<PAGE>
As filed with the Securities and Exchange Commission on February 24, 1999
Registration No. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-1
REGISTRATION STATEMENT
Under the Securities Act of 1933
----------------
COMPS.COM, INC.
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<CAPTION>
Delaware 7375 33-0645337
<S> <C> <C>
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>
----------------
9888 Carroll Centre Road, Suite 100
San Diego, California 92126-4581
(619) 578-3000
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
----------------
Mr. Christopher A. Crane
President and Chief Executive Officer
COMPS.COM, INC.
9888 Carroll Centre Road, Suite 100
San Diego, California 92126-4581
(619) 578-3000
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
----------------
Copies to:
<TABLE>
<S> <C>
Craig S. Andrews, Esq. Lawrence D. Levin, Esq.
Faye H. Russell, Esq. Katten Muchin & Zavis
Brobeck, Phleger & Harrison LLP 525 West Monroe Street, Suite 1600
550 West C Street, Suite 1300 Chicago, Illinois 60661
San Diego, California 92101 (312) 902-5200
(619) 234-1966
</TABLE>
----------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]
----------------
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Title of Each Class of Proposed Maximum Amount of
Securities to be Registered Aggregate Offering Price(1) Registration Fee(1)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stock, par value $0.01 per share.... $50,000,000 $13,900
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Estimated pursuant to Rule 457(o) solely for the purpose of calculating the
amount of the registration fee.
----------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to
Section 8(a), may determine.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this preliminary prospectus is not complete and may +
+change. We and the selling stockholders may not sell these securities until +
+the registration statement filed with the SEC is effective. This preliminary +
+prospectus is not an offer to sell these securities, and it is not soliciting +
+an offer to buy these securities in any state where the offer or sale is not +
+permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED FEBRUARY 24, 1999
Shares
[LOGO]
Common Stock
------------
COMPS.COM, INC. is offering shares of its common stock. This is our initial
public offering and no public market currently exists for our shares. We
anticipate that the initial public offering price will be between $ and
$ per share.
------------
We intend to list our common stock on the Nasdaq National Market under the
symbol "CDOT."
------------
Please see "Risk Factors" beginning on page 7 to read about certain risks
that you should consider before buying shares of our common stock.
------------
PRICE $ PER SHARE
------------
<TABLE>
<CAPTION>
Per Share Total
--------- -----------
<S> <C> <C>
Public offering price.................................... $ $
Underwriting discounts and commissions................... $ $
Proceeds, before expenses, to COMPS.COM.................. $ $
</TABLE>
The Securities and Exchange Commission and state securities commissions have
not approved or disapproved of these securities, or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The underwriters have an option to purchase additional shares from us
and the selling stockholders to cover over-allotments of shares. We will not
receive any of the proceeds from the sale of shares by the selling
stockholders.
------------
Volpe Brown Whelan & Company
EVEREN Securities, Inc.
Needham & Company, Inc
, 1999
<PAGE>
Front Cover:
[The front cover will have a dark background and the text will be printed in
white. A picture of database wheel resembling a radar screen will appear on the
background of the front cover.]
[LOGO]
Inside Front Cover:
COMPREHENSIVE CONTENT
[The following text are placed in varying fonts and font sizes throughout the
recurring database wheel: buyers & sellers, phone number, square footage,
contact name, capitalization rate, building characteristics and condition,
confirmed sales price, financing information, income and expense, unit mix,
color photos, lenders, financing. Four screen shots of four different pages
from our Web site showing some of our products are placed on parts of the
database wheel.]
Inside Spread:
DYNAMIC DELIVERY
[A two page spread of a screen depicting a picture of a page on our Web site.
Our market segments are listed in a bar down the left side of the screen. Each
market segment is underlined. In the main frame of the screen is (1) a picture
of a hand with a mouse, (2) the database wheel laid on top of a group of
commercial real estate buildings, (3) an arrow pointing at the center of the
database wheel and (4) a screen shot of a page from our Web site.]
2
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary....................................................... 4
Risk Factors............................................................. 7
Use of Proceeds.......................................................... 17
Dividend Policy.......................................................... 17
Capitalization........................................................... 18
Dilution................................................................. 19
Selected Financial Data.................................................. 20
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 21
Business................................................................. 29
</TABLE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Management................................................................. 40
Certain Relationships and Related Transactions............................. 51
Principal and Selling Stockholders......................................... 53
Description of Securities.................................................. 54
Shares Eligible For Future Sale............................................ 58
Underwriting............................................................... 59
Legal Matters.............................................................. 61
Experts.................................................................... 61
Where You Can Find More Information........................................ 61
Index to Financial Statements.............................................. F-1
</TABLE>
---------------
Notes to Readers of this Prospectus
. Comps Incorporated was incorporated in California in January 1982. It was
purchased by Business Real Estate Information Corp. in 1992 and
reincorporated in Delaware in 1994 as COMPS InfoSystems, Inc. In January
1999, we changed our name to COMPS.COM, INC. Our principal executive offices
are located at 9888 Carroll Centre Road, Suite 100, San Diego, California
92126. Our telephone number at that location is (619) 578-3000. Our Web site
address is www.comps.com. Information contained on our Web site does not
constitute part of this prospectus.
. This offering is for shares; however, the underwriters have a 30-day
option to purchase up to additional shares from us and the selling
stockholders to cover over-allotments. Some of the disclosures in this
prospectus would be different if the underwriters exercise the option.
Unless we tell you otherwise, the information in this prospectus assumes
that the underwriters will not exercise the option.
. Unless we tell you otherwise, all information in this prospectus relating to
our outstanding common stock: (1) reflects the automatic conversion of each
share of our Class B common stock into one share of our Class A common stock
and the renaming of such stock as "common stock" upon the closing of this
offering, (2) reflects the automatic conversion of each share of our
preferred stock into one share of our common stock upon the closing of this
offering; (3) reflects the exercise of warrants outstanding to purchase
723,295 shares at a weighted average exercise price of $0.01 per share and
(4) reflects a for stock split of our common stock to be
effected prior to the closing of this offering.
. COMPS, COMPSLink, CallCOMPS, WinCOMPS, COMPS NET, REALBID and our logo are
our registered trademarks. Each other trademark, trade name or service mark
appearing in this prospectus belongs to its holder.
---------------
Special Note Regarding Forward-Looking Statements
This prospectus may contain forward-looking statements based on our current
expectations, assumptions, estimates and projections about us and our industry.
These forward-looking statements involve risks and uncertainties. Our actual
results could differ materially from those anticipated in these forward-looking
statements as a result of certain factors, as more fully described in the "Risk
Factors" section and elsewhere in this prospectus. We are not obligated to
update or revise these forward-looking statements to reflect new events or
circumstances.
---------------
You should rely only on the information contained in this document or to
which we have referred you. We have not authorized anyone to provide you with
information that is different. This document may only be used where it is legal
to sell these securities. The information in this document may only be accurate
on the date of this document.
---------------
Until , 1999, all dealers selling shares of our common stock,
whether or not participating in this offering, may be required to deliver a
prospectus. This delivery requirement is in addition to the obligation of
dealers to deliver a prospectus when acting as underwriters and with respect to
their unsold allotments or subscriptions.
3
<PAGE>
Prospectus Summary
This summary highlights some of the information in this prospectus. It may
not contain all of the information that is important to you. To understand this
offering fully, you should read the entire prospectus carefully, including the
risk factors and financial statements.
About COMPS
Our Business
We are a leading national provider of confirmed commercial real estate sales
information both offline and on the Internet. We have also recently begun
leveraging our extensive database to facilitate commercial real estate
transactions on the Internet. Over the last 17 years, we have developed a
highly evolved data collection and confirmation system to provide information
on commercial real estate properties. We believe we have established the
foundation to be the trusted online resource linking commercial real estate
brokers, lenders, appraisers, insurers and other professionals by efficiently
distributing market information on the Internet.
Our Market
The Internet has rapidly become a significant global medium for
communications, information and commerce. It has emerged as a primary business
channel alongside the telephone, paper-based communication and face-to-face
interaction. The Internet allows online providers to efficiently distribute
information with the potential for less infrastructure and overhead and greater
economies of scale. It also offers customers diverse options and unparalleled
convenience.
The commercial real estate market is large and fragmented. Prior to the
availability of confirmed sales information from a centralized source,
commercial real estate professionals either maintained their own research
departments to catalog comparable sales, market statistics and other property-
specific information, or aggregated such information, to the limited extent
available, from multiple third parties. These methods resulted in high internal
costs and nonstandard data with varying degrees of comprehensiveness and
accuracy. In addition, there are currently no comprehensive, standardized
transaction support services that efficiently identify properties and bring
together brokers, buyers, lenders and insurers in commercial real estate
transactions.
Our Solution
The vast information sharing and communications power of the Internet creates
an opportunity to improve upon the inefficiencies in conducting commercial real
estate transactions. We provide comprehensive and reliable information
services, and transaction support products that save industry professionals
both time and money. To date, we have:
. developed a comprehensive and standardized proprietary database of
approximately 400,000 commercial real estate transactions;
. migrated our database to the Internet, allowing our customers to receive
updated commercial real estate transaction information more frequently and
analyze the data more quickly and easily;
. established an Internet-based listing-broker/buyer matching service,
allowing us to identify and refer potential buyers of listed properties to
brokers and actively market these properties for brokers using our Internet-
based new listing notification system; and
. introduced an Internet-based commercial real estate listing service,
enabling brokers to market their properties over the Internet and increase a
property's exposure to prospective buyers and their brokers.
Our Business Strategy
Our objective is to be the trusted online resource linking commercial real
estate professionals by efficiently distributing market information on the
Internet. Our business strategy to achieve this objective includes the
following key elements:
. continue to enhance our comprehensive historical database of commercial real
estate transactions;
. expand our online listing-broker/buyer matching service;
. create a comprehensive online national listing service for commercial real
estate;
. enhance our services and products to facilitate the online exchange of
commercial real estate market information;
. expand into new geographic markets; and
. continue to build our brand name.
4
<PAGE>
The Offering
<TABLE>
<C> <S>
Common stock offered by us.............. shares
Common stock outstanding after this
offering............................... shares
Use of proceeds......................... For working capital and other general
corporate purposes, including
expansion of our proprietary
database, enhancement and development
of existing and new information
services and transaction support
products, geographic expansion, and
repayment of debt. We may also use a
portion of the proceeds for strategic
alliances and acquisitions. Please
see "Use of Proceeds."
Proposed Nasdaq National Market symbol.. CDOT
</TABLE>
The information above is as of December 31, 1998. In addition to the
shares of common stock to be outstanding after this offering, we may issue the
following securities, which share numbers do not reflect a stock split of to
, which is subject to stockholder approval:
. 2,385,449 shares upon the exercise of options outstanding at a weighted
average exercise price of $0.86 per share;
. 213,068 shares upon the exercise of warrants outstanding at a weighted
average exercise price of $1.76 per share; and
. 512,909 shares upon exercise of options available for issuance under our
stock plans. For a description of our stock option plans, please see
"Management--Benefit Plans."
5
<PAGE>
Summary Financial And Operating Data
(dollars in thousands, except per share and other operating data)
The following table summarizes the financial data for our business. The pro
forma statement of operations data gives effect to our acquisition of REALBID,
LLC as if it had occurred on January 1, 1998.
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------
Pro Forma
1994 1995 1996 1997 1998 1998
-------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Net revenues............ $ 6,030 $ 6,716 $ 8,141 $ 10,450 $ 12,806 $13,029
Cost of revenues........ 2,674 3,488 4,357 5,054 5,746 5,791
-------- -------- -------- -------- -------- -------
Gross profit............ 3,356 3,228 3,784 5,396 7,060 7,238
Operating expenses:
Selling and marketing.. 2,306 2,072 2,813 3,408 4,182 4,182
Product development and
engineering........... -- -- 376 768 1,230 1,230
General and
administrative........ 1,743 2,527 2,835 2,525 2,936 3,638
-------- -------- -------- -------- -------- -------
Total operating
expenses............ 4,049 4,599 6,024 6,701 8,348 9,050
-------- -------- -------- -------- -------- -------
Loss from operations.... (693) (1,371) (2,240) (1,305) (1,288) (1,812)
Other income (expense),
net.................... (9) 12 (67) (252) (260) (260)
-------- -------- -------- -------- -------- -------
Net loss................ (702) (1,359) (2,307) (1,557) (1,548) (2,072)
Dividend accretion on
preferred stock........ 63 299 299 299 363 363
-------- -------- -------- -------- -------- -------
Net loss attributable to
common stockholders.... $ (765) $ (1,658) $ (2,606) $ (1,856) $ (1,911) $(2,435)
======== ======== ======== ======== ======== =======
Net loss per share
attributable to common
stockholders, basic and
diluted................ $ (0.12) $ (0.35) $ (0.55) $ (0.39) $ (0.40) $ (0.51)
======== ======== ======== ======== ======== =======
Shares used in computing
net loss per share
attributable to common
stockholders, basic and
diluted................ 6,408 4,774 4,774 4,774 4,795 4,795
======== ======== ======== ======== ======== =======
Pro forma net loss per
share, basic and
diluted................ $ (0.16) $ (0.22)
======== =======
Shares used in computing
pro forma net loss per
share, basic and
diluted................ 9,635 9,635
======== =======
Other Operating Data:
Markets covered by
database.............. 16 24 24 25 34
Transactions in
database.............. 245,951 270,945 302,684 341,670 387,427
Value of transactions
in database (dollars
in millions).......... $ 191 $ 222 $ 272 $ 355 $ 460
Value of transactions
supported by REALBID
(dollars in
millions)............. -- -- -- $ 300 $ 3,800
</TABLE>
<TABLE>
<CAPTION>
At December 31, 1998
-----------------------
Actual As Adjusted
--------- ------------
<S> <C> <C>
Balance Sheet Data:
Cash and cash equivalents............................... $ 378 $
Working capital (deficit)............................... (4,354)
Total assets............................................ 7,397
Deferred subscription revenue........................... 5,503
Long-term debt, less current portion.................... 1,123
Redeemable convertible preferred stock.................. 7,316
Total stockholders' deficit (9,195)
</TABLE>
- --------
Please see Note 1 to our financial statements for an explanation of the
determination of the number of shares used in computing pro forma net loss per
share.
The as adjusted balance sheet data listed above reflects the sale of
shares of common stock offered at an assumed initial public offering price of
$ per share after deducting the estimated underwriting discount and
estimated offering expenses payable by us. Please see "Use of Proceeds" and
"Capitalization" for a discussion about how we intend to use the proceeds from
this offering and about our capitalization.
6
<PAGE>
Risk Factors
Any investment in our common stock involves a high degree of risk. You should
consider carefully the following information about these risks, together with
the other information contained in this prospectus, before you decide to buy
our common stock. If any of the following risks actually occur, our business
would likely suffer. In such case, the trading price of our common stock could
decline, and you may lose all or part of the money you paid to buy our common
stock.
Risks Related to Our Business
We may not achieve future profitability due to continued operating losses and
negative cash flows.
We have incurred significant net losses since our inception. As of December
31, 1998, we had an accumulated deficit of $11.4 million. We have incurred
substantial costs to expand into new markets, develop new products and create,
introduce and enhance our Web site. We expect operating losses and negative
cash flows to continue for the foreseeable future as we continue to incur
significant expenses. As a result, we will need to generate significant
revenues to achieve profitability. Even if we do become profitable, we cannot
assure you that we can sustain or increase profitability on a quarterly or
annual basis. If revenues grow more slowly than we anticipate, or if operating
expenses exceed our expectations or cannot be adjusted in response to slower
revenue growth, our business will be materially adversely affected. Please see
"Selected Financial Data" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and our financial statements for
detailed information related to our uncertain profitability.
We have only been operating on the Internet since 1998 and cannot assure you
that our Internet products will achieve market acceptance.
We only recently began offering our services on the Internet. During 1998,
over 90% of our revenue was a result of our information services products
delivered on CD-ROM and other non-Internet media. Less than 10% of our revenues
in 1998 were a result of our services and products delivered on the Internet.
We intend to continue to increase our reliance on the Internet for delivery of
our services and products. As a result, our future profitability will
increasingly rely upon the use of our information services and transaction
support products on the Internet. Our ability to obtain market acceptance for
our Internet products will depend on the following factors:
. our ability to transition our customers from the use of our services and
products on CD-ROM to the use of these services and products on the
Internet in a timely and efficient manner;
. our customers' acceptance of, and their ability to adapt to the use of,
our existing and future services and products on the Internet; and
. our ability to anticipate and adapt to the changing Internet market.
If our Internet-based information services or transaction support products
are not received favorably by our current customers, it may negatively affect
their use of our other products or cause new customers to choose a competitive
service over ours.
If we do not successfully develop new and enhanced services and products, our
revenues could decrease.
We will not be financially successful if we are unable to meet the
increasingly sophisticated needs of our customers through timely developments
and new and enhanced versions of our services and products. Our planned
development and enhancement efforts have inherent risks. We may experience
financial or technical difficulties that could prevent us from introducing new
or enhanced information services or transaction support products. Furthermore,
these new or enhanced services and products may contain problems that are
discovered after the products are introduced. We may need to significantly
modify the design of these products on the Internet to correct these problems.
Our business could be materially adversely affected if we experience
difficulties in introducing new or enhanced services and products or if these
services or products are not
7
<PAGE>
received favorably by our customers. Finally, development and enhancement of
our services and products will require significant additional expenses and
could strain our management, financial and operational resources. The lack of
market acceptance of our services or products or our inability to generate
satisfactory revenues from such development or enhancements to offset their
costs could have a material adverse effect on our business.
Our quarterly results of operations fluctuate which could cause our stock
price to fluctuate.
Our quarterly operating results have fluctuated significantly and are
expected to continue to fluctuate in the future due to a variety of factors,
many of which are outside of our control. It is possible that in some future
periods our results of operations may be below the expectations of public
market analysts and investors. In this event, the price of our common stock is
likely to fall. Factors contributing to these fluctuations include:
. the demand for and acceptance of information services and transaction
support products on the Internet in general or on our Web site;
. the loss of clients or revenue due to consolidation in the real estate
brokerage, lending, appraisal, insurance and investment industries;
. changes in rates paid for information services or transaction support
products in the commercial real estate industry or related industries
resulting from competition or other factors;
. changes in customer budgets;
. technical difficulties or system downtime affecting the Internet or the
operation of our Web site and our ability to upgrade and develop our
systems and infrastructure to minimize such difficulties in a timely and
effective manner;
. the amount and timing of our costs related to our product development,
marketing efforts and other initiatives;
. fees we may pay for distribution or content or other costs we may incur
as we expand our operations or geographic coverage;
. our costs related to acquisitions of businesses, technologies, services
and products;
. economic conditions or other factors specific to the real estate market
or the Internet as well as general economic and market conditions;
. changes in the privacy laws that may hinder our ability to gather
information necessary for our information services or transaction
support products; or
. the seasonality of our revenues.
Due to all of these factors and the other risks discussed in this section,
you should not rely on quarter-to-quarter comparisons of our results of
operations as an indication of our future performance.
Since we expect to be substantially dependent on revenues from our
information services and transaction support products offered on the Internet,
our quarterly revenues are likely to be particularly affected by the number of
visitors to our Web site. In addition, our operating expenses are based on our
expectations of our future revenues and are relatively fixed in the short-term.
We may be unable to adjust spending quickly enough to offset any unexpected
revenue shortfall. If we have a shortfall in revenues in relation to our
expenses, or if our expenses increase before our revenues do, then our business
for a particular quarter would be materially adversely affected. This could
affect the market price of our common stock. Please see "Management's
Discussion and Analysis of Financial Condition and Results of Operations" for
detailed information on our quarterly operating results.
We may need additional capital by the end of 2000.
We currently anticipate that the net proceeds of this offering, together with
available funds, will be sufficient to meet our anticipated needs until at
least the end of 2000. We may need to raise additional funds in
8
<PAGE>
the future in order (1) to fund more rapid expansion, (2) to develop new or
enhanced services or products, (3) to respond to competitive pressures, (4) to
acquire complementary businesses, technologies or services or (5) to conduct
more aggressive brand promotions. Additional financing may not be available on
terms favorable to us, if at all. If adequate funds are not available or not
available on acceptable terms, we may be unable to fund our expansion, take
advantage of acquisition opportunities, develop or enhance our services or
products, respond to competitive pressures or successfully promote our brand
name. Any such inability could have a material adverse effect on our business.
If we do not expand our geographic coverage our services and products could
become less desirable.
We believe our success is highly dependent on our ability to increase the
geographic coverage of our database. Currently our proprietary database
contains confirmed sales comparable records in 35 of the 74 largest markets in
the U.S. If we are not able to expand the geographic coverage of our database
into other markets, our business could be materially adversely affected. We
also plan to expand into selected international markets. We expect this
geographic expansion effort to impose additional burdens on our research, sales
and administrative resources. Please see "Business--Our Business Strategy" for
a discussion of our geographic expansion strategy.
If we cannot maintain the integrity and reliability of our proprietary
database, we may not be successful.
We cannot assure you that the information in our database will be
comprehensive, accurate or timely, particularly as we grow. Our success is
highly dependent on our customers' confidence in the comprehensiveness,
accuracy and timeliness of our proprietary database of confirmed commercial
real estate transactions and the software used to access our database. We
expect the task of establishing and maintaining such comprehensiveness,
accuracy and timeliness during the growth of our business to require
substantial effort and expense. Please see "Business--Our Proprietary Database"
for a discussion of how we maintain our proprietary database.
Cyclical economic swings in the real estate market could decrease demand for
our services and products.
The real estate industry traditionally has been subject to cyclical economic
swings which could materially adversely affect our business. Our business is
dependent on the real estate industry and related industries that supply goods
or services to, or invest in, the real estate industry. Changes in the real
estate market may affect demand for our services and products. These cyclical
economic swings may be caused by various factors, such as, changes in interest
rates and changes in economic conditions.
When interest rates are high or general economic conditions are weak, there
may be less sales activity in commercial real estate and on the part of
mortgage brokers and lenders. These cyclical economic swings could materially
adversely affect our business.
Consolidation of the real estate industry could negatively impact our
business.
The real estate industry is undergoing a period of consolidation, motivated
in part by a desire to reduce expenses. Such consolidation poses a number of
risks and could materially adversely affect our business. These risks include:
. a decrease in our client base;
. reduction in the size of our target market;
. creation of competitors with sufficiently greater bargaining power which
could cause price erosion;
. creation of competitors with access or rights to, or ownership of,
sources that provide the data we need for our proprietary database; and
. reduction in the number of sources from whom we obtain data for our
proprietary database.
9
<PAGE>
We may not be able to successfully develop our "COMPS.COM" brand name.
To be successful, we must strengthen awareness of our brand name. In order to
build our brand name, we must succeed in our marketing efforts, provide high-
quality services and products and increase the number of visitors to our Web
site. If our marketing efforts are not successful or if we cannot increase
awareness of our brand name, our business would be materially adversely
affected.
If we are unable to continue to develop our direct sales force, it could
materially adversely affect our business.
In order to support our growth, we need to substantially increase the size of
our direct sales force. Our ability to increase our direct sales force involves
a number of risks, including:
. the competition we face from other companies in hiring and retaining
sales personnel;
. our ability to integrate and motivate additional sales and sales support
personnel;
. our ability to manage a multi-location sales organization; and
. the length of time it takes new sales personnel to become productive.
There would be a material adverse effect on our business if we do not
continue to develop and maintain an effective direct sales force.
Intense competition may render our services and products uncompetitive or
obsolete.
The market for our Internet-related and non-Internet-related information
services and transaction support products is competitive. Our principal
competitive factors are:
. quality and depth of the underlying databases;
. the proprietary nature of methodologies, databases and technical
resources;
. the usefulness of the data and reports generated by our software;
. effectiveness of marketing and sales efforts;
. customer service and support;
. compatibility with the customer's existing information systems;
. vendor reputation;
. price;
. timeliness; and
. brand loyalty.
We compete directly and indirectly for customers and content providers with
the following categories of companies:
. publishers and distributors of traditional off-line information
services;
. online services or Web sites targeted to commercial real estate brokers,
appraisers, mortgage brokers, lenders, buyers and sellers of commercial
real estate properties and insurance companies; and
. public record providers.
We cannot assure you that our competitors will not develop services or
products that are equal or superior to ours or that achieve greater market
acceptance. We anticipate that the number of direct and indirect competitors
will increase in the future and could result in price reductions, reduced
margins, greater operating losses or loss of market share, any of which would
materially adversely affect our business. For further information about our
competition, please see "Business--Competition."
If we fail to be year 2000 compliant, it could harm our business.
We have not fully completed tests to assure that our information technology
systems will function properly in the year 2000. Our computer systems and
software programs may need to be upgraded in order to
10
<PAGE>
comply with year 2000 requirements, or we risk system failure or
miscalculations causing disruptions of normal business activities.
We estimate expenses to achieve year 2000 readiness will be $300,000,
$150,000 of which was expended prior to December 31, 1998. Until our testing is
complete and such vendors and providers are contacted, we will not be able to
completely evaluate whether our information technology systems or non-
information technology systems will need to be revised or replaced. If our
efforts to address year 2000 risks are not successful, or if suppliers or other
third parties with whom we conduct business do not successfully address such
risks, it could have a material adverse effect on our business. Please see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Impact of the year 2000" for detailed information on our state of
readiness, potential risks and contingency plans regarding the year 2000 issue.
If we do not effectively manage our growth, it could have a material adverse
effect on our business.
We have experienced growth in our business which we expect to continue. Such
growth has placed, and will continue to place, a significant strain on our
management systems and resources. We will need to continue to improve our
operational and financial systems and managerial controls and procedures. We
will need to continue to expand, train and manage our workforce. We expect that
our workforce will continue to increase for the foreseeable future. We will
have to maintain close coordination among our technical, accounting, finance,
marketing, sales and research departments. If we fail to effectively manage our
growth and address the above concerns it could have a material adverse effect
on our business.
If we do not successfully integrate acquired businesses with our business, it
could have a material adverse effect on our business.
Since October 1993, we have acquired six businesses and three product lines.
We may not be able to integrate our recent or any future acquisitions
successfully with our existing operations without substantial costs, delays or
other problems. As we integrate acquired businesses or product lines, we could
have difficulty in assimilating personnel and operations. In addition, the key
personnel of acquired companies may decide not to work for us. We could also
have difficulty in assimilating the acquired products, services or technologies
into our operations. These difficulties could disrupt our ongoing business,
distract our management and employees, increase our expenses and materially
adversely affect our results of operations due to accounting requirements such
as amortization of goodwill or other purchased intangibles. Furthermore, we may
incur debt or issue equity securities to pay for any future acquisitions. The
issuance of equity securities could be dilutive to our existing stockholders.
If we are unable to retain key personnel or attract new personnel, it could
have a material adverse effect on our business.
The loss of the services of any of our key personnel or our inability to
successfully attract and retain qualified personnel in the future would have a
material adverse effect on our business. Our future success depends on the
continued service of our key personnel, including Christopher A. Crane, our
President and Chief Executive Officer, Emmett R. DeMoss, our Vice President and
the Chairman of our REALBID division, Karen Goodrum, our Vice President of
Finance and Administration, Chief Financial Officer and Secretary, Walter W.
Papciak, our Executive Vice President of Sales, Marketing and Product
Development, and Michael Arabe, our Senior Vice President of Sales. Mr. Crane
is the only key person for whom we maintain life insurance (face amount of
$2,000,000). Our future success also depends on our ability to attract, retain,
integrate and motivate highly skilled researchers and other employees.
Competition for researchers and other employees in our industry is intense,
particularly in the San Diego area, where our headquarters are located. Please
see "Management" for detailed information on our key personnel.
11
<PAGE>
Increased users straining our systems and other systems malfunctions could
materially adversely affect our business.
The performance of our Web site is critical to our reputation, our ability to
attract customers and market acceptance of our Web site. All of our
communications and network infrastructure is hosted at our headquarters in San
Diego. We have in the past experienced system failures, including network,
software or hardware failures, that have interrupted or increased the response
time of our online services. In the future, the capacity of our software and
hardware could be strained by an increase in the use of our products on the
Internet as we migrate our customers to the Internet. Our ability to provide
uninterrupted, secure online services depends on our ability to protect our
facilities and equipment against damage from fire, earthquakes, power loss,
water damage, telecommunications failures, vandalism, computer viruses, hacker
attacks and other malicious acts, and similar unexpected material adverse
events. Customers may become dissatisfied if a system failure interrupts our
ability to provide access to our Web site. Since our insurance policies have
low coverage limits, our insurance may not adequately compensate us for any
losses that may occur due to any system failures or interruptions.
Our customers also depend on Internet service providers, online service
providers and other Web site operators for access to our Web site. Each of them
has experienced significant outages in the past, and could experience outages,
delays and other difficulties due to system failures unrelated to our systems.
Moreover, the Internet infrastructure may not be able to support continued
growth in its use. Any of these problems could materially adversely affect our
business.
We may not be able to adequately protect our proprietary rights.
It may be difficult to protect our proprietary rights. We regard our database
of confirmed commercial real estate transactions and the software used to
operate our Web site, as well as our various trademarks and copyrights, as
proprietary. We will continue to attempt to protect them under a combination of
copyright, trade secret and trademark laws, as well as by contractual
restrictions on employees and third parties. Despite these precautions, it may
be possible for unauthorized parties to copy our services or otherwise obtain
and use information that we regard as proprietary. Existing trade secrets and
copyright laws provide only limited protection. Certain provisions of other
license and distribution agreements that we intend to use, including provisions
protecting against unauthorized use, copying, transfer and disclosure, may be
unenforceable under the laws of certain jurisdictions. Furthermore, we may be
required to negotiate limits on these provisions from time to time. In
addition, the laws of some foreign countries do not protect our proprietary
rights to the same extent as do the laws of the U.S. The steps we take may not
be adequate to deter misappropriation of proprietary information. We also may
not be able to detect unauthorized use and take appropriate steps to enforce
our intellectual property rights. Significant and protracted litigation may be
necessary to protect our intellectual property rights, to determine the scope
of the proprietary rights of others or to defend against claims for
infringement. Third parties may assert claims against us alleging infringement,
misappropriations or other violation of proprietary rights, whether or not such
claims have merit. Such claims can be time consuming and expensive to defend
and could require us to cease the use and sale of allegedly infringing services
and products, to incur significant litigation costs and expenses, to develop or
acquire non-infringing technology and to obtain licenses to the alleged
infringing technology. We may not be able to develop or acquire alternative
technologies or obtain such licenses on commercially acceptable terms.
If we are not able to meet our customers' needs, it could result in liability
for us.
If our services or products either fail to satisfy a customer's needs or have
a material adverse impact on a customer, the customer might bring a claim for
damages against us, even if we are not responsible for such failure. The
limitations of liability set forth in customer contracts may not be enforceable
and may not otherwise protect us from liability for damages. The successful
assertion of one or more large claims against us that exceed available
insurance coverages, or changes in our insurance policies, such as premium
increases or the imposition of large deductibles or co-insurance requirements
could materially adversely affect our business.
12
<PAGE>
Risks Related To Our Industry
If Internet usage does not continue to grow, it could materially adversely
affect our business.
The Internet is relatively new and is rapidly evolving. Our business would be
materially adversely affected if Internet usage does not continue to grow.
Internet usage may be inhibited for a number of reasons, such as:
. the Internet infrastructure may not be able to support the demands
placed on it;
. security and authentication concerns with respect to attempts by
unauthorized computer users to penetrate network security and
transmission over the Internet of confidential information, such as
credit card numbers, may remain; and
. privacy concerns, particularly because, for a variety of information
gathering purposes, Web sites typically place certain information on a
user's hard drive without the user's knowledge or consent.
We may not be able to adapt to the rapid technological changes to the Internet
and Internet Products.
To be successful, we must adapt to the rapid technological changes to the
Internet and Internet products by continually enhancing our Web site and
introducing and integrating new services and products to capitalize on the
technological advances in the Internet. This process is costly and we cannot
assure you that we will be able to successfully integrate our services and
products to the technological advances in the Internet. The collection,
storage, management and dissemination of commercial real estate information
from a centralized database on the Internet is a recent and evolving
development. Our market is characterized by rapidly changing technologies,
evolving industry standards, increasingly sophisticated customer needs and
frequent new product introductions. These factors are exacerbated by the rapid
technological change experienced by the computer and software industries. We
could incur substantial costs if we need to modify our services or
infrastructure in order to adapt to these changes. If we incurred significant
costs without adequate results or we were unable to adapt to rapid
technological changes, it could have a material adverse effect on our business.
Adoption of new laws and government regulations relating to the Internet could
harm our business.
Our business could be materially adversely affected by the adoption or
modification of laws or regulations in the U.S. or abroad relating to the
Internet. Laws and regulations directly applicable to Internet communications
and commerce are becoming more prevalent. Such legislation could dampen the
growth in use of the Internet generally and decrease the acceptance of the
Internet as a communications and commercial medium. The governments of states
or foreign countries might attempt to regulate our transmissions or levy sales
or other taxes relating to our activities. The laws governing the Internet,
however, remain largely unsettled, even in areas where there has been some
legislative action. It may take years to determine whether and how existing
laws such as those governing intellectual property, privacy, libel and taxation
apply to the Internet and Internet commerce. In addition, the growth and
development of the market for Internet commerce may prompt calls for more
stringent consumer protection laws, both in the U.S. and abroad, that may
impose additional burdens on companies conducting business over the Internet.
The growth and development of the market for Internet commerce may also prompt
calls for widening access on the Internet to public records, including records
concerning the commercial real estate industry.
Internet security concerns could hinder Internet commerce and materially
adversely affect our business.
We may be required to expend significant capital and other resources to
protect against security breaches on our Web site or to alleviate problems
caused by such breaches. If any compromise of our security were to occur, it
could damage our reputation and expose us to a risk of loss, litigation and
possible liability. A significant barrier to online commerce and communications
is the need for secure transmission of confidential information over public
networks. Concerns over the security of transactions conducted on the Internet
and other online services, as well as user's desires for privacy, may also
inhibit the growth of the Internet and other online services especially as a
means of conducting commercial transactions. Our services involve the storage
and transmission of proprietary information, such as credit card numbers and
other confidential information.
13
<PAGE>
We cannot assure you that our security measures will prevent security breaches
or that our failure to prevent such security breaches will not have a material
adverse effect on our business. Although credit card companies and others are
in the process of developing anti-theft and anti-fraud protections, and while
we are continually monitoring this problem, at the present time the risk from
such activities could have a material adverse effect on us. We cannot assure
you that advances in computer capabilities, new discoveries in the field of
cryptography or other events or developments will not result in a compromise or
breach of the algorithms used by us to protect customer transaction data. A
party who is able to circumvent our security measures could misappropriate
confidential information or cause interruptions in our operations.
We may be subject to legal liability for displaying or distributing
information over the Internet.
Because content on our Web site is distributed to others, we may be subjected
to claims for defamation, negligence or copyright or trademark infringement or
claims based on other theories. These types of claims have been brought,
sometimes successfully, against Internet services in the past. We could also be
subjected to claims based upon the content that is accessible from our Web site
through links to other web sites or information on our Web site supplied by
third parties. Our insurance may not adequately protect us against these types
of claims. Even to the extent such claims do not result in liability to us, we
could incur significant costs in investigating and defending against such
claims. Our potential liability for information carried on or disseminated
through our Web site could require us to implement measures to reduce our
exposure to such liability, which may require the expenditure of substantial
resources and limit the attractiveness of our service to users.
We also enter into agreements with customers under which we are entitled to
receive a flat fee related to the support of purchase of commercial properties
through our Web site using REALBID or other transaction support products that
we offer. Such arrangements may expose us to additional legal risks and
uncertainties, including regulation by local, state, federal and foreign
authorities and potential liabilities to property buyers, even if we are not
selling such properties. The indemnification provided to us in our agreements
with these parties, if available, may not be adequate.
Risks Related To This Offering
The number of shares eligible for public sale after this offering could cause
our stock price to decline.
The market price of our common stock could decline as a result of sales of a
large number of shares of our common stock in the market after this offering or
the perception that such sales could occur. Such sales also might make it more
difficult for us to sell equity securities in the future at a price that we
deem appropriate. After this offering, we will have outstanding shares
of common stock. Of these shares, the shares being offered hereby are
freely tradable.
