once in any 12 month period for an
additional period of up to sixty (60) days. Any registration pursuant to this
Section II(C) shall not be counted as a registration pursuant to Section II(A).
D. Expenses of Registration. All expenses incurred in connection with any
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registration, qualification or compliance pursuant to this Agreement, including
without limitation, all registration, filing and qualification fees, printing
expenses, fees and disbursements of counsel for the Company and expenses of any
special audits incidental to or required by such registration, shall be borne by
the Company except as follows:
1. The Company shall not be required to pay for expenses of any
registration proceeding begun pursuant to Sections II(A) or II(C), the request
for which has been subsequently withdrawn by the Initiating Holders, in which
case, such expenses shall be borne by the Holders requesting such withdrawal;
provided, however, that in lieu of paying such expenses a majority in interest
of the Initiating Holders may elect to forfeit the right of the holders of
Registrable Securities to request one registration pursuant to Section II(A) or
II(C). Notwithstanding the foregoing, if at the time of such withdrawal (i) the
Holder has teamed of a material adverse change in the condition, business or
prospects of the Company from that known to the Holder at the time of its
request, and (ii) the Company knew or had reason to know of the likelihood of
such material adverse change at the time of its request and did not inform the
Holder thereof, then the Company shall be required to pay such expenses and the
Holder shall retain its rights pursuant to Section II(A) or II(C).
2. The Company shall not be required to pay reasonable fees of legal
counsel of a Holder except for a single counsel acting on behalf of all selling
Holders.
3. The Company shall not be required to pay underwriters' fees,
discounts or commissions relating to the Registrable Securities.
E. Registration Procedures. In the case of each registration,
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qualification or compliance effected by the Company pursuant to this Agreement,
the Company will keep each Holder participating therein advised in writing as to
the initiation of each registration, qualification and compliance and as to the
completion thereof. At its expense the Company will:
1. Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the Holders
of a majority of the Registrable Securities registered thereunder, keep such
registration statement effective for up to one hundred twenty 1 120) days.
2. Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.
3. Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other
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documents as they may reasonably request in order to facilitate the disposition
of Registrable Securities owned by them.
4. Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders,
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
5. In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Each Holder participating
in such underwriting shall also enter into and use best efforts to perform its
obligations under such an agreement.
6. Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
7. Furnish, at the request of any Holder, on the date that the
securities are delivered to the underwriters for sale in connection with a
registration being sold through underwriters, (i) an opinion, if any, dated such
date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering, addressed to the underwriters and to the
Holders and (ii) a letter dated such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to the Holders
requesting of Registrable Securities.
F. Indemnification.
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1. The Company will indemnify and hold harmless each Holder of
Registrable Securities, each of its officers, directors and partners, and each
person controlling such Holder within the meaning of Section 15 of the
Securities Act, with respect to which such registration, qualification or
compliance has been effected pursuant to this Agreement, and each underwriter,
if any, and each person who controls any underwriter of the Registrable
Securities held by or issuable to such Holder, against all claims, losses,
expenses, damages and liabilities (or actions in respect thereto) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any registration statement, preliminary or final prospectus,
or any amendment or supplement thereto, offering circular or other document
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any violation or alleged violation by the Company relating to action or inaction
required of the Company in connection with any rule or regulation promulgated
under
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the Securities Act or any state securities law applicable to the Company and
will reimburse each such Holder within the meaning of Section 15 of the
Securities Act, each of its officers, directors and partners, and each person
controlling such Holder, each such underwriter and each person who controls any
such underwriter, for any reasonable legal and any other expenses, as incurred,
in connection with investigating, defending or settling any such claim, loss,
damage, liability or action; provided, however, that the Company will not be
liable in any such case to the extent that any such claim, loss, damage or
liability arises out of or is based on any untrue statement or omission based
upon written information furnished to the Company in an instrument duly executed
by such Holder or underwriter specifically for use therein, and provided further
that the agreement of the Company to indemnify any underwriter and any person
who controls such underwriter contained herein with respect to any such
preliminary prospectus shall not inure to the benefit of any underwriter, from
whom the person asserting any such claim, loss, damage, liability or action
purchased the stock which is the subject thereof, if at or prior to the written
confirmation of the sale of such stock, a copy of the prospectus (or the
prospectus as amended or supplemented) was not sent or delivered to such person,
excluding the documents incorporated therein by reference, and the untrue
statement or omission of a material fact contained in such preliminary
prospectus was corrected in the prospectus (or the prospectus as amended or
supplemented).
