Exhibit 10.4
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
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Consolidation 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
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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
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any reclassification, capital reorganization or change in the Class B Common
Stock of the Company (other than as a result of a subdivision, combination or
stock dividend provided for in Section 2(a) above), then, as a condition of such
reclassification, reorganization or change, lawful provision shall be made, and
duly executed documents evidencing the same from the Company or its successor
shall be delivered to the holder of this Warrant, so that the holder of this
Warrant shall have the right, commencing upon the times set forth in Section 3,
and prior to the expiration of this Warrant, to purchase, at a total price equal
to that payable upon the exercise of this Warrant, the kind and amount of shares
of stock and other securities and property receivable in connection with such
reclassification, reorganization or change by a holder of the same number of
shares of Class B Common Stock as were subject to this Warrant immediately prior
to such reclassification, reorganization or change. In any such, case
appropriate provisions shall be made with respect to the rights and interests of
the holder of this Warrant so that the provisions hereof shall thereafter be
applicable with respect to any shares of stock or other securities and property
deliverable upon exercise hereof, and appropriate adjustments shall be made to
the purchase price per share payable hereunder, provided the aggregate purchase
price shall remain the same.
c. Conversion of Class B Common Stock. If at any time prior to the
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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
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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
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Holder hereof of any applicable transfer taxes) and (b) prepare and issue a new
warrant of like terms if this Warrant is exercised for less than all of the
Shares subject hereto. "Liquidity Event" shall mean (i) an acquisition,
consolidation or merger of the Company with or into any other corporation or
corporations unless the stockholders of the Company prior to such transaction
directly or indirectly own more than fifty percent (50%) of the voting stock of
the surviving or accruing corporation or corporations; (ii) the sale, transfer
or other disposition of all or substantially all of the assets of the Company to
a person other than a corporation or partnership controlled by the Company or
its stockholders; (iii) the effectuation by the Company of a transaction or
series of related transactions in which more than fifty percent (50%) of the
outstanding voting power of the Company prior to such transaction or series of
related transactions, is disposed of; and (iv) the closing of the sale of the
Company's securities pursuant to an underwritten public offering.
a. Net Issue Exercise. Notwithstanding any provisions herein to the
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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 Clm B Common Stock computed using the following formula:
X = Y (A - B)
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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
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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, October 14, 2004, 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 Shares being issued upon such exercise of such exercise, a
representation in writing that the are being acquired for investment and not
with a view to any sale or distribution thereof, or a statement of the pertinent
facts covering any proposed distribution thereof. It shall be a condition to
any transfer of any or all of the Shares issued upon exercise of this Warrant,
other than a transfer registered under the Securities Act of 1933, as amended
(the "Act"), that the Company shall have received a legal opinion, in form and
substance reasonably satisfactory to the Company and its counsel, reciting the
pertinent circumstances surrounding the proposed transfer and stating that such
transfer is exempt from the prospectus and the registration requirement of the
Act Each certificate evidencing the Shares issued upon exercise of this Warrant,
or upon any transfer of such shares (other than a transfer registered under the
Act or any subsequent transfer of shares so registered) shall, at the option of
the Company, contains a legend, in form and substance satisfactory to the
Company and its counsel, restricting the transfer of such shares to sales or
other dispositions exempt from the requirements of the Act. It is agreed that
the Company will not require opinions of counsel for transactions made pursuant
to Rule 144, other than opinions with regard to sales under Rule 144(k).
6. Fractional Shares. This Warrant shall in no event be exercisable
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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.
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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,
is such, any rights of a shareholder of the Company or any right to vote, give
or withhold consent to any corporate action, receive notice of meetings, receive
dividends or subscription rights, or otherwise.
d. Receipt of this Warrant by the Holder shall constitute
acceptance of and agreement to the foregoing terms and conditions.
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e. Upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction or mutilation of this Warrant and, in the case of
any such loss, theft or destruction, upon delivery of an indemnity agreement
reasonably satisfactory in form valid amount to the Company or, in the case of
any such mutilation, upon surrender and cancellation of such Warrant, the
Company at its expense will execute and deliver, in lieu thereof, a new Warrant
of like date and tenor.
f. This Warrant shall be governed by the internal laws of the State
of California.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer.
Dated: October 14, 1994
COMPS INFOSYSTEMS, INC.
By:
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Christopher A. Crane
President
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Schedule of Warrant Holders
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Name Number of Warrants
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Summit Ventures III, L.P. 372,272
Summit Ventures II, L.P. 7,597