All of our directors and officers, stockholders, optionholders and
warrantholders, who, as of December 31, 1998, held a total of 13,047,298 shares
of our outstanding or issuable common stock, on a pre-split basis, have entered
into lock-up agreements. Under these lock-up agreements, they have agreed that
for a period of 180 days from the date of this prospectus, they will not,
without the prior written consent of Volpe Brown Whelan & Company, LLC
(1) offer, sell, contract to sell, make any short sale, pledge or otherwise
dispose of, directly or indirectly, any shares of common stock, or options to
acquire shares of common stock or securities convertible into or exchangeable
for, or any other rights to purchase or acquire, common stock or (2) enter into
swap or other agreements that transfer, in whole or in part, any of the
economic consequences or ownership of common stock.
As of December 31, 1998, options to purchase a total of 2,385,449 shares of
common stock, on a pre-split basis, were outstanding, of which options to
purchase 679,623 shares were exercisable. Of the options to purchase 1,705,826
shares of common stock that were not exercisable, options to purchase 152,000
shares of common stock, on a pre-split basis, shall immediately vest and become
exercisable upon the closing of this offering. Upon the closing of this
offering, we intend to file a registration statement to register for resale the
2,800,000 shares of common stock, on a pre-split basis reserved for issuance
under our stock option plans. We
14
<PAGE>
expect such registration statement to become effective immediately upon filing.
Shares issued upon the exercise of stock options granted under our stock option
plans will be eligible for resale in the public market from time to time
subject to vesting and, in the case of certain options, the expiration of the
lock-up agreements referred to below.
As of December 31, 1998, certain stockholders and warrantholders, holding
approximately 5,844,489 shares of outstanding or issuable common stock, on a
pre-split basis, have the right, subject to certain conditions and limitations,
to include their shares in certain registration statements relating to our
securities. By exercising their registration rights and causing a large number
of shares to be registered and sold in the public market, these holders may
cause the price of the common stock to fall. In addition, any demand to include
such shares in our registration statements could have a material adverse effect
on our ability to raise needed capital. Please see "Management--Benefit Plans,"
"Principal and Selling Stockholders," "Description of Securities--Registration
Rights," "Shares Eligible for Future Sale" and "Underwriting."
The liquidity of our stock is uncertain, since it has never been publicly
traded.
Prior to this offering, there has been no public market for our common stock.
We cannot predict if an active trading market in our common stock will develop
or how liquid that market might become. The market price of the common stock
may decline below the initial public offering price. The initial public
offering price for the shares will be determined by negotiations between us and
the representatives of the underwriters and may not be indicative of prices
that will prevail in the trading market. Please see "Underwriting" for more
information regarding how the initial public offering price was determined.
The market price of our stock may be materially adversely affected by market
volatility.
The stock market has experienced extreme price and volume fluctuations. The
market prices of the securities of Internet-related companies have been
especially volatile. The trading price of our common stock could be subject to
wide fluctuations in response to a number of factors, including:
. our quarterly results of operations;
. changes in earnings estimates by analysts and whether our earnings meet
or exceed such estimates;
. announcements of technological innovations by us or our competitors;
. additions or departures of key personnel;
. other matters discussed elsewhere in this prospectus; and
. other events or factors, which may be beyond our control.
In the past, companies that have experienced volatility in the market price
of their stock have been the object of securities class action litigation. If
we were the object of securities class action litigation, it could result in
substantial costs and a diversion of our management's attention and resources.
We have broad discretion regarding the use of the proceeds from this offering.
We have not identified specific uses for most of the proceeds from this
offering. Our management can spend most of the proceeds from this offering in
ways with which the stockholders may not agree. Please see "Use of Proceeds"
for detailed information on our intended use of the proceeds of this offering.
The interests of our controlling stockholders may conflict with your
interests.
We anticipate that the executive officers, directors and entities affiliated
with them will, in the aggregate, beneficially own approximately % of our
outstanding common stock following the completion of this offering. These
stockholders will be able to exercise control over all matters requiring
approval by our stockholders, including the election of directors and approval
of significant corporate transactions. This
15
<PAGE>
concentration of ownership may also have the effect of delaying or preventing a
change in control of us. Please see "Management" and "Principal and Selling
Stockholders" for detailed information on the beneficial ownership of our
executive officers, directors and affiliates.
Anti-takeover provisions in our charter documents and Delaware law could make
a third-party acquisition of us difficult.
Certain provisions of our restated certificate of incorporation, our restated
bylaws and Delaware law could make it more difficult for a third party to
acquire us, even if doing so might be beneficial to our stockholders. Please
see "Description of Securities" for detailed information on these provisions.
You will suffer dilution in the value of your shares.
Investors purchasing shares in this offering will incur immediate and
substantial dilution in net tangible book value per share. To the extent
outstanding options to purchase common stock are exercised, there will be
further dilution. Please see "Dilution" for detailed information on dilution
resulting from this offering.
16
<PAGE>
Use of Proceeds
We estimate that the net proceeds from the sale of the shares offered
by us will be approximately $ million, assuming an initial public
offering price of $ per share and after deducting the estimated
underwriting discounts and commissions and estimated offering expenses payable
by us. If our portion of the underwriters' over-allotment is exercised in full,
we estimate that such net proceeds will be approximately $ million.
We intend to use the net proceeds of this offering for working capital and
other general corporate purposes (approximately $ million), including
expansion of our proprietary database, enhancement and development of existing
and new information services and transaction support products and geographic
expansion. We may also use a portion of the proceeds for strategic alliances
and acquisitions. However, we currently have no strategic alliances or material
acquisitions planned.
We intend to use a portion of the net proceeds of this offering for repayment
of $2.1 million of debt with various maturity dates between April 1999 and
January 2002. Approximately $1.5 million of this debt bears interest at an
annual rate of 8.75% during the term of the loan and a one-time 15% interest
balloon payment is due upon completion of the term. The loan proceeds from
$300,000 of this $1.5 million in debt loaned to us in October 1998 were used to
acquire REALBID, LLC. Of the remaining approximately $600,000 of debt, $350,000
bears no interest and $250,000 will bear interest at 8% beginning December 1,
1999.
We have not yet determined the amount of net proceeds to be used specifically
for each of the foregoing purposes other than the repayment of debt.
Accordingly, management will have significant flexibility in applying the net
proceeds of this offering. Pending any such use, as described above, we intend
to invest the net proceeds in interest-bearing instruments. We will not receive
any proceeds from the sale of shares by the selling stockholders. Please see
"Principal and Selling Stockholders" for a description of shares to be sold by
selling stockholders.
Dividend Policy
We have never declared or paid any cash dividends on our capital stock. We
currently intend to retain future earnings to support operations and to finance
the expansion of our business. Any future determination to pay cash dividends
will be at the discretion of our board of directors and will be dependent on
financial condition, operating results, capital requirements and other factors
that our board deems relevant.
17
<PAGE>
Capitalization
The following table sets forth on a pre-split basis our capitalization as of
December 31, 1998 on an actual basis and as adjusted to give effect to the
receipt by us of the estimated net proceeds from the sale of shares
offered hereby at an assumed initial public offering price of $ per
share. This information should be read in conjunction with our financial
statements and the notes relating to such statements appearing elsewhere in
this prospectus. This information is based on the number of shares of common
stock outstanding on December 31, 1998. It excludes the following shares that
we may issue: (1) 2,385,449 shares upon the exercise of options outstanding at
a weighted average exercise price of $0.86 per share and (2) 213,068 shares
upon the exercise of warrants outstanding at a weighted average exercise price
of $1.76 per share. Please see "Management--Benefit Plans," "Description of
Securities" and the more detailed financial statements and notes appearing
elsewhere in this prospectus.
<TABLE>
<CAPTION>
December 31, 1998
---------------------
Actual As Adjusted
------- ------------
(dollars in
thousands)
<S> <C> <C>
Long-term debt, less current portion..................... $ 1,123
Redeemable convertible preferred stock:..................
Preferred stock, $0.01 par value, 5,000,000 shares
authorized on an actual basis; shares authorized on an
as adjusted basis; 4,908,126 shares issued and
outstanding on an actual basis; and no shares issued
and outstanding on an as adjusted basis............... 7,316
Stockholders' equity (deficit):
Common stock, $0.01 par value, 22,500,000 shares of
Class A common stock and 2,500,000 shares of Class B
common stock authorized on an actual basis; 4,773,860
shares of Class A common stock and 43,500 shares of
Class B common stock issued and outstanding on an
actual basis; shares issued and outstanding on
an as adjusted basis.................................. 30
Additional paid-in capital............................. 4,760
Deferred compensation.................................. (2,539)
Accumulated deficit.................................... (11,446)
------- ------------
Total stockholders' equity (deficit)..................... (9,195)
------- ------------
Total capitalization................................. $ (756)
======= ============
</TABLE>
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<PAGE>
Dilution
Our pro forma net tangible book value as of December 31, 1998, after giving
effect to (1) the automatic conversion of each share of Class B common stock
into one share Class A common stock and the renaming of such stock as "common
stock," (2) the automatic conversion of each share of our preferred stock into
one share of our common stock, (3) the exercise of warrants outstanding to
purchase 723,295 shares at a weighted average exercise price of $0.01 per share
and (4) a -for- stock split, was $ , or $ per
share of common stock. Pro forma net tangible book value per share is equal to
the amount of our total tangible assets less total liabilities, divided by the
number of shares of common stock outstanding as of December 31, 1998. Assuming
the sale by us of the shares offered hereby at an assumed initial
public offering price of $ per share and after deducting underwriting
discounts and estimated offering expenses, and the application of the estimated
net proceeds therefrom, our pro forma net tangible book value as of December
31, 1998 would have been $ , or $ per share of common stock. This
represents an immediate increase in pro forma net tangible book value of
$ per share to existing stockholders and an immediate dilution in pro
forma net tangible book value of $ per share to new investors. The
following table illustrates this per share dilution:
<TABLE>
<S> <C> <C>
Assumed initial public offering price per share.............. $
Pro forma net tangible book value per share as of December
31, 1998.................................................. $
Increase attributable to new investors.....................
--------
Pro forma net tangible book value per share after this
offering....................................................
--------
Pro forma dilution per share to new investors................ $
========
</TABLE>
The following table summarizes, on a pro forma basis as of December 31, 1998,
after giving effect to the automatic conversion of all outstanding shares of
preferred stock into common stock, the total number of shares of common stock
purchased from us, the total consideration paid to us and the average price per
share paid by existing stockholders and by new investors:
<TABLE>
<CAPTION>
Total
Shares Purchased Consideration
----------------- ------------------ Average Price
Number Percent Amount Percent Per Share
--------- ------- ---------- ------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders........ % $ % $
New investors................
--------- ----- ---------- -----
Total..................... 100.0% 100.0%
========= ===== ========== =====
</TABLE>
The tables and calculations above assume no exercise of outstanding options
or warrants, other than those warrants exercisable for $0.01 per share. At
December 31, 1998, on a pre-split basis there were (1) 2,385,449 shares
issuable upon the exercise of options outstanding at a weighted average
exercise price of $0.86 per share, (2) 213,068 shares issuable upon the
exercise of warrants outstanding at a weighted average exercise price of $1.76
per share and (3) 512,909 shares available for issuance under our stock option
plans. To the extent that these options or warrants are exercised, there will
be further dilution to new investors. Please see "Management--Benefit Plans."
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<PAGE>
Selected Financial Data
The following selected financial data should be read in conjunction with the
financial statements and the notes to such statements and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included elsewhere in this prospectus. The statement of operations data for the
three years ended December 31, 1998, and the consolidated balance sheet data at
December 31, 1997 and 1998, are derived from our financial statements which
have been audited by Ernst & Young LLP, independent auditors, and are included
elsewhere in this prospectus. The statement of operations data for the two
years ended December 31, 1995, and the consolidated balance sheet data at
December 31, 1994, 1995 and 1996 are derived from audited financial statements
not included in this prospectus. Historical results are not necessarily
indicative of the results to be expected in the future. The pro forma statement
of operations data gives effect to our acquisition of REALBID, LLC as if it had
occurred on January 1, 1998.
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------
Pro Forma
1994 1995 1996 1997 1998 1998
------ ------- ------- ------- ------- ---------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Net revenues............. $6,030 $ 6,716 $ 8,141 $10,450 $12,806 $13,029
Cost of revenues......... 2,674 3,488 4,357 5,054 5,746 5,791
------ ------- ------- ------- ------- -------
Gross profit............. 3,356 3,228 3,784 5,396 7,060 7,238
Operating expenses:
Selling and marketing.. 2,306 2,072 2,813 3,408 4,182 4,182
Product development and
engineering........... -- -- 376 768 1,230 1,230
General and
administrative........ 1,743 2,527 2,835 2,525 2,936 3,638
------ ------- ------- ------- ------- -------
Total operating
expenses............ 4,049 4,599 6,024 6,701 8,348 9,050
------ ------- ------- ------- ------- -------
Loss from operations..... (693) (1,371) (2,240) (1,305) (1,288) (1,812)
Other income (expense),
net..................... (9) 12 (67) (252) (260) (260)
------ ------- ------- ------- ------- -------
Net loss................. (702) (1,359) (2,307) (1,557) (1,548) (2,072)
Dividend accretion on
preferred stock 63 299 299 299 363 363
------ ------- ------- ------- ------- -------
Net loss attributable to
common stockholders..... $ (765) $(1,658) $(2,606) $(1,856) $(1,911) $(2,435)
====== ======= ======= ======= ======= =======
Net loss per share
attributable to common
stockholders, basic and
diluted................. $(0.12) $ (0.35) $(0.55) $ (0.39) $ (0.40) $ (0.51)
====== ======= ======= ======= ======= =======
Shares used in computing
net loss per share
attributable to common
stockholders, basic and
diluted................. 6,408 4,774 4,774 4,774 4,795 4,795
====== ======= ======= ======= ======= =======
Pro forma net loss per
share, basic and
diluted................. $ (0.16) $ (0.22)
======= =======
Shares used in computing
pro forma net loss per
share, basic and
diluted................. 9,635 9,635
======= =======
</TABLE>
<TABLE>
<CAPTION>
At December 31,
--------------------------------------
1994 1995 1996 1997 1998
------ ------ ------ ------ ------
(in thousands, except per share
data)
<S> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash and cash equivalents............. $2,866 $ 260 $ 578 $ 352 $ 378
Working capital (deficit)............. 1,225 (1,119) (2,056) (3,053) (4,354)
Total assets.......................... 4,687 4,714 4,224 4,091 7,397
Deferred subscription revenue......... 2,152 2,670 3,197 4,023 5,503
Long-term debt, less current portion.. 230 777 1,533 1,822 1,123
Redeemable convertible preferred
stock................................ 4,919 5,218 5,517 5,816 7,316
Total stockholders' deficit........... (3,414) (5,072) (7,678) (9,505) (9,195)
</TABLE>
Please see Note 1 to the financial statements appearing elsewhere in this
prospectus for the determination of number of shares used in computing basic
and diluted loss per share.
20
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following discussion of our financial condition and results of operations
should be read in conjunction with the financial statements and the notes to
those statements included elsewhere in this prospectus. This discussion may
contain forward-looking statements that involve risks and uncertainties. Our
actual results may differ materially from those anticipated in these forward-
looking statements as a result of certain factors, such as those set forth
under "Risk Factors" and elsewhere in this prospectus.
Overview
We are a leading national provider of confirmed commercial real estate sales
information both offline and on the Internet. We have also recently begun
leveraging our extensive database to facilitate commercial real estate
transactions on the Internet. Over the last 17 years, we have developed a
highly evolved data collection and confirmation system for providing
information on commercial real estate properties. We believe we have
established the foundation to be the trusted online resource linking commercial
real estate brokers, lenders, appraisers, insurers and other professionals by
efficiently distributing market information on the Internet.
In January 1982, we first began providing confirmed sales information on
commercial properties in San Diego County. From 1982 through 1985, we expanded
our coverage throughout Southern California to Orange, Riverside, San
Bernardino and Los Angeles counties and to Phoenix and Tucson, Arizona. We
continued our geographic expansion from 1987 through 1992 with coverage of
Northern California, Las Vegas and Seattle. During the period from June 1994
through December 1998, we further broadened our geographic reach to cover
additional key markets including Washington D.C., New York, Chicago, Boston,
Atlanta, Denver, Baltimore, Dallas/Fort Worth and Miami. This expansion was
driven by both internal growth and acquisitions.
We originally offered paper-based commercial real estate transaction
information. In 1986, we introduced our CallCOMPS service, which permitted
customers to call in and obtain sales transaction information, and, in 1990, we
introduced a DOS-based subscription product. Through 1996, the majority of our
revenues continued to come from print subscriptions. In October 1996, we began
to offer our services on CD-ROM, allowing for the computerized manipulation of
data to provide more customized reports. Most recently, in January 1998, we
began to offer our information services on the Internet. This has allowed our
customers to receive updated commercial real estate transaction information
more frequently and analyze the data more quickly and easily. Delivery of our
information on the Internet and other electronic media has provided additional
value to customers, resulting in increased revenues from subscriptions and one-
time, fee-based transactions. Less than 10% of our 1998 revenues were derived
from delivery of our services and products on the Internet. We expect this
percentage to increase as more of our customers transition to using our
services and products on the Internet.
In November 1998, we acquired the assets of REALBID, LLC, a real estate
marketing services company which supports commercial real estate transactions
on the Internet. As a result of this acquisition, our 1998 pro forma net
revenues were $13.0 million and our pro forma operating expenses were $9.0
million, compared to our 1998 actual net revenues of $12.8 million and our
actual operating expenses of $8.3 million. The purchase price of the
acquisition totaled $2.3 million, which consisted of $163,000 in cash, stock
options granted to the principals valued at approximately $2.1 million and
acquisition costs of $54,000. Intangible assets of $2.2 million were recorded
as a result of this acquisition. These intangible assets will be amortized over
their estimated useful lives, ranging from three to five years, and will be
primarily allocated to general and administrative expenses. In 1998, we
amortized $82,000 relating to the intangible assets of REALBID, LLC. We
currently expect to amortize the following amounts relating to the intangible
assets of REALBID, LLC in the future: 1999--$489,000; 2000--$489,000; 2001--
$475,000; 2002--$396,000; and 2003--$313,000.
Substantially all of our revenues have been derived from licensing our
confirmed sales comparable information, either on a subscription or a per use
basis, both offline and, to a lesser extent, on the Internet.
21
<PAGE>
In 1998, approximately 75% of our information licensing revenue was derived
from subscription contracts and approximately 25% was derived from fees paid on
a per use basis. The subscription licenses range from one to three years and
generally renew automatically for successive one-year terms. Many of the
license rates increase at the time of renewal. Subscribers pay contract license
fees on an annual, semi-annual, quarterly or monthly basis in advance of their
license term. We recognize this revenue on a straight line basis over the life
of the contract. Accordingly, contract license fees which are invoiced from a
new contract or upon contract renewal result in deferred revenue.
Since our November 1998 acquisition of REALBID, LLC, we have also begun to
derive revenues from our transaction support services. For the period of
November 6, 1998 through December 31, 1998, these revenues totaled
approximately $17,000. The 1998 pro forma transaction support services revenues
totaled approximately $240,000. We derive all of our transaction support
product revenues from the delivery of products on the Internet. We recognize
these revenues as services are provided.
In order to expand our operations, we anticipate incurring additional
expenses to: (1) implement new Internet-related products; (2) continue the
integration of our REALBID services with our database; (3) further automate the
data collection process; and (4) integrate acquired databases into our
standardized format. We also intend to hire additional programmers and research
employees as needed to implement our product development efforts and to
continue to expand our database of commercial real estate. In addition, we
intend to further expand our sales force and marketing team to further develop
new and existing strategic relationships and strengthen our brand name as we
enter new markets. Lastly, we anticipate incurring additional costs related to
being a public company, including director's and officer's liability insurance,
investor relation programs and professional service fees. As a result of these
expenditures and other related factors, we expect to continue to incur losses
for the forseeable future.
We have incurred significant net losses since our inception. As of December
31, 1998, we had an accumulated deficit of $11.4 million. Also, in connection
with the grant of certain stock options to employees during 1998, we recorded
deferred compensation of approximately $2.7 million for the year ended
December 31, 1998, representing the difference between the fair value of our
common stock for accounting purposes and the exercise price of such options at
the date of grant. Such amount is presented as a reduction of stockholders'
equity and amortized over the vesting period of the applicable options,
generally five years. In 1998, we recorded $118,000 in compensation expense and
expect to record the following amounts in the future: 1999--$606,000; 2000--
$606,000; 2001--$606,000; 2002--$544,000; and 2003--$176,000.
Results of Operations
The following table sets forth certain statement of operations data expressed
as a percentage of net revenues for the periods indicated:
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------
1996 1997 1998
------- ------- -------
<S> <C> <C> <C>
Statement of Operations Data:
Net revenues................................... 100 % 100 % 100 %
Cost of revenues............................... 54 48 45
------- ------- -------
Gross profit................................... 46 52 55
Operating expenses:
Selling and marketing........................ 34 33 32
Product development and engineering.......... 5 7 10
General and administrative................... 35 24 23
------- ------- -------
Total operating expenses................... 74 64 65
------- ------- -------
Loss from operations........................... (28) (12) (10)
Other expense, net............................. (0) (3) (2)
------- ------- -------
Net loss....................................... (28)% (15)% (12)%
</TABLE>
22
<PAGE>
Comparison of Years Ended December 31, 1998, 1997 and 1996
Net Revenues
Our net revenues for 1998 were $12.8 million, an increase of $2.4 million or
22.5% from 1997. Our net revenues for 1997 were $10.4 million, an increase of
$2.3 million or 28.4% from $8.1 million in 1996. In both years the increase was
primarily due to an increase in subscriptions as a result of geographic
expansion and further penetration of our existing markets. We had no customer
that accounted for more than 5% of our net revenues in 1998, 1997 or 1996.
Cost of Revenues
Cost of revenues consists primarily of compensation and benefits for research
personnel. Our cost of revenues for 1998 was $5.7 million, an increase of
$700,000 or 13.7% from 1997. Cost of revenues for 1997 was $5.1 million, an
increase of $700,000 or 16.0% from $4.4 million in 1996. In both years, the
increase in dollar amount was primarily due to an increase in sales transaction
volume, and geographic expansion and the hiring of additional research
employees. In addition, cost of revenues increased in 1997 due to the
conversion of print subscriptions to CD-ROM format, as well as the full
amortization of an asset relating to a 1995 purchase agreement which was
amended in November 1997. Cost of revenues as a percentage of net revenues
decreased to 45% for the year ended December 31, 1998 from 48% for the year
ended December 31, 1997 and from 54% for the year ended December 31, 1996. In
each year, the percentage decrease was primarily due to increased revenues
during periods when certain costs remained relatively fixed.
Selling and Marketing Expenses
Selling and marketing expenses consist primarily of compensation and benefits
for sales and marketing personnel, as well as sales commissions to our direct
sales force. Our selling and marketing expenses for 1998 were $4.2 million, an
increase of $800,000 or 22.7% from 1997. Our selling and marketing expenses for
1997 were $3.4 million, an increase of $600,000 or 21.2% from $2.8 million in
1996. In both years, the increases in dollar amount were primarily due to
increases in commission expense, increases in telesales and marketing
employees, and increases in direct marketing and technical support pertaining
to the promotion of our COMPSLink/Windows product. As a percentage of net
revenues, such expenses decreased to 32% for the year ended December 31, 1998
from 33% for the year ended December 31, 1997 and 34% for the year ended
December 31, 1996. The percentage decreases were primarily due to increased
revenues during periods when certain costs remained relatively fixed.
Product Development and Engineering Expenses
Product development and engineering expenses consist primarily of
compensation and benefits for software engineers and quality assurance
personnel and expenses for contract programmers and developers. Our product
development and engineering expenses for 1998 were $1.2 million, an increase of
$500,000 or 60.2% from 1997. Our product development and engineering expenses
for 1997 were $800,000, an increase of $400,000 or 104% from $400,000 in 1996.
As a percentage of net revenues, product development and engineering expenses
increased to 10% for the year ended December 31, 1998 from 7% for the year
ended December 31, 1997 and 5% for the year ended December 31, 1996. The dollar
and percentage increases were primarily due to the hiring of additional
software engineers and quality assurance personnel for development of new
Internet-related products.
General and Administrative Expenses
General and administrative expenses consist primarily of compensation and
benefits for finance and administrative personnel, professional fees,
amortization expense, insurance expenses and charges relating to merchant
credit card fees and bad debts. Our general and administrative expenses for
1998 were $2.9 million, an increase of $400,000 or 16.3% from 1997. This dollar
increase in general and administrative expenses was
23
<PAGE>
primarily due to efforts in connection with our acquisition strategy, increases
in professional fees, increased expenses incurred in connection with increase
in our work force and related payroll expenses. Our general and administrative
expenses for 1997 were $2.5 million, a decrease of $300,000 or 10.9% from $2.8
million in 1996. As a percentage of net revenues, such expenses decreased to
23% for the year ended December 31, 1998 from 24% for the year ended December
31, 1997 and 35% for the year ended December 31, 1996. The dollar decrease in
1997 and the decreases in such expenses as a percentage of net revenues in both
years were primarily due to decreases in payroll expense and professional fees.
Other Expense, Net
Other expense, net consists primarily of interest expense on our debt less
the amount of interest we earn on our cash and short-term investments. Total
other expense, net for 1998 was $260,000, an increase of $8,000 or 3.2% from
1997. Total other expense, net for 1997 was $252,000, an increase of $185,000
or 276% from $67,000 in 1996. In both years, the increase in other expense was
primarily due to interest expense under a loan agreement.
Quarterly Results Of Operations
The following table sets forth certain unaudited quarterly statement of
operations data for each of the eight quarters in the two year period ended
December 31, 1998. In the opinion of management, this information has been
prepared substantially on the same basis as the audited financial statements
appearing elsewhere in this prospectus, and all necessary adjustments,
consisting only of normal recurring adjustments, have been included in the
amounts stated below to present fairly the unaudited quarterly results of
operations data.
<TABLE>
<CAPTION>
Three Months Ended
------------------------------------------------------------------------
March 31, June 30, Sept 30, Dec 31, March 31, June 30, Sept 30, Dec 31
1997 1997 1997 1997 1998 1998 1998 1998
--------- -------- -------- ------- --------- -------- -------- -------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Net revenues............ $2,181 $2,562 $2,632 $3,075 $2,947 $3,226 $3,316 $ 3,317
Cost of revenues........ 1,163 1,191 1,264 1,436 1,287 1,306 1,468 1,685
------ ------ ------ ------ ------ ------ ------ -------
Gross profit............ 1,018 1,371 1,368 1,639 1,660 1,920 1,848 1,632
Operating expenses:
Selling and
marketing............. 775 848 866 919 909 917 979 1,377
Product development
and engineering....... 156 179 190 243 212 318 395 305
General and
administrative........ 502 560 569 894 672 665 679 920
------ ------ ------ ------ ------ ------ ------ -------
Total operating
expenses............ 1,433 1,587 1,625 2,056 1,793 1,900 2,053 2,602
------ ------ ------ ------ ------ ------ ------ -------
Loss from operations... (415) (216) (257) (417) (133) 20 (205) (970)
Other expense, net..... (83) (85) (57) (27) (82) (73) (38) (67)
------ ------ ------ ------ ------ ------ ------ -------
Net loss................ $ (498) $ (301) $ (314) $ (444) $ (215) $ (53) $ (243) $(1,037)
====== ====== ====== ====== ====== ====== ====== =======
</TABLE>
24
<PAGE>
The following table sets forth, for the periods indicated, the percentage of
net revenues represented by each item in our statement of operations.
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------------------------------------------------
March 31, June 30, Sept 30, Dec 31, March 31, June 30, Sept 30, Dec 31
1997 1997 1997 1997 1998 1998 1998 1998
--------- -------- -------- ------- --------- -------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Net Revenues............ 100% 100% 100% 100% 100% 100% 100% 100%
Cost of revenues........ 53 46 48 47 44 40 44 51
---- ---- ---- ---- ---- ---- ---- ----
Gross profit............ 47 54 52 53 56 60 56 49
Operating expenses:
Selling and
marketing............. 36 33 33 30 31 28 30 41
Product development
and engineering....... 7 7 7 8 7 10 12 9
General and
administrative........ 23 22 22 29 23 21 20 28
---- ---- ---- ---- ---- ---- ---- ----
Total operating
expenses............ 66 62 62 67 61 59 62 78
---- ---- ---- ---- ---- ---- ---- ----
Loss from operations... (19) (8) (10) (14) (5) 0 (6) (29)
Other expense, net..... (4) (4) (2) (0) (2) (2) (1) (2)
---- ---- ---- ---- ---- ---- ---- ----
Net loss................ (23)% (12)% (12)% (14)% (7)% (2)% (7)% (31)%
==== ==== ==== ==== ==== ==== ==== ====
</TABLE>
In the fourth quarter of 1998, gross profit declined due to increased
expenses incurred in connection with our geographic expansion. In addition,
during the fourth quarter of 1998, sales and marketing and general and
administrative expenses increased as a result of our acquisition of REALBID,
LLC and the amortization of intangibles and deferred compensation. The
quarterly data should be read in conjunction with the financial statements and
the notes to such statements appearing elsewhere in this prospectus. The
operating results for any quarter are not necessarily indicative of the
operating results for any future period and are subject to significant
fluctuation. For further information regarding factors which may impact this
fluctuation, please see "Risk Factors--Our quarterly results of operations
fluctuate which could cause our stock price to fluctuate."
Liquidity And Capital Resources
Since our inception, we have financed our operations primarily through the
private placement of equity securities, borrowing arrangements and through cash
flow from operations. As of December 31, 1998, we had approximately $378,000 in
cash and cash equivalents.
Our capital requirements depend on numerous factors, including our geographic
and product expansions, investments in our Web site and other factors. We have
experienced a substantial increase in our capital expenditures and operating
expenses since our inception consistent with our growth in operations and
staffing, and anticipate that this trend will continue for the foreseeable
future. Additionally, we will continue to evaluate possible strategic
acquisitions, products and technologies, and we plan to expand our sales and
marketing programs and conduct aggressive brand promotions.
In September 1996, we entered into a $3.0 million loan agreement with Venture
Lending & Leasing, Inc. This agreement provides $1.5 million for fixed asset
acquisition and $1.5 million for working capital. Borrowings for fixed asset
acquisition are due 48 months from the date of disbursement. Borrowings for
working capital are due 36 months from the date of disbursement. This loan
agreement requires payment of 8.75% interest during the term and a one-time 15%
interest balloon payment is due upon completion of the term. The notes issued
under this loan agreement are secured by either all of our fixed assets or all
of our business assets. In connection with this loan agreement, we issued to
Venture Lending & Leasing, Inc. a warrant to purchase 213,068 shares of our
common stock on a pre-split basis at an exercise price of $1.76 per share,
subject to antidilutive adjustments. The warrant may be exercised in whole or
in part at any time. The warrant expires on September 24, 2003. At December 31,
1998, $541,750 was available for working capital
25
<PAGE>
and none is available for fixed asset acquisition. The loan agreement
originally was set to expire on June 30, 1998, but was extended during 1998 to
June 30, 1999.
In February 1999, we entered into an additional $1.8 million loan agreement
with Venture Lending & Leasing, Inc. This agreement permits the use of funds
for either fixed asset acquisition or working capital. Under this loan
agreement, borrowings for fixed assets acquisition are due 48 months from the
date of disbursement and borrowings for working capital are due 36 months from
the date of disbursement. This loan agreement requires payment of 8.75%
interest during the term and a one-time 15% interest balloon payment upon
completion of the term. The notes issued under this loan agreement are secured
by either all of our fixed assets or all of our business assets. In connection
with this loan agreement, we issued a warrant to Venture Lending & Leasing,
Inc. This warrant is exercisable for a number of shares determined by a formula
based on whether or not we close a new equity financing prior to August 2000.
The number of warrant shares will be equal to $225,000 divided by the exercise
price, which will be the average of $1.8031 and the per share price of the new
equity financing. If no equity financing occurs by August 2000, the warrant
will be exercisable for 83,338 shares, on a pre-split basis, at $2.70 per
share. The warrant may be exercised in whole or in part at any time. The
warrant expires on February 14, 2008. At February 22, 1999, $1.8 million was
available under this loan agreement. This loan agreement expires on March 31,
2000.
We currently anticipate that the net proceeds of this offering, together with
available funds, will be sufficient to meet our anticipated needs until at
least the end of 2000. We may need to raise additional funds in the future in
order to fund more aggressive brand name promotions or more rapid expansion, to
develop new or enhanced services and products, to respond to competitive
pressures or to acquire complementary businesses, technologies or services.
Additional financing may not be available on terms favorable to us, if at all.
If adequate funds are not available or not available on acceptable terms, we
may be unable to fund our expansion, successfully promote our brand name, take
advantage of unanticipated acquisition opportunities, develop or enhance
services and products or respond to competitive pressures. Any such inability
could have a material adverse effect on our business. Please see "Risk
Factors--We may need additional capital by the end of 2000."
Impact of the Year 2000
We have not fully completed tests to assure that our information technology
systems will function properly in the year 2000. The computer systems and
software programs of many companies and governmental agencies are currently
coded to accept or recognize only two digit entries in the date code field.
These systems may recognize a date using "00" as the year 1900 rather than the
year 2000. As a result, these computer systems and/or software programs may
need to be upgraded to comply with such year 2000 requirements or risk system
failure or miscalculations causing disruptions of normal business activities.
State of Readiness. We have made an assessment of the year 2000 readiness of
our information technology systems, including the hardware and software that
operate our Web site and our non-information technology systems. We are in the
process of a year 2000 simulation to test our information technology systems'
readiness which we expect to complete by the end of June 1999. Based on the
results of our year 2000 simulation test, we intend to revise our proprietary
software as necessary to improve our year 2000 compliance. We believe that
substantially all of our applications, databases and infrastructure are year
2000 compliant. We have been informed by many of our vendors of material
hardware and software components of our information technology systems that
substantially all of the products we use are currently year 2000 compliant. We
will request vendors of the material hardware and software components of our
information technology systems to provide assurances of their year 2000
compliance. We plan to complete this process during the first half of 1999. We
are currently assessing our material non-information technology systems and
will seek assurances of year 2000 compliance from providers of these systems.
Until such testing is complete and such vendors and providers are contacted, we
will not be able to completely evaluate whether our information technology
systems or non-information technology systems will need to be revised or
replaced. If our efforts to address year 2000 risks are not successful, or if
suppliers or other third parties with whom we conduct business do not
successfully address such risks, it could have a material adverse effect on our
business.
26
<PAGE>
Costs. We have identified approximately $300,000 in capital equipment and
software that required upgrading or replacement for year 2000 compliance. We
expended $150,000 prior to December 31, 1998 and still have an outstanding
balance of $150,000 in capital equipment and software to replace. These costs
have been included in our operating capital budget.
Risks. We are not currently aware of any year 2000 compliance problems
relating to our proprietary software or our information technology or non-
information technology systems that would have a material adverse effect on our
business. We cannot assure that we will not discover year 2000 compliance
problems in our proprietary software that will require substantial revisions.
In addition, we cannot assure you that third-party software, hardware or
services incorporated into our material information technology and non-
information technology systems will not need to be revised or replaced, all of
which could be time consuming and expensive. Our failure to fix our proprietary
software or to fix or replace third-party software, hardware or services on a
timely basis could result in lost revenues, increased operating costs, the loss
of customers and other business interruptions, any of which could have a
material adverse effect on our business. Moreover, the failure to adequately
address year 2000 compliance issues in our proprietary software and our
information technology and non-information technology systems could result in
claims of mismanagement, misrepresentation or breach of contract and related
litigation, which could be costly and time-consuming to defend.
In addition, we cannot assure you that governmental agencies, utility
companies, Internet access companies, third-party service providers and others
outside our control will be year 2000 compliant. The failure by such entities
to be year 2000 compliant could result in a systemic failure beyond our
control, such as a prolonged Internet, telecommunications or electrical
failure, which could prevent us from delivering our Web site, could decrease
the use of the Internet or prevent users from accessing our Web site, which
could have a material adverse effect on our business.