2. Each Holder will, if Registrable Securities held by or issuable to
such Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify and hold harmless the
Company, each of its directors and officers, each underwriter, if any, of the
Company's securities covered by such a registration statement, each person who
controls the Company within the meaning of the Securities Act, and each other
such Holder, each of its officers, directors and partners and each person
controlling such Holder, against all claims, losses, expenses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any preliminary or final prospectus, offering circular or other document
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse the Company, such Holders, such directors, officers, partners,
persons or underwriters for any reasonable legal or any other expenses incurred
in connection with investigating, defending or settling any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company in an instrument duly executed by such Holder
specifically for use therein, and provided further that the agreement of the
holder to indemnify any underwriter and any person who controls such underwriter
contained herein with respect to any such preliminary prospectus shall not inure
to the benefit of any underwriter, from whom the person asserting any such claim
loss, damage, liability or action purchased the stock which is the subject
thereof, if at or prior to the written confirmation of the sale of such stock, a
copy of the prospectus (or the prospectus as amended or supplemented) was not
sent or delivered to such person, excluding the documents incorporated therein
by reference, and the untrue statement or omission of a material fact contained
in such preliminary prospectus was corrected in the prospectus (or the
prospectus as amended or supplemented). Notwithstanding the foregoing, in no
event shall the indemnification provided
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by any Holder hereunder exceed the gross proceeds received by such Holder for
the sale of such Holder's securities pursuant to such registration.
3. Each party entitled to indemnification under this Section II(F)
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought. The
Indemnified Party she promptly permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense of such claim
or litigation, shall be approved by the Indemnified Party (whose approval shall
not be unreasonably be withheld). The Indemnified Party may participate in such
defense and hire counsel at such party's own expense. The failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations hereunder, unless such failure is
materially prejudicial to an Indemnifying Party's ability to defend such action.
No Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of the Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such claim or litigation. Any
Indemnified Party shall cooperate with the Indemnifying Party in the defense of
any claim or litigation brought against such Indemnified Party.
G. Lock-Up Provision. Upon receipt of a written request by the Company or
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by its underwriters, the Holders shall not sell, sell short, grant an option to
buy, or otherwise dispose of shares of the Company's Common Stock or other
securities (except for any such shares included in the registration) for a
period of one hundred and eighty (180) days following the effective date of the
initial registration of the Company's securities; provided, however, that such
Holder shall have no obligation to enter into the agreement described in this
Section II(G) unless all executive officers, directors and holders of three
percent (3%) or more of the outstanding voting securities of the Company and all
other Holders and holders of other registration rights from the Company enter
into similar agreements. The Company may impose stop-transfer instructions with
respect to the shares (or securities) subject to the foregoing restriction until
the end of said 120-day period.
H. Information by Holder. The Holder or Holders of Registrable Securities
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included in any registration shall promptly furnish to the Company such
information regarding such Holder or Holders and the distribution proposed by
such Holder or Holders as the Company may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to herein.
I. Rule 144 Reporting. With a view to making available to Holders of
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Registrable Securities the benefits of certain rules and regulations of the SEC
which may permit the sale of the Registrable Securities to the public without
registration, at all times after 90 days after the effective date of the first
registration filed by the Company for an offering of its securities to the
general public the Company agrees to:
1. Make and keep public information available, as those terms are
understood and defined in SEC Rule 144.
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2. File with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
3. So long as a Holder owns any Registrable Securities, to furnish to
such Holder forthwith upon such Holder's request a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144
(at any time after 90 days after the effective date of the first registration
statement filed by the Company for an offering of its securities to the public)
and of the Securities Act and the Exchange Act (at any time after it has become
subject to such reporting requirements), a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so filed
by the Company as such Holder may reasonably request in availing itself of any
rule or regulation of the SEC allowing such Holder to sell any such securities
without registration.
J. Transfer of Registration Rights. A Holder's rights under Sections
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II(A), II(B), II(C) and II(I) may be assigned by any Holder to a transferee or
assignee of at least 10% of a Holder's Registrable Securities (as adjusted for
stock splits, stock dividends, recapitalizations and the like) not sold to the
public or a transferee or assignee of any shares of its Registrable Securities
not sold to the public that is a partner or affiliate of such Holder, provided,
that the Company is given written notice by the Holder at the time of or within
thirty (30) days after said transfer, stating the name and address of said
transferee or assignee and identifying the securities with respect to which such
registration rights are being assigned. No such transfer or assignment shall be
effective until such transferee or assignee agrees in writing to become subject
to the obligations of the transferring Holder hereunder.
K. Limitations on Subsequent Registration Rights. From and after the date
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of this Agreement, the Company shall not, without the prior written consent of
the Holders of a majority of the outstanding Registrable Securities, enter into
any agreement with any holder or prospective holder of any securities of the
Company which would allow such holder or prospective holder (a) to include such
securities in any registration filed under Section II(A), II(B) or II(C) hereof,
unless under the terms of such agreement, such holder or prospective holder may
include such securities in any such registration only to the extent that the
inclusion of its securities will not reduce the number of amount of the
Registrable Securities of the Holders which are included or (b) to make a demand
registration which could result in such registration statement being declared
effective prior to the earlier of either of the dates set forth in Subsection
II(A)(1)(b)(i).
L. Termination. The rights of all Holders under this Agreement shall
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terminate on the fifth anniversary of the closing of the Company's first
registered public offering of its securities; provided however, that the
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Company's reporting obligations under SEC Rule 144 as set forth in Section 10
above, shall survive the termination of this Agreement.
III. RIGHT OF FIRST REFUSAL
If, at any time prior to the expiration of the period set forth in Section
IV(B) below, the Company should desire to issue in any transaction not
registered under the Securities Act in reliance upon a claimed exemption
thereunder, any Equity Securities (as defined in Subsection
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(E) below), it shall give each Stockholder a first right of refusal to purchase
such Stockholder's pro rata share (or any part thereof) of all of such privately
offered Equity Securities on the same terms as the Company is willing to sell
such Equity Securities to any other person. The Stockholder's pro rata share of
the Equity Securities shall be equal to the percentage that the Equity
Securities of the Company held by the Stockholder on an as-converted basis on
the date of the Company's written notification referred to in subparagraph (A)
below, bears to all outstanding Equity Securities of the Company on the date of
such written notification.
A. Notices. Prior to any sale or issuance by the Company of any Equity
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Securities, the Company shall notify each Stockholder, in writing, of its bona
fide intention to sell and issue such Equity Securities, setting forth any
material terms under which it proposes to make such sale. Within fifteen (15)
days after receipt of such notice, each Stockholder shall notify the Company
whether the Stockholder exercises its option and elects to purchase the
Stockholder's pro rata share (or any part hereof) of the Equity Securities so
offered.
B. Procedure. If any Stockholder has failed to exercise its option to
---------
purchase all of its pro rata portion of the Equity Securities upon the terms and
conditions set forth in the Subsection (A) notice, the Company may, during the
period of ninety (90) days following the expiration of such option period, sell
and issue such securities as to which such Stockholder has not exercised its
option to any other person upon the same terms and conditions as those set forth
in the notice to the Stockholders. In the event the Company has not sold the
Equity Securities within said ninety (90) day period, the Company shall not
thereafter issue or sell any Equity Securities without first offering such
securities to the Stockholders in the manner provided above.