Contingency Plan. In the event that year 2000-related problems materialize,
we have the ability to revert to a set of manual methods previously utilized in
the collection and distribution of data if necessary. We also maintain
relationships with several suppliers of services and products to mitigate the
risks associated with suppliers who are not year 2000 compliant.
Effects of Inflation
Due to relatively low levels of inflation in 1996, 1997 and 1998, inflation
has not had a significant effect on our results of operations since our
inception.
Impact of Recently Issued Accounting Standards
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, Reporting Comprehensive Income (SFAS
130). SFAS 130 requires that all components of comprehensive income, including
net income, be reported in financial statements in the period in which they are
recognized. SFAS 130 is effective for fiscal years beginning after December 15,
1997. There was no difference between our net loss and our total comprehensive
loss for the years ended December 31, 1996, 1997 and 1998.
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, Disclosures About Segments of an
Enterprise and Related Information (SFAS 131). SFAS 131 replaces SFAS 14,
Financial Reporting for Segments of a Business Enterprise and changes the way
the public companies report segment information. SFAS 131 is effective for
fiscal years beginning after December 15, 1997 and has been adopted by us for
the year ending December 31, 1998.
In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-1 Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use (SOP 98-1). This standard requires
companies to capitalize qualifying computer software costs which are incurred
during the
27
<PAGE>
application development stage and amortize them over the software's estimated
useful life. SOP 98-1 is effective for fiscal years beginning after December
15, 1998. We are currently evaluating the impact of SOP 98-1 on our financial
statements and related disclosures.
In April 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-5 Reporting for the Costs of Start-Up Activities (SOP
98-5). This standard requires companies to expense the cost of start-up
activities and organization costs as incurred. In general, SOP 98-5 is
effective for fiscal years beginning after December 15, 1998. We believe the
adoption of SOP 98-5 will not have a material impact on our results of
operations.
In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities. SFAS No. 133 establishes accounting and
reporting standards for derivative instruments, including derivative
instruments embedded in other contracts, and for hedging activities. SFAS No.
133 is effective for all fiscal quarters of fiscal years beginning after June
15, 1999. The statement is not expected to affect us because we currently do
not hold any derivative instruments or conduct any hedging activities.
28
<PAGE>
Business
This Prospectus may contain forward-looking statements that involve risks and
uncertainties. Our actual results may differ significantly from the results
discussed in any forward-looking statements. Factors that may cause such a
difference include, but are not limited to, those discussed in "Risk Factors."
Overview
We are a leading national provider of confirmed commercial real estate sales
information both offline and on the Internet. We have also recently begun
leveraging our extensive database to facilitate commercial real estate
transactions on the Internet. Over the last 17 years, we have developed a
highly evolved data collection and confirmation system to provide information
on commercial real estate properties. We believe that we are well-positioned to
leverage our extensive database of information to support brokers, lenders and
insurers in their sales, finance and insurance transactions involving
commercial real estate on the Internet.
Industry Background
Growth of the Internet
The Internet has rapidly become a significant global medium for
communications, information and commerce. The Internet enables millions of
people worldwide to share information, communicate and conduct business
electronically. International Data Corporation estimates that the number of
Internet users worldwide exceeded 95 million by the end of 1998, will exceed
170 million by the end of 2000 and will grow to over 319 million by the end of
2002. Growth in Internet usage has been fueled by a number of factors,
including:
. a large and growing base of personal computers in the workplace and
home;
. advances in the performance of personal computers and modems;
. improvements in network systems and infrastructure;
. more readily available and lower cost access to the Internet;
. increased awareness of the Internet among businesses and consumers;
. increased volume of information and services offered on the Internet;
and
. reduced security risks involved in conducting transactions on the
Internet.
Growth in Internet usage is expected to continue as new technologies, such as
multimedia capabilities, are developed and adopted, as Internet access and
bandwidth increases, and as Internet content improves and becomes more dynamic.
The Internet as a New Medium for Business-to-Business Commerce
As the Internet has become more accessible and widely used, it has emerged as
a primary business channel alongside the telephone, paper-based communication
and face-to-face interaction. Forrester Research estimates that businesses
bought and sold $43 billion in goods over the Internet last year, as opposed to
$8 billion bought by consumers. In addition, they predict that by the year
2003, more than 90% of the projected $1.4 trillion of Internet commerce will be
business-to-business related. The Internet allows online providers to
efficiently distribute information with the potential for less infrastructure
and overhead and greater economies of scale. It also offers customers diverse
options and unparalleled convenience.
The Commercial Real Estate Industry
The commercial real estate industry is large and fragmented. The Federal
Reserve has estimated the value of commercial real estate property in the
United States to be approximately $3.3 trillion. We estimate that property
valued at approximately $285 billion changed ownership in 1998. However, we
estimate that no commercial real estate brokerage firm was involved in more
than 5% of the value of these transactions. In addition, approximately $200
billion of loans covering commercial real estate properties were written in
1998, approximately half of which were refinancing transactions.
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Comprehensive and reliable information is a critical component of virtually
all commercial real estate transactions. Prior to the availability of confirmed
commercial real estate sales information from a centralized source, industry
professionals either maintained their own research departments to catalog
comparable sales, market statistics and other property-specific information or
aggregated such information, to the limited extent available, from multiple
third parties. These firms have also traditionally spent significant resources
adapting or developing software to analyze such information. These methods have
resulted in high internal costs and nonstandard data with varying degrees of
comprehensiveness and accuracy.
In addition, there are currently no comprehensive, standardized transaction
support services that efficiently identify properties and bring together
brokers, lenders and insurers in commercial real estate transactions. The lack
of such services results in higher internal costs and lost opportunities for
brokers, buyers, lenders and insurers.
The COMPS.COM Solution
The vast information sharing and communications power of the Internet creates
an opportunity to improve upon the inefficiencies in conducting commercial real
estate transactions. We provide comprehensive and reliable information
services, and transaction support products that save industry professionals
both time and money. We believe we have established the foundation to be the
trusted online resource linking commercial real estate brokers, lenders,
appraisers, insurers and other professionals. To date, we have:
. Developed a comprehensive and standardized proprietary database. Over the
last 17 years, we have developed a highly evolved data collection and
confirmation system to provide information on commercial real estate
properties. This system is based on a unique combination of our highly trained
research staff of over 155 researchers, management practices, proprietary
software systems, and computer and communications hardware. To build each of
our transaction records, our researchers conduct from 25 to 30 collection and
confirmation procedures. We generally confirm property sales over $250,000
within the markets that we cover. Since our inception, we have created a
historical database of approximately 400,000 commercial real estate
transactions. As a result, we believe that the cost, time and effort involved
in replicating our commercial real estate property database should deter
competitors from entering into this market and create a significant barrier to
entry.
. Migrated our database to the Internet. We started out as a paper-based
confirmed commercial real estate transaction information service in January
1982. In October 1996, we began to offer our customers the service on CD-ROM,
allowing for the computerized manipulation of data to provide more customized
reports. In January 1998, we began to offer this service on the Internet. This
allows our customers to receive updated commercial real estate transaction
information more frequently and analyze the data more quickly and easily. On
the date of this prospectus, approximately 27% of our customers use the
Internet along with traditional methods when obtaining our services, and
approximately 11% use our Internet services exclusively.
. Established an Internet-based listing-broker/buyer matching service. We
acquired REALBID, LLC in November 1998 in order to offer a listing-broker/buyer
matching service to commercial listing-brokers for properties with values
exceeding $5 million. As part of the REALBID service, we develop a specific Web
site for each listed property using the listing-brokers' summary description.
This summary generally includes property information, maps, site plans,
pictures, summary financials and broker contact information and also includes a
confidentiality agreement. Our comprehensive database allows us to identify and
refer potential buyers of listed properties to brokers on REALBID and actively
market these properties for brokers using our Internet-based new listing
notification system. Our database includes the specific investment criteria of
pension fund managers, real estate investment trusts, opportunistic funds,
private investors, insurance companies and other potential buyers. In 1998,
REALBID was used to support approximately $3.8 billion in commercial real
estate transactions.
. Introduced a commercial real estate listing service. In January 1999, we
introduced our proprietary commercial real estate property listing service,
DealPoint, for San Diego County. DealPoint is our
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Internet-based, commercial listing service enabling brokers to market their
properties on the Internet. This form of marketing provides the commercial
property broker with an opportunity to increase a property's exposure to
prospective buyers and their brokers. Posting may be accomplished by the
broker's remote entry or by sending the property information to us for manual
entry. During January 1999, more than 500 for-sale commercial properties were
posted on the system by brokers in San Diego.
Our Business Strategy
Our objective is to be the trusted online resource linking commercial real
estate brokers, lenders, appraisers, insurers and other professionals by
efficiently distributing market information on the Internet. As a resource of
commercial real estate market information, we expect to have brokers, lenders,
insurers, appraisers and others come to our Web site to transact their business
because we can save them time and money. Our business strategy includes the
following key elements:
. Continue to enhance our comprehensive historical database of commercial
real estate transactions. We intend to maintain our position as a leading
provider of comprehensive, reliable commercial real estate transaction
information. We expect to do this by: (1) expanding our information gathering
processes across multiple services and products; (2) using technology to
further automate the data collection process; (3) integrating acquired
databases into our standardized format; and (4) continually improving our data
collection and error detection methods. We believe that these efforts will
permit us to build upon our current comprehensive historical database of
commercial real estate transactions and maintain the competitive advantages it
affords us in our industry.
. Expand our online listing-broker/buyer matching network. We intend to
expand and enhance the listing-broker/buyer matching services of REALBID by
further integrating our REALBID service into our proprietary database. In
addition, we plan to increase the number of commercial properties serviced
through the REALBID database by including commercial properties with sale
prices as low as $1 million. Our comprehensive investor database will allow
brokers to more easily identify prospective buyers and our Internet-based new
listing notification system allows brokers to more efficiently market
commercial properties to such buyers.
. Create a comprehensive online national listing service for commercial real
estate. We intend to expand the geographic coverage of our online listing
service, DealPoint, by soliciting commercial real estate listings throughout
the United States. We expect these efforts to result in a comprehensive online
national listing service for commercial real estate which will enhance our role
in the commercial real estate transaction process.
. Enhance our services and products to facilitate online exchange of key
commercial real estate market information. We believe that our Web site has the
potential to be an online forum for commercial real estate transactions. We
believe that commercial real estate industry professionals will be drawn to our
Web site because we provide the information necessary to complete transactions.
We initially plan to expand our existing services to match lenders, mortgage
bankers and brokers with borrowers, followed by matching insurers and agents
with property owners and lenders. Combined with our REALBID service, these
expanded services will allow buyers and, where applicable, existing property
owners, to find the appropriate broker-listed property and arrange financing
and insurance coverage for that property from a single source.
. Expand into new geographic markets. Since 1995, we have expanded our
geographic coverage by establishing commercial real estate information services
in 19 new markets through internal expansion and three additional markets
through acquisitions. We will continue to establish footholds in new geographic
markets by incorporating the commercial real estate sales information obtained
through internal development or acquisitions into our database. We plan to
expand into new geographic markets using our existing relationships with
national customers to gain market acceptance. This strategy will allow us to
add new customers and to more effectively service our existing customers,
particularly those with national or regional focus.
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. Continue to build our brand name. We believe that commercial real estate
professionals in the markets we serve associate the COMPS brand name with
comprehensive, accurate and standardized commercial real estate sales
information. We intend to continue building and strengthening our brand name
by: (1) maintaining a strong commitment to quality, accuracy and timeliness;
(2) increasing our marketing and advertising activities; and (3) continuing to
expand our presence on the Internet. We expect these efforts to maintain and
build upon the COMPS brand name for quality commercial real estate sales
information.
Our Proprietary Database
Our proprietary database of confirmed commercial real estate sales
transactions is the result of 17 years of research. We believe it to be the
largest and most sophisticated confirmed sales database covering all categories
of commercial real estate properties available today. In 1998, we researched
nearly 46,000 transactions totaling approximately $105 billion.
Our database is an online information system offering full-color building
photographs as well as more than 200 inter-related data fields of information.
These data fields include the following current information and key value
indicators:
. buyers . income and expense information
. sellers . building characteristics and
. brokerage companies condition
. agents . prices per square foot
. lenders and mortgages . prices per unit
. sales prices . capitalization rates
. seller financing . gross income multipliers
. property uses or property
descriptions
Our database covers approximately 400,000 transactions totaling over $466
billion, including 1.8 million acres of land transactions, over 780,000 buyer
and seller records and over 300,000 brokerage and agent records.
We have developed a highly evolved data collection and confirmation system.
This system is based on a unique combination of our highly trained research
staff of over 155 researchers supported by management, computer and
communications hardware and software systems. Many of our researchers have
prior experience in the commercial real estate industry. Our research process
includes from 25 to 30 collection and confirmation procedures on every
property. We currently cover nine property types: office, industrial, retail,
specialty, multi-family, mobile home, residential land, commercial land and
industrial land. These property types are further categorized by nearly 150
specific use codes. We also research properties to see if they have one of over
45 detrimental conditions, such as asbestos or earthquake damage. Our
proprietary software utilizes over 38 search categories to allow users to
search the database efficiently and quickly. This software enables us to
provide commercial real estate professionals with specific detailed and
comprehensive coverage of virtually every commercial property sale in excess of
$250,000 in most of our covered markets.
We research real property transfers throughout the country to identify recent
commercial property transactions. Typically, we review multiple sources of
commercial real estate property information to identify transactions. Once a
potential transaction is identified, in order to increase accuracy, our
researchers inspect county courthouse records and extract pertinent information
directly from the recorded deed into our database. Our researchers match the
legal description of the deed with a tax or plat map and then proceed to
perform a site inspection on the commercial properties, including land. Our
site inspections consist of photographing the building, measuring the building
(if necessary), counting parking spaces, assessing property condition and
construction and gathering tenant information. Our researchers then continue to
ensure the accuracy of our sales data by interviewing buyers, sellers and
brokers to confirm that the information we have collected is accurate and to
gather additional data pertinent to the property and transaction. Through the
telephone confirmation process, we are able to obtain additional property
specific details including conditions of the sale, income and expense data and
other information not readily available through public records or other
traditional data sources.
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Our Services and Products
We have developed advanced information services and products utilizing our
proprietary database. In addition, we have acquired and further developed
Internet transaction support products. These products use sophisticated
Windows-based programs with Internet connectivity to access our database and
present information in a variety of formats. Our services are used by brokers,
lenders, appraisers, property owners, international accounting firms, tax
appeal professionals, public sector agencies, investment banks and many others
interested in the valuation of commercial real estate.
Internet-Related
Information Services
Our information services use real-time Internet connectivity for accessing,
viewing and reporting information from our proprietary database of confirmed
commercial real estate sales transactions. The database contains over 400,000
confirmed sales comparable records in 35 of the top 74 markets in the U.S.
. E-COMPS. E-COMPS, introduced in January 1998, provides a comprehensive
search engine to access and search our proprietary database. Typically,
commercial real estate professionals require the review of between four
and seven sales comparable transactions to support a valuation decision.
E-COMPS allows the customer to enter multiple search parameters,
including location, property type, square footage, price range and
number of units. Customers receive a summary report of all relevant
properties in our database, including photographs. Customers may also
choose to receive more detailed reports.
. Pipeline. Pipeline, introduced in September 1998, allows registered
customers to search, retrieve, view and print reports of properties in
our work-in-process research database which includes unconfirmed and
non-arms-length market sales transactions. Customers interested in
knowing what the total market consists of, in addition to the confirmed
data, use this product.
. Spectrum. Spectrum, introduced in August 1998, allows our customers to
integrate their data with our proprietary database information,
including our sales comparables and for-sale listings. The customer may
use the system as an extranet with all of their user locations linked
through the Internet to our databases and their internal data housed at
our facilities. Spectrum includes easy-to-use query and report writing
functions including trend reporting and export features. Spectrum also
provides its subscribers access to PRO/FILES property reports. These
customized property reports can include confirmed sales and lease
comparables, property inspection, demographics and photographs.
Transaction Support Products
Our Internet-based transaction support products enhance the productivity of
industry professionals by deploying information and tools necessary to support
the sale, financing and insuring of commercial real estate.
. REALBID. REALBID, introduced in 1997 and acquired by us in November
1998, allows our customers to view properties using a listing-broker's
summary description. We then identify investors and match them with the
property using REALBID's buyer profile database. Commercial listing-
brokers can use REALBID as a marketing tool to quickly identify,
contact, inform and capture potential investors by notifying them of new
listings by e-mail or facsimile. These brokers can also use REALBID to
help organize competitive, efficient and orderly sales by leveraging the
real-time nature of the Internet. We offer REALBID posting and
broadcasting at a fixed fee per property. In 1998, REALBID supported
approximately $3.0 billion in commercial real estate transactions.
. DealPoint. DealPoint, introduced in January 1999, is our free commercial
listing service whereby brokers can effectively market properties on the
Internet. This service is currently only available in San Diego County,
and we expect to roll it out nationally by the end of 1999 with
extensive in-depth listings by the end of 2000. Brokers and prospective
buyers use DealPoint to identify the properties for sale that meet their
investment needs by selecting relevant search criteria and then viewing
selected property information.
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<PAGE>
Products in Development
We are currently developing a product that will facilitate the financing of
commercial properties by efficiently matching prospective borrowers' loan
requirements with lenders' loan products. Prospective borrowers will be able to
complete and submit comprehensive applications online to those lenders of
choice. We plan to develop products that will facilitate other aspects of
commercial real estate transactions, for example the matching of insurers with
property owners and lenders.
Non-Internet Related
We also offer services that do not rely on the Internet as a means of
delivery. While these services accounted for more than 90% of our revenue in
1998, we expect the percentage of our revenues represented by these products to
diminish as more of our customers transition to using our services and products
on the Internet.
. COMPS Reports. COMPS Reports, introduced in 1982, is a paper-based
service allowing customers to receive confirmed sales comparable
reports.
. CallCOMPS. CallCOMPS, introduced in 1986, is our phone service allowing
customers to license confirmed sales comparable reports on a per use
basis.
. COMPSLink Windows. COMPSLink Windows, introduced in 1996, is a desktop
product which provides access to our proprietary database through data
diskette or CD-ROM. COMPSLink Windows allowed us to migrate the customer
base from paper to electronic media during 1997 and 1998.
Our Customers
As of the end of 1998, we had over 4,000 customers, none of which accounted
for more than 5% of our revenue. In 1998, our customers included:
<TABLE>
<S> <C>
Arthur Andersen, LLP Grubb & Ellis
Bank of America KPMG Peat Marwick, LLP
Bankers Trust Co. Los Angeles County Assessor
CB Richard Ellis Marcus & Millichap
Cushman & Wakefield PricewaterhouseCoopers
Deloitte & Touche, LLP Trammell Crow Co.
Fannie Mae Union Pacific Corporation
Federal Deposit Insurance Corporation Washington Mutual
First Nationwide Bank Wells Fargo Bank
GMAC World Savings and Loan
</TABLE>
Our Sales and Marketing Efforts
Sales
Our sales efforts have been designed to address the specific market needs of
our customers and prospective customers. We use a variety of tools and
techniques including:
. face-to-face sales calls;
. telesales;
. direct mail;
. seminar marketing; and
. contact management software to build a centralized database which is
regularly synchronized.
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Our sales force focuses on subscription services for all products. There are
three teams involved in our sales efforts:
. Major Account Team. Our major account team is responsible for managing our
relationships with a select number of customers and prospects meeting certain
pre-defined criteria. Major account representatives are strategically located
in key cities across the country in order to serve the needs of our largest and
most strategic accounts. Account assignments for this group include many of the
country's key brokers, lenders, fee appraisers, tax appeal professionals and
governmental entities.
. Field Sales Team. We deploy our field sales team in strategic locations
across the country in order to meet the specific needs of a local market. Field
sales representatives are responsible for managing accounts and prospects in a
specific geographic area.
. Telesales Team. Our telesales team is located in San Diego and assumes the
field sales role in our established western markets. In this capacity, they are
also responsible for building and maintaining relationships with a wide variety
of subscription customers within a specific geographic area. Additionally, this
team provides telephone prospecting and sales support for all markets
nationally.
When we enter a new market we build a database of key prospects and then
execute a market opening campaign. Expansion into new markets is coordinated
among all sales teams. Prospects are notified via direct mail and fax followed
by a telesales blitz designed to qualify and invite prospects to a seminar
launching sales in the market. The seminar is followed by face-to-face sales
calls. This local activity is leveraged by agreements with national customers
which have been put in place by the major accounts team. The process of opening
new markets has been refined as we have expanded and is designed to achieve the
fastest possible sales growth.
Marketing
We use a multi-faceted marketing strategy, leveraging our own research to
effectively target both individual professionals and organizations. We employ a
combination of personal selling, telesales, online and off-line advertising,
direct mail, fax and e-mail programs, public relations and industry trade shows
to promote product sales.
Off-line advertising is focused on print media specifically concerned with
commercial real estate. Print advertising is used to build corporate image,
promote new products and announce new geographic coverage. Some vehicles
include Commercial Property News, National Real Estate Investor and Real Estate
Forum. We use regional real estate and business journals to introduce products
and new markets.
We also use direct mail, fax and e-mail programs to support new products and
market expansion. Through our prospect and customer database, we deliver a
highly tailored message directly to those most likely to buy. Mail is used when
the message is detailed and color can be used to effectively illustrate the
marketing message. E-mail and fax are used when communication needs to be swift
and when the message will not suffer because of the lack of resolution or
graphics. We augment our database by licensing or purchasing lists and other
sources to achieve the most comprehensive database of all users of commercial
real estate information and services. In all direct marketing efforts, the Web
site is utilized as a marketing tool, to help explain our services.
In order to market our Web site, www.comps.com, we:
. market to industry associations;
. establish relationships with commercial real estate Web sites;
. use online advertising to drive traffic to our Web site; and
. provide discounts and limited free information to entice potential
customers to our Web site.
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Public relations efforts are both national and regional. We use traditional
releases to communicate news regarding our company and to maintain brand
awareness. We also use public relations as a tool to educate editors on the
type of data we offer and are regarded as an information source by editors.
Speaking engagements are also used to communicate the expertise of our staff
and quality of our data.
Attendance at industry tradeshows and seminars reinforces relationships with
our core user groups. We also host our own seminars to promote good use of our
products and provide valuable customer service. These venues allow for the in-
depth demonstration of our products to highly motivated, captive audiences.
Our Markets
Our database currently covers the following 35 markets, which represent 102
counties and 48 of the 100 largest U.S. cities:
Atlanta Jacksonville Orange County, CA San Francisco
Austin Las Vegas Orlando San Jose
Baltimore Los Angeles Palm Beach County Seattle
Boston Marin-North SF Philadelphia Stockton/Modesto,
Chicago Bay Area Phoenix CA
Colorado Miami Portland Tampa/Saint
Springs New York City- Riverside/San Petersburg
Dallas/Fort Manhattan Bernardino, CA Tucson
Worth Newark Sacramento Ventura, CA
Denver Oakland San Diego Washington,
Fort Lauderdale D.C./
(Broward No. Virginia
County)
Fresno
Infrastructure, Operations and Technology
Our Web site is hosted by servers located at our facilities in San Diego,
California, and is also hosted by UUNET and RealPage. All data and applications
are stored and executed from the facilities in San Diego, California. We
maintain multiple Internet servers, which run Microsoft Windows NT operating
systems and use Microsoft Internet Information Server. We maintain Internet
access through UUNET and VERIO. We maintain multiple redundant high-speed
connections with each Internet service provider. Compaq multi-processor servers
are used to host our Web site.
We configure our servers to minimize downtime associated with hardware
failures. Additionally, all Internet and database servers have active matching
hardware configurations for redundancy. Backups of all servers are run daily
and sent weekly to an off-site data storage facility. All servers maintained in
our San Diego, California offices are kept in a secured facility with central
air conditioning and a centralized UPS system. All Internet traffic is logged
and filtered by high performance dedicated firewall servers. An anti-virus
scanning solution is used on all computer systems and servers to protect
against computer viruses and monitor inbound and outbound e-mail. Nonetheless,
our operations are dependent on our ability to protect our facilities and
equipment against damage from fire, earthquakes, power loss, water damage,
telecommunications failures, vandalism, computer viruses, hacker attacks and
other malicious acts, and similar unexpected material adverse events. For
further information regarding these issues, please see "Risk Factors--Increased
users straining our systems and other systems malfunctions could materially
adversely affect our business."
We have developed a proprietary custom client/server database application
used to capture the revenue generated by our transaction and subscription-based
business. The system maintains our list of customers and products and includes
an installment-billing module to provide the billing flexibility required by
our customers. The resulting revenue transaction details are summarized and fed
into our accounting system.
Rapidly changing technology, evolving standards, frequent new and upgraded
products, and rapid expansion characterize our business. To be successful, we
must adapt to our market by continually improving the performance, features,
and reliability of our services.
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Management Systems
As we enter new markets, we must integrate new and existing data into our
databases. Additionally, we must integrate automated and non-automated controls
to manage our data collection process to ensure data integrity. Automated data
validation controls are used in both the initial research worksheet application
and the final data collection application. These data validation controls
ensure data integrity by checking against a valid range of values as soon as
data is entered into input screens. These controls eliminate erroneous data in
critical fields, such as recorded date, sale price and appraisal values. The
controls also ensure the use of industry standard terminology. A final edit
check feature ensures the information entered is logically related.
Computer and Communications Hardware
We maintain 24 Novell and/or Windows NT servers to support our corporate
databases, internal applications and Internet services. We also maintain a
national high speed internal frame relay network of high speed access to allow
remote researchers real-time access to our databases, internal applications and
Internet services. All servers are protected by secured firewalls. We also
maintain backup drive arrays and inventories of spare parts to minimize
potential system downtime. Finally, we store full data backups of servers off-
site.
We currently keep our main property inventory related databases on Compaq
enterprise servers running Microsoft Windows NT. The database management
software is Microsoft Server. Databases are replicated on to additional Compaq
enterprise servers that are located outside the network firewall. This
configuration allows users of our applications to access relevant data without
gaining access to internal network systems. We monitor application load
balancing across servers and maintain up-to-date copies of primary databases
for backup.
Software Systems
Our software systems have kept pace with the evolution of technology. These
systems currently use client server architecture to optimize management of our
internal data collection. The custom client server applications facilitate the
data collection process. The custom client server applications span the entire
data collection process, from initial research to identification of potential
records through the collection of verified and value-added information. Our
software enables us to continuously enhance the process through: productivity,
attaining superior data quality and maintaining data integrity. Additionally,
these custom applications allow publication of finalized transactions meeting
quality and editing controls.
Competition
The market for information systems and services is generally competitive and
rapidly changing. The market for Internet services and providers is relatively
new, intensely competitive and rapidly changing. In the commercial real estate
industry, the principal competitive factors are:
. quality and depth of the underlying databases;
. the proprietary nature of methodologies, databases and technical
resources;
. the usefulness of the data and reports generated by the software;
. effectiveness of marketing and sales efforts;
. customer service and support;
. compatibility with the customer's existing information systems;
. vendor reputation;
. price;
. timeliness; and
. brand loyalty among customers and individual users.
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We compete directly and indirectly for customers and content providers with
the following categories of companies:
. publishers and distributors of traditional off-line information services,
such as national provider, Realty Information Group, regional providers such as
Realty Information Tracking Services, Inc., Databank, Dressco, Inc., Revac,
Baca Landata and several smaller local providers, many of which have or may
establish Web sites;
. online services or Web sites targeted to commercial real estate brokers,
buyers and sellers of commercial real estate properties, insurance companies,
mortgage brokers and lenders, such as LoopNet, Inc., Commrex, Commercial
Search, American Real Estate Exchange, Association of Industrial Realtors,
Property Line, CLOAN, Datamerge, A Big Deal.com, Property First, First Realty
Advisors, and numerous small regional and local sites; and
. public record providers such as Experian, Acxiom DataQuick and
TransAmerica, though many of our customers view these public record providers
as complementary to our services and often subscribe to one of these services
as well as our service.
We believe our proprietary database and content compete favorably with our
competitors. However, many of our existing competitors, as well as a number of
potential new competitors, have longer operating histories in the Internet
market, greater name recognition, larger customer bases, greater user traffic
and significantly greater financial, technical and marketing resources. Such
competitors may be able to undertake more extensive marketing campaigns, adopt
more aggressive pricing policies, make more attractive offers to potential
employees, subscribers, distribution partners and content providers and may be
able to respond more quickly to new or emerging technologies and changes in
Internet user requirements. For further information regarding potential
competition, please see "Risk Factors--Intense competition may render our
services and products uncompetitive or obsolete."
Intellectual Property
We rely primarily on a combination of copyrights, trademarks, trade secret
laws, our subscriber agreements and restrictions on disclosure to protect our
intellectual property, such as our proprietary database, software, trademarks,
trade names and trade secrets. We enter into agreements with our customers that
grant our customers revocable, non-transferable, non-exclusive licenses to use
the information and the software on our Web site. These agreements also contain
confidentiality provisions and other provisions prohibiting our customers from
reproducing the information or software they access on our Web site. We also
enter into confidentiality agreements with our employees and consultants, and
seek to control access to and distribution of our other proprietary
information. Despite these precautions, it may be possible for a third party to
copy or otherwise obtain and use the content of our Web site or our other
intellectual property without authorization. There can be no assurance that
these precautions will prevent misappropriation, infringement or other
violations of our intellectual property. A failure to protect our intellectual
property in a meaningful manner could have a material adverse effect on our
business. In addition, we may need to engage in litigation in order to enforce
our intellectual property rights in the future or to determine the validity and
scope of the proprietary rights of others. Such litigation could result in
substantial costs and diversion of management and other resources, either of
which could have a material adverse effect on our business.
We also license certain data and content from certain public record providers
such as Experian, Acxiom DataQuick and TransAmerica. Experian has agreed to
publish a subset of our data as a stand-alone product and to make such data
available through its online services. Acxiom DataQuick has granted us a non-
exclusive, non-transferable license to their real property ownership data
conveyed on magnetic tape or by electronic transmission through any online
system. TransAmerica granted us a limited non-exclusive, non-transferable
license to use its Metroscan CD-Rom database for certain localities, together
with its Metroscan software.
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<PAGE>
We believe that factors such as technical and creative skills of our
personnel and ongoing reliable product maintenance and support are critical
factors in establishing and maintaining our leadership position in the
commercial real estate industry due to the rapid pace of innovation within the
software and Internet industries.
Employees
As of January 31, 1999, we had approximately 246 full-time employees and
approximately 50 part-time employees. We have never had a work stoppage and, as
of the date of this prospectus, no personnel are represented under collective
bargaining agreements. We consider our employee relations to be good. However,
for further information regarding employees, please see "Risk Factors--If we
are unable to retain key personnel or attract new personnel, it could have a
material adverse effect on our business."
Facilities
Our principal administrative, sales, marketing, research and product
development facilities are located in approximately 33,217 square feet of
office space in San Diego, California. We lease our facility from a limited
partnership whose general partner is a company owned by Mr. Crane, our
President, Chief Executive Officer and Chairman of the Board. In addition, Mr.
Beasley, one of our directors, is a limited partner of the limited partnership
from which we lease our facilities. Our lease is for a five-year term
commencing in February 1999 with five two-year extension options. For further
information regarding this transaction, please see "Certain Relationships and
Related Transactions." We also rent office space in Burlingame, California,
Phoenix, Arizona, and Vienna, Virginia. We believe our current facilities will
be adequate to meet our needs for the foreseeable future. However, please see
"Risk Factors--Increased users straining our systems and other systems
malfunctions could materially adversely affect our business," for further
information regarding our facilities.
Legal Proceedings
As of the date of this prospectus, we are not a party to any material legal
proceedings.
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<PAGE>
Management
Executive Officers and Directors
Set forth below is the name, age, position and a brief account of the
business experience of each of our executive officers and directors.
<TABLE>
<CAPTION>
Name Age Position
---------------------------- --- --------------------------------------------
<C> <C> <S>
Christopher A. Crane........ 47 Chairman of the Board, Chief Executive
Officer and President
Emmett R. DeMoss, Jr. ...... 62 Vice President and Chairman of REALBID
Division
Walter W. Papciak........... 60 Executive Vice President of Sales, Marketing
and Product Development
Michael Arabe............... 52 Senior Vice President of Sales
Craig S. Farrington......... 40 Vice President of Product Marketing and
Development
Karen Goodrum............... 41 Vice President of Finance and Administration
and Chief Financial Officer and Secretary
Joseph A. Mannina........... 34 Vice President of Operations
Robert C. Beasley (2)....... 61 Director
Gregory M. Avis (1)(2)...... 40 Director
Kenneth F. Potashner 41 Director
(1)(2).....................
</TABLE>
- --------
(1) Member of the compensation committee.
(2) Member of the audit committee.
Christopher A. Crane has served as our President, Chief Executive Officer and
Chairman of the Board since August 1992. Prior to joining us, Mr. Crane served
as Group President and a director of Nitches, Inc., an apparel company, and as
Vice President of Corporate Development for Oster Communications, Inc., an
international financial database publishing company. Mr. Crane received his
B.S. in finance summa cum laude from Boston College and his M.B.A. from Harvard
University.
Emmett R. DeMoss, Jr. has served as our Vice President and Chairman of our
REALBID division since November 1998. In October 1994, Mr. DeMoss co-founded
REALBID, LLC, an Internet marketing services company specializing in
transactional support of high-end commercial property sales, and from June 1997
until November 1998, Mr. DeMoss served as a Manager of REALBID, LLC. From
October 1993 until September 1994, Mr. DeMoss served as President of Ironstone
Company, a real estate tax appeal service. Mr. DeMoss previously served for
over 10 years in a number of senior executive positions with Grubb & Ellis, a
real estate brokerage and property management firm, including Executive Vice
President, Chief Operating Officer, Senior Vice President, Chief Financial
Officer and as a director. Mr. DeMoss received his B.S. in engineering from
Princeton University and his M.B.A. from Stanford Business School.
Walter W. Papciak has served as our Executive Vice President of Sales,
Marketing and Product Development since August 1995. From October 1994 until
July 1995 Mr. Papciak served as Executive Vice President of QED, Inc., an
education database company. From May 1994 until September 1994, Mr. Papciak
worked as a consultant on various internet and database projects. From January
1985 until April 1994, Mr. Papciak was Senior Vice President of Computer
Intelligence, the computer and communications industry research and market
information division of Ziff-Davis. Mr. Papciak received his B.S. in physics
and his M.B.A. in information systems from Wayne State University.
Michael Arabe has been one of our senior executives since 1989 and has served
as our Senior Vice President of Sales since January 1996. Prior to joining us,
Mr. Arabe was a sales executive with Celluland, Inc. Mr. Arabe received his
B.S. in economics from Louisiana State University.
Craig S. Farrington has served as our Vice President of Product Marketing and
Development since September 1996 . Mr. Farrington previously served as Vice
President of our CallCOMPS division from January 1993 until August 1996 and has
held various other positions with us since 1983. Mr. Farrington received his
B.A. in business and economics from Westmont College.
40
<PAGE>
Karen Goodrum has served as our Vice President of Finance and Administration
since September 1993 and our Chief Financial Officer since January 1997 and our
Secretary since February 1999. Ms. Goodrum previously served as our Vice
President and Controller from October 1988 until August 1993. Ms. Goodrum
received her B.A. in education from the University of Maryland and her M.B.A.
from San Diego State University.
Joseph A. Mannina has served as our Vice President of Operations since August
1998. Mr. Mannina previously served as our Director of East Coast Operations
from January 1994 until July 1998 and has served in various other positions at
COMPS since 1988. Mr. Mannina received his B.S. in economics from the
University of California, Berkeley.
Robert C. Beasley is our founder and has served as as one of our directors
since August 1992. Mr. Beasley previously served as our Secretary from October
1984 until February 1989. Mr. Beasley founded COMPS, Inc., our predecessor, in
December 1981 and served as its President from December 1981 until March 1992.
Mr. Beasley has over 34 years of experience in commercial real estate as a
broker, researcher, lender and developer. Mr. Beasley received his B.A. in
Business Administration from Claremont McKenna College. He also graduated from
Westminster Theological Seminary.
Gregory M. Avis has served as one of our directors since October 1994. Mr.