C. Closing. If a Stockholder gives the Company notice that it desires to
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purchase any of the Equity Securities offered by the Company, payment for the
Equity Securities shall be by check, or wire transfer, against delivery of the
securities at the executive offices of the Company within ten (10) days after
giving the Company such notice, or, if later, the closing date for the sale of
such Equity Securities to third parties. The Company shall take all such action
as may be required by any regulatory authority in connection with the exercise
by the Stockholder of the right to purchase Equity Securities as set forth in
this Section III.
D. Exceptions. The right of first refusal contained in this Section III
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shall not apply to (i) the issuance by the Company of Equity Securities
exclusively to employees or directors of, or consultants to the Company pursuant
to the approval of the Board of Directors, (ii) the issuance of Common Stock of
the Company upon conversion of Preferred Stock, (iii) the issuance of Class A
Common Stock upon conversion of Class B Common Stock, or (iv) any Equity
Securities issued in connection with an acquisition or SEC Rule 145 transaction.
E. "Equity Securities". The term "Equity Securities" shall mean (i)
-------------------
Common Stock, rights, options or warrants to purchase Common Stock; (ii) any
other instrument convertible into Common Stock; (iii) any security convertible
into or exchangeable for any of the foregoing.
F. Assignment. A Purchaser's right to purchase any Equity Securities
----------
pursuant to this Section III may be assigned by the Purchaser to an affiliate of
the Purchaser. For the purposes of this subparagraph (F), an "affiliate" shall
mean any partner or shareholder of the
11
Purchaser, any person or entity that director or indirectly through one or more
intermediaries controls or is controlled by or is under common control with a
Purchaser. A right to purchase any Equity Securities pursuant to this Section
III shall not be assignable.
IV. REPURCHASE
A. Put Option.
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1. Exercise of Option. In the event that upon the earlier to occur
------------------
of (i) October 14, 2001, (ii) a liquidation, dissolution, winding-up or (iii)
the closing of an acquisition, merger, exchange of securities, sale of all or
substantially all of the assets of Company, reorganization in which the Company
is not the surviving entity or a stock issuance or "reverse merger" in which the
Company is the surviving entity but under which the holders of the Company's
securities prior to such stock issuance or reverse merger do not hold more than
fifty percent (50%) of the voting securities of the Company following such stock
issuance or reverse merger, the Purchasers continue to hold any Securities, any
Purchaser may notify the Company that it intends to offer to the Company any or
all of the Securities then held by it for purchase by the Company, and the
Company shall be required to repurchase the Securities so offered under this
Agreement as provided below.
2. Price. The price to be paid by the Company for the Securities to
-----
be sold hereunder shall be the greater of (i) the Purchaser's original purchase
price of such Securities (as set forth in the Purchase Agreement) plus all
accrued and unpaid dividends through the date of the repurchase, and (ii) the
fair market value of the Securities as of the date of such proposed repurchase
as agreed upon by the Company and the Purchaser. If the Common Stock is
publicly traded, fair market value, with respect to the Common Stock, shall mean
the average over the preceding twenty (20) trading days of the mean of the
closing bid and asked prices on the over-the-counter market as reported by
Nasdaq, or if then traded on a national securities exchange or the Nasdaq
National Market, the average over the preceding twenty (20) trading days of the
mean of the high and low prices on the principal national securities exchange or
the Nasdaq National Market on which it is so traded (or, in either event, such
fewer number of days as such Common Stock has been so traded). If no such
agreement is reached within thirty (30) days, the fair market value shall be
determined by appraisal as set forth below.