Avis is currently a Managing General Partner of Summit Partners, a private
venture capital firm, and has held various positions at Summit Partners since
1984. Mr. Avis received his B.A. in political economics cum laude from Williams
College and his M.B.A. with distinction from Harvard Business School.
Kenneth F. Potashner has served as one of our directors since February 1999.
Since November 1998, Mr. Potashner has served as the Chief Executive Officer of
S3 Incorporated, a manufacturer of embedded graphics accelerator chips. Since
April 1996, Mr. Potashner has served as the Chairman of the Board of Directors
of Maxwell Technologies, Inc., a developer of pulse power technologies. From
April 1996 until November 1998, Mr. Potashner served as the President, Chief
Executive Officer and Chief Operating Officer of Maxwell Technologies. From
November 1994 to April 1996, Mr. Potashner served as Executive Vice President
of Operations of Conner Peripherals, a designer and manufacturer of information
storage solution products for computer applications. From March 1991 to October
1994, Mr. Potashner was Vice President of Product Engineering for Quantum
Corporation, a designer and manufacturer of hard drives for computer systems.
Mr. Potashner received his B.S.E.E. from Lafayette College and his M.S.E.E.
from Southern Methodist University.
Other Key Employees
Set forth below is the name, age, position and a brief account of the
business experience of certain of our other key employees.
<TABLE>
<CAPTION>
Name Age Position
--------------------------------- --- ---------------------------------------
<S> <C> <C>
Christopher T. Fenton............ 43 Vice President of Corporate Development
Vice President of Commercial Listing
Herbert D. Steele................ 55 Services
Lori Reisinger................... 37 Regional Vice President
Vicki Ridley..................... 35 Regional Vice President
Assistant Vice President of Product
Robert Evatt..................... 42 Development
Assistant Vice President of Information
Donald Ward...................... 37 Technology
Robert A. Potter, Jr. ........... 44 President of REALBID Division
</TABLE>
Christopher T. Fenton has served as our Vice President of Corporate
Development since August 1998. Mr. Fenton also served as our Vice President of
Operations from June 1990 until July 1998 and held various other positions with
us since 1985. Mr. Fenton received his B.S. in finance magna cum laude from San
Diego State University.
41
<PAGE>
Herbert D. Steele has served as our Vice President of Commercial Listing
Services since June 1998. From April 1996 until May 1998, Mr. Steele was
Executive Vice President of REAL USA, LLC, an online, subscription-based
national listing service for commercial real estate. From November 1991 until
March 1996, Mr. Steele served as Executive Vice President of The Carlson
Company, an asset and property management company. Prior to that Mr. Steele
founded The Cornerstone Corporation, a commercial mortgage brokerage company,
and served as its President. Mr. Steele received his B.A. in english literature
from Duke University and his M.B.A. from the University of Connecticut.
Lori Reisinger has served as our Regional Vice President in Burlingame,
California since July 1994. Ms. Reisinger has held various positions with us
since 1986. Ms. Reisinger received her B.A. in political science from Southern
Oregon State College.
Vicki Ridley has served as our Regional Vice President in Phoenix, Arizona
since April 1997. Ms. Ridley has held various positions with us since 1987. Ms.
Ridley received her B.A. in finance from Arizona State University.
Robert Evatt has served as our Assistant Vice President of Product
Development since May 1996. From August 1986 until May 1996, Mr. Evatt was
Assistant Vice President of Product Development for Equifax National Decision
Systems, an information company. Mr. Evatt received his B.A. in geography from
the University of Arizona and his M.S. in urban planning from the University of
Washington.
Donald Ward has served as our Assistant Vice President of Information
Technology since March 1997. From October 1993 until March 1997, Mr. Ward was
the director of Technical Services for Equifax National Decision Systems, an
information company. Mr. Ward attended New Mexico State University and the
University of Texas.
Robert A. Potter, Jr. has served as President of our REALBID Division since
we acquired REALBID in November 1998. In June 1992, Mr. Potter co-founded
REALBID, LLC and from June 1992 until November 1998, Mr. Potter served as a
Manager of REALBID, LLC. From January 1990 until December 1996, Mr. Potter
served as Vice President, Pacific Rim Country Manager and Western Regional
Manager for MBIA, a credit enhancement company. Mr. Potter received his B.A. in
history from Santa Clara University and his M.B.A. from the University of
California, Berkeley.
Classes of the Board
Our board currently has four members. Under our bylaws, beginning at our next
annual meeting of stockholders, our board will be divided into two classes of
directors serving staggered two-year terms, with one class of directors to be
elected at each annual meeting of stockholders.
Board Committees
The audit committee of the board of directors was established in November
1997 and reviews, acts on and reports to the board of directors with respect to
various auditing and accounting matters, including the recommendation of our
auditors, the scope of the annual audits, fees to be paid to the auditors, the
performance of our independent auditors and our accounting practices. The
members of the audit committee are Messrs. Avis, Beasley and Potashner.
The compensation committee of the board of directors was established in
November 1994 and recommends, reviews and oversees the salaries, benefits and
stock option plans for our employees, consultants, directors and other
individuals compensated by us. The compensation committee also administers our
compensation plans. The members of the compensation committee are Messrs. Avis
and Potashner.
42
<PAGE>
Director Compensation
We reimburse our directors for the reasonable expenses of attending the
meetings of the board of directors or committees. Under our 1999 stock
incentive plan, each individual who first becomes a non-employee member of the
board of directors at any time after the completion of this offering will
receive an option to purchase 12,000 shares of common stock on a pre-split
basis on the date such individual joins the board of directors, provided such
individual has not previously been employed by us or any parent or subsidiary
corporation. In addition, on the date of each annual stockholders' meeting,
beginning in 2000, each non-employee member of the board of directors will
automatically be granted an option to purchase 2,000 shares of common stock on
a pre-split basis, provided such individual has served as a non-employee member
of the board of directors for at least six months. Please see "--Benefit
Plans."
Upon Mr. Potashner's election to the board in February 1999, our board
granted Mr. Potashner options to purchase 32,500 shares of our common stock, on
a pre-split basis, at an exercise price of $8.20 per share. The options vest on
a yearly basis in equal installments over a four-year period and are
exercisable for a 10 year term following the grant date.
Compensation Committee Interlocks and Insider Participation
Our compensation committee currently consists of Messrs. Avis and Potashner.
Neither member of the compensation committee has been an officer or employee of
us at any time. None of our executive officers serves as a member of the board
of directors or compensation committee of any other company that has one or
more executive officers serving as a member of our board of directors or
compensation committee. Prior to the formation of the compensation committee in
November 1994, the board of directors as a whole made decisions relating to
compensation of our executive officers. Mr. Crane participated in all such
discussions and decisions, except those regarding his own compensation.
Employment and Severance Arrangements
Most of our current employees have entered into agreements with us which
contain certain restrictions and covenants. These provisions include covenants
relating to the protection of our confidential information, the assignment of
inventions, and restrictions on competition and soliciting our clients,
employees, or independent contractors.
In November 1994, we entered into employment agreements with each of Messrs.
Arabe and Farrington, and in August 1995, we entered into an employment
agreement with Mr. Papciak. Under these agreements, each of these employee's
base salary may be increased or decreased from time-to-time, in the sole
discretion of our management. Each such employee is also eligible to receive an
incentive bonus determined by our compensation committee. If any of these
employees is terminated for reasons other than good cause, he will be entitled
to receive six months' salary and a pro-rata portion of his incentive bonus.
In October 1994, we entered into an employment agreement with Mr. Crane.
Under this agreement, Mr. Crane's base salary may be increased or decreased
from time-to-time, in the sole discretion of our compensation committee. Mr.
Crane is also eligible to receive an incentive bonus determined by our
compensation committee. If Mr. Crane's employment is terminated for reasons
other than good cause, he will be entitled to receive eight months' salary and
a pro-rata portion of his incentive bonus.
In November 1994, we entered into an employment with Ms. Goodrum. Under this
agreement, Ms. Goodrum's base salary may be increased or decreased from time-
to-time, at our sole discretion. Ms. Goodrum is also eligible to receive an
incentive bonus. If Ms. Goodrum is terminated for reasons other than good
cause, then she will be entitled to receive six months' salary and a pro-rata
portion of her incentive bonus. We may terminate any of these employees at any
time.
For specific salary information in connection with our employment
arrangements with the above individuals, please see "Management--Executive
Compensation."
43
<PAGE>
In addition, the compensation committee as plan administrator of our 1999
stock incentive plan will have the authority to grant options and to structure
repurchase rights under that plan so that the shares subject to those options
or repurchase rights will immediately vest in connection with a change in
control of us (whether by merger, asset sale, successful tender offer for more
than 50% of the outstanding voting stock or by a change in the majority of the
board by reason of one or more contested elections for board membership), with
such vesting to occur either at the time of such change in control or upon the
subsequent involuntary termination of the individual's service within a
designated period (not to exceed 18 months) following such change in control.
Executive Compensation
The following table sets forth all compensation received during the year
ended December 31, 1998 by our Chief Executive Officer and our other four
executive officers whose salary and bonus exceeded $100,000 in 1998 for
services rendered in all capacities to us during 1998. "All other compensation"
represents matching payments under our 401(k) plan. All share numbers below are
calculated prior to a stock split of to , which is subject to stockholder
approval.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Annual Compensation
Compensation Awards
---------------- ------------
Shares
Underlying All Other
Name and Principal Position Salary Bonus Options/SARs Compensation
- --------------------------- -------- ------- ------------ ------------
<S> <C> <C> <C> <C>
Christopher A. Crane................ $150,000 $65,000 -- $1,500
Chairman of the Board, Chief
Executive Officer
and President
Walter W. Papciak................... 150,000 22,653 9,000 --
Executive Vice President of Sales,
Marketing and
Product Development
Michael Arabe....................... 129,887 5,764 18,000 974
Senior Vice President of Sales
Craig S. Farrington................. 102,240 9,790 -- 850
Vice President of Product Marketing
and Development
Karen Goodrum....................... 81,167 21,500 -- 615
Vice President of Finance and
Administration and
Chief Financial Officer
</TABLE>
44
<PAGE>
Option Grants in Last Fiscal Year
The following table sets forth certain information regarding options granted
to our executive officers listed in the Summary Compensation Table during the
fiscal year ended December 31, 1998. We have not granted any stock appreciation
rights.
Each option represents the right to purchase one share of common stock. The
options shown in this table are all incentive stock options granted pursuant to
our stock option plans. The options become exercisable at a rate of 20% per
year. To the extent not already exercisable, certain of these options may also
accelerate and become exercisable in the event of a merger in which we are not
the surviving corporation or upon the sale of substantially all of our assets.
Please see "--Benefit Plans" for more details regarding these options. In the
year ended December 31, 1998, we granted options to purchase an aggregate of
1,559,199 shares of common stock. This share number and all share numbers below
are calculated prior to a stock split of to , which is subject to
stockholder approval.
Option Grants In Last Fiscal Year
<TABLE>
<CAPTION>
Potential Realizable
Individual Grants Value at Assumed
--------------------------------------------- Annual Rates Of
Number of % of Total Stock Price
Securities Options/SARs Appreciation
Underlying Granted to For Option Term
Options/SARs Employees In Exercise Expiration ---------------------
Name Granted 1998 Price Date 5% 10%
- ---- ------------ ------------ -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Christopher A. Crane.... -- -- -- -- -- --
Walter W. Papciak....... 9,000 * $0.45 02/11/08 $ 2,547 $ 6,455
Michael Arabe........... 18,000 1.15% 1.00 06/29/08 11,320 28,687
Craig S. Farrington..... -- -- -- -- -- --
Karen Goodrum........... -- -- -- -- -- --
</TABLE>
- --------
* Less than 1% of total
The potential realizable value at assumed annual rates of stock price
appreciation for the option term represents hypothetical gains that could be
achieved for the respective options if exercised at the end of the option term.
The 5% and 10% assumed annual rates of compounded stock price appreciation are
mandated by rules of the Securities and Exchange Commission and do not
represent our estimate or projection of our future common stock prices. These
amounts represent certain assumed rates of appreciation in the value of our
common stock from the fair market value on the date of grant. Actual gains, if
any, on stock option exercises are dependent on the future performance of the
common stock and overall stock market conditions. The amounts reflected in the
table may not necessarily be achieved.
45
<PAGE>
Aggregated Option Exercises in the Year Ended December 31, 1998 and Year-End
Option Values
The following table sets forth certain information concerning the number and
value of unexercised options held by each of the executive officers listed in
the Summary Compensation Table at December 31, 1998. These option share numbers
reflect the full acceleration of the vesting schedule of certain options upon
completion of this offering and do not reflect a for stock split.
None of these executive officers exercised options to purchase common stock
during the year ended December 31, 1998.
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options
December 31, 1998 at December 31, 1998
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Christopher A. Crane........ -- -- -- --
Walter W. Papciak........... 67,200 31,800 $ $
Michael Arabe............... 67,200 40,800
Craig S. Farrington......... 67,200 22,800
Karen Goodrum............... 67,200 22,800
</TABLE>
There was no public trading market for the common stock as of December 31,
1998. Accordingly, the value of unexercised in-the-money options listed above
has been calculated on the basis of the assumed initial public offering price
of $ per share, less the applicable exercise price per share,
multiplied by the number of shares underlying such options.
Benefit Plans
1999 Stock Incentive Plan
Our 1999 stock incentive plan is intended to serve as the successor equity
incentive program to our amended and restated stock option plan, 1998
supplemental option plan, and 1998 equity participation plan. Our 1999 stock
incentive plan was adopted by the board and stockholders in February 1999. Our
1999 stock incentive plan will become effective on the date the underwriting
agreement is signed in connection with this offering of our common stock. All
outstanding options under the predecessor plans will be incorporated into our
1999 stock incentive plan on the date this plan is effective, and no further
option grants will be made under the predecessor plans after such date. The
incorporated options will continue to be governed by their existing terms,
unless the plan administrator elects to extend one or more features of our 1999
stock incentive plan to those options. Except as otherwise noted below, the
incorporated options will have substantially the same terms as in effect for
grants made under the discretionary option grant program of our 1999 stock
incentive plan. All share numbers below regarding our 1999 employee stock
purchase plan are calculated prior to a stock split of to , which is
subject to stockholder approval.
An initial reserve of 2,800,000 shares of common stock has been authorized
for issuance under our 1999 stock incentive plan. Such share reserve consists
of (1) approximately the number of shares which will remain available for
issuance under the predecessor plans on the date our 1999 stock incentive plan
becomes effective, including the shares subject to outstanding options
thereunder, plus (2) an additional increase of approximately 51,417 shares. The
number of shares of common stock reserved for issuance under our 1999 stock
incentive plan will automatically increase on the first trading day in January
each calendar year, beginning in calendar year 2000, by an amount equal to 2.5%
of the total number of shares of common stock outstanding on the last trading
day in December of the preceding calendar year, but in no event will any such
annual increase exceed 500,000 shares. In addition, no participant in our 1999
stock incentive plan may be granted stock options, separately exercisable stock
appreciation rights and direct stock issuances for more than 700,000 shares of
common stock in the aggregate per calendar year.
Our 1999 stock incentive plan is divided into five separate components: (1)
the discretionary option grant program under which eligible individuals in our
employ or service (including officers, non-employee board members and
consultants) may, at the discretion of the plan administrator, be granted
options to purchase shares of common stock at an exercise price not less than
100% of the fair market value of those shares on the
46
<PAGE>
grant date, (2) the stock issuance program under which such individuals may, in
the plan administrator's discretion, be issued shares of common stock directly,
through the purchase of such shares at a price not less than 100% of their fair
market value at the time of issuance or as a bonus tied to the performance of
services, (3) the salary investment option grant program which may, at the plan
administrator's sole discretion, be activated for one or more calendar years
and, if so activated, will allow executive officers and other highly
compensated employees the opportunity to apply a portion of their base salary
to the acquisition of special below-market stock option grants, (4) the
automatic option grant program under which option grants will automatically be
made at periodic intervals to eligible non-employee board members to purchase
shares of common stock at an exercise price equal to 100% of the fair market
value of those shares on the grant date and (5) the director fee option grant
program which may, in the plan administrator's sole discretion, be activated
for one or more calendar years and, if so activated, will allow non-employee
board members the opportunity to apply a portion of the annual retainer fee
otherwise payable to them in cash each year to the acquisition of special
below-market option grants.
The discretionary option grant program and the stock issuance program will be
administered by the compensation committee. The compensation committee as plan
administrator will have complete discretion to determine which eligible
individuals are to receive option grants or stock issuances under those
programs, the time or times when such option grants or stock issuances are to
be made, the number of shares subject to each such grant or issuance, the
status of any granted option as either an incentive stock option or a non-
statutory stock option under the federal tax laws, the vesting schedule to be
in effect for the option grant or stock issuance and the maximum term for which
any granted option is to remain outstanding. However, the board acting by
disinterested majority will have the exclusive authority to make any
discretionary option grants or stock issuances to members of the compensation
committee. The compensation committee will also have the exclusive authority to
select the executive officers and other highly compensated employees who may
participate in the salary investment option grant program in the event that
program is activated for one or more calendar years. Neither the compensation
committee nor the board will exercise any administrative discretion with
respect to option grants under the salary investment option grant program or
under the automatic option grant or director fee option grant program for the
non-employee board members. All grants under those latter three programs will
be made in strict compliance with the express provisions of each such program.
The exercise price for the shares of common stock subject to option grants
made under our 1999 stock incentive plan may be paid in cash or in shares of
common stock valued at fair market value on the exercise date. The option may
also be exercised through a same-day sale program without any cash outlay by
the optionee. In addition, the plan administrator may provide financial
assistance to one or more optionees in the exercise of their outstanding
options or the purchase of their unvested shares by allowing such individuals
to deliver a full-recourse, interest-bearing promissory note in payment of the
exercise price and any associated withholding taxes incurred in connection with
such exercise or purchase.
The plan administrator will have the authority to effect the cancellation of
outstanding options under the discretionary option grant program, including
options incorporated from the predecessor plans, in return for the grant of new
options for the same or different number of option shares with an exercise
price per share based upon the fair market value of our common stock on the new
grant date. Stock appreciation rights are authorized for issuance under the
discretionary option grant program. Such rights will provide the holders with
the election to surrender their outstanding options for an appreciation
distribution from us equal to the excess of (1) the fair market value of the
vested shares of common stock subject to the surrendered option over (2) the
aggregate exercise price payable for those shares. Such appreciation
distribution may be made in cash or in shares of common stock. None of the
incorporated options from the predecessor plans contain any stock appreciation
rights.
In the event that we are acquired by merger or asset sale, each outstanding
option under the discretionary option grant program which is not to be assumed
by the successor corporation will automatically accelerate in full, and all
unvested shares under the discretionary option grant and stock issuance
programs will immediately vest, except to the extent our repurchase rights with
respect to those shares are to be assigned to the successor
47
<PAGE>
corporation. The plan administrator will have complete discretion to grant one
or more options under the discretionary option grant program which will become
fully exercisable for all the option shares in the event those options are
assumed in the acquisition and the optionee's service with us or the acquiring
entity involuntarily terminates within a designated period not exceeding 18
months following such acquisition. The vesting of outstanding shares under the
stock issuance program may be accelerated upon similar terms and conditions.
The plan administrator will also have the authority to grant options which will
immediately vest upon an acquisition of us, whether or not those options are
assumed by the successor corporation.
The plan administrator is also authorized under the discretionary option
grant and stock issuance programs to grant options and to structure repurchase
rights so that the shares subject to those options or repurchase rights will
immediately vest in connection with a change in ownership or control of us,
whether this change in ownership or control is by a successful tender offer for
more than 50% of the outstanding voting stock or by a change in the majority of
the board by reason of one or more contested elections for board membership.
Such accelerated vesting may occur either at the time of such change or upon
the subsequent involuntary termination of the individual's service within a
designated period (not to exceed 18 months) following such change in control.
The options incorporated from the predecessor plans may, in the plan
administrator's discretion, immediately vest in the event of (1) our merger or
consolidation, or (2) the acquisition by another corporation or person of all
or substantially all of our assets or 80% or more of our then outstanding
voting stock, unless those options are assumed or substituted in the
acquisition of us. The plan administrator will have the discretion to extend
the acceleration provisions of our 1999 stock incentive plan to any or all of
the options outstanding under the predecessor plans.
In the event the plan administrator elects to activate the salary investment
option grant program for one or more calendar years, each of our executive
officers and other highly compensated employees selected for participation may
elect, prior to the start of the calendar year, to reduce his or her base
salary for that calendar year by a specified dollar amount not less than
$10,000 nor more than $50,000. Each selected individual who files such a timely
election will automatically be granted, on the first trading day in January of
the calendar year for which that salary reduction is to be in effect, a non-
statutory option to purchase that number of shares of common stock determined
by dividing the salary reduction amount by two-thirds of the fair market value
per share of common stock on the grant date. The option will be exercisable at
a price per share equal to one-third of the fair market value of the option
shares on the grant date. As a result, the total spread on the option shares at
the time of grant (the fair market value of the option shares on the grant date
less the aggregate exercise price payable for those shares) will be equal to
the amount of salary invested in that option. The option will vest and become
exercisable in a series of 12 equal monthly installments over the calendar year
for which the salary reduction is to be in effect and will be subject to full
and immediate vesting upon certain changes in the ownership or control of us.
Under the automatic option grant program, each individual who first becomes a
non-employee board member at any time after the completion of this offering
will automatically receive an option grant for 12,000 shares on the date such
individual joins the board, provided such individual has not been in our prior
employ. In addition, on the date of each annual stockholders meeting held after
the completion of this offering, each non-employee board member who is to
continue to serve as a non-employee board member will automatically be granted
an option to purchase 2,000 shares of common stock, provided such individual
has served on our board for at least six months.
Each automatic grant will have a term of 10 years, subject to earlier
termination following the optionee's cessation of board service. The option
will be immediately exercisable for all of the option shares; however, any
unvested shares purchased under the option will be subject to repurchase by us,
at the exercise price paid per share, should the optionee cease board service
prior to vesting in those shares. The shares subject to each 12,000-share
automatic option grant will vest in a series of eight successive equal semi-
annual installments upon the individual's completion of each six-month period
of board service over the four-year period measured from the option grant date.
Each 2,000-share automatic option grant will vest in two successive equal semi-
48
<PAGE>
annual installments upon the individual's completion of each six month period
of board service over the one year period measured from the option grant date.
However, the shares subject to each automatic grant will immediately vest in
full upon certain changes in control or ownership of us or upon the optionee's
death or disability while a board member.
Should the director fee option grant program be activated in the future, each
non-employee board member will have the opportunity to apply all or a portion
of any annual retainer fee otherwise payable in cash to the acquisition of a
below-market option grant. The option grant will automatically be made on the
first trading day in January in the year for which the retainer fee would
otherwise be payable in cash. The option will have an exercise price per share
equal to one-third of the fair market value of the option shares on the grant
date, and the number of shares subject to the option will be determined by
dividing the amount of the retainer fee applied to the program by two-thirds of
the fair market value per share of common stock on the grant date. As a result,
the total spread on the option (the fair market value of the option shares on
the grant date less the aggregate exercise price payable for those shares) will
be equal to the portion of the retainer fee invested in that option. The option
will vest and become exercisable for the option shares in a series of 12 equal
monthly installments over the calendar year for which the election is to be in
effect. However, the option will become immediately exercisable and vested for
all the option shares upon (1) certain changes in the ownership or control of
us or (2) the death or disability of the optionee while serving as a board
member.
The shares subject to each option under the salary investment option grant,
automatic option grant and director fee option grant programs will immediately
vest upon (1) an acquisition of us by merger or asset sale or (2) the
successful completion of a tender offer for more than 50% of our outstanding
voting stock or a change in the majority of the board effected through one or
more contested elections for board membership.
Limited stock appreciation rights will automatically be included as part of
each grant made under the automatic option grant, salary investment option
grant and director fee option grant programs and may be granted to one or more
of our officers as part of their option grants under the discretionary option
grant program. Options with such a limited stock appreciation right may be
surrendered to us upon the successful completion of a hostile tender offer for
more than 50% of our outstanding voting stock. In return for the surrendered
option, the optionee will be entitled to a cash distribution from us in an
amount per surrendered option share equal to the excess of (1) the highest
price per share of common stock paid in connection with the tender offer over
(2) the exercise price payable for such share.
The board may amend or modify our 1999 stock incentive plan at any time,
subject to any required stockholder approval. Our 1999 stock incentive plan
will terminate on the earliest of (1) February 18, 2009, (2) the date on which
all shares available for issuance under our 1999 stock incentive plan have been
issued as fully-vested shares or (3) the termination of all outstanding options
in connection with certain changes in control or ownership of us.
1999 Employee Stock Purchase Plan
Our 1999 employee stock purchase plan was adopted by the board and
stockholders in February 1999 and will become effective immediately upon the
execution of the underwriting agreement for this offering. Our employee stock
purchase plan is designed to allow our eligible employees to purchase shares of
common stock, at semi-annual intervals, through their periodic payroll
deductions under our employee stock purchase plan. All share numbers below
regarding our 1999 employee stock purchase plan are calculated prior to a stock
split of to , which is subject to stockholder approval.
An initial reserve of 300,000 shares of common stock has been authorized for
issuance under our employee stock purchase plan. The number of shares of common
stock reserved for issuance under our employee stock purchase plan will
automatically increase on the first trading day in January each calendar year,
beginning in calendar year 2000, by an amount equal to 2% of the total number
of shares of common stock outstanding on the last trading day in December of
the preceding calendar year, but in no event will any such annual increase
exceed 300,000 shares. Our employee stock purchase plan will be implemented in
a series of
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successive offering periods, each with a maximum duration for 24 months.
However, the initial offering period will begin on the execution date of the
underwriting agreement and will end on the last business day in July 2001. The
next offering period will commence on the first business day in August 2001,
and subsequent offering periods will commence as designated by the plan
administrator.
Individual employees who are scheduled to work more than 20 hours per week
for more than 5 calendar months per year on the start date of any offering
period may enter our employee stock purchase plan on that start date or on the
first business day of February or August after that start date. Individuals who
become eligible employees after the start date of the offering period may join
our employee stock purchase plan on any subsequent semi-annual entry date
within that offering period.
Payroll deductions may not exceed 10% of the participant's cash earnings, and
the accumulated payroll deductions of each participant will be applied to the
purchase of shares on his or her behalf on the last business day in January and
July each year at a purchase price per share equal to 85% of the lower of (1)
the fair market value of the common stock on the participant's entry date into
the offering period or (2) the fair market value on the semi-annual purchase
date. In no event, however, may any participant purchase more than 1,500 shares
on any semi-annual purchase date nor may all participants in the aggregate
purchase more than 75,000 shares on any such semi-annual purchase date.
Should the fair market value per share of common stock on any purchase date
be less than the fair market value per share on the start date of the two-year
offering period, then that offering period will automatically terminate, and a
new two-year offering period will begin on the next business day, with all
participants in the terminated offering to be automatically transferred to the
new offering period.
In the event we are acquired by merger or asset sale, all outstanding
purchase rights will automatically be exercised immediately prior to the
effective date of such acquisition. The purchase price will be equal to 85% of
the lower of (1) the fair market value per share of common stock on the
participant's entry date into the offering period in which such acquisition
occurs or (2) the fair market value per share of common stock immediately prior
to such acquisition.
Our employee stock purchase plan will terminate on the earlier of (1) the
last business day of July 2009 (2) the date on which all shares available for
issuance under our employee stock purchase plan shall have been sold pursuant
to purchase rights exercised thereunder or (3) the date on which all purchase
rights are exercised in connection with an acquisition of us by merger or asset
sale.
The board may at any time alter, suspend or discontinue our employee stock
purchase plan. However, certain amendments to our employee stock purchase plan
may require stockholder approval.
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Certain Relationships and Related Transactions
Certain Sales of Securities
We have issued the following securities in private placement transactions:
4,270,336 shares of Series A preferred stock and Class B common stock warrants
exercisable for 379,869 shares for an aggregate price of $5,000,000 in October
1994; and 637,790 shares of Series B preferred stock, Class A common stock
warrants exercisable for 37,329 shares and Class B common stock warrants
exercisable for 306,097 shares for an aggregate price of $1,150,000 in February
1998. These numbers do not reflect the for stock split. The
purchasers of such securities include, among others, the following executive
officers, directors and holders of more than 5% of our outstanding stock and
their affiliates:
<TABLE>
<CAPTION>
Preferred Stock Warrants
Executive Officer, Directors ------------------ --------------- Total
and 5% Stockholders Series A Series B Class A Class B Consideration
---------------------------- --------- -------- ------- ------- -------------
<S> <C> <C> <C> <C> <C>
Christopher A. Crane......... -- 69,325 37,329 -- $ 125,000
Funds Affiliated with Summit
Partners(1)................. 4,270,336 554,600 -- 678,500 $6,000,000
</TABLE>
- --------
(1) Includes Summit Ventures III, L.P. and Summit Investors II, L.P. Mr. Avis,
one of our directors, is a general partner of Stamps, Woodsum & Co. III, a
general partner of Summit Partners III, L.P. Summit Partners III, L.P. is
the general partner of Summit Ventures III, L.P. Mr. Avis is also a general
partner of Summit Investors II, L.P.
For additional information regarding the sale of securities to executive
officers, directors and stockholders of more than 5% of our outstanding common
stock, please see "Principal and Selling Stockholders."
Holders of outstanding preferred stock and common stock issuable upon
exercise of warrants are entitled to certain registration rights with respect
to the common stock issued or issuable upon conversion or exercise of such
preferred stock or warrants. Please see "Description of Securities--
Registration Rights."
Employment Agreements
We have entered into employment agreements with each of Messrs. Crane, Arabe,
Farrington and Papciak and Ms. Goodrum. Please see "Management--Employment and
Severance Arrangements" for more details regarding these agreements.
In November 1994, we entered into an employment agreement with Mr. Fenton.
Under this agreement, Mr. Fenton's base salary may be increased or decreased
from time-to-time, at our sole discretion. Mr. Fenton is also eligible to
receive an incentive bonus. If Mr. Fenton's employment is terminated for
reasons other than good cause, then he will be entitled to receive six months'
salary and a pro-rata portion of his incentive bonus. We may terminate Mr.
Fenton at any time. Mr. Fenton's current salary under the employment agreement
is $96,996 per year. In addition, Mr. Fenton's current potential quarterly
incentive bonuses, to be determined pursuant to the terms of the employment
agreement, are based upon 1.25% of Mr. Fenton's annual salary.
In November 1998, we entered into employment agreements with each of Messrs.
DeMoss and Potter. Under these agreements, each employee receives a base salary
of at least $225,000 per year and a bonus of up to $50,000 per year. In
addition, pursuant to the agreement, each employee was granted a fully vested
option to purchase 6,920.5 shares of our common stock, on a pre-split basis,
and an additional option to purchase 416,666.5 shares of our common stock, on a
pre-split basis, 20% of which vested immediately and 80% of which vest over
48 months commencing on January 1, 1999. The term of each agreement expires on
January 1, 2003. If either employee is terminated without cause prior to
November 5, 2000, then he shall be entitled to receive twelve months' salary in
exchange for consulting services. If either employee is terminated after
November 5, 2000, then he shall receive his base salary for a period equal to
the shorter of six months or the remaining term of his employment agreement in
exchange for consulting services. During any period in which the terminated
employee provides consulting services to us, his options will continue to vest.
In any event, at least 75% of such terminated employee's options will vest if
he is terminated without cause prior to January 1, 2003.
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Corporate Headquarters Lease
We lease our corporate headquarters in San Diego, California from a limited
partnership whose general partner is a company owned by Mr. Crane, our
President, Chief Executive Officer and Chairman of the Board. In addition, Mr.
Beasley, one of our directors, is a limited partner of the limited partnership
from which we lease our facilities. Our lease is for a five-year term
commencing in February 1999 with five two-year extension options. We believe
that the terms of the lease are no less favorable to us than those that could
have been obtained from an independent third party lessor at the time the lease
was executed. For additional information regarding our facility leases, please
see "Business--Facilities."
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Principal and Selling Stockholders
The following table sets forth certain information with respect to the
beneficial ownership of our common stock as of February 19, 1999 on a pre-split
basis and assuming the exercise of all warrants, and as adjusted to reflect the
sale of the shares of common stock offered hereby, by (1) each person (or group
of affiliated persons) who we know owns beneficially 5% or more of our common
stock, (2) each of our directors, (3) our executive officers listed in the
Summary Compensation Table and (4) all of our directors and executive officers
as a group. Percentage of ownership is calculated as required by Commission
Rule 13d-3(d)(1). Except as indicated below, the persons named in the table
have sole voting and investment power with respect to all shares of common
stock shown as beneficially owned by them. The number of shares underlying
options includes shares which are exercisable within 60 days from the date of
this offering. The address for those individuals for which an address is not
otherwise indicated is: 9888 Carroll Centre Road, Suite 100, San Diego,
California 92126-4581. Certain selling stockholders may sell shares in
connection with the exercise of the over-allotment option. Mr. Crane may sell
up to shares, Mr. Beasley may sell up to shares and Summit
Partners may sell up to shares. Any shares that may be sold by selling
stockholders if the underwriters exercise their over-allotment option have not
been reflected in this table. For further information regarding the selling
stockholders' relationship with us during the last three years, please see,
"Management--Executive Officers and Directors" and "Certain Relationships and
Related Transactions."
<TABLE>
<CAPTION>
Number of Percentage of Percentage of
Number of Shares Shares Beneficially Shares Beneficially
Shares Underlying Owned Prior Owned After
Beneficial Owner Outstanding Options to this Offering this Offering
- ---------------- ----------- ---------- ------------------- -------------------
<S> <C> <C> <C> <C>
Funds affiliated with
Summit Partners........ 5,503,436 -- 52.67%
499 Hamilton Avenue,
Suite 200
Palo Alto, CA 94301
Christopher A. Crane.... 3,985,974 -- 38.15%
Gregory M. Avis......... 5,503,436 -- 52.67%
Robert C. Beasley....... 894,540 -- 8.56%
Kenneth F. Potashner.... -- -- *
Walter W. Papciak....... -- 69,000 *
Michael Arabe........... -- 78,600 *
Craig S. Farrington..... -- 78,600 *
Karen Goodrum........... -- 78,600 *
All directors and
executive officers as a
group (8 persons)...... 10,383,950 304,800 100% 100%
</TABLE>
- --------
* Less than 1% of total.
The 5,503,436 shares listed above as outstanding for Summit Partners and Mr.
Avis includes 4,728,437 shares beneficially owned by Summit Ventures III, L.P.
and 96,499 shares beneficially owned by Summit Investors II, L.P. This number
also includes 664,930 shares issuable upon exercise of warrants to purchase
common stock beneficially owned by Summit Ventures III, L.P. and 13,570 shares
issuable upon exercise of warrants to purchase common stock beneficially owned
by Summit Investors II, L.P. Mr. Avis is a general partner of Stamps, Woodsum &
Co. III, a general partner of Summit Partners III, L.P. Summit Partners III,
L.P. is the general partner of Summit Ventures III, L.P. Mr. Avis is also a
general partner of Summit Investors II, L.P. Mr. Avis disclaims beneficial
ownership of all shares of common stock issued or issuable to Summit
Ventures III, L.P. and Summit Investors II, L.P., except to the extent of his
pecuniary interest, but exercises shared voting and investment power with
respect to all such shares.
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<PAGE>
Description of Securities
The following information describes our common stock and preferred stock and
certain provisions of our certificate of incorporation and our bylaws as will
be in effect upon the closing of this offering. This description is only a
summary. You should also refer to the certificate and bylaws which have been
filed with the SEC as exhibits to our registration statement, of which this
prospectus forms a part. The descriptions of our common stock and preferred
stock reflect changes to our capital structure that will occur upon the
approval of our board of directors and stockholders and upon the closing of
this offering in accordance with the terms of the certificate. All share
numbers below are calculated prior to a stock split of to , which is
subject to stockholder approval.
Upon the completion of the offering our authorized capital stock will consist
of 70,000,000 shares of common stock, par value $0.01 per share, and 5,000,000
shares of preferred stock, par value $0.01 per share.
Common Stock
As of December 31, 1998, there were 4,817,360 shares of common stock
outstanding and held of record by three stockholders. Based upon the number of
shares outstanding and giving effect to (1) the automatic conversion of each
share of our Class B common stock into one share of our Class A common stock
and the renaming of such stock as "common stock" upon the closing of this
offering, (2) the automatic conversion of each share of our preferred stock
into one share of our common stock upon the closing of this offering, (3) a
for stock split of our common stock to be effected prior to the
closing of this offering and (4) the issuance of the shares of common
stock offered by us hereby, there will be shares of common stock
outstanding upon the closing of this offering.
Holders of common stock are entitled to one vote for each share held on all
matters submitted to a vote of stockholders and do not have cumulative voting
rights. Accordingly, holders of a majority of the shares of common stock
entitled to vote in any election of directors may elect all of the directors
standing for election. Holders of common stock are entitled to receive ratably
such dividends, if any, as may be declared by the board of directors out of
funds legally available therefor, subject to any preferential dividend rights
of any outstanding preferred stock. Holders of common stock have no preemptive,
subscription, redemption or conversion rights. The outstanding shares of common
stock are, and the shares offered by us in this offering will be, when issued
in consideration for payment thereof, fully paid and nonassessable. The rights,
preferences and privileges of holders of common stock are subject to, and may
be materially adversely affected by, the rights of the holders of shares of any
series of preferred stock which we may designate and issue in the future. Upon
the closing of this offering, there will be no shares of preferred stock
outstanding.
Preferred Stock
As of December 31, 1998, there were 4,908,126 shares of convertible preferred
stock outstanding. Each outstanding share of convertible preferred stock will
be converted into one share of common stock upon the closing of this offering
and such shares of convertible preferred stock will no longer be authorized,
issued or outstanding.
Upon the closing of this offering, the board of directors will be authorized,
without further stockholder approval, to issue from time to time up to an
aggregate of 5,000,000 shares of preferred stock in one or more series and to
fix or alter the designations, powers, preferences, rights and any
qualifications, limitations or restrictions of the shares of each such series
thereof, including the dividend rights, dividend rates, conversion rights,
voting rights, terms of redemption (including sinking fund provisions),
redemption price or prices, liquidation preferences and the number of shares
constituting any series or designations of such series. We have no present
plans to issue any shares of preferred stock. Please see "--Anti-Takeover
Effects of Certain Provisions of Delaware Law and our Certificate of
Incorporation and Bylaws."
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<PAGE>
Options
As of December 31, 1998, options to purchase a total of 2,385,449 shares of
common stock were outstanding, all of which are subject to lock-up arrangements
under the terms of the option agreements. Upon completion of this offering,
options to purchase a total of 2,800,000 shares of common stock may be granted
under the 1999 stock incentive plan. Please see "Management--Benefit Plans" and
"Shares Eligible for Future Sale."
Common Stock Warrants
As of December 31, 1998, we have outstanding warrants to purchase a total of
723,295 shares of common stock, at an exercise price of $0.01 per share and
warrants to purchase a total of 213,068 shares of common stock, at a weighted
average exercise price of $1.76 per share. The warrants contain anti-dilution
provisions providing for adjustments of the exercise price and the number of
shares underlying the warrants upon the occurrence of certain events, including
any recapitalization, reclassification, stock dividend, stock split, stock
combination or similar transaction. The warrants grant their holders certain
registration rights with respect to the common stock issuable upon their
exercise, which are described below. All of these warrants will be exercisable
immediately prior to this offering. Warrants to purchase 213,068 shares expire
in September 2003, warrants to purchase 379,869 shares expire in October 2004,
and warrants to purchase 343,426 in February 2008.
Registration Rights
As of December 31, 1998, pursuant to the terms of an agreement with certain
of our stockholders, after the closing of this offering, the holders of
5,844,489 shares of outstanding or issuable common stock on a pre-split basis
will be entitled to certain demand registration rights with respect to the
registration of their shares under the Securities Act of 1933. The holders of
50% of such shares are entitled to demand that we register their shares under
the Securities Act of 1933, subject to certain limitations. We are not required
to effect more than two such registrations for such holders pursuant to such
demand registration rights. In addition, after the closing of this offering,
these holders will be entitled to certain piggyback registration rights with
respect to the registration of such shares of common stock under the Securities
Act of 1933. In the event that we propose to register any shares of common
stock under the Securities Act of 1933 either for our account or for the
account of our other security holders, the holders of shares having piggyback
rights are entitled to receive notice of such registration and are entitled to
include their shares in any such registration, subject to certain limitations.
Further, at any time after we become eligible to file a registration statement
on Form S-3, the holders of 584,449 shares of common stock on a pre-split basis
may require us to file registration statements under the Securities Act of 1933
on Form S-3 with respect to their shares of common stock. These registration
rights are subject to certain conditions and limitations, including the right
of the underwriters of an offering to limit the number of shares of common
stock held by securityholders with registration rights to be included in such
registration. We are generally required to bear all of the expenses of all such
registrations, including the reasonable fees of a single counsel acting on
behalf of all selling holders, except underwriting discounts and selling
commissions. Registration of any of the shares of common stock held by
securityholders with registration rights would result in such shares becoming
freely tradable without restriction under the Securities Act of 1933
immediately upon effectiveness of such registration.
Anti-Takeover Effects of Certain Provisions of Delaware Law and our Certificate
of Incorporation and Bylaws
We are subject to the provisions of Section 203 of the Delaware General
Corporation Law. Subject to certain exceptions, Section 203 prohibits a
publicly-held Delaware corporation from engaging in a "business combination"
with an "interested stockholder" for a period of three years after the date of
the transaction in which the person became an interested stockholder, unless
the interested stockholder attained such status with the approval of the board
of directors or unless the business combination is approved in a prescribed
manner. A
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<PAGE>
"business combination" includes mergers, asset sales and other transactions
resulting in a financial benefit to the interested stockholder. Subject to
certain exceptions, an "interested stockholder" is a person who, together with
affiliates and associates, owns, or within three years did own, 15% or more of
the corporation's voting stock. This statute could prohibit or delay the
accomplishment of mergers or other takeover or change in control attempts with
respect to us and, accordingly, may discourage attempts to acquire us.
In addition, certain provisions of our certificate and bylaws, which
provisions will be in effect upon the closing of this offering and are
summarized in the following paragraphs, may be deemed to have an anti-takeover
effect and may delay, defer or prevent a tender offer or takeover attempt that
a stockholder might consider in its best interest, including those attempts
that might result in a premium over the market price for the shares held by
stockholders.
Board of Directors Vacancies. Our bylaws authorize the board of directors to
fill vacant directorships or increase the size of the board of directors. This
may deter a stockholder from removing incumbent directors and simultaneously
gaining control of the board of directors by filling the vacancies created by
such removal with its own nominees.
Staggered Board. Our bylaws provide that our board will be classified into
two classes of directors beginning at the next annual meeting of stockholders.
Please see "Management--Classes of the Board" for more information regarding
the staggered board.
Stockholder Action; Special Meeting of Stockholders. Our certificate provides
that stockholders may not take action by written consent, but only at duly
called annual or special meetings of stockholders. Our bylaws further provide
that special meetings of our stockholders may be called only by the President,
Chief Executive Officer or Chairman of the board of directors or a majority of
the board of directors.
Advance Notice Requirements for Stockholder Proposals and Director
Nominations. Our bylaws provide that stockholders seeking to bring business
before our annual meeting of stockholders, or to nominate candidates for
election as directors at our annual meeting of stockholders, must provide
timely notice thereof in writing. To be timely, a stockholder's notice must be
delivered to, or mailed and received at, our principal executive offices not
less than 120 days prior to the first anniversary of the date of our notice of
annual meeting provided with respect to the previous year's annual meeting of
stockholders; provided, that if no annual meeting of stockholders was held in
the previous year or the date of the annual meeting of stockholders has been
changed to be more than 30 calendar days earlier than such anniversary, notice
by the stockholder, to be timely, must be so received a reasonable time before
the solicitation is made. Our bylaws also specify certain requirements as to
the form and content of a stockholder's notice. These provisions may preclude
stockholders from bringing matters before our annual meeting of stockholders or
from making nominations for directors at our annual meeting of stockholders.
Authorized But Unissued Shares. Our authorized but unissued shares of common
stock and preferred stock are available for future issuance without stockholder
approval, subject to certain limitations imposed by the Nasdaq National Market.
These additional shares may be utilized for a variety of corporate purposes,
including future public offerings to raise additional capital, corporate
acquisitions and employee benefit plans. The existence of authorized but
unissued and unreserved common stock and preferred stock could render more
difficult or discourage an attempt to obtain control of us by means of a proxy
contest, tender offer, merger or otherwise.
Delaware law provides generally that the affirmative vote of a majority of
the shares entitled to vote on any matter is required to amend a corporation's
certificate of incorporation or bylaws, unless a corporation's certificate of
incorporation or bylaws, as the case may be, requires a greater percentage.
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<PAGE>
Limitation of Liability and Indemnification Matters
Our certificate provides that, except to the extent prohibited by Delaware
law, our directors shall not be personally liable to us or our stockholders for
monetary damages for any breach of their fiduciary duty as directors. Under
Delaware law, the directors have a fiduciary duty to us which is not eliminated
by this provision of our certificate and, in appropriate circumstances,
equitable remedies such as injunctive or other forms of nonmonetary relief will
remain available. In addition, each director will continue to be subject to
liability under Delaware law for breach of their duty of loyalty to us for acts
or omissions which are found by a court of competent jurisdiction to be not in
good faith or which involve intentional misconduct, or knowing violations of
law, for actions leading to improper personal benefit to the director, and for
payment of dividends or approval of stock repurchases or redemptions that are
prohibited by Delaware law. This provision also does not affect the directors'
responsibilities under any other laws, such as the federal securities laws or
state or federal environmental laws.
Section 145 of the Delaware General Corporation Law allows a corporation to
indemnify its directors and officers and to purchase insurance with respect to
liability arising out of their capacity or status as directors and officers,
provided that the indemnification does not eliminate or limit the liability of
a director for the following:
. any breach of the director's duty of loyalty to us or our stockholders;
. acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;
. unlawful payments of dividends or unlawful stock purchases or
redemptions; and
. any transaction from which the director derived an improper personal
benefit.
Delaware law further provides that the permitted indemnification shall not be
deemed exclusive of any other rights to which the directors and officers may be
entitled under our bylaws, any agreement, a vote of stockholders or otherwise.
Our certificate eliminates the personal liability of directors to the fullest
extent permitted by Delaware law. In addition, our certificate provides that we
may fully indemnify any person who was or is a party, or is threatened to be
made a party to, any threatened, pending or completed action, suit or
proceeding (whether civil, criminal, administrative or investigative) by reason
of the fact that such person is or was one of our directors or officers or is
or was serving at our request as a director or officer of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise,
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection
with such action, suit or proceeding.
We have also entered into agreements to indemnify our directors and executive
officers, in addition to the indemnification provided for in our bylaws. We
believe that these provisions and agreements are necessary to attract and
retain qualified directors and executive officers. Our bylaws also permit us to
secure insurance on behalf of any officer, director, employee or other agent
for any liability arising out of his or her actions, regardless of whether
Delaware law would permit indemnification. We have applied for liability
insurance for our officers and directors.
At present, there is no pending litigation or proceeding involving any
director, officer, employee or agent as to which indemnification will be
required or permitted under the certificate. We are not aware of any threatened
litigation or proceeding that may result in a claim for such indemnification.
Transfer Agent and Registrar
The transfer agent and registrar for the common stock is American Stock
Transfer.
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<PAGE>
Shares Eligible For Future Sale
The market price of our common stock could decline as a result of sales of a
large number of shares of our common stock in the market after this offering,
or the perception that such sales could occur. Such sales also might make it
more difficult for us to sell equity securities in the future at a time and
price that we deem appropriate. After this offering, we will have outstanding
shares of common stock. Of these shares, the shares being offered
hereby are freely tradable.
All of our directors and officers, stockholders, optionholders and
warrantholders, who, as of December 31, 1998, held a total of 13,047,298 shares
of our outstanding or issuable common stock, on a pre-split basis, have entered
into lock-up agreements. Under these lock-up agreements, they have agreed that
they will not sell, directly or indirectly, any shares of common stock without
the prior written consent of Volpe Brown Whelan & Company, LLC, for a period of
180 days from the date of this prospectus.
In general, under Rule 144, as currently in effect, a person (or persons
whose shares are required to be aggregated), including an affiliate, who has
beneficially owned shares for at least one year is entitled to sell, within any
three-month period commencing 90 days after the date of this prospectus, a
number of shares that does not exceed the greater of (1) 1% of the then
outstanding shares of common stock (approximately shares immediately
after this offering) or (2) the average weekly trading volume in the common
stock during the four calendar weeks preceding the date on which notice of such
sale is filed, subject to certain restrictions. In addition, a person who is
not deemed to have been our affiliate at any time during the 90 days preceding
a sale and who has beneficially owned the shares proposed to be sold for at
least two years would be entitled to sell such shares under Rule 144(k) without
regard to the requirements described above. To the extent that shares were
acquired from one of our affiliates, such person's holding period for the
purpose of effecting a sale under Rule 144 commences on the date of transfer
from the affiliate.
As of December 31, 1998, options to purchase a total of 2,385,449 shares of
common stock, on a pre-split basis, were outstanding, of which options to
purchase 679,623 shares, on a pre-split basis, were exercisable. Of the options
to purchase 1,705,826 shares of common stock, on a pre-split basis, that were
not exercisable, options to purchase 152,000 shares of common stock, on a pre-
split basis, shall immediately vest and become exercisable upon the closing of
this offering. Upon the closing of this offering, we intend to file a
registration statement to register for resale the 2,800,000 shares of common
stock, on a pre-split basis, reserved for issuance under our stock option
plans. We expect such registration statement to become effective immediately
upon filing. Shares issued upon the exercise of stock options granted under our
stock option plans will be eligible for resale in the public market from time
to time subject to vesting and, in the case of certain options, the expiration
of the lock-up agreements referred to below.
As of December 31, 1998 certain stockholders and warrantholders, holding
approximately 5,844,489 shares of outstanding or issuable common stock, on a
pre-split basis, had the right, subject to certain conditions and limitations,
to include their shares in certain registration statements relating to our
securities. By exercising their registration rights and causing a large number
of shares to be registered and sold in the public market, these holders may
cause the price of the common stock to fall. In addition, any demand to include
such shares in our registration statements could have a material adverse effect
on our ability to raise needed capital. Please see "Management--Benefit Plans,"
"Principal and Selling Stockholders," "Description of Securities--Registration
Rights," "Shares Eligible for Future Sale" and "Underwriting."
58
<PAGE>
Underwriting
Under the terms and conditions contained in an underwriting agreement among
the underwriters and us, each of the underwriters, for whom Volpe Brown Whelan
& Company, LLC, EVEREN Securities, Inc. and Needham & Company, Inc., are acting
as representatives, have severally agreed to purchase from us the number of
shares of common stock set forth opposite its name below:
<TABLE>
<CAPTION>
Number of
Underwriter Shares
- ----------- -------------
<S> <C>
Volpe Brown Whelan & Company, LLC.................................
EVEREN Securities, Inc. ..........................................
Needham & Company, Inc. ..........................................
-------------
Total.........................................................
=============
</TABLE>
The underwriting agreement provides that the obligations of the several
underwriters to purchase shares of common stock are subject to approval of
certain legal matters by their counsel and to certain other conditions. Under
the terms and conditions of the underwriting agreement, all of the underwriters
are obligated to take and pay for all such shares of common stock if any are
taken.
The underwriters propose initially to offer the shares of common stock
directly to the public at the public offering price set forth on the cover page
of this prospectus and to certain dealers at such price, less a concession not
in excess of $ per share. The underwriters may allow, and such dealers
may reallow, concessions not in excess of $ per share of the common
stock to certain other dealers. After the initial public offering of the common
stock, the offering price of the common stock and other selling terms may be
changed by the underwriters. The underwriters expect to deliver the shares
against payment in San Francisco, California on , 1999.
Pursuant to the underwriting agreement, the selling stockholders have granted
to the underwriters an option, exercisable for 30 days from the date of this
prospectus, to purchase up to additional shares of common stock on the
same terms and conditions as set forth on the cover page of this prospectus.
The underwriters may exercise this option solely to cover over-allotments. To
the extent such option is exercised, each underwriter will have a commitment
subject to certain conditions, to purchase a number of additional shares of
common stock proportionate to such underwriter's initial commitment pursuant to
the underwriting agreement.
From the date of this prospectus until 180 days after such date, we and all
of our stockholders, officers and directors have agreed not to (1) offer, sell,
contract to sell, make any short sale, pledge or otherwise dispose of, directly
or indirectly, any shares of common stock or any options to acquire shares of
common stock or securities convertible into or exchangeable for any other
rights to purchase or acquire common stock or (2) enter into any swap or other
agreements that transfers, in whole or in part, any of the economic
consequences or ownership of common stock, without the prior consent of Volpe
Brown Whelan & Company, LLC.
The underwriters have reserved for sale, at the initial public offering
price, shares of common stock for certain of our directors, officers,
employees, friends and family who have expressed an interest in purchasing
shares of common stock in this offering. Such persons are expected to purchase,
in the aggregate, not more than 5% of the common stock offered in this
offering. The number of shares available for sale to the general public in this
offering will be reduced to the extent such persons purchase such reserved
shares. Any reserved shares not purchased will be offered by the underwriters
on the same basis as other shares offered hereby.
We and the selling stockholders have agreed to indemnify the underwriters
against certain liabilities, losses and expenses, including liabilities under
the Securities Act of 1933, or to contribute to payments that the underwriters
may be required to make in respect thereof.
59
<PAGE>
Prior to this offering, there has been no public market for our common stock.
The initial public offering price for the shares of common stock in this
offering was determined by agreement between us and the underwriters. Among the
factors considered in making such determination were the history of, and the
prospects for, the industry in which we compete, an assessment of our
management, our present operations, our historical results of operations and
the trend of our revenues and earnings, our prospects for future earnings, the
general condition of the securities markets at the time of this offering and
the price of similar securities of generally comparable companies. We cannot
assure you that an active trading market will develop for our common stock or
that our common stock will trade in the public markets at or above the initial
public offering price.
Certain persons participating in this offering may engage in transactions
that stabilize, maintain or otherwise affect the price of our common stock
including over-allotment, stabilizing and short-covering transactions and the
impositions of penalty bids. Certain persons participating in this offering may
also engage in passive market making transactions in the common stock on the
Nasdaq National Market.
In order to facilitate this offering, certain persons participating in this
offering may engage in transactions that stabilize, maintain or otherwise
affect the price of the common stock during and after this offering.
Specifically, the underwriters may over-allot or otherwise create a short
position in the common stock for their own account by selling more shares of
common stock than have been sold to them by us. The underwriters may elect to
cover any such short position by purchasing shares of common stock in the open
market or by exercising the over-allotment option granted to the underwriters.
In addition, the underwriters may stabilize or maintain the price of the common
stock by bidding for or purchasing shares of common stock in the open market
and may impose penalty bids, under which selling concessions allowed to
syndicate members or other broker-dealers participating in this offering are
reclaimed if shares of common stock previously distributed in this offering are
repurchased in connection with stabilization transactions or otherwise. The
effect of these transactions may be to stabilize or maintain the market price
at a level above that which might otherwise prevail in the open market. The
imposition of a penalty bid may also affect the price of the common stock to
the extent that it discourages resales thereof. No representation is made as to
the magnitude or effect of any such stabilization or other transactions. Such
transactions may be effected on the Nasdaq National Market or otherwise and, if
commenced, may be discontinued at any time.
60
<PAGE>
Legal Matters
The validity of the shares of common stock offered hereby will be passed upon
for us by Brobeck, Phleger & Harrison LLP, San Diego, California. Certain legal
matters in connection with this offering will be passed upon for the
underwriters by Katten Muchin & Zavis, Chicago, Illinois.
Experts
Ernst & Young LLP, independent auditors, have audited our financial
statements and schedule included in this prospectus as of December 31, 1997 and
1998 and for each of the three years in the period ended December 31, 1998, as
set forth in their report, which is included in this prospectus. In addition,
Ernst & Young LLP have audited the financial statements of REALBID, LLC
included in this prospectus as of December 31, 1997 and for the period from
June 19, 1997 (inception) to December 31, 1997, as set forth in their report,
which is also included in this prospectus. Our financial statements and the
financial statements of REALBID, LLC are included in this prospectus in
reliance on Ernst & Young LLP's reports, given on their authority as experts in
accounting and auditing.
Where You Can Find More Information
We have filed with the SEC a registration statement on Form S-1 (including
the exhibits, schedules and amendments to the registration statement) under the
Securities Act of 1933 with respect to the shares of common stock to be sold in
this offering. This prospectus does not contain all the information set forth
in the registration statement. For further information with respect to COMPS
and the shares of common stock to be sold in this offering, reference is made
to the registration statement. Statements contained in this prospectus as to
the contents of any contract, agreement or other document referred to are not
necessarily complete, and in each instance reference is made to the copy of
such contract, agreement or other document filed as an exhibit to the
registration statement, each such statement being qualified in all respects by
such reference.
You may read and copy all or any portion of the registration statement or any
other information we file at the SEC's public reference room at 450 Fifth
Street, N.W., Washington, D.C. 20549. You can request copies of these
documents, upon payment of a duplicating fee, by writing to the SEC. Please
call the SEC at 1-800-SEC-0330 for further information on the operation of the
public reference rooms. Our SEC filings, including the registration statement,
are also available to you on the Commission's Web site (http://www.sec.gov).
As a result of this offering, we will become subject to the information and
reporting requirements of the Securities Exchange Act of 1934, and, in
accordance therewith, will file periodic reports, proxy statements and other
information with the SEC. Upon approval of the common stock for the quotation
on the Nasdaq National Market, such reports, proxy and information statements
and other information may also be inspected at the offices of Nasdaq
Operations, 1735 K Street, N.W., Washington, D.C. 20006.
We intend to furnish our stockholders with annual reports containing audited
financial statements and with quarterly reports for the first three quarters of
each year containing unaudited interim consolidated financial information.
61
<PAGE>
Index to Financial Statements
<TABLE>
<CAPTION>
Page
----
<S> <C>
COMPS.COM, Inc.
Report of Ernst & Young LLP, Independent Auditors......................... F-2
Balance Sheets as of December 31, 1997 and 1998........................... F-3
Statements of Operations for the years ended December 31, 1996, 1997 and
1998..................................................................... F-4
Statements of Stockholders' Deficit for the years ended December 31, 1996,
1997 and 1998............................................................ F-5
Statements of Cash Flows for the years ended December 31, 1996, 1997 and
1998..................................................................... F-6
Notes to Financial Statements............................................. F-7
REALBID, LLC
Report of Ernst & Young LLP, Independent Auditors......................... F-21
Statements of Operations for the period from June 19, 1997 (inception) to
December 31, 1997 and the nine-month period ended September 30, 1998
(unaudited).............................................................. F-22
Statements of Members' Equity for the period from June 19, 1997
(inception) to December 31, 1997 and the nine-month period ended
September 30, 1998 (unaudited)........................................... F-23
Statements of Cash Flows for the period from June 19, 1997 (inception) to
December 31, 1997 and the nine-month period ended September 30, 1998
(unaudited).............................................................. F-24
Notes to Financial Statements............................................. F-25
Unaudited Pro Forma Condensed Statements of Operations
Unaudited Pro Forma Condensed Statement of Operations..................... F-27
Notes to Unaudited Pro Forma Condensed Statement of Operations............ F-28
</TABLE>
F-1
<PAGE>
Report of Ernst & Young LLP, Independent Auditors
The Board of Directors
COMPS.COM, Inc.
We have audited the accompanying balance sheets of COMPS.COM, Inc. as of
December 31, 1997 and 1998, and the related statements of operations,
stockholders' deficit and cash flows for each of the three years in the period
ended December 31, 1998. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of COMPS.COM, Inc. at December
31, 1997 and 1998, and the results of its operations and its cash flows for
each of the three years in the period ended December 31, 1998 in conformity
with generally accepted accounting principles.
Ernst & Young LLP
San Diego, California
February 5, 1999,
except for Note 15, as to which the date is
February 22, 1999
F-2
<PAGE>
COMPS.COM, Inc.
Balance Sheets
<TABLE>
<CAPTION>
Pro Forma
December 31, Stockholders'
----------------------- Deficit at
1997 1998 December 31, 1998
---------- ----------- -----------------
(Unaudited)
<S> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents.......... $ 351,621 $ 377,803
Accounts receivable, less allowance
for bad debts and cancellations of
$1,384,242 and $1,464,922 at
December 31, 1997 and 1998,
respectively...................... 2,298,167 3,165,817
Prepaid expenses................... 146,363 184,520
---------- -----------
Total current assets................ 2,796,151 3,728,140
Furniture and equipment, net........ 1,203,750 1,470,538
Intangible assets, net.............. 53,485 2,162,350
Deposits and other assets........... 37,450 36,249
---------- -----------
Total assets........................ $4,090,836 $ 7,397,277
========== ===========
Liabilities, redeemable preferred
stock and stockholders' deficit
Current liabilities:
Accounts payable................... $ 358,638 $ 530,860
Accrued liabilities................ 934,953 1,019,647
Current portion of long-term debt.. 467,203 979,208
Current portion of capital lease
obligations....................... 65,101 49,343
Deferred subscription revenue...... 4,023,228 5,502,869
---------- -----------
Total current liabilities........... 5,849,123 8,081,927
Long-term debt, less current
portion............................ 1,750,372 1,100,628
Capital lease obligations, less
current portion.................... 71,955 22,612
Deferred rent....................... 108,906 71,187
---------- -----------
Total liabilities................... 7,780,356 9,276,354
Commitments
Redeemable convertible preferred
stock, par value $.01 per share;
5,000,000 shares authorized:
Series A, 4,270,336 shares issued
and outstanding at December 31,
1997 and 1998..................... 5,815,806 6,114,730 $ --
Series B, 637,790 shares issued and
outstanding at December 31, 1998.. -- 1,201,462 --
Stockholders' deficit:
Class A common stock, par value
$.01 per share; 22,500,000 shares
authorized; 4,773,860 shares
issued and outstanding (at stated
value) at December 31, 1997 and
1998 (9,725,486 pro forma--
unaudited)........................ 29,219 29,219 78,735
Class B common stock, par value
$.01 per share; 2,500,000 shares
authorized; 43,500 shares issued
and outstanding at December 31,
1998 (0 pro forma--unaudited)..... -- 435 --
Additional paid-in capital........ -- 4,759,600 12,026,711
Deferred compensation............. -- (2,538,421) (2,538,421)
Accumulated deficit............... (9,534,545) (11,446,102) (11,446,102)
---------- ----------- -----------
Total stockholders' deficit......... (9,505,326) (9,195,269) $(1,879,077)
---------- ----------- ===========
Total liabilities, redeemable
preferred stock and stockholders'
deficit............................ $4,090,836 $ 7,397,277
========== ===========
</TABLE>
See accompanying notes.
F-3
<PAGE>
COMPS.COM, Inc.
Statements of Operations
<TABLE>
<CAPTION>
Years ended December 31,
-------------------------------------
1996 1997 1998
----------- ----------- -----------
<S> <C> <C> <C>
Net revenues............................ $ 8,140,693 $10,449,936 $12,805,761
Cost of revenues........................ 4,356,973 5,053,998 5,746,180
----------- ----------- -----------
Gross profit............................ 3,783,720 5,395,938 7,059,581
Operating expenses:
Selling and marketing................. 2,812,596 3,407,906 4,181,945
Product development and engineering... 376,331 768,051 1,230,349
General and administrative............ 2,835,271 2,525,526 2,936,052
----------- ----------- -----------
Total operating expenses................ 6,024,198 6,701,483 8,348,346
----------- ----------- -----------
Loss from operations.................... (2,240,478) (1,305,545) (1,288,765)
Other:
Gain from termination of covenant not-
to-compete........................... 58,396 -- --
Interest income....................... 34,616 16,650 42,595
Interest expense...................... (159,905) (268,290) (302,152)
----------- ----------- -----------
Net loss................................ (2,307,371) (1,557,185) (1,548,322)
Dividend accretion on preferred stock... 298,924 298,924 363,235
----------- ----------- -----------
Net loss attributable to common
stockholders........................... $(2,606,295) $(1,856,109) $(1,911,557)
=========== =========== ===========
Net loss per share attributable to
common stockholders, basic and
diluted................................ $ (0.55) $ (0.39) $ (0.40)
=========== =========== ===========
Shares used in computing net loss
attributable to common stockholders,
basic and diluted...................... 4,773,860 4,773,860 4,794,896
=========== =========== ===========
Pro forma net loss per share, basic and
diluted................................ $ (0.16)
===========
Shares used in computing pro forma net
loss per share, basic and diluted...... 9,634,874
===========
</TABLE>
See accompanying notes.
F-4
<PAGE>
COMPS.COM, Inc.
Statements of Stockholders' Deficit
<TABLE>
<CAPTION>
Common Stock
------------------------------- Additional Total
Class A Class B Paid-In Deferred Accumulated Stockholders'
Shares Amount Shares Amount Capital Compensation Deficit Deficit
--------- ------- ------ ------ ---------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1995................... 4,773,860 $29,219 -- $ -- $ -- $ -- $ (5,072,141) $(5,042,922)
Accretion of preferred
stock redemption
value................. -- -- -- -- -- -- (298,924) (298,924)
Net loss............... -- -- -- -- -- -- (2,307,371) (2,307,371)
--------- ------- ------ ----- ---------- ----------- ------------ -----------
Balance at December 31,
1996................... 4,773,860 29,219 -- -- -- -- (7,678,436) (7,649,217)
Accretion of preferred
stock redemption
value................. -- -- -- -- -- -- (298,924) (298,924)
Net loss............... -- -- -- -- -- -- (1,557,185) (1,557,185)
--------- ------- ------ ----- ---------- ----------- ------------ -----------
Balance at December 31,
1997................... 4,773,860 29,219 -- -- -- -- (9,534,545) (9,505,326)
Issuance of stock upon
exercise of options... -- -- 43,500 435 12,615 -- -- 13,050
Accretion of preferred
stock redemption
value................. -- -- -- -- -- -- (363,235) (363,235)
Grant of stock options
in connection with
REALBID acquisition... -- -- -- -- 2,091,000 -- -- 2,091,000
Deferred compensation
related to grant of
certain stock
options............... -- -- -- -- 2,655,985 (2,655,985) -- --
Amortization of
deferred
compensation.......... -- -- -- -- -- 117,564 -- 117,564
Net loss............... -- -- -- -- -- -- (1,548,322) (1,548,322)
--------- ------- ------ ----- ---------- ----------- ------------ -----------
Balance at December 31,
1998................... 4,773,860 $29,219 43,500 $ 435 $4,759,600 $(2,538,421) $(11,446,102) $(9,195,269)
========= ======= ====== ===== ========== =========== ============ ===========
</TABLE>
See accompanying notes
F-5
<PAGE>
COMPS.COM, Inc.
Statements of Cash Flows
<TABLE>
<CAPTION>
Years ended December 31,
-------------------------------------
1996 1997 1998
----------- ----------- -----------
<S> <C> <C> <C>
Operating activities
Net loss................................ $(2,307,371) $(1,557,185) $(1,548,322)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Depreciation and amortization......... 1,020,029 913,781 803,998
Deferred compensation................. -- -- 117,564
Provision for bad debts............... -- 39,491 167,858
Impairment loss on acquired
intangibles.......................... -- 183,233 --
Loss on disposal/write-off of assets.. -- 97,011 --
Interest imputed on note payable to
TRW REDI............................. -- 48,619 49,252
Gain from covenant not-to-compete..... (58,396) -- --
Changes in operating assets and
liabilities, net of effects from
acquisitions:
Accounts receivable................. (293,785) (529,824) (978,508)
Prepaid expenses.................... 50,916 (41,820) (27,969)
Deposits and other assets........... 23,414 3,767 (674)
Accounts payable.................... 82,033 (56,032) 172,222
Accrued liabilities................. 334,016 326,864 84,694
Deferred rent....................... 24,534 (19,172) (37,719)
Deferred subscription revenue....... 527,010 667,801 1,479,641
----------- ----------- -----------
Net cash provided by (used in) operating
activities............................. (597,600) 76,534 282,037
Investing activities
Maturities of marketable securities,
available-for-sale..................... 459,645 243,645 --
Purchases of furniture and equipment.... (592,278) (725,835) (933,876)
Purchase of TRW REDI and LSR............ -- (80,000) --
Purchase of REALBID, net of cash
acquired............................... -- -- (209,900)
Loans to employees, net of repayments... 1,285 (6,715) (10,188)
----------- ----------- -----------
Net cash used in investing activities... (131,348) (568,905) (1,153,964)
Financing activities
Proceeds from notes payable............. 1,411,879 742,800 300,000
Payments on notes payable............... (264,851) (384,683) (486,991)
Payments on capital lease obligations... (100,286) (91,664) (65,101)
Proceeds from sale of preferred stock,
net of issuance costs.................. -- -- 1,137,151
Proceeds from issuance of common stock.. -- -- 13,050
----------- ----------- -----------
Net cash provided by financing
activities............................. 1,046,742 266,453 898,109
----------- ----------- -----------
Net increase (decrease) in cash......... 317,794 (225,918) 26,182
Cash at beginning of year............... 259,745 577,539 351,621
----------- ----------- -----------
Cash at end of year..................... $ 577,539 $ 351,621 $ 377,803
=========== =========== ===========
Supplemental disclosures of cash flow
information:
Interest paid......................... $ 143,024 $ 244,877 $ 251,527
=========== =========== ===========
Income taxes paid..................... $ 5,563 $ 3,941 $ 3,712
=========== =========== ===========
Supplemental schedule of noncash
investing and financing activities:
Equipment financed under capital
leases............................... $ -- $ 30,806 $ --
=========== =========== ===========
</TABLE>
See accompanying notes.
F-6
<PAGE>
COMPS.COM, Inc.
Notes to Financial Statements
December 31, 1998
1. Organization and Significant Accounting Policies
Organization and Business Activity
COMPS.COM, Inc., formerly known as COMPS InfoSystems, Inc. (the Company),
compiles and maintains a national database of confirmed commercial real estate
information. The Company provides its customers with reports on sales of
office, industrial, retail, apartments, residential land, commercial land,
hotels, motels and other special use properties. As of December 31, 1998,
national coverage includes over 45 major cities throughout the United States.
Basis of Presentation
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. This basis of accounting contemplates
the recovery of the Company's assets and the satisfaction of its liabilities in
the normal course of conducting business. The Company anticipates that it will
require additional funds to continue the Company's product development
activities; expand the Company's marketing and sales and customer services and
support capabilities; fund the Company's capital expenditures to accommodate
the anticipated increase in customers and geographic expansion; and expand
certain financial and administrative functions. Management believes that the
funds necessary to meet its capital requirements for the next twelve months
will be raised either from a public offering or by private equity or debt
financing. Without the additional funds, the Company will be required to reduce
the scope of its product development projects and significantly reduce its
expenditures on infrastructure and product and service upgrade programs.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in financial statements and accompanying
notes. Actual results could differ from those estimates.
Cash Equivalents
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
Concentration of Credit Risk
The majority of sales and the related accounts receivable are from companies
dealing in the commercial real estate industry throughout the United States.
Credit is extended based upon an evaluation of the customer's financial
condition and generally collateral is not required. Reserves for doubtful
accounts are maintained by the Company. The Company has not experienced losses
in excess of its reserves.
Furniture and Equipment
Furniture and equipment are depreciated using the double declining balance
method over estimated useful lives of five and seven years, respectively.
F-7
<PAGE>
COMPS.COM, Inc.
Notes to Financial Statements (continued)
1. Organization and Significant Accounting Policies (continued)
Intangible Assets
Intangible assets arose primarily from the acquisition of REALBID, LLC (see
Note 2). The excess of cost over the fair value of the net assets purchased has
been allocated to goodwill, customer base, database and web site technology,
trademark and trade name and assembled work force. These intangible assets are
being amortized over estimated useful lives ranging from three to five years.