All appraisals shall be undertaken by two appraisers, one selected by the
Company and one selected by the Purchasers of a majority of the Securities. The
fair market value shall be the fair market value arrived at by those appraisers
within sixty (60) days following the appointment of the last appraiser to be
appointed. In the event that the two appraisers cannot agree on such fair
market value within such a period of time, (i) if the appraisers' valuations are
within 10% of each other the fair market value shall be the mean of the two
valuations and (ii) if the differences in the valuations are greater, the
appraisers shall elect a third appraiser who will calculate fair market value
independently, and, except as provided in the next sentence, the fair market
value of the Securities shall in each case be the average of the two fair market
values arrived at by the appraisers who are closest in amount. If one
appraiser's valuation is the mean of the other two valuations, the mean
valuation shall be the fair market value. In the event that the two original
appraisers cannot agree upon a third appraiser within thirty (30) days following
the end of the sixty (60) day period referred to above, then the third appraiser
shall be appointed by the
12
American Arbitration Association upon the request of either party. If, following
the conclusion of any appraisal referred to above, a Purchaser shall choose not
to sell any or all of its Securities, then it shall so notify the Company,
within twenty (20) days following receipt of the appraisal. If the Purchaser
chooses not to sell any or all of its Securities and after the initiation of the
procedures outlined in Section IV(A), then its rights hereunder shall terminate
with respect to all such securities not offered to the Company. The expenses of
the appraiser chosen by the Company will be borne by it, the expenses of the
appraiser chosen by the Purchasers will be borne by the Purchasers and the
expenses of the third appraiser will be borne 50% by the Company and 50% by the
Purchasers.
3. Payment. The Company shall, within sixty (60) days following
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either the agreement, as provided above, with the Purchasers concerning the fair
market value of the Securities or the receipt of the results of the appraisal
referred to above, to the extent permitted by applicable law (the "Repurchase
Date"), purchase the Securities tendered to it at the price established by the
agreement or the appraisal and the Purchasers shall deliver to the Company, upon
receipt of payment therefor, the certificates for the Securities duly endorsed
by them. Payment shall be made by certified check or wire transfer of funds to
such bank account or accounts as the Purchaser shall direct.
B. Termination of Option. The obligation of the Company to purchase the
---------------------
Purchased Common Stock as provided in this Agreement shall terminate upon (i)
the closing of a Qualified Public Offering (as defined below); (ii) the closing
of an acquisition, merger, exchange of securities, sale of all or substantially
all of the assets of Company, reorganization in which the Company is not the
surviving entity or a stock issuance or "reverse merger" in which the Company is
the surviving entity but under which the holders of the Company's securities
prior to such stock issuance or reverse merger do not hold more than fifty
percent (50%) of the voting securities of the Company following such stock
issuance or reverse merger; provided, however, that the Purchaser shall have the
right to exercise the option granted pursuant to Section IV(A) hereof
concurrently with such closing by delivering written notice of their intention
to so exercise at least ten (10) days prior to the date of closing, and,
provided further, that the Company shall provide the Holders not less than 30
days written notice of the closing of a transaction contemplated by this Section
IV(B), or (iii) the liquidation of the Company. For purposes of this Agreement,
a "Qualified Public Offering" shall mean an underwritten public offering in
which the Company receives gross proceeds of not less than $10 million at a
purchase price per share of not less than $3.73 (as adjusted for stock splits,
dividends, recapitalization and the like).
V. MISCELLANEOUS
A. Notices. All notices or other communications required or permitted to
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be delivered hereunder shall be in writing signed by the party giving the notice
to the Company at 9888 Carroll Centre Road, Suite 100, San Diego, CA 92126-4581,
Attn: President, and to the Purchasers at the addresses listed opposite their
names in Schedule A attached hereto. Any Purchaser may at any time change the
----------
address to which notice shall be mailed by giving notice of such change to the
Company and to the other parties and such notice shall be deemed given when
received by the other party hereto.
13
B. Amendment. This Agreement may be amended with the written consent of
---------
the Company and the written consent of the holders of a majority of the
Securities held by the Purchasers.
C. Entire Agreement. This Agreement constitutes the entire agreement of
----------------
the parties with respect to the matters contemplated herein. This Agreement
supersedes any and all prior understandings as to the subject matter of this
Agreement.
D. Binding Effect; Assignment. This Agreement shall be binding upon and
--------------------------
inure to the benefit of the successors and assigns of the respective parties
hereto, except that the Company shall not have the right to assign its rights
hereunder or any interest herein, and the rights and interests of the Purchasers
shall be assignable, without the consent of the Company, to any assignee.