Asset Impairment
In accordance with Statement of Financial Accounting Standards No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long Lived Assets to
be Disposed Of (SFAS 121), the Company recognizes impairment losses to be
recorded on long-lived assets used in operations when indicators of impairment
are present and the estimated undiscounted cash flows to be generated by those
assets are less than the assets' carrying amount. SFAS 121 also addresses the
accounting for long-lived assets that are expected to be disposed of. In 1997,
impairment losses of approximately $183,000 were recorded to write-down certain
acquired intangibles. In 1996 and 1998, no impairment losses were recorded.
Stock-Based Compensation
The Company has elected to follow Accounting Principles Board Opinion No. 25
Accounting for Stock Issued to Employees (APB 25) and related Interpretations
in accounting for its employee stock options.
Revenue Recognition
The Company recognizes product and related services revenue at the time of
shipment or performance of services. A substantial portion of the Company's
revenues come from subscription sales. Subscriptions are recorded as accounts
receivable and as deferred revenues at the time the customer is invoiced.
Subscription revenue, net of reserve for cancellations, is recognized over the
subscription term.
Significant Customers
During 1996, 1997 and 1998, no single customer accounted for more than 10% of
revenues.
Product Development and Engineering
Product development and engineering costs are expensed in the period
incurred.
Net Loss Per Share and Unaudited Pro Forma Stockholders' Deficit
Historical basic and diluted net loss per share are computed using the
weighted average number of common shares outstanding. Options, warrants and
preferred stock were not included in the computation of diluted net loss per
share because the effect would be antidilutive.
Pro forma net loss per share has been computed as described above and also
gives effect to common equivalent shares from preferred stock that will
automatically convert upon the closing of the Company's initial public offering
(using the as-if-converted method). If the offering contemplated is
consummated, all of the redeemable convertible preferred stock outstanding as
of the closing date will automatically be converted into an aggregate of
4,908,126 shares of common stock. Unaudited pro forma stockholders' deficit at
December 31, 1998, as adjusted for the conversion of redeemable convertible
preferred stock, is disclosed on the balance sheet.
F-8
<PAGE>
COMPS.COM, Inc.
Notes to Financial Statements (continued)
1. Organization and Significant Accounting Policies (continued)
Net Loss Per Share and Unaudited Pro Forma Stockholders' Deficit (continued)
A reconciliation of shares used in the calculation of historical and pro
forma basic and diluted net loss per share attributable to common stockholders
follows:
<TABLE>
<CAPTION>
Year ended December 31,
-------------------------------------
1996 1997 1998
----------- ----------- -----------
<S> <C> <C> <C>
Historical net loss per share
attributable to common stockholders,
basic and diluted:
Net loss attributable to common
stockholders....................... $(2,606,295) $(1,856,109) $(1,911,557)
=========== =========== ===========
Shares used in computing net loss
attributable to common
stockholders, basic and diluted.... 4,773,860 4,773,860 4,794,896
=========== =========== ===========
Net loss per share attributable to
common stockholders, basic and
diluted............................ $ (0.55) $ (0.39) $ (0.40)
=========== =========== ===========
Antidilutive securities including
options, warrants, and preferred
stock not included in historical
net loss per share attributable to
common stockholders calculations... 5,508,682 5,748,023 8,229,938
=========== =========== ===========
Pro forma net loss per share:
Net loss attributable to common
stockholders....................... $(1,911,557)
Less: dividend accretion on
redeemable convertible preferred
stock.............................. 363,235
-----------
Pro forma net loss.................. $(1,548,322)
===========
Shares used in computing net loss
attributable to common
stockholders, basic and diluted.... 4,794,896
Adjustment to reflect the effect of
the assumed conversion of weighted
average shares of redeemable
convertible preferred stock........ 4,839,979
-----------
Shares used in computing pro forma
net loss per share, basic and
diluted............................ 9,634,874
===========
Pro forma net loss per share, basic
and diluted......................... $ (0.16)
===========
</TABLE>
F-9
<PAGE>
COMPS.COM, Inc.
Notes to Financial Statements (continued)
1. Organization and Significant Accounting Policies (continued)
Impact of Recently Issued Accounting Standards
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, Reporting Comprehensive Income (SFAS
130). SFAS 130 requires that all components of comprehensive income, including
net income, be reported in the financial statements in the period in which they
are recognized. SFAS 130 is effective for fiscal years beginning after December
15, 1997. There was no difference between the Company's net loss and its total
comprehensive loss for the years ended December 31, 1996, 1997 and 1998.
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards, No. 131, Disclosures About Segments of an
Enterprise and Related Information (SFAS 131). SFAS 131 replace SFAS 14,
"Financial Reporting for Segments of a Business Enterprise" and changes the way
the public companies report segment information. SFAS 131 is effective for
fiscal years beginning after December 15, 1997 and has been adopted by the
Company for the year ending December 31, 1998.
In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-1 Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use (SOP 98-1). This standard requires
companies to capitalize qualifying computer software costs which are incurred
during the application development stage and amortize them over the software's
estimated useful life. SOP 98-1 is effective for fiscal years beginning after
December 15, 1998. The Company is currently evaluating the impact of SOP 98-1
on its financial statements and related disclosures.
In April 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-5 Reporting for the Costs of Start-Up Activities (SOP
98-5). This standard requires companies to expense the cost of start-up
activities and organization costs as incurred. In general, SOP 98-5 is
effective for fiscal years beginning after December 15, 1998. The Company
believes the adoption of SOP 98-5 will not have a material impact on its
results of operations.
Reclassification
Reclassifications have been made to certain prior period amounts to conform
to the 1998 presentation.
2. Acquisitions
Experian RES
On November 30, 1997, the Company acquired the Experian RES investment
property publishing business in Georgia and Florida for $80,000. The purchase
price has been allocated to the assets purchased and the liabilities assumed
based upon the fair values at the date of acquisition as follows:
<TABLE>
<S> <C>
Current assets.................................................... $114,244
Subscription contracts............................................ 124,198
Deferred revenues................................................. (158,442)
--------
$ 80,000
========
</TABLE>
Deferred revenues represent liabilities assumed to fulfill subscription
contracts acquired from Experian. Deferred revenues will be recognized over the
subscription term as product is shipped. The subscription contracts represent
the estimated value of future revenue streams from renewals of subscription
contracts
F-10
<PAGE>
COMPS.COM, Inc.
Notes to Financial Statements (continued)
2. Acquisitions (continued)
purchased. Experian RES is the successor-in-interest to TRW REDI and based on
the Company's 1995 acquisition of TRW REDI's investment property publishing
business, 50% of the subscription contracts were amortized in 1997 and the
remaining 50% were amortized in 1998.
REALBID
On November 6, 1998, the Company acquired the assets of REALBID, LLC
(REALBID) a real estate marketing services company which supports commercial
real estate transactions over the Internet. The transaction was accounted for
as a purchase. The purchase price consisted of cash payments of $163,000 and
the grant of stock options to the principals to acquire 544,612 shares of the
Company's common stock at $1.20 per share. The fair value of the options was
determined to be $3.84 per share as of the date of the acquisition. As a
result, the purchase price is calculated to be $2,308,400, which includes
acquisition costs of $54,400. In addition, employment and incentive
compensation agreements were entered into with the two principals of REALBID.
The purchase price has been allocated as follows:
<TABLE>
<S> <C>
Current assets.................................................... $ 64,500
Intangible assets................................................. 2,243,900
----------
Net purchase price................................................ $2,308,400
==========
</TABLE>
The accompanying statements of operations reflect the operating results of
REALBID since the date of the acquisition. The pro forma unaudited results of
operations for the years ended December 31, 1997 and 1998, assuming the
purchase of REALBID has occurred on June 19, 1997, are as follows:
<TABLE>
<CAPTION>
1997 1998
----------- -----------
<S> <C> <C>
Net revenues..................................... $10,465,436 $13,028,927
=========== ===========
Net loss attributable to common stockholders..... $(2,362,860) $(2,434,911)
=========== ===========
Net loss per share attributable to common
stockholders.................................... $ (0.49) $ (0.51)
=========== ===========
</TABLE>
AOBR, Inc.
On December 4, 1998, the Company agreed to acquire certain assets of AOBR,
Inc., subject to certain conditions, including completion of due diligence and
approval by the Company's Board of Directors. The transaction closed on January
7, 1999. The purchase price consisted of cash payments of $120,000 plus
acquisition costs of $9,200. The transaction will be recorded as a purchase and
the purchase price will be allocated to the acquired database, non-competition
agreement and goodwill. These intangibles will be amortized over two to five
years.
3. Furniture and Equipment
Furniture and equipment are stated at cost and consist of the following at
December 31:
<TABLE>
<CAPTION>
1997 1998
----------- -----------
<S> <C> <C>
Machinery and equipment............................ $ 2,394,486 $ 3,200,644
Office furniture and fixtures...................... 87,559 141,877
Leasehold improvements............................. 150,553 223,953
----------- -----------
2,632,598 3,566,474
Accumulated depreciation........................... (1,428,848) (2,095,936)
----------- -----------
$ 1,203,750 $ 1,470,538
=========== ===========
</TABLE>
F-11
<PAGE>
COMPS.COM, Inc.
Notes to Financial Statements (continued)
4. Intangibles Assets
Intangible assets consist of the following at December 31:
<TABLE>
<CAPTION>
1997 1998
-------- ----------
<S> <C> <C>
Customer base.......................................... $ -- $1,791,100
Database and web site technology....................... -- 268,700
Assembled workforce.................................... -- 94,600
Trademark and trade name............................... -- 89,500
Subscription contracts................................. 141,426 --
-------- ----------
141,426 2,243,900
Less accumulated amortization.......................... (87,941) (81,550)
-------- ----------
$ 53,485 $2,162,350
======== ==========
</TABLE>
During 1997, the Company determined that the subscription base relating to
the 1995 acquisitions of TRW REDI and The Land Sales Resource was impaired as a
result of lower than expected retention of the purchased subscription base.
Fair value of the assets was calculated based on estimated future cash flows to
be generated by the subscription base, discounted at a market rate of interest.
This resulted in a write-down of the acquired intangibles of $183,233, which is
reflected in general and administrative expense on the statement of operations.
5. Long-Term Debt
In September 1996, the Company entered into a $3.0 million loan agreement
with Venture Lending & Leasing, Inc. The terms of the agreement provide $1.5
million for fixed asset acquisition and $1.5 million as working capital.
Borrowings for fixed assets acquisition and working capital are due forty-eight
months and thirty-six months, respectively, from the date of disbursement. At
December 31, 1998, $541,750 is available for draw for general operations and
none is available for fixed asset acquisitions. The loan agreement originally
expired on June 30, 1998, but was extended during 1998 to June 30, 1999.
Notes payable to Venture Lending & Leasing, Inc. bear interest at 8.75% per
annum during the term and a one-time balloon interest payment of 15% of the
original principal amount is due upon completion of the term. The notes payable
are secured by all fixed assets of the Company with the exception of two notes
payable which are secured by all business assets of the Company.
Long-term debt consists of the following at December 31:
<TABLE>
<CAPTION>
1997 1998
--------- ---------
<S> <C> <C>
Note payable to Venture Lending & Leasing, Inc.
Principal and interest of $18,458 are due monthly through
August 1, 1999 with additional balloon interest of
$86,250 due October 1, 1999.............................. $ 378,636 $ 212,367
Note payable to Venture Lending & Leasing, Inc.
Principal and interest of $21,006 are due monthly through
August 1, 2000 with additional balloon interest of
$125,532 due October 1, 2000............................. 630,194 463,489
Note payable to Venture Lending & Leasing, Inc.
Principal and interest of $8,557 are due monthly through
February 1, 2001 with additional balloon interest of
$51,140 due April 1, 2001................................ 286,960 224,051
</TABLE>
F-12
<PAGE>
COMPS.COM, Inc.
Notes to Financial Statements (continued)
5. Long-Term Debt (continued)
<TABLE>
<CAPTION>
1997 1998
---------- ----------
<S> <C> <C>
Note payable to Venture Lending & Leasing, Inc.
Principal and interest of $2,555 are due monthly through
October 1, 2001 with additional balloon interest of
$15,268 due December 1, 2001............................ 96,356 79,851
Note payable to Venture Lending & Leasing, Inc.
Principal and interest of $2,595 are due monthly through
October 1, 2001 with additional balloon interest of
$15,505 due January 1, 2002............................. 98,180 82,494
Note payable to Venture Lending & Leasing, Inc.
Principal and interest of $2,931 are due monthly through
November 1, 2001 with additional balloon interest of
$17,514 due January 1, 2002............................. 110,301 93,431
Note payable to Venture Lending & Leasing, Inc.
Principal and interest of $2,672 are due monthly through
November 1, 2000 with additional balloon interest of
$12,486 due December 1, 2001............................ 77,473 59,709
Note payable to Venture Lending & Leasing, Inc.
Principal and interest of $9,630 are due monthly through
September 1, 2001 with additional balloon interest of
$45,000 due November 1, 2001............................ -- 275,717
Unsecured note payable to TRW REDI, due as follows:
$405,800 on December 1, 1999; $145,000 on December 1,
2000; and $135,000 on December 31, 2001. Interest is
imputed at 10% through December 1, 1999. Note bears
interest at 8% subsequent to December 1, 1999........... 539,475 588,727
---------- ----------
2,217,575 2,079,836
Less current portion..................................... 467,203 979,208
---------- ----------
Total long-term debt..................................... $1,750,372 $1,100,628
========== ==========
</TABLE>
Future annual payments of long-term debt are as follows at December 31, 1998:
<TABLE>
<S> <C>
1999........................................................... $ 979,208
2000........................................................... 659,738
2001........................................................... 423,812
2002........................................................... 17,078
----------
Total.......................................................... $2,079,836
==========
</TABLE>
F-13
<PAGE>
COMPS.COM, Inc.
Notes to Financial Statements (continued)
6. Commitments
Leases
The Company leases its offices under operating leases which expire at various
dates through June 2002. Under these operating leases, the Company pays taxes,
insurance and maintenance expenses related to the premises. Certain of the
leases provide for increasing minimum annual rental amounts. Rent payable for
the Company's corporate headquarters office during the period from July 2000
through June 2002 will be determined based upon fair market rental value at
July 1, 2000. Rent expense is recorded evenly over the term of the lease.
Accordingly, deferred rent, as reflected on the accompanying balance sheets,
represents the difference between rent expense accrued and amounts paid under
the terms of the lease agreement. Rent expense for the years ended December 31,
1996, 1997 and 1998 totaled $410,705, $405,874 and $468,533, respectively.
The Company leases certain equipment under capital lease obligations. Cost
and accumulated depreciation of equipment under capital leases were $379,978
and $321,854, respectively, at December 31, 1998.
Future minimum lease payments under operating and capital leases at December
31, 1998 are as follows:
<TABLE>
<CAPTION>
Operating Capital
Leases Leases
--------- -------
<S> <C> <C>
1999...................................................... $513,505 $54,463
2000...................................................... 256,144 15,714
2001...................................................... 92,603 8,890
2002...................................................... 81,294 --
-------- -------
Total minimum lease payments.............................. $943,546 79,067
========
Less amount representing interest......................... 7,112
-------
Present value of minimum lease payments................... 71,955
Less current portion...................................... 49,343
-------
Noncurrent portion........................................ $22,612
=======
</TABLE>
Employment, Incentive Compensation, and Stock Agreements
The Company has employment and incentive compensation agreements with key
employees which grant these employees the right to receive bonuses and
incentive compensation upon certain events and circumstances as defined in the
agreements. The agreements provide for severance pay of three to eight months
in the event of termination of employment.
7. Information Sharing Agreement
The Company has agreements to license its database to other information
service providers for licensing through their computer networks. Under the
agreements, the Company receives a certain percentage of the related annual
gross receipts earned by these other service providers. In addition, neither
the Company nor the other service providers shall develop competing products
during the term of the agreement. The Company earned $307,381, $163,341 and
$41,185 under the agreements during the years ended December 31, 1996, 1997 and
1998, respectively.
F-14
<PAGE>
COMPS.COM, Inc.
Notes to Financial Statements (continued)
8. Redeemable Convertible Preferred Stock
During 1994, the Company sold 4,270,336 shares of Series A convertible
redeemable preferred stock and warrants to purchase 379,869 shares of Class B
common stock at $.01 per share (Note 10), for $4,856,758, net of issuance costs
of $143,242. The holders of the Series A preferred stock are entitled to
receive cumulative dividends at an annual rate of $.07 per share, payable at
the time of: 1) repurchase of Series A preferred stock; 2) liquidation of the
Company; or 3) sale of the Company's securities pursuant to an underwritten
public offering. The right to such dividends will be forfeited in the event of
a repurchase of all of the outstanding shares of Series A preferred stock or a
liquidation if the holders of the Series A preferred stock are entitled to
receive in excess of $3.52 per share prior to the payment of dividends or upon
a public offering of not less than $10 million at a purchase price of not less
than $3.52 per share. Holders of Series A preferred stock have a liquidation
preference of $1.17 per share plus all accumulated but unpaid dividends.
In February 1998, the Company sold 637,790 shares of Series B redeemable
convertible preferred stock and warrants to purchase 306,097 shares of Class B
common stock and 37,329 shares of Class A common stock at $.01 per share (Note
10), for $1,137,151, net of issuance costs of $12,849. The holders of the
Series B preferred stock are entitled to receive cumulative dividends at an
annual rate of $0.11 per share, payable at the time of 1) repurchase of Series
A or Series B preferred stock; 2) liquidation of the Company; or 3) sale of the
Company's securities pursuant to an underwritten public offering. The right to
such dividends will be forfeited in the event of a repurchase of all of the
outstanding shares of Series B preferred stock or a liquidation if the holders
of the Series B preferred stock are entitled to receive in excess of $3.83 per
share prior to the payment of dividends or upon a public offering of not less
than $10 million at a purchase price of not less than $3.83 per share. Holders
of Series B preferred stock have a liquidation preference of $1.80 per share
plus all accumulated but unpaid dividends.
The Series A and Series B preferred stock is convertible at the option of the
holder into an equal number of shares of Class A common stock. The holders of
preferred and Class A common stock vote together as a class on all matters to
be voted on by the shareholders of the Company, with each holder of preferred
stock entitled to one vote for each share held.
A summary of the redeemable convertible preferred stock and the liquidation
and redemption values at December 31, 1998 are as follows:
<TABLE>
<CAPTION>
Liquidation Redemption
Shares Preference Value
--------- ----------- ----------
<S> <C> <C> <C>
Series A preferred stock................... 4,270,336 $5,000,000 $6,257,972
Series B preferred stock................... 637,790 1,150,000 1,214,311
--------- ---------- ----------
Total...................................... 4,908,126 $6,150,000 $7,472,283
========= ========== ==========
</TABLE>
9. Repurchase Agreement
As part of the issuance of Series A and Series B redeemable convertible
preferred stock and Class B common stock warrants, (see Note 10), the Company
granted the purchasers a "put option" in which the Company is required to
repurchase the shares held by the purchasers; the repurchase is required to
take place in October 2001 or earlier if an event such as a liquidation or
merger or acquisition occurs and there is a 50% change in the holders of voting
securities. The repurchase price is the greater of the original purchase price
plus accrued dividends or fair market value of the shares held. This put option
is terminated if the Company has a public offering of its shares in which the
Company's gross proceeds are at least $10 million and the per share price is
not less the $3.52 for the Series A preferred stock and $3.83 for the Series B
preferred stock.
F-15
<PAGE>
COMPS.COM, Inc.
Notes to Financial Statements (continued)
9. Repurchase Agreement (continued)
The purchasers have also been granted registration rights in certain
conditions and a right of first refusal in the event the Company intends to
sell shares in a private transaction.
10. Stockholders' Deficit
Common Stock
The Class A and Class B common stock shall have the same rights and
privileges except that the Class B common stock shall not have any right to
vote. Additionally, each share of Class B common stock shall automatically
convert into one share of Class A common stock upon the earlier of the time of
consent of the holders of at least 66 2/3% of the outstanding Class A common
stock to the conversion is obtained or upon the closing of a public offering.
Warrants
In connection with the issuance of the Series A redeemable preferred stock,
the Company issued warrants to purchase 379,869 shares of Class B common stock
at $.01 per share. The warrants may be exercised in whole or in part on the
earlier to occur of one day prior to the closing of a liquidity event, as
defined in the agreement, or October 14, 2001. The warrants expire on October
14, 2004.
In connection with the issuance of the Series B redeemable preferred stock,
the Company issued warrants to purchase 306,097 shares of Class B common stock
and 37,329 shares of Class A common stock at $0.01 per share. The warrants to
purchase Class B common stock are exercisable at the earlier of (i) one day
prior to the closing or effective time of a liquidity event, as defined in the
warrant agreement, or (ii) October 14, 2001. The warrant to purchase Class A
Common Stock is immediately exercisable. All warrants issued in connection with
the Series B Preferred Stock expire on February 6, 2008.
In connection with the loan agreement with Venture Lending & Leasing, Inc.
(see Note 5), the Company issued a warrant to purchase 213,068 shares of the
Company's Class B common stock at $1.76 per share, subject to antidilutive
adjustments. The warrant expires on September 24, 2003. As set forth in SFAS
123, the warrant must be accounted for based on its fair value. Accordingly,
the Company estimated the fair value of the warrant using the Black-Scholes
option pricing model, however, no value was allocated to the warrant as the
current estimated fair value was nominal.
Stock Options
In November 1998, the Company replaced its amended and restated stock option
plan (Old Plan), under which options to purchase 1,008,000 shares of Class B
common stock were outstanding, with the 1998 Equity Participation Plan and the
1998 Supplemental Option Plan (the 1998 Plans). Under the 1998 Plans, both
incentive stock options and non-qualified stock options to purchase Class B
common stock may be issued to key employees, board members and consultants of
the Company. The aggregate number of shares which the Company is authorized to
issue under the 1998 Plans, together with the aggregate number of shares which
may be issued under the Old Plan is 2,792,083. Options granted under the Plans
generally vest over five years, except for options issued to independent
directors under the 1998 Plans which vest over four years, and are exercisable
for a period of ten years from the date of grant. The board of directors may,
in its discretion, accelerate the period during which an option granted to an
employee or consultant vests. Generally, stock options are granted at a price
which approximates the fair value of the shares at the date of grant as
determined by the board of directors.
F-16
<PAGE>
COMPS.COM, Inc.
Notes to Financial Statements (continued)
10. Stockholders' Deficit (continued)
Stock Options (continued)
The following table summarizes stock option activity:
<TABLE>
<CAPTION>
Weighted
Average
Exercise
Shares Price
--------- --------
<S> <C> <C>
Outstanding at December 31, 1995......................... 709,909 $0.30
Granted................................................ 117,808 $0.30
Cancelled.............................................. (182,308) $0.30
--------- -----
Outstanding at December 31, 1996......................... 645,409 $0.30
Granted................................................ 333,841 $0.30
Cancelled.............................................. (94,500) $0.30
--------- -----
Outstanding at December 31, 1997......................... 884,750 $0.30
Granted................................................ 1,559,199 $1.15
Exercised.............................................. (43,500) $0.30
Cancelled.............................................. (15,000) $0.65
--------- -----
Outstanding at December 31, 1998......................... 2,385,449 $0.86
========= =====
</TABLE>
Included above are options to purchase a total of 149,775 shares of common
stock which were issued outside of the Plans. In addition, 190,000 of the
options granted in 1997 will become fully vested upon the closing of an initial
public offering.
At December 31, 1998, options to purchase 679,623 shares (including 138,275
shares related to options granted outside the Plans) are exercisable and
512,909 shares are available for future grant.
Through December 31, 1998, the Company recorded deferred compensation expense
for the difference between the exercise price and the fair value for financial
statement presentation purposes of the Company's common stock, as determined in
part by an independent valuation, for options granted during 1998. This
deferred compensation aggregates to $2,655,985, which is being amortized over
the vesting period of the related options. Amortization during 1998 was
$117,564.
Following is a further breakdown of the options outstanding as of December
31, 1998:
<TABLE>
<CAPTION>
Weighted average
Weighted average exercise price of
Range of Options remaining life Weighted average Options options
Exercise Prices Outstanding in years exercise price exercisable exercisable
- --------------- ----------- ---------------- ---------------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
$0.30-$0.45 905,250 7.70 $0.31 350,313 $0.30
$1.00-$1.20 1,480,199 9.65 $1.19 329,310 $1.20
- ----------- --------- ---- ----- ------- -----
$0.30-$1.20 2,385,449 8.93 $0.86 679,623 $0.74
</TABLE>
Pro forma information regarding net loss is required by SFAS 123, and has
been determined as if the Company had accounted for its employee stock options
under the fair value method of that Statement. The fair value of the options
was estimated at the date of grant, using the "minimum value" method for option
pricing with the following weighted-average assumptions for options granted in
1996, 1997 and 1998: risk-free interest rate of 6%, 6% and 5.5%, respectively;
dividend yield of 0%; and a weighted-average expected life of options of five
years. The weighted-average fair value of options granted in 1996, 1997 and
1998 was $0.08. $0.08 and $0.28, respectively.
F-17
<PAGE>
COMPS.COM, Inc.
Notes to Financial Statements (continued)
10. Stockholders' Deficit (continued)
Stock Options (continued)
For purpose of pro forma disclosure, the estimated fair value of the options
is amortized to expense over the options' vesting period. The Company's pro
forma information is as follows:
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------------
1996 1997 1998
------------ ------------ ------------
<S> <C> <C> <C>
Pro forma net loss attributable to
common stockholders.............. $ (2,615,089) $ (1,867,929) $ (1,939,328)
Pro forma basic and diluted net
loss per share attributable to
common stockholders.............. $ (0.55) $ (0.39) $ (0.40)
</TABLE>
Common Stock Reserved for Issuance
At December 31, 1998, the Company has reserved shares of common stock for
future issuance as follows:
<TABLE>
<S> <C>
Stock options...................................................... 2,898,358
Preferred stock.................................................... 4,908,126
Warrants........................................................... 936,363
---------
8,742,847
=========
</TABLE>
11. Income Taxes
At December 31, 1998, the Company had federal and state tax net operating
loss carryforwards of approximately $4,942,000 and $2,494,000, respectively.
The difference between the federal and California tax loss carryforwards is
primarily attributable to the 50% limitation on California loss carryforwards.
The federal and California tax loss carryforwards begin expiring in 2009 and
1999, respectively, unless previously utilized.
Pursuant to Internal Revenue Code Section 382, use of the Company's net
operating loss carryforwards may be limited if a cumulative change in ownership
of more than 50% occurs within a three-year period.
Significant components of the Company's deferred tax assets at December 31,
1997 and 1998 are shown below. A valuation allowance of $1,652,000 has been
recognized to offset the deferred tax assets as realization of such assets is
uncertain.
<TABLE>
<CAPTION>
1997 1998
---------- ----------
<S> <C> <C>
Deferred tax assets:
Net operating loss carryforwards................... $1,343,000 $1,826,000
Other.............................................. 338,000 361,000
Amortization....................................... 464,000 463,000
---------- ----------
Total deferred tax assets............................ 2,145,000 2,650,000
Deferred tax liabilities:
Intangibles........................................ -- (998,000)
---------- ----------
Net deferred tax assets.............................. 2,145,000 1,652,000
Valuation allowance for deferred tax assets.......... (2,145,000) (1,652,000)
---------- ----------
Net deferred tax assets.............................. $ -- $ --
========== ==========
</TABLE>
F-18
<PAGE>
COMPS.COM, Inc.
Notes to Financial Statements (continued)
12. Employee Benefit Plan
The Company has a 401(k) defined contribution employee benefit plan (the
"Plan") for the benefit of eligible employees, generally those who have
completed one year of service. The Company is not required to contribute to the
Plan. In 1996, the Company did not contribute to the Plan. Contributions
totaling $14,956 and $34,130 were charged to expense in 1997 and 1998,
respectively.
13. Related Party Transactions
The Company currently leases its corporate headquarters operating space from
a limited partnership whose general partner is a company owned by the President
and major stockholder of the Company. Another director and stockholder is a
limited partner of this limited partnership. Rent expense to this related party
of $253,684, $295,018 and $304,579 was incurred in 1996, 1997 and 1998,
respectively. The Company retains the consulting services of one of its board
of director members. Consulting expense to this related party of $57,000,
$11,580 and $25,780 was incurred in 1996, 1997 and 1998, respectively.
14. Reportable Segments
Description of the types of products and services from which each reportable
segment derives its revenues
The Company has two reportable segments: information services and
transactions support services. Revenues for the Company's information services
division are derived from licensing commercial real estate sales comparable
information on a subscription and ad-hoc basis. Revenues of $16,500 for
transaction support services were derived from REALBID, a marketing services
company acquired in November 1998 which supports commercial real estate
transactions over the Internet.
Measurement of segment profit or loss and segment assets
The Company evaluates performance and allocates resources based on profit or
loss from operations before income taxes. The accounting policies of the
reportable segments are the same as those described in the summary of
significant accounting policies.
Factors management used to identify the enterprise's reportable segments
The Company's reportable segments are business units that offer different
products and services. The Company did not have reportable segments in prior
years, and therefore only the information for the year ended December 31, 1998
is included below.
<TABLE>
<CAPTION>
Year ended December 31, 1998
-----------------------------------
Transaction
Information Support
Services Services Totals
----------- ----------- ----------
<S> <C> <C> <C>
Revenues from external customers...... 12,789,261 16,500 12,805,761
Intersegment revenues................. -- -- --
Interest expense...................... 302,152 -- 302,152
Depreciation and amortization
expense.............................. 721,648 82,350 803,998
Segment profit (loss) before income
taxes................................ (1,164,204) (384,118) (1,548,322)
Other significant non cash item:
Deferred compensation on stock
options............................ 967,231 1,571,190 2,538,421
Segment assets
Fixed assets, net................... 1,460,211 10,327 1,470,538
Intangible assets, net.............. -- 2,162,350 2,162,350
Expenditures of long-lived assets..... 922,749 11,127 933,876
</TABLE>
F-19
<PAGE>
COMPS.COM, Inc.
Notes to Financial Statements (continued)
15. Subsequent Events
In February 1999, the Company entered into a $1.8 million loan agreement with
Venture Lending & Leasing, Inc., under which the Company may purchase both
equipment and working capital. The borrowing base under the loan is limited to
$1.8 million or 80% of the Company's eligible accounts. The loan agreement
expires on March 31, 2000.
In connection with the loan agreement, the Company issued a warrant to
purchase a certain number of shares of Class B non-voting common stock with an
aggregate initial exercise price of $225,000. The exercise price per share will
be based on an amount equal to the median of i) $1.8031 and ii) the per share
price in the next round of equity financing. If there is no new equity
financing done within 18 months of the date of the loan agreement (February 12,
1999) the exercise price will be $2.70. The Company will account for this
warrant in accordance with SFAS 123.
In February 1999, the Company entered into a new lease agreement for its
corporate headquarters. The new lease is with the same related party (see Note
13) and is effective February 1, 1999. The Company's prior lease, which was due
to expire in June 2002 and provided for monthly rent payments of $37,015 will
be canceled upon commencement of the new lease. The term of the new lease is 5
years, with the option to extend for five terms of two years each. The initial
monthly rent payment of $44,843 will be increased by 3 1/2% each year during
the original five year term. Upon commencement of each extension of the term,
monthly base rent will be adjusted to reflect the fair market rental value.
In February 1999, the Board of Directors adopted the 1999 Stock Incentive
Plan and the 1999 Employee Stock Purchase Plan. The plans are effective on the
date the underwriting agreement is signed in connection with the Company's
contemplated initial public offering. Shares reserved for issuance under the
1999 Stock Incentive Plan and the 1999 Employee Stock Purchase Plan total
2,800,000 and 300,000, respectively.
F-20
<PAGE>
Report of Ernst & Young LLP, Independent Auditors
The Members
REALBID, LLC
We have audited the accompanying statements of operations, members' equity
(deficit) and cash flows of REALBID, LLC for the period from June 19, 1997
(inception) through December 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of operations and cash flows of REALBID, LLC
for the period from June 19, 1997 (inception) through December 31, 1997, in
conformity with generally accepted accounting principles.
Ernst & Young LLP
San Diego, California
February 17, 1999
F-21
<PAGE>
REALBID, LLC
Statements of Operations
<TABLE>
<CAPTION>
For the
period from
June 19, 1997 For the nine-month
(inception) to period ended
December 31, 1997 September 30, 1998
----------------- ------------------
(unaudited)
<S> <C> <C>
Net revenues............................... $ 15,500 $ 196,666
Cost of revenues........................... 9,615 37,608
--------- ---------
Gross profit............................... 5,885 159,058
Operating expenses:
General and administrative............... 247,598 271,477
--------- ---------
Total operating expenses................... 247,598 271,477
--------- ---------
Net loss................................... $(241,713) $(112,419)
========= =========
</TABLE>
See accompanying notes.
F-22
<PAGE>
REALBID, LLC
Statements of Members' Equity (Deficit)
<TABLE>
<CAPTION>
Total
Members' Shares Members'
--------------- Accumulated Equity
Shares Amount Deficit (Deficit)
------ ------ ----------- ---------
<S> <C> <C> <C> <C>
Issuance of members' shares.............. 8,000 $8,000 $ -- $ 8,000
Net loss for the period from June 19,
1997 (inception) to December 31, 1997... -- -- (241,713) (241,713)
----- ------ --------- ---------
Balance at December 31, 1997............. 8,000 8,000 (241,713) (233,713)
Net loss for nine-month period ended
September 30, 1998 (unaudited).......... -- -- (112,419) (112,419)
----- ------ --------- ---------
Balance at September 30, 1998
(unaudited)............................. 8,000 $8,000 $(354,132) $(346,132)
===== ====== ========= =========
</TABLE>
See accompanying notes.
F-23
<PAGE>
REALBID, LLC
Statements of Cash Flows
<TABLE>
<CAPTION>
For the
period from
June 19, 1997 For the nine-month
(inception) to period ended
December 31, 1997 September 30, 1998
----------------- ------------------
(unaudited)
<S> <C> <C>
Operating activities
Net loss................................. $(241,713) $(112,419)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Depreciation........................... -- 699
Provision for bad debts................ -- 10,000
Changes in operating assets and
liabilities:
Accounts receivable.................. -- (79,000)
Prepaid assets....................... -- (2,000)
Accounts payable..................... 1,797 13,331
Accrued liabilities.................. 150,000 187,000
--------- ---------
Net cash provided by (used in) operating
activities.............................. (89,916) 17,611
Financing activities
Payments on lease obligation............. -- (1,748)
Proceeds from member advances............ 83,510 12,704
Proceeds from issuance of members'
shares.................................. 8,000 --
--------- ---------
Net cash provided by financing
activities.............................. 91,510 10,956
--------- ---------
Net increase in cash and cash
equivalents............................. 1,594 28,567
Cash and cash equivalents at beginning of
period.................................. -- 1,594
--------- ---------
Cash and cash equivalents at end of
period.................................. $ 1,594 $ 30,161
========= =========
Supplemental disclosure of cash flow
information:
Interest paid............................ $ -- $ 176
Supplemental schedule of non cash
investing and financing activities:
Equipment financed under capital leases.. $ -- $ 8,713
</TABLE>
See accompanying notes.
F-24
<PAGE>
REALBID, LLC
Notes to Financial Statements
December 31, 1997
(Information subsequent to December 31, 1997 and pertaining to the nine-month
period ended September 30, 1998 is unaudited)
1. Organization and Summary of Significant Accounting Policies
Organization and Business Activities
REALBID, LLC (the "Company") is a California company with limited liability
status which was formed on June 19, 1997 and shall continue until June 30, 2047
or until dissolution in accordance with the terms of the Operating Agreement.
Each member's liability is limited pursuant to the Beverly-Killea Limited
Liability Company Act. The Company is a real estate marketing services company
which facilitates commercial property transactions using both the internet and
traditional communication technologies.
The Company's primary purpose is to provide computer on-line real estate
services, including market data, specific property information, buyer profiles
and a trading platform for private and public format transactions.
Basis of Presentation
The Company has an accumulated deficit at December 31, 1997 and has not yet
generated income from operations and thus needs to continue to raise cash to
fund future operations. Refer to Note 5 for subsequent event.
Unaudited Interim Financial Information
The financial statements for the nine months ended September 30, 1998 are
unaudited. The unaudited financial statements have been prepared on the same
basis as the audited financial statements, and in the opinion of management,
include all adjustments, consisting only of normal recurring adjustments,
necessary to state fairly the financial information set forth therein, in
accordance with generally accepted accounting principles.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts of revenues and expenses reported during the period.
Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with a remaining maturity
of three months or less when acquired to be cash equivalents.
Equipment
Equipment is depreciated using the straight-line method over estimated useful
lives of three to five years.
Revenue Recognition
The Company recognizes revenue at the time of performance of services.
F-25
<PAGE>
REALBID, LLC
Notes to Financial Statements (continued)
(Information subsequent to December 31, 1997 and pertaining to the nine-month
period ended September 30, 1998 is unaudited)
1. Organization and Summary of Significant Accounting Policies (continued)
Profits and Losses and Distributions
Profits and losses of the Company are allocated to the members and
distributions are made in accordance with the Operating Agreement.
2. Commitments
During the nine months ended September 30, 1998, the Company leased its
facilities under two operating leases expiring on November 30, 1998 and
January 5, 1999, each of which was renewed for an additional six month term.
Rent expense totaled $8,490 for the period from June 19, 1997 through December
31, 1997 and $24,914 for the nine-month period ended September 30, 1998.
The Company leases certain equipment under capital leases obligations. The
leases expire on March 27, 2000 and August 23, 2000.
3. Related Party Transactions
Since inception and through the nine month period ended September 30, 1998,
two of the Company's members have loaned the Company funds to be used for
expenditures incurred by the Company in order to conduct business. At December
31, 1997 and at September 30, 1998, loan amounts due to members totaled $83,510
and $96,214, respectively.
4. Income Taxes
Under federal and California law, income or loss of limited liability
companies are passed through to the separate tax returns of the members.
Accordingly, no provision (benefit) for taxes based on income or losses is
shown in the accompanying financial statements.
5. Sale of Assets
On November 6, 1998, COMPS.COM Inc. purchased substantially all of the assets
of the Company for $163,000 and stock options granted to the members.
6. Year 2000 Compliance (Unaudited)
Many currently installed computer systems and software products are coded to
accept only two-digit entries in the date code filed. Beginning in the year
2000, these date code fields will need to accept four-digit entries to
distinguish 21st century dates from 20th century dates. As a result, computer
systems and/or software used by many companies may need to be upgraded to
comply with such "Year 2000" requirements.
Significant uncertainty exists concerning the potential effects associated
with compliance. Although the Company believes that it is year 2000 compliant,
there can be no assurance that coding errors or other defects will not be
discovered in the future. Any year 2000 compliance problem of the Company, its
service providers, its customers or the Internet infrastructure could result in
a material adverse effect on the Company's business, operating results and
financial condition.
F-26
<PAGE>
COMPS.COM, Inc.
Unaudited Pro Forma Condensed Statement of Operations
On November 6, 1998, the Company acquired REALBID, LLC (REALBID) for
approximately $3.1 million, including acquisition costs. The unaudited pro
forma condensed statement of operations for the year ended December 31, 1998
give effect to the acquisition of REALBID as if it had occurred on January 1,
1998. The pro forma condensed statement of operations is based on historical
results of operations of the Company for the year ended December 31, 1998 and
REALBID for the period from January 1, 1998 to November 5, 1998. The pro forma
condensed statement of operations should be read in conjunction with the
historical financial statements and notes thereto of the Company and REALBID.
The pro forma condensed statement of operations is presented for illustrative
purposes only and is not necessarily indicative of results of operations that
would have actually occurred had the acquisition of REALBID been effected on
January 1, 1998.
<TABLE>
<CAPTION>
COMPS.COM, REALBID, LLC
Inc. Period from
Year ended January 1, 1998
December 31, to November 5, Pro Forma
1998 1998 Adjustments Pro Forma
------------ --------------- ----------- -----------
<S> <C> <C> <C> <C>
Net revenues............. $12,805,761 $ 223,166 -- $13,028,927
Cost of revenues......... 5,746,180 44,988 -- 5,791,168
----------- --------- --------- -----------
Gross profit............. 7,059,581 178,178 -- 7,237,759
Operating expenses:
Selling and marketing... 4,181,945 -- -- 4,181,945
Product development..... 1,230,349 -- -- 1,230,349
General and
administrative......... 2,936,052 293,782 407,750 3,637,584
----------- --------- --------- -----------
Total operating
expenses................ 8,348,346 293,782 407,750 9,049,878
----------- --------- --------- -----------
Loss from operations..... (1,288,765) (115,604) (407,750) (1,812,119)
Other income (expense)... (259,557) -- -- (259,557)
----------- --------- --------- -----------
Net loss................. (1,548,322) (115,604) (407,750) (2,071,676)
Dividend accretion on
preferred stock......... 363,235 -- -- 363,235
----------- --------- --------- -----------
Net loss attributable to
common stockholders..... $(1,911,557) $(115,604) $(407,750) $(2,434,911)
=========== ========= ========= ===========
Net loss per share
attributable to common
stockholders, basic and
diluted................. $ (0.40) (0.51)
=========== ===========
Shares used in computing
net loss attributable to
common stockholders,
basic and diluted....... 4,794,896 4,794,896
=========== ===========
</TABLE>
See accompanying notes.
F-27
<PAGE>
COMPS.COM, Inc.
Notes to Unaudited Pro Forma Condensed
Statement Of Operations
Note 1.
On November 6, 1998, COMPS.COM, Inc. (the Company) acquired all of the assets
of REALBID, LLC (REALBID) for cash of $163,000 and options to acquire 544,612
shares of the Company's common stock at $1.20 per share. The fair value of the
options was determined to be $3.84 per share as of the date of the acquisition.
As a result, the purchase price is calculated to be $2,308,400, which includes
acquisition costs of $54,400. The purchase price was allocated as follows,
based upon a valuation of the tangible and intangible assets by an independent
appraiser, as well as management's best estimates:
<TABLE>
<S> <C>
Current assets acquired....................................... $ 64,500
Customer base................................................. 1,791,100
Database and website technology............................... 268,700
Assembled workforce........................................... 94,600
Trademark and trade name...................................... 89,500
----------
$2,308,400
</TABLE>
The intangible assets are being amortized over estimated useful lives ranging
from three to five years.
Note 2.
The accompanying unaudited pro forma condensed statement of operations for
the year ended December 31, 1998 gives effect to the acquisition of REALBID as
if it had occurred as of January 1, 1998. The pro forma adjustment reflects
twelve months of amortization expense.
F-28
<PAGE>
Inside Back Cover:
NATIONAL COVERAGES
[A map of the U.S. is shown. Nine icons are lined up across the top of the map.
Below each icon is the name of one of the nine property types that we cover in
our database. Each icon will have a picture of the property type that it
represents. White dots are placed on the map in cities representing our current
market. Red dots are placed on the map in cities representing the markets in
our expansion plan. A legend is provided explaining the meaning of the dots.
[LOGO]
Outside back cover:
RELIABLE COMMERCIAL REAL ESTATE
[The back cover will consist of a dark background with white text. There will
be a picture of a database wheel resembling a radar screen with a picture of a
group of commercial real estate buildings inside the database wheel.]
[LOGO]
COMPS.COM, INC.
www.comps.com
<PAGE>
PART II
Information Not Required in Prospectus
Item 13. Other Expenses of Issuance and Distribution
The expenses to be paid by the registrant are as follows. All amounts other
than the SEC registration fee, the NASD filing fees and the Nasdaq National
Market listing fee are estimates.
<TABLE>
<CAPTION>
Amount
to
be Paid
--------
<S> <C>
SEC registration fee............................................... $ 13,900
NASD filing fee.................................................... 5,500
Nasdaq National Market listing fee................................. 5,000
Legal fees and expenses............................................ 250,000
Accounting fees and expenses....................................... 200,000
Printing and engraving............................................. 120,000
Blue sky fees and expenses (including legal fees).................. 5,000
Transfer agent fees................................................ 10,000
Miscellaneous...................................................... 10,000
--------
Total.......................................................... $619,400
========
</TABLE>
Item 14. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's board of directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933.
As permitted by the Delaware General Corporation Law, the registrant's Second
Restated Certificate of Incorporation includes a provision that eliminates the
personal liability of its directors for monetary damages for breach of
fiduciary duty as a director, except for liability (1) for any breach of the
director's duty of loyalty to the registrant or its stockholders, (2) for acts
or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law, (3) under section 174 of the Delaware General
Corporation Law (regarding unlawful dividends and stock purchases) or (4) for
any transaction from which the director derived an improper personal benefit.
As permitted by the Delaware General Corporation Law, the bylaws of the
registrant provide that (1) the registrant is required to indemnify its
directors and officers to the fullest extent permitted by the Delaware General
Corporation Law, subject to certain very limited exceptions, (2) the registrant
may indemnify its other employees and agents as set forth in the Delaware
General Corporation Law, (3) the registrant is required to advance expenses, as
incurred, to its directors and executive officers in connection with a legal
proceeding to the fullest extent permitted by the Delaware General Corporation
Law, subject to certain very limited exceptions and (4) the rights conferred in
the bylaws are not exclusive.
The registrant has entered into indemnification agreements with each of its
directors and executive officers to give such directors and officers additional
contractual assurances regarding the scope of the indemnification set forth in
the registrant's Amended and Restated Certificate of Incorporation and to
provide additional procedural protections. At present, there is no pending
litigation or proceeding involving a director, officer or employee of the
registrant regarding which indemnification is sought, nor is the registrant
aware of any threatened litigation that may result in claims for
indemnification.
II-1
<PAGE>
Reference is also made to Section of the Underwriting Agreement, which
provides for the indemnification of officers, directors and controlling persons
of the registrant against certain liabilities. The indemnification provision in
the registrant's Certificate of Incorporation, bylaws and the indemnification
agreements entered into between the registrant and each of its directors and
executive officers may be sufficiently broad to permit indemnification of the
registrant's directors and executive officers for liabilities arising under the
Securities Act of 1933.
The registrant has applied for liability insurance for its officers and
directors.
Reference is made to the following documents filed as exhibits to this
registration statement regarding relevant indemnification provisions described
above and elsewhere in this prospectus:
<TABLE>
<CAPTION>
Exhibit
Document Number
-------- -------
<S> <C>
Underwriting Agreement (draft dated , 1999).................. 1.1
Form of Second Restated Certificate of Incorporation of Registrant...... 3.2
Form of Restated Bylaws of Registrant................................... 3.4
Form of Indemnification Agreement....................................... 10.22
Form of Indemnification Agreement....................................... 10.23
</TABLE>
Item 15. Recent Sales of Unregistered Securities
The registrant has sold and issued the following securities since January 1,
1996 (such share numbers do not reflect the -for- stock
split):
(1) The registrant from time to time has granted stock options to employees and
consultants in reliance upon exemption from registration pursuant to either
(1) Section 4(2) of the Securities Act of 1933 or (2) Rule 701 promulgated
under the Securities Act of 1933. The following table sets forth certain
information regarding such grants:
<TABLE>
<CAPTION>
Number of Exercise
Shares Prices
--------- -----------
<S> <C> <C>
January 1, 1996 to December 31, 1996.................. 117,808 $0.30
January 1, 1997 to December 31, 1997.................. 333,841 $0.30
January 1, 1998 to December 31, 1998.................. 1,559,199 $0.45-$1.20
</TABLE>
For additional information concerning these transactions, please see
"Management--Benefit Plans" in the Prospectus included in this registration
statement.
(2) On September 24, 1996, we issued a warrant to purchase 213,068 shares of
Class B common stock to Venture Lending & Leasing, Inc. in consideration
for entering into a certain loan agreement.
(3) On February 9, 1998, we issued 637,790 shares of Series B preferred stock,
warrants to purchase 37,329 shares of Class A common stock and warrants to
purchase 306,097 shares of Class B common stock to various venture
capitalists and insiders for an aggregate consideration of $1,150,000.
(4) On May 18, 1998, we issued 33,500 shares of Class B common stock to a
director upon exercise of options for a consideration of $10,050.
(5) On December 28, 1998, we issued 10,000 shares of Class B common stock to a
director upon exercise of options for a consideration of $3,000.
(6) On February 15, 1999, we issued a warrant to purchase no more than 124,309
shares of Class B common stock to Venture Lending & Leasing, Inc. in
consideration for entering into a certain loan agreement.
The above securities were offered and sold by the registrant in reliance upon
exemptions from registration pursuant to either (1) Section 4(2) of the
Securities Act of 1933 as transactions not involving any public offering, or
(2) Rule 701 promulgated under the Securities Act of 1933. No underwriters were
involved in connection with the sales of securities referred to in this Item
15.
II-2
<PAGE>
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits.
<TABLE>
<CAPTION>
Number Description
------ -----------------------------------------------------------------------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1 Restated Certificate of Incorporation, as amended.
3.2 Form of Second Restated Certificate of Incorporation to be in effect
upon the closing of this offering.
3.3 Bylaws.
3.4 Form of Restated Bylaws to be in effect upon the closing of this
offering.
4.1* Specimen common stock certificate.
5.1* Opinion of Brobeck, Phleger & Harrison LLP.
10.1 Amended and Restated Investor Rights Agreement among us and certain of
our stockholders, dated February 9, 1998.
10.2 Stock and Warrant Purchase Agreement among us and the purchasers
identified in Exhibit A to the Agreement, dated October 14, 1994.
10.3 Stock and Warrant Purchase Agreement among us and the purchasers
identified in Exhibit A to the Agreement, dated February 9, 1998.
10.4 Form of Class B Common Stock Warrant between us and the persons listed
on the attached schedule, dated October 14, 1994.
10.5 Class A Common Stock Warrant issued to Christopher A. Crane, dated
February 9, 1998.
10.6 Form of Class B Common Warrant between us and the persons listed on the
attached schedule, dated February 9, 1998.
10.7 Warrant to Purchase 213,068 Shares of Class B Common Stock between us
and Venture Lending & Leasing, Inc., dated September 24, 1996.
10.8 Loan Agreement between us and Venture Lending & Leasing, Inc., dated
September 24, 1996.
10.9 Security Agreement between us and Venture Lending & Leasing, Inc.,
dated September 24, 1996.
10.10 Trademark Collateral Assignment between us and Venture Lending &
Leasing, Inc., dated September 24, 1996.
10.11 Patent Collateral Assignment between us and Venture Lending & Leasing,
Inc., dated September 24, 1996.
10.12 Form of Promissory Note between us and Venture Lending & Leasing, in
such principal amounts as set forth on the attached schedule.
10.13 Form of Promissory Note between us and Venture Lending & Leasing, in
such principal amounts as set forth on the attached schedule.
10.14 Office Building Lease between us and Comps Plaza Associates, L.P.,
dated January 31, 1999.
10.15 Form of Employment and Incentive Compensation Agreement between us and
the employees listed on the attached schedule.
10.16 Executive Employment Agreement between us and Christopher A. Crane,
dated October 14, 1994.
10.17 Form of Employment Agreement between us and the employees listed on the
attached schedule, dated November 6, 1998.
10.18 Covenant Not to Compete between us and Robert C. Beasley, dated October
14, 1994.
10.19 Form of Non-Competition and Non-Disclosure Agreement between us and the
parties listed on the attached schedule, dated November 6, 1998.
10.20 Form of Non-Competition and Non-Disclosure Agreement between us and the
parties listed on the attached schedule, dated January 7, 1999.
10.21 Form of Employee Confidentiality and Inventions Agreement.
10.22 Form of Indemnification Agreement between us and each of our directors.
10.23 Form of Indemnification Agreement between us and each of our officers.
10.24 Software License Agreement between us and Qualitative Marketing
Software, Inc., dated February 27, 1997.
10.25 License and Subscription Agreement between us and Transamerica
Information Management Services, dated December 17, 1992.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
Number Description
------ -----------------------------------------------------------------------
<C> <S>
10.26 License Agreement between us and NCompass Labs Inc., dated December 2,
1998.
10.27 Amended and Restated Stock Option Plan.
10.28 Form of Amended and Restated Stock Option Plan Incentive Stock Option
Agreement.
10.29 Form of Amended and Restated Stock Option Plan Non-Qualified Stock
Option Agreement.
10.30 The 1998 Equity Participation Plan.
10.31 Form of 1998 Equity Participation Plan Incentive Stock Option
Agreement.
10.32 Form of 1998 Equity Participation Plan Non-Qualified Stock Option
Agreement.
10.33 The 1998 Supplemental Option Plan.
10.34 1998 Supplemental Option Plan Form of Notice of Grant of Stock Option.
10.35 1999 Stock Incentive Plan.
10.36* Form of 1999 Stock Incentive Plan Notice of Grant.
10.37* Form of 1999 Stock Incentive Plan Stock Option Agreement.
10.38 Employee Stock Purchase Plan.
10.39 Assignment and Assumption Agreement between us and REALBID LLC, dated
November 6, 1998.
10.40 Intellectual Property Assignment between us and REALBID LLC, dated
November 6, 1998.
10.41 Service Mark Assignment between us and REALBID LLC, dated November 6,
1998.
10.42 Asset Purchase Agreement between us, The Land Sales Resource and Kitty
Layne, dated July 17, 1995.
10.43+ Purchase Agreement between us and TRW Redi Property Data, dated August
31, 1995, as amended by the Addendum, dated November 20, 1997.
10.44+ Asset Purchase Agreement among us, REALBID LLC, Emmett DeMoss and
Robert Potter, dated November 6, 1998.
10.45+ Asset Purchase Agreement between us and AOBR, Inc., dated December 4,
1998.
10.46 Loan and Security Agreement between us and Venture Lending & Leasing
II, Inc., dated February 12, 1999.
10.47 Patent Collateral Assignment Agreement between us and Venture Lending &
Leasing II, Inc., dated February 12, 1999.
10.48 Trademark Collateral Assignment between us and Venture Lending &
Leasing II, Inc., dated February 12, 1999.
10.49 Warrant to Purchase an aggregate of $225,000 of Class B Shares of
Common Stock between us and Venture Lending & Leasing II, Inc., dated
February 12, 1999.
11.1* Statement re: Computation of Basic and Diluted Net Loss Per Share.
23.1 Consent of Ernst & Young LLP
23.2* Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1)
24.1 Powers of Attorney (See Signature Page on Page II-6).
27.1 Financial Data Schedule.
</TABLE>
- --------
* To be filed by amendment.
+ We have sought confidential treatment pursuant to Rule 406 of portions of
the referenced exhibit.
(b) Financial Statement Schedules.
Schedule II--Valuation and Qualifying Accounts.
All other schedules are omitted because they are not required, are not
applicable or the information is included in our financial statements or notes
thereto.
Item 17. Undertakings
The undersigned Registrant hereby undertakes to provide to the Underwriter at
the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriter to
permit prompt delivery to each purchaser.
II-4
<PAGE>
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Act, and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933 the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424 (b)(1) or (4), or
497(h) under the Securities Act of 1933 shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of
1933 each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-5
<PAGE>
Signatures
Pursuant to the requirements of the Securities Act of 1933 the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in San Diego, California, on this 24th
day of February, 1999.
COMPS.COM, INC.
By: /s/ Christopher A. Crane
----------------------------------
Name: Christopher A. Crane
Title: President and Chief Executive
Officer
Power of Attorney
We, the undersigned directors and/or officers of COMPS.COM, INC. hereby
severally constitute and appoint Christopher A. Crane, President and Chief
Executive Officer, and Karen Goodrum, Vice President of Finance and
Administration and Chief Financial Officer, and each of them individually, with
full powers of substitution and resubstitution, our true and lawful attorneys,
with full powers to them and each of them to sign for us, in our names and in
the capacities indicated below, the Registration Statement on Form S-1 filed
with the SEC, and any and all amendments to said Registration Statement
(including post-effective amendments), and any registration statement filed
pursuant to Rule 462(b) under the Securities Act of 1933 in connection with the
registration under the Securities Act of 1933 of our equity securities, and to
file or cause to be filed the same, with all exhibits thereto and other
documents in connection therewith, with the SEC, granting unto said attorneys,
and each of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in connection therewith, as fully
to all intents and purposes as each of them might or could do in person, and
hereby ratifying and confirming all that said attorneys, and each of them, or
their substitute or substitutes, shall do or cause to be done by virtue of this
Power of Attorney.
Pursuant to the requirements of the Securities Act of 1933 this Registration
Statement has been signed by the following persons in the capacities indicated
on February 24, 1999:
<TABLE>
<CAPTION>
Signature Title(s) Date
--------- ------- ----
<C> <S> <C>
/s/ Christopher A. Crane Chairman of the Board, President and February 24, 1999
____________________________________ Chief Executive Officer (principal
Christopher A. Crane executive officer)
/s/ Karen Goodrum Vice President of Finance and February 24, 1999
____________________________________ Administration and Chief Financial
Karen Goodrum Officer (principal financial and
accounting officer) and Secretary
/s/ Gregory M. Avis Director February 24, 1999
____________________________________
Gregory M. Avis
/s/ Robert C. Beasley Director February 24, 1999
____________________________________
Robert C. Beasley
</TABLE>
II-6
<PAGE>
Consent of Ernst & Young LLP, Independent Auditors
We consent to the reference to our firm under the captions "Selected
Financial Data" and "Experts" and to the use of our report on the COMPS.COM,
Inc. financial statements dated February 5, 1999 (except for Note 15, as to
which the date is February 22, 1999) and our report on the REALBID, LLC
financial statements dated February 17, 1999, in the Registration Statement
(Form S-1) and related Prospectus of COMPS.COM, Inc. dated February 24, 1999.
Our audits also included the financial statement schedule of COMPS.COM, Inc.
for the three years ended December 31, 1998 listed in Item 16(b). This schedule
is the responsibility of the Company's management. Our responsibility is to
express an opinion based on our audits. In our opinion, the financial statement
schedule referred to above, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.
Ernst & Young LLP
San Diego, California
February 23, 1999
II-7
<PAGE>
Schedule II
COMPS.COM, Inc.
Valuation And Qualifying Accounts
<TABLE>
<CAPTION>
Additions
--------------------
Balance
at Charged to Balance
Allowance for Doubtful Beginning Costs and at End of
Accounts of Year Expenses Other (1) Deductions Year
- ---------------------- --------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Year ended December 31,
1996..................... 362,913 -- 644,322 437,109 570,126
Year ended December 31,
1997..................... 570,126 39,491 1,238,593 463,968 1,384,242
Year ended December 31,
1998..................... 1,384,242 167,858 260,627 347,805 1,464,922
</TABLE>
- --------
(1) These amounts have been offset against deferred subscription revenue.
II-8
<PAGE>
Index to Exhibits
<TABLE>
<CAPTION>
Number Description
------ -----------------------------------------------------------------------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1 Restated Certificate of Incorporation, as amended.
3.2 Form of Second Restated Certificate of Incorporation to be in effect
upon the closing of this offering.
3.3 Bylaws.
3.4 Form of Restated Bylaws to be in effect upon the closing of this
offering.
4.1* Specimen common stock certificate.
5.1* Opinion of Brobeck, Phleger & Harrison LLP.
10.1 Amended and Restated Investor Rights Agreement among us and certain of
our stockholders, dated February 9, 1998.
10.2 Stock and Warrant Purchase Agreement among us and the purchasers
identified in Exhibit A to the Agreement, dated October 14, 1994.
10.3 Stock and Warrant Purchase Agreement among us and the purchasers
identified in Exhibit A to the Agreement, dated February 9, 1998.
10.4 Form of Class B Common Stock Warrant between us and the persons listed
on the attached schedule, dated October 14, 1994.
10.5 Class A Common Stock Warrant issued to Christopher A. Crane, dated
February 9, 1998.
10.6 Form of Class B Common Warrant between us and the persons listed on the
attached schedule, dated February 9, 1998.
10.7 Warrant to Purchase 213,068 Shares of Class B Common Stock between us
and Venture Lending & Leasing, Inc., dated September 24, 1996.
10.8 Loan Agreement between us and Venture Lending & Leasing, Inc., dated
September 24, 1996.
10.9 Security Agreement between us and Venture Lending & Leasing, Inc.,
dated September 24, 1996.
10.10 Trademark Collateral Assignment between us and Venture Lending &
Leasing, Inc., dated September 24, 1996.
10.11 Patent Collateral Assignment between us and Venture Lending & Leasing,
Inc., dated September 24, 1996.
10.12 Form of Promissory Note between us and Venture Lending & Leasing, in
such principal amounts as set forth on the attached schedule.
10.13 Form of Promissory Note between us and Venture Lending & Leasing, in
such principal amounts as set forth on the attached schedule.
10.14 Office Building Lease between us and Comps Plaza Associates, L.P.,
dated January 31, 1999.
10.15 Form of Employment and Incentive Compensation Agreement between us and
the employees listed on the attached schedule.
10.16 Executive Employment Agreement between us and Christopher A. Crane,
dated October 14, 1994.
10.17 Form of Employment Agreement between us and the employees listed on the
attached schedule, dated November 6, 1998.
10.18 Covenant Not to Compete between us and Robert C. Beasley, dated October
14, 1994.
10.19 Form of Non-Competition and Non-Disclosure Agreement between us and the
parties listed on the attached schedule, dated November 6, 1998.
10.20 Form of Non-Competition and Non-Disclosure Agreement between us and the
parties listed on the attached schedule, dated January 7, 1999.
10.21 Form of Employee Confidentiality and Inventions Agreement.
10.22 Form of Indemnification Agreement between us and each of our directors.
10.23 Form of Indemnification Agreement between us and each of our officers.
10.24 Software License Agreement between us and Qualitative Marketing
Software, Inc., dated February 27, 1997.
10.25 License and Subscription Agreement between us and Transamerica
Information Management Services, dated December 17, 1992.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Number Description
------ -----------------------------------------------------------------------
<C> <S>
10.26 License Agreement between us and NCompass Labs Inc., dated December 2,
1998.
10.27 Amended and Restated Stock Option Plan.
10.28 Form of Amended and Restated Stock Option Plan Incentive Stock Option
Agreement.
10.29 Form of Amended and Restated Stock Option Plan Non-Qualified Stock
Option Agreement.
10.30 The 1998 Equity Participation Plan.
10.31 Form of 1998 Equity Participation Plan Incentive Stock Option
Agreement.
10.32 Form of 1998 Equity Participation Plan Non-Qualified Stock Option
Agreement.
10.33 The 1998 Supplemental Option Plan.
10.34 1998 Supplemental Option Plan Form of Notice of Grant of Stock Option.
10.35 1999 Stock Incentive Plan.
10.36* Form of 1999 Stock Incentive Plan Notice of Grant.
10.37* Form of 1999 Stock Incentive Plan Stock Option Agreement.
10.38 Employee Stock Purchase Plan.
10.39 Assignment and Assumption Agreement between us and REALBID LLC, dated
November 6, 1998.
10.40 Intellectual Property Assignment between us and REALBID LLC, dated
November 6, 1998.
10.41 Service Mark Assignment between us and REALBID LLC, dated November 6,
1998.
10.42 Asset Purchase Agreement between us, The Land Sales Resource and Kitty
Layne, dated July 17, 1995.
10.43+ Purchase Agreement between us and TRW Redi Property Data, dated August
31, 1995, as amended by the Addendum, dated November 20, 1997.
10.44+ Asset Purchase Agreement between us, REALBID LLC, Emmett DeMoss and
Robert Potter, dated November 6, 1998.
10.45+ Asset Purchase Agreement among us and AOBR, Inc., dated December 4,
1998.
10.46 Loan and Security Agreement between us and Venture Lending & Leasing
II, Inc., dated February 12, 1999.
10.47 Patent Collateral Assignment Agreement between us and Venture Lending &
Leasing II, Inc., dated February 12, 1999.
10.48 Trademark Collateral Assignment between us and Venture Lending &
Leasing II, Inc., dated February 12, 1999.
10.49 Warrant to Purchase an aggregate of $225,000 of Class B Shares of
Common Stock between us and Venture Lending & Leasing II, Inc., dated
February 12, 1999.
11.1* Statement re: Computation of Basic and Diluted Net Loss Per Share.
23.1 Consent of Ernst & Young LLP
23.2* Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1)
24.1 Powers of Attorney (See Signature Page on Page II-6).
27.1 Financial Data Schedule.
</TABLE>
- --------
* To be filed by amendment.
+ We have sought confidential treatment pursuant to Rule 406 of portions of
the referenced exhibit.
<PAGE>
EXHIBIT 3.1
RESTATED
CERTIFICATE OF INCORPORATION
OF
COMPS INFOSYSTEMS, INC.
A DELAWARE CORPORATION
COMPS INFOSYSTEMS, INC., a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), hereby certifies as follows:
ONE: The name of this Corporation is COMPS INFOSYSTEMS, INC. The original
Certificate of Incorporation of the Corporation was filed with the Secretary of
State of Delaware on September 1, 1994. The Certificate of Incorporation was
later amended and restated and filed with the Delaware Secretary of State on
October 13, 1994.
TWO: Pursuant to Sections 242 and 245 of the General Corporation Law of
the State of Delaware, this Restated Certificate of Incorporation restates and
integrates and further amends the provisions of the Restated Certificate of
Incorporation of this Corporation.
THREE: The text of the Restated Certificate of Incorporation as heretofore
in effect is hereby restated and further amended to read in its entirety as
follows:
ARTICLE I
---------
The name of the Corporation is COMPS InfoSystems, Inc. (the "Corporation").
ARTICLE II
----------
The address of the registered office of the Corporation in the State of
Delaware is 1013 Centre Road, City of Wilmington, Delaware. The name of the
registered agent at that address is The Prentice Hall Corporation System, Inc.,
County of New Castle.
ARTICLE III
-----------
The purpose of the Corporation is to engage in any lawful act or activity
for which a corporation may be organized under the General Corporation Law of
Delaware.
ARTICLE IV
----------
The Corporation is authorized to issue two classes of shares to be
designated respectively "Preferred Stock" and "Common Stock." The total number
of shares of Preferred Stock par value $.01 per share, which are authorized is
5,000,000. The total number of shares of Common Stock, par value $.01 per
share, which are authorized is 25,000,000.
A. Common Stock. The first series of Common Stock shall be comprised of
------------
22,500,000 shares designated "Class A Common Stock." The second series of
Common Stock shall be comprised of 2,500,000 shares of Common Stock designated
"Class B Common Stock."
1
<PAGE>
The Class A and Class B Common Stock shall have the same rights and privileges
except as provided below:
1. Voting. The Class B Common Stock shall not have any right to vote
------
unless otherwise required by law.
2. Conversion. Each share of Class B Common Stock shall automatically
----------
convert into one share of Class A Common Stock upon the earlier to occur of (i)
the time the consent of at least 66 2/3% of the outstanding Class A Common Stock
to such conversion is obtained, or (ii) closing of the sale of the Corporation's
securities pursuant to an underwritten public offering. Upon conversion of the
Class B Common Stock, the Class A Common Stock shall be renamed "Common Stock."
(a) In case the Corporation shall at any time (i) subdivide the
outstanding Class A Common Stock, or (ii) issue a stock dividend on its
outstanding Class A Common Stock, the number of shares of Class B Common Stock
issuable upon conversion of the Class B Common Stock immediately prior to such
subdivision or the issuance of such stock dividend shall be proportionately
increased by the same ratio as the subdivision or dividend. In case the
Corporation shall at any time combine its outstanding Class A Common Stock, the
number of shares of Class B Common Stock issuable upon conversion of the Class B
Common Stock immediately prior to such combination shall be proportionately
decreased by the same ratio as the combination. All such adjustments described
herein shall be effective at the close of business on the date of such
subdivision, stock dividend or combination, as the case may be.
(b) In case of any capital reorganization (other than in
connection with a merger or other reorganization which the Corporation is not
the continuing or surviving entity) or any reclassification of the Common Stock
of the Corporation, the Class B Common Stock shall thereafter be convertible
into that number of shares of stock or other securities or property to which a
holder of the number of shares of Class A Common Stock of the Corporation
deliverable upon conversion of the shares of Class B Common Stock immediately
prior to such reorganization or recapitalization would have been entitled upon
such reorganization or reclassification.
B. Preferred Stock. The first series of Preferred Stock shall be
---------------
comprised of 4,270,336 shares designated as "Series A Preferred Stock." The
second series of Preferred Stock shall be comprised of 637,790 shares designated
as "Series B Preferred Stock." The relative rights, preferences, restrictions
and other matters relating to the Series A Preferred Stock and Series B
Preferred Stock are as follows:
1. Dividend Rights of Preferred. The holders of Preferred Stock shall
----------------------------
be entitled to receive, out of any assets at the time legally available
therefor, cumulative non-compounded dividends from the date of issuance at the
rate per annum of $0.07025 per share (subject to adjustments for stock splits,
dividends, recapitalizations and the like) of Series A Preferred Stock and
$0.10808 per share (subject to adjustments for stock splits, dividends,
recapitalization and the like) of Series B Preferred Stock, payable immediately
prior to the effective time of (i) any repurchase of the Series A Preferred
Stock or Series B Preferred Stock; (ii) any liquidation pursuant to Section
B(2)(b) of this Article IV, or (iii) any sale of the
2
<PAGE>
Corporation's securities pursuant to an underwritten public offering, provided,
--------
however, that the right to receive such accrued and unpaid dividends shall
- -------
forfeit with respect to a particular Series of Preferred Stock in the event of
(x) a repurchase of all of the outstanding shares of a series of Preferred Stock
(each series with shares still outstanding retains such right) or a liquidation
pursuant to Section B(2)(b) of this Article IV, if the aggregate amount to be
received by the holders of the Series A Preferred Stock and Series B Preferred
Stock prior to the payment of such accrued and unpaid dividends would exceed
$3.52 and $3.83 per share, respectively, (as adjusted for stock-splits,
combinations, reorganizations and the like) or (y) with respect only to the
Series A Preferred Stock, an underwritten public offering of the Corporation's
securities if the Corporation receives gross proceeds of not less than
$10,000,000 at a purchase price of not less than $3.52 per share (as adjusted
for stock splits, stock dividends, reorganizations and the like), and with
respect only to the Series B Preferred Stock, an underwritten public offering of
the Corporation's securities of the Corporation receives gross proceeds of not
less than $10,000,000 at a purchase price of not less than $3.83 per share (as
adjusted for stock splits, stock dividends, reorganizations and the like). Upon
conversion of the Preferred Stock any accrued but unpaid dividends shall remain
accrued and shall remain payable pursuant to this Section B(1) of this Article
IV. In addition to the cumulative dividends specified above, no cash dividends
shall be paid on any Common Stock unless an equal dividend is paid with respect
to all outstanding shares of Preferred Stock in an amount for each such share of
Preferred Stock equal to the aggregate amount of such dividends for all Common
Stock into which each such share of Preferred Stock could then be converted.
2. Preference on Liquidation.
-------------------------
(a) In the event of any liquidation, dissolution or winding up of
the Corporation, distributions to the stockholders of the Corporation shall be
made in the following manner:
(i) The holders of the Preferred Stock shall be entitled to
receive, prior and in preference to any distribution of any of the assets or
surplus funds of the Corporation to the holders of the Common Stock by reason of
their ownership of such stock, the amount of (A) $1.17087 per share for each
share of Series A Preferred Stock and $1.80310 per share for each share of
Series B Preferred Stock then held by them, adjusted for any stock split,
combination, consolidation, or stock distributions or stock dividends with
respect to such shares, and (B) an amount equal to all accumulated but unpaid
dividends on the Preferred Stock as provided in Subsection 1 above. If the
assets and funds thus distributed among the holders of the Preferred Stock shall
be insufficient to permit the payment to such holders of the full aforesaid
preferential amount, then the entire assets and funds of the Corporation legally
available for distribution shall be distributed ratably among the holders of the
Preferred Stock, pari passu, in proportion to their aggregate
---- -----
preferential amounts.
(ii) The remaining assets of the Corporation, after payment
in full to the holders of Preferred Stock of all amounts exclusively payable on
or with respect to said shares, shall be distributed ratably among the holders
of the Common Stock.
(b) The following shall be deemed to be a liquidation, dissolution
or winding up within the meaning of this Subsection: (i) an acquisition,
consolidation or merger of
3
<PAGE>
this Corporation with or into any other corporation or corporations unless the
stockholders of the Corporation prior to such transaction directly or indirectly
own more than fifty percent (50%) of the voting stock of the surviving or
acquiring corporation or corporations; (ii) the sale, transfer or other
disposition of all or substantially all of the assets of this Corporation to a
person other than a corporation or partnership controlled by the Corporation or
its stockholders; and (iii) the effectuation by the Corporation of a transaction
or series of related transactions in which more than 50% of the outstanding
voting power of the Corporation prior to such transaction or series of related
transactions is disposed of.
(c) In the event the Corporation shall propose to take any action
of the type described in subsection (a) or (b) of this Subsection 2, the
Corporation shall, within ten (10) days after the date the Board of Directors
approves such action or twenty (20) days prior to any stockholders' meeting
called to approve such action, whichever is earlier, give each holder of shares
of the Preferred Stock written notice of the proposed action. Such written
notice shall describe the material terms and conditions of such proposed action,
including a description of the stock, cash and property to be received by the
holders of shares of the Preferred Stock upon consummation of the proposed
action and the proposed date of delivery thereof. If any material change in the
facts set forth in the notice shall occur, the Corporation shall promptly give
written notice to each holder of shares of the Preferred Stock of such material
change.
(d) The Corporation shall not consummate any proposed action of
the type described in subsection (a) or (b) of this Subsection 2 before the
expiration of thirty (30) days after the mailing of the initial written notice
or ten (10) days after the mailing of any subsequent written notice, whichever
is later; provided, however, that any such 30-day or 10-day period may be
-------- -------
shortened upon the written consent of the holders of a majority of the
outstanding shares of the Preferred Stock.
(e) If the Corporation shall propose to take any action of the
type described in subsection (a) or (b) of this Subsection 2 which will involve
the distribution of assets other than cash, the Corporation shall, if requested
by the holders of a majority of the Preferred Stock, promptly engage independent
competent appraisers to determine the value of the assets to be distributed to
the holders of shares of the Preferred Stock and the Common Stock. The
Corporation shall, upon receipt of such appraiser's valuation, give prompt
written notice of the appraiser's valuation to each holder of shares of the
Preferred Stock.
3. Voting.
------
(a) Except as set forth in paragraph (b) of this Subsection 3 and
in Subsection 6 hereof, or as otherwise required by law, the shares of the
Preferred Stock shall be voted together with the Corporation's Class A Common
Stock at any annual or special meeting of the stockholders of the Corporation,
or may act by written consent in the same manner as the Corporation's Class A
Common Stock; and shall have the voting rights and powers equal to the voting
right of the Class A Common Stock, upon the following basis: each holder of
shares of Preferred Stock shall be entitled to such number of votes for the
Preferred Stock held by him on the record date fixed for such meeting or, if no
record date is established, at the date such vote is taken or on the effective
date of any such written consent, as shall be equal to the nearest whole number
of shares of the Corporation's Common Stock into which his shares of Preferred
Stock
4
<PAGE>
are convertible immediately after the close of business on the record date fixed
for such meeting, the date of such vote or the effective date of such written
consent.
(b) The holders of Series A and Series B Preferred Stock, voting
together as a separate class, shall be entitled to elect one director. The
election of a director by the holders of the Preferred Stock shall occur at the
annual meeting of holders of Common Stock or at any special meeting of holders
of Preferred Stock called by holders of a majority of the outstanding shares of
Preferred Stock or by the written consent of all such holders. If the person
elected by the holders of Preferred Stock should cease to be a director for any
reason, the vacancy shall only be filled by the vote or written consent of
holders of a majority of the outstanding shares of Preferred Stock. The holders
of the Common Stock shall be entitled to elect the remaining directors.
4. Status of Converted or Redeemed Stock. In the event that any shares
-------------------------------------
of Preferred Stock shall be converted pursuant to Subsection 5 hereof or shall
be repurchased or otherwise acquired by the Corporation in any manner
whatsoever, such shares shall be retired and canceled promptly after the
acquisition thereof. Such shares shall not be reissued as shares of any series
of Preferred Stock. Upon such cancellation, and upon the filing of any
certificates required or appropriate under applicable law, the number of
authorized shares of Preferred Stock as set forth in Article IV, shall be
reduced by the number of such shares so canceled.
5. Conversion Rights. The holders of Preferred Stock shall have
-----------------
conversion rights as follows:
(a) Each share of Preferred Stock shall be convertible, at the
option of the holder thereof, at any time at the principal office of the
Corporation or any transfer agent for such shares, into fully paid and
nonassessable shares of Class A Common Stock of the Corporation. The number of
shares of Class A Common Stock into which each share of Preferred Stock may be
converted shall be determined by dividing $1.17087 for the Series A Preferred
Stock and $1.80310 for the Series B Preferred Stock by the Conversion Price
determined as hereinafter provided in effect at the time of the conversion. The
Conversion Price per share at which shares of Class A Common Stock shall be
initially issuable upon conversion of any shares of Preferred Stock shall be
$1.17087 for the Series A Preferred Stock and $1.80310 for the Series B
Preferred Stock, subject to adjustment as provided herein.
(b) Each share of Preferred Stock shall be converted into Class A
Common Stock automatically in the manner provided herein upon the earlier to
occur of (i) the time the consent of holders of at least 66-2/3% of the
outstanding Preferred Stock to such conversion is obtained, or (ii) the closing
of the sale of the Corporation's securities pursuant to an underwritten public
offering from which the Corporation receives gross proceeds of not less than
$10,000,000 at a purchase price of not less than $3.73 per share (as adjusted
for stock splits, stock dividends, reorganizations and the like).
(c) Before any holder of Preferred Stock shall be entitled to
convert the same into Common Stock, such holder shall surrender the certificate
or certificates therefor, duly endorsed in blank or accompanied by proper
instruments of transfer, at the principal office of the Corporation or of any
transfer agent for the Preferred Stock, and shall give written notice
5
<PAGE>
to the Corporation at such office that such holder elects to convert the same
and shall state in writing therein the name or names in which such holder wishes
the certificate or certificates for Common Stock to be issued. As soon as
practicable thereafter, the Corporation shall issue and deliver at such office
to such holder's nominee or nominees, certificates for the number of whole
shares of Common Stock to which such holder shall be entitled. No fractional
shares of Common Stock shall be issued by the Corporation and all such
fractional shares shall be disregarded. In lieu thereof, the Corporation shall
pay in cash the fair market value of such fractional share as determined by the
Board of Directors of the Corporation. Such conversion shall be deemed to have
been made as of the date of such surrender of the Preferred Stock to be
converted, and the person or persons entitled to receive the Common Stock
issuable upon such conversion shall be treated for all purposes as the record
holder or holders of such Common Stock on said date.
(d) In case the Corporation shall at any time (i) subdivide (i.e.
stock split) the outstanding Common Stock, or (d) issue a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock issuable upon
conversion of the Preferred Stock immediately prior to such subdivision or the
issuance of such stock dividend shall be proportionately increased by the same
ratio as the subdivision or dividend (with appropriate adjustments in the
Conversion Price of the Preferred Stock). In case the Corporation shall at any
time combine (i.e. reverse stock split) its outstanding Common Stock, the number
of shares of Common Stock issuable upon conversion of the Preferred Stock
immediately prior to such combination shall be proportionately decreased by the
same ratio as the combination (with appropriate adjustments in the Conversion
Price of the Preferred Stock). All such adjustments described herein shall be
effective at the close of business on the date of such subdivision (i.e. stock
split), stock dividend or combination (i.e. reverse stock split), as the case
may be.
(e) In case of any capital reorganization (other than in
connection with a merger or other reorganization in which the Corporation is not
the continuing or surviving entity) or any reclassification of the Common Stock
of the Corporation, the Preferred Stock shall thereafter be convertible into
that number of shares of stock or other securities or property to which a holder
of the number of shares of Common Stock of the Corporation deliverable upon
conversion of the shares of Preferred Stock immediately prior to such
reorganization or recapitalization would have been entitled upon such
reorganization or reclassification. In any such case, appropriate adjustment (as
determined by the Board of Directors) shall be made in the application of the
provisions herein set forth with respect to the rights and interests thereafter
of the holders of Preferred Stock, such that the provisions set forth herein
shall thereafter be applicable, as nearly as reasonably may be, in relation to
any share of stock or other property thereafter deliverable upon the conversion.
(f) In case:
(i) the Corporation shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive a dividend, or any
other distribution, payable otherwise than in cash; or
6
<PAGE>
(ii) the Corporation shall take a record of the holders of
its Common Stock for the purpose of entitling them to subscribe for or purchase
any shares of stock of any class or to receive any other rights; or
(iii) the Corporation shall effect a capital reorganization of
the Corporation, reclassification of the capital stock of the Corporation (other
than a subdivision or combination of its outstanding Common Stock),
consolidation or merger of the Corporation (other than a merger or other
reorganization in which the Corporation is not the continuing or surviving
entity);
then, and in any such case, the Corporation shall cause to be mailed to the
holders of its outstanding Preferred Stock, at least twenty (20) days prior to
the date hereinafter specified, a notice stating the date on which a record is
to be taken for the purpose of such dividend, distribution or rights, or such
action is to be taken in connection with such reorganization, reclassification,
merger or consolidation.
(g) The Corporation shall at all times reserve and keep available
out of its authorized but unissued Common Stock, solely for the purpose of
effecting the conversion of the Preferred Stock, the full number of shares of
Common Stock deliverable upon the conversion of all Preferred Stock from time to
time outstanding. The Corporation shall from time to time (subject to obtaining
necessary director and stockholder action), in accordance with the laws of the
State of Delaware, increase the authorized amount of its Common Stock if at any
time the authorized number of shares of Common Stock remaining unissued shall
not be sufficient to permit the conversion of all of the shares of Preferred
Stock at the time outstanding.
(h) Upon the issuance by the Corporation of Common Stock, or any
right or option to purchase Common Stock, or any obligation or any shares of
stock convertible into or exchangeable for Common Stock for a consideration per
share less than the Conversion Price of a series of Preferred Stock in effect
immediately prior to the time of such issue or sale other than the issuance of
shares of Common Stock upon conversion of such series of Preferred Stock, then
forthwith upon such issue or sale, the Conversion Price of such series of
Preferred Stock shall be reduced to a price (calculated to nearest cent)
determined by dividing:
(i) an amount equal to the sum of (x) the number of shares of
Common Stock outstanding immediately prior to such issue or sale multiplied by
the then existing Conversion Price of the affected series of Preferred Stock,
(y) the number of shares of Common Stock issuable upon conversion of any shares
of stock of the Corporation outstanding immediately prior to such issue or sale
multiplied by the then existing Conversion Price of the affected series of
Preferred Stock, and (z) an amount equal to the aggregate consideration received
by the Corporation upon such issue or sale, by
(ii) the sum of the number of shares of Common Stock
outstanding immediately after such issue or sale and the number of shares of
Common Stock (without taking into account any adjustment in such number
resulting from such issue or sale) issuable upon conversion of any shares of
stock of the Corporation outstanding immediately after such issue or sale.
7
<PAGE>
For purposes of this subsection (h) the following provisions shall be
applicable:
(1) In the case of an issue or sale for cash of shares
of Common Stock, the consideration received by the Corporation therefor shall be
deemed to be the amount of cash received, before deducting therefrom any
commissions or expenses paid or incurred by the Corporation.
(2) In case of the issuance (otherwise than upon
conversion or exchange of obligations or shares of stock of the Corporation) of
additional shares of Common Stock for a consideration other than cash or a
consideration partly other than cash, the amount of the consideration other than
cash received by the Corporation for such shares shall be deemed to be the value
of such consideration as reasonably determined by the Board of Directors.
(3) In case of the issuance by the Corporation in any
manner of any rights to subscribe for or to purchase shares of Common Stock, at
a consideration per share (as computed below) less than the Conversion Price in
effect for a series of Preferred Stock immediately prior to the date of the
offering of such rights or the granting of such options, as the case may be, the
maximum number of shares of Common Stock to which the holders of such rights or
options shall be entitled to subscribe for or purchase pursuant to such rights
or options shall be deemed to be issued or sold as of the date of the offering
of such rights or the granting of such options, as the case may be, and the
minimum aggregate consideration named in such rights or options for the shares
of Common Stock covered thereby, plus the consideration, if any, received by the
Corporation for such rights or options, shall be deemed to be the consideration
actually received by the Corporation (as of the date of the offering of such
rights or the granting of such options, as the case may be) for the issuance of
such shares.
(4) In case of the issuance or issuances by the
Corporation in any manner of any obligations or of any shares of stock of the
Corporation that shall be convertible into or exchangeable for Common Stock, at
a consideration per share (as computed below) less than the Conversion Price in
effect for a series of Preferred Stock immediately prior to the date such
obligation or shares are issued, the maximum number of shares of Common Stock
issuable upon the conversion or exchange of such obligations or shares shall be
deemed issued as of the date such obligations or shares are issued, and the
amount of the consideration received by the Corporation for such additional
shares of Common Stock will be deemed to be the total of the amount of
consideration received by the Corporation upon the issuance of such obligations
or shares, as the case may be, plus the minimum aggregate consideration, if any,
other than such obligations or shares, receivable by the Corporation upon such
conversion or exchange, except in adjustment of dividends.
(5) The amount of the consideration received by the
Corporation upon the issuance of any rights or options referred to in subsection
(3) above or upon the issuance of any obligations or shares which are
convertible or exchangeable as describes in subsection (4) above, and the amount
of the consideration, if any, other than such obligations or shares so
convertible or exchangeable, receivable by the Corporation upon the exercise,
conversion or exchange thereof shall be determined in the same manner provided
in subsections (h)(1) and (2) above with respect to the consideration received
by the Corporation in
8
<PAGE>
case of the issuance of additional shares of Common Stock. On the expiration of
any rights or options referred to in subsection (3), or the termination of any
right of conversion or exchange referred to in subsection (4), the Conversion
Price then in effect for a series of Preferred Stock shall forthwith be
readjusted to such Conversion Price as would have obtained had the adjustments
made upon the issuance of such option, right or convertible or exchangeable
securities been made upon the basis of the delivery of only the number of shares
of Common Stock actually delivered upon the exercise of such rights or options
or upon the conversion or exchange of such securities.
(6) Anything herein to the contrary notwithstanding,
the Corporation shall not be required to make any adjustment of the Conversion
Price in the case of (A) the sale and issuance by the Corporation of up to
1,944,909 shares of Common Stock or rights or options to purchase shares of
Common Stock, net of repurchases and expired or canceled options, (as adjusted
for stock splits, stock dividends, reorganizations and the like) to officers,
directors, employees, consultants and equipment lessors to the Corporation; (B)
the issuance of Common Stock upon the conversion of outstanding Preferred Stock;
or (C) the issuance of up to 723,295 shares of Common Stock upon the exercise of
Warrants issued to the holders of Preferred Stock.
(i) Upon the occurrence of each adjustment or readjustment of the
Conversion Price for any series of Preferred Stock pursuant to this Subsection
5, the Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to each
holder of Preferred Stock a certificate setting forth such adjustment or
readjustment showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon the reasonable written
request at any time of any holder of Preferred Stock, furnish or cause to be
furnished to such holder a like certificate setting forth (i) such adjustments
and readjustments, and (ii) the number of shares of Common Stock and the amount,
if any, of other property which at the time would be received upon the
conversion of the Preferred Stock.
(j) In the event the Corporation at any time or from time to time
makes, or fixes a record date for the determination of holders of Common Stock
entitled to receive any distribution payable in securities or other property of
the Corporation other than Common Stock and other than as otherwise adjusted in
this Subsection 5, then and in each such event provision shall be made so that
the holders of Preferred Stock shall receive upon conversion thereof, in
addition to the number of shares of Common Stock receivable thereupon, the
amount of securities and other property of the Corporation which they would have
received had their shares of Preferred Stock been converted into shares of
Common Stock on the date of such event and had they thereafter, during the
period from the date of such event to and including the date of conversion;
retained such securities and other property receivable by them as aforesaid
during such period, subject to all other adjustments called for during such
period under this Subsection 5 with respect to the rights of the holders of
Preferred Stock.
(k) Any notices required by the provisions of this Subsection 5 to
be given to the holders of shares of Preferred Stock shall be deemed given if
deposited in the United States mail, first class, postage prepaid and addressed
to each holder of record at its address appearing on the books of the
Corporation.
9
<PAGE>
6. Changes. So long as shares of Preferred Stock are outstanding, the
-------
Corporation shall not, without first obtaining the approval by vote or written
consent, in the manner provided by law, of the holders of at least a majority of
the total number of shares of Series A and Series B Preferred Stock outstanding,
voting together as a single Class: (1) alter or change any of the powers,
preferences, privileges or rights of any series of Preferred Stock; (2) increase
the authorized number of shares of Preferred Stock; (3) amend the provisions of
this Section 6; (4) undertake or effect any consolidation or merger of the
Corporation with or into another corporation or any acquisition by or the
conveyance of all or substantially all of the assets of the Corporation to
another person; (5) create any new series of Preferred Stock; (6) amend this
Certificate of Incorporation of the Corporation; (7) declare or pay any
dividends on the Corporation's capital stock, (8) redeem or repurchase any
outstanding stock other than from employees, consultants or directors upon the
termination of their employment or services pursuant to agreements providing for
such repurchases; or (9) increase the size of the Board of Directors to more
than four directors.
ARTICLE V
---------
The following provisions are inserted for the management of the business
and the conduct of the affairs of the Corporation, and for further definition,
limitation and regulation of the powers of the Corporation and of its directors
and stockholders:
A. The business and affairs of the Corporation shall be managed by or
under the direction of the Board of Directors. In addition to the powers and
authority expressly conferred upon them by statute or by this Restated
Certificate of Incorporation or the By-laws of the Corporation, the directors
are hereby empowered to exercise all such powers and do all such acts and things
as may be exercised or done by the Corporation.
B. The directors of the Corporation need not be elected by written ballot
unless the Bylaws so provide.
ARTICLE VI
----------
A. The number of directors shall initially be four (4) and, thereafter,
subject to the rights of the holders of any outstanding series of Preferred
Stock, shall be fixed from time to time exclusively by the Board of Directors
pursuant to a resolution adopted by a majority of the total number of authorized
directors (whether or not there exist any vacancies in previously authorized
directorships at the time any such resolution is presented to the Board for
adoption). Subject to the rights of the holders of any series of Preferred Stock
then outstanding, a vacancy resulting from the removal of a director by the
stockholders as provided in Article VI, Section C below may be filled at a
special meeting of the stockholders held for that purpose in accordance with
Article IV, Section B.3(b). All directors shall hold office until the expiration
of the term for which elected, and until their respective successors are
elected, except in the case of the death, resignation, or removal of any
director.
B. Subject to the rights of the holders of any series of Preferred Stock
then outstanding, newly created directorships resulting from any increase in the
authorized number of directors or any vacancies in the Board of Directors
resulting from death, resignation or other
10
<PAGE>
cause (other than removal from office by a vote of the stockholders) may be
filled only by a majority vote of the directors then in office, though less than
a quorum, and directors so chosen shall hold office for a term expiring at the
next annual meeting of stockholders at which the term of office of the class to
which they have been elected expires, and until their respective successors are
elected, except in the case of the death, resignation, or removal of any
director. No decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director.
C. Subject to the rights of the holders of any series of Preferred Stock
then outstanding, any directors, or the entire Board of Directors, may be
removed from office at any time, with or without cause, but only by the
affirmative vote of the holders of at least a majority of the voting power of
all of the then outstanding shares of capital stock of the Corporation entitled
to vote generally in the election of directors, voting together as a single
class. Vacancies in the Board of Directors resulting from such removal may be
filled by a majority of the directors then in office, though less than a quorum
or by the stockholders as provided in Article VI, Section A above. Directors so
chosen shall hold office for a term expiring at the next annual meeting of
stockholders at which the term of office of the class to which they have been
elected expires, and until their respective successors are elected, except in
the case of the death, resignation or removal of any director.
ARTICLE VII
-----------
The Board of Directors is expressly empowered to adopt amend or repeal By-
laws of the Corporation. Any adoption, amendment or repeal of By-laws of the
Corporation by the Board of Directors shall require the approval of a majority
of the total number of authorized directors (whether or not there exist any
vacancies in previously authorized directors at the time any resolution
providing for adoption, amendment or repeal is presented to the Board). The
stockholders shall also have power to adopt, amend or repeal the By-laws of the
Corporation. Any adoption, amendment or repeal of By-laws of the Corporation by
the stockholders shall require, in addition to any vote of the holders of any
class or series of stock of the Corporation required by law or by this
Certificate of Incorporation, the affirmative vote of the holders of at least
sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the
then outstanding shares of the capital stock of the Corporation entitled to vote
generally in the election of directors, voting together as a single class.
ARTICLE VIII
------------
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involved intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit.
If the Delaware General Corporation Law is hereafter amended to authorize
the further elimination or limitation of the liability of a director, then the
liability of a director of the
11
<PAGE>
Corporation shall be eliminated or limited to the fullest extent permitted by
the Delaware General Corporation Law, as so amended.
Any repeal or modification of the foregoing provisions of this Article VIII
by the stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such repeal
or modification.
ARTICLE IX
----------
The Corporation shall to the fullest extent permitted by Section 145 of the
General Corporation Law of the State of Delaware, as the same may be amended and
supplemented, indemnify any and all persons whom it shall have power to
indemnify under said section from and against any and all of the expenses,
liabilities or other matters referred to in or covered by said section, and the
indemnification provided for herein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under bylaw, agreement, vote
of stockholders or disinterested directors or otherwise, both as to action in
his official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such person.
ARTICLE X
---------
The Corporation reserves the right to amend or repeal any provision
contained in this Restated Certificate of Incorporation in the manner prescribed
by the laws of the State of Delaware and all rights conferred upon stockholders
are granted subject to this reservation; provided, however, that,
-------- -------
notwithstanding any other provision of this Restated Certificate of
Incorporation or any provision of law which might otherwise permit a lesser vote
or no vote, but in addition to any vote of the holders of any class or series of
the stock of this Corporation required by law or by this Restated Certificate of
Incorporation, the affirmative vote of the holders of at least 66-2/3% of the
voting power of all of the then outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class, shall be required to amend or repeal this Article X,
Article V, Article VI, Article VII, Article VIII, or Article IX.
The foregoing Restated Certificate of Incorporation has been approved by
the Board of Directors of the Corporation.
The foregoing Restated Certificate of Incorporation has been approved by
the outstanding shares of the Corporation in accordance with Sections 242 and
245 of the Delaware General Corporation Law.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been
executed by the undersigned duly authorized officer of the Corporation on this
4th day of February, 1998.
/s/ CHRISTOPHER A. CRANE
--------------------------------------
Christopher A. Crane, President
12
<PAGE>
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
COMPS INFOSYSTEMS, INC.
COMPS INFOSYSTEMS, INC., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of said corporation, by the unanimous
written consent of its members, filed with the minutes of the Board, adopted a
resolution proposing and declaring advisable the following amendment to the
Restated Certificate of Incorporation of said corporation:
RESOLVED, that the Restated Certificate of Incorporation of COMPS
Infosystems, Inc. be amended by changing Article IV thereof so that, as amended,
said Article shall read in its entirety as follows:
"ARTICLE IV
The Corporation is authorized to issue two classes of shares to be
designated respectively "Preferred Stock" and "Common Stock." The total number
of shares of Preferred Stock, par value $.01 per share, which are authorized is
5,000.000. The total number of shares of Common Stock, par value $.01 per
share, which are authorized is 25,000,000.
A. Common Stock. The first series of Common Stock shall be comprised of
------------
22,500,000 shares designated "Class A Common Stock." The second series of Common
Stock shall be comprised of 2,500,000 shares of Common Stock designated "Class B
Common Stock." The Class A and Class B Common Stock shall have the same rights
and privileges except as provided below.
1. Voting. The Class B Common Stock shall not have any right to vote
------
unless otherwise required by law.
2. Conversion. Each share of Class B Common Stock shall automatically
----------
convert into one share of Class A Common Stock upon the earlier to occur of (i)
the time the consent of at least 66 2/3% of the outstanding Class A Common Stock
to such conversion is obtained, or (ii) closing of the sale of the Corporation's
securities pursuant to an underwritten public offering. Upon conversion of the
Class B Common Stock, the Class A Common Stock shall be renamed "Common Stock."
(a) In case the Corporation shall at any time (i) subdivide the
outstanding Class A Common Stock or (ii) issue a stock dividend on its
outstanding Class A Common Stock, the number of shares of Class B Common Stock
issuable upon conversion of the Class B Common Stock immediately prior to such
subdivision or the issuance of such stock
<PAGE>
dividend shall be proportionately increased by the same ratio as the subdivision
or dividend. In case the Corporation shall at any time combine its outstanding
Class A Common Stock, the number of shares of Class B Common Stock issuable upon
conversion of the Class B Common Stock immediately prior to such combination
shall be proportionately decreased by the same ratio as the combination. All
such adjustments described herein shall be effective at the close of business on
the date of such subdivision, stock dividend or combination, as the case may be.
(b) In case of any capital reorganization (other than in
connection with a merger or other reorganization which the Corporation is not
the continuing or surviving entity) or any reclassification of the Common Stock
of the Corporation, the Class B Common Stock shall thereafter be convertible
into that number of shares of stock or other securities or property to which a
holder of the number of shares of Class A Common Stock of the Corporation
deliverable upon conversion of the shares of Class B Common Stock immediately
prior to such reorganization or recapitalization would have been entitled upon
such reorganization or reclassification.
B. Preferred Stock. The first series of Preferred Stock shall be
---------------
comprised of 4,270,336 shares designated as "Series A Preferred Stock." The
second series of Preferred Stock shall be comprised of 637,790 shares designated
as "Series B Preferred Stock." The relative rights, preferences, restrictions
and other matters relating to the Series A Preferred Stock and Series B
Preferred Stock are as follows:
1. Dividend Rights of Preferred. The holders of Preferred Stock shall
----------------------------
be entitled to receive, out of any assets at the time legally available
therefor, cumulative non-compounded dividends from the date of issuance at the
rate per annum of $0.07025 per share (subject to adjustments for stock splits,
dividends, recapitalizations and the like) of Series A Preferred Stock and
$0.10808 per share (subject to adjustments for stock splits, dividends,
recapitalizations and the like) of Series B Preferred Stock, payable immediately
prior to the effective time of (i) any repurchase of the Series A Preferred
Stock or Series B Preferred Stock; (ii) any liquidation pursuant to Section
B(2)(b) of this Article IV; or (iii) any sale of the Corporation's securities
pursuant to an underwritten public offering; provided, however, that the right
-------- -------
to receive such accrued and unpaid dividends shall forfeit with respect to a
particular Series of Preferred Stock in the event of (x) a repurchase of all of
the outstanding shares of a series of Preferred Stock (each series with shares
still outstanding retains such right) or a liquidation pursuant to Section
B(2)(b) of this Article IV, if the aggregate amount to be received by the
holders of the Series A Preferred Stock and Series B Preferred Stock prior to
the payment of such accrued and unpaid dividends would exceed $3.52 and $3.83
per share, respectively, (as adjusted for stock splits, combinations,
reorganizations and the like) or (y) with respect only to the Series A Preferred
Stock, an underwritten public offering of the Corporation's securities if the
Corporation receives gross proceeds of not less than $10,000,000 at a purchase
price of not less than $3.52 per share (as adjusted for stock splits, stock
dividends, reorganizations and the like), and with respect only to Series B
Preferred Stock, an underwritten public offering of the Corporation's securities
if the Corporation receives gross proceeds of not less than $10,000,000 at a
purchase price of not less than $3.83 per share (as adjusted for stock splits,
stock dividends, reorganizations and the like). Upon conversion of the Preferred
Stock any accrued but unpaid dividends shall remain accrued and shall remain
payable pursuant to this Section B(l) of this Article IV. In addition to the
cumulative dividends specified above, no cash dividends shall be
<PAGE>
paid on any Common Stock unless an equal dividend is paid with respect to all
outstanding shares of Preferred Stock in an amount for each such share of
Preferred Stock equal to the aggregate amount of such dividends for all Common
Stock into which each such share of Preferred Stock could then be converted.
2. Preference on Liquidation.
-------------------------
(a) In the event of any liquidation, dissolution or winding up of
the Corporation, distributions to the stockholders of the Corporation shall be
made in the following manner:
(i) The holders of Preferred Stock shall be entitled to
receive, prior and in preference to any distribution of any of the assets or
surplus funds of the Corporation to the holders of the Common Stock by reason of
their ownership of such stock, the amount of (A) $1.17087 per share for each
share of Series A Preferred Stock and $1.80310 per share for each share of
Series B Preferred Stock then held by them, adjusted for any stock split,
combination, consolidation, or stock distributions or stock dividends with
respect to such shares, and (B) an amount equal to all accumulated but unpaid
dividends on the Preferred Stock as provided in Subsection 1 above. If the
assets and funds thus distributed among the holders of the Preferred Stock shall
be insufficient to permit the payment to such holders of the full aforesaid
preferential amount, then the entire assets and funds of the Corporation legally
available for distribution shall be distributed ratably among the holders of the
Preferred Stock, pari passu, in proportion to their aggregate preferential
---- -----
amounts.
(ii) The remaining assets of the Corporation, after payment
in full to the holders of Preferred Stock of all amounts exclusively payable on
or with respect to said shares, shall be distributed ratably among the holders
of the Common Stock.
(b) The following shall be deemed to be a liquidation, dissolution
or winding up within the meaning of this Subsection: (i) an acquisition,
consolidation or merger of this Corporation with or into any other corporation
or corporations unless the stockholders of the Corporation prior to such
transaction directly or indirectly own more than fifty percent (50%) of the
voting stock of the surviving or acquiring corporation or corporations, (ii) the
sale, transfer or other disposition of all or substantially all of the assets of
this Corporation to a person other than a corporation or partnership controlled
by the Corporation or its stockholders; and (iii) the effectuation by the
Corporation of a transaction or series of related transactions in which more
than 50% of the outstanding voting power of the Corporation prior to such
transaction or series of related transactions is disposed of.
(c) In the event the Corporation shall propose to take any action
of the type described in subsection (a) or (b) of this Subsection 2, the
Corporation shall, within ten (10) days after the date the Board of Directors
approves such action or twenty (20) days prior to any stockholders' meeting
called to approve such action, whichever is earlier, give each holder of shares
of the Preferred Stock written notice of the proposed action. Such written
notice shall describe the material terms and conditions of such proposed action,
including a description of the stock, cash and property to be received by the
holders of shares of the Preferred Stock upon consummation of the proposed
action and the proposed date of delivery thereof. If any material
<PAGE>
change in the facts set forth in the notice shall occur, the Corporation shall
promptly give written notice to each holder of shares of the Preferred Stock of
such material change.
(d) The Corporation shall not consummate any proposed action of
the type described in subsection (a) or (b) of this Subsection 2 before the
expiration of thirty (30) days after the mailing of the initial written notice
or ten (10) days after the mailing of any subsequent written notice, whichever
is later; provided, however, that any such 30-day or 10-day period may be
-------- -------
shortened upon the written consent of the holders of a majority of the
outstanding shares of the Preferred Stock.
(e) If the Corporation shall propose to take any action of the
type described in subsection (a) or (b) of this Subsection 2 which will involve
the distribution of assets other than cash, the Corporation shall, if requested
by the holders of a majority of the Preferred Stock, promptly engage independent
competent appraisers to determine the value of the assets to be distributed to
the holders of shares of the Preferred Stock and the Common Stock. The
Corporation shall, upon receipt of such appraiser's valuation, give prompt
written notice of the appraiser's valuation to each holder of shares of the
Preferred Stock.
3. Voting.
------
(a) Except as set forth in paragraph (b) of this Subsection 3 and
in Subsection 6 hereof, or as otherwise required by law, the shares of the
Preferred Stock shall be voted together with the Corporation's Class A Common
Stock at any annual or special meeting of the stockholders of the Corporation,
or may act by written consent in the same manner as the Corporation's Class A
Common Stock, and shall have the voting rights and powers equal to the voting
rights of the Class A Common Stock, upon the following basis: each holder of
shares of Preferred Stock shall be entitled to such number of votes for the
Preferred Stock held by him on the record date fixed for such meeting, or, if no
record date is established, as the date such vote is taken or on the effective
date of any such written consent, as shall be equal to the nearest whole number
of shares of the Corporation's Common Stock into which his shares of Preferred
Stock are convertible immediately after the close of business on the record date
fixed for such meeting, the date of such vote or the effective date of such
written consent.
(b) The holders of Series A and Series B Preferred Stock, voting
together as a separate class, shall be entitled to elect one director. The
election of a director by the holders of the Preferred Stock shall occur at the
annual meeting of holders of Common Stock or at any special meeting of holders
of Preferred Stock called by holders of a majority of the outstanding shares of
Preferred Stock or by the written consent of all such holders. If the person
elected by the holders of Preferred Stock should cease to be a director for any
reason, the vacancy shall only be filled by the vote or written consent of
holders of a majority of the outstanding shares of Preferred Stock. The holders
of the Common Stock shall be entitled to elect the remaining directors.
4. Status of Converted or Redeemed Stock. In the event that any
-------------------------------------
shares of Preferred Stock shall be converted pursuant to Subsection 5 hereof or
shall be repurchased or otherwise acquired by the Corporation in any manner
whatsoever, such shares shall be retired and canceled promptly after the
acquisition thereof. Such shares shall not be reissued as shares
<PAGE>
of any series of Preferred Stock. Upon such cancellation, and upon the filing of
any certificates required or appropriate under applicable law, the number of
authorized shares of Preferred Stock as set forth in Article IV, shall be
reduced by the number of such shares so canceled.
5. Conversion Rights. The holders of Preferred Stock shall have
-----------------
conversion rights as follows:
(a) Each share of Preferred Stock shall be convertible, at the
option of the holder thereof, at any time at the principal office of the
Corporation or any transfer agent for such shares, into fully paid and
nonassessable shares of Class A Common Stock of the Corporation. The number of
shares of Class A Common Stock into which each share of Preferred Stock may be
converted shall be determined by dividing $1.17087 for the Series A Preferred
Stock and $1.80310 for the Series B Preferred Stock by the Conversion Price
determined as hereinafter provided in effect at the time of the conversion. The
Conversion Price per share at which shares of Class A Common Stock shall be
initially issuable upon conversion of any shares of Preferred Stock shall be
$1.17087 for the Series A Preferred Stock and $1.80310 for the Series B
Preferred Stock, subject to adjustment as provided herein.
(b) Each share of Preferred Stock shall be converted into Class A
Common Stock automatically in the manner provided herein upon the earlier to
occur of (i) the time the consent of holders of at least 66 2/3% of the
outstanding Preferred Stock to such conversion is obtained, or (ii) the closing
of the sale of the Corporation's securities pursuant to an underwritten public
offering from which the Corporation receives gross proceeds of not less than
$10,000,000 at a purchase price of not less than $3.73 per share (as adjusted
for stock splits, stock dividends, reorganizations and the like).
(c) Before any holder of Preferred Stock shall be entitled to
convert the same into Common Stock, such holder shall surrender the certificate
of certificates therefor, duly endorsed in blank or accompanied by proper
instruments of transfer, at the principal office of the Corporation or of any
transfer agent for the Preferred Stock, and shall give written notice to the
Corporation at such office that such holder elects to convert the same and shall
state in writing therein the name or names in which such holder wishes the
certificate or certificates for Common Stock to be issued. As soon as
practicable thereafter, the Corporation shall issue and deliver at such office
to such holder's nominee or nominees, certificates for the number of whole
shares of Common Stock to which such holder shall be entitled. No fractional
shares of Common Stock shall be issued by the Corporation and all such
fractional shares shall be disregarded. In lieu thereof, the Corporation shall
pay in cash the fair market value of such fractional share as determined by the
Board of Directors of the Corporation. Such conversion shall be deemed to have
been made as of the date of such surrender of the Preferred Stock to be
converted, and the person or persons entitled to receive the Common Stock
issuable upon such conversion shall be treated for all purposes as the record
holder or holders of such Common Stock on said date.
(d) In case the Corporation shall at any time (i) subdivide (i.e.,
stock split) the outstanding Common Stock or (ii) issue a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock issuable upon
conversion of the Preferred Stock immediately prior to such subdivision or the
issuance of such stock dividend shall be
<PAGE>
proportionately increased by the same ratio as the subdivision or dividend (with
appropriate adjustments in the Conversion Price of the Preferred Stock). In case
the Corporation shall at any time combine (i.e. reverse stock split) its
outstanding Common Stock, the number of shares of Common Stock issuable upon