E. General. The headings contained in this Agreement are for reference
-------
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement. In this Agreement the singular includes the plural, the plural
the singular, the masculine gender includes the neuter, masculine and feminine
genders. This Agreement shall be governed by and construed under the laws of
the State of California.
F. Severability. If any provision of this Agreement shall be found by any
------------
court of competent jurisdiction to be invalid or unenforceable, the parties
hereby waive such provision to the extent that it is found to be invalid or
unenforceable. Such provision shall, to the maximum extent allowable by law, be
modified by such court so that it becomes enforceable, and, as modified, shall
be enforced as any other provision hereof, all the other provisions hereof
continuing in full force and effect.
G. Counterparts. This Agreement may be executed in counterparts, all of
------------
which together shall constitute one and the same instrument.
H. Dispute Resolution. The parties acknowledge and agree that time is of
------------------
the essence in resolving any dispute that may arise in connection with this
Agreement. Except as provided herein, any controversy or claim arising out of
or relating to this Agreement, or the breach thereof, that cannot be resolved
between the parties in a timely manner shall be settled by binding arbitration
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association ("AAA"). The expenses of the arbitration, including the
arbitrator's fees, expert witness fees, and attorneys' fees, may be awarded to
the prevailing party, in the discretion of the arbitrator, or may be apportioned
between the parties in any manner deemed appropriate by the arbitrator. Unless
and until the arbitrator decides that one party is to pay for all (or a share)
of such expenses, the Company shall pay all reasonable expenses, including legal
and accounting fees and costs arising in connection with enforcement of this
Agreement or the Collateral Agreements. The parties shall keep confidential the
decision of the arbitrator. Notwithstanding the foregoing, the parties may
disclose information about such decision to persons who have a need to know,
such as limited partners, directors, trustees, management employees, witnesses,
experts, investors, attorneys, lenders, insurers, and others who may be
affected. Once the arbitration award has become final if the arbitration award
is not promptly satisfied, then these confidentiality provisions shall no longer
be applicable. Notwithstanding the
14
foregoing, the parties will be entitled to enforce their rights under this
Agreement specifically (without posting a bond or other security). The parties
hereto agree and acknowledge that money damages may not be an adequate remedy
for any breach of the provisions of this Agreement and any party may in its sole
discretion apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive relief in order to enforce or prevent any
violation of the provisions of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
COMPS INFOSYSTEMS, INC. THE PURCHASERS
SUMMIT VENTURES III, L.P.
By: Summit Partners III, L.P.
By: /s/ CHRISTOPHER A. CRANE its General Partner
------------------------------- By: Stamps, Woodsum & Co. III,
Christopher A. Crane, President its General Partner
By: /s/ GREGORY M. AVIS
-------------------------------
Gregory M. Avis, General Partner
/s/ ROBERT C. BEASLEY SUMMIT VENTURES II, L.P.
-------------------------------
Robert C. Beasley
in his individual capacity By: /s/ GREGORY M. AVIS
-------------------------------
Gregory M. Avis, General Partner
/s/ CHRISTOPHER A. CRANE
-------------------------------
Christopher A. Crane
in his individual capacity
/s/ MERRILL OSTER
-------------------------------
Merrill Oster
in his individual capacity
15
Schedule A
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Purchasers Address
- ---------- -------
Christopher A. Crane c/o COMPS InfoSystems, Inc.
9888 Carroll Centre Road, Suite 100
San Diego, CA 92126-4581
(619) 578-3000
Summit Ventures III, L.P. 499 Hamilton Avenue, Suite 200
Palo Alto, CA 94301
(650) 321-1166
Summit Investors II, L.P. 499 Hamilton Avenue, Suite 200
Palo Alto, CA 94301
(650) 321-1166
Merrill Oster c/o COMPS InfoSystems, Inc.
9888 Carroll Centre Road, Suite 100
San Diego, CA 92126-4581
(619) 578-3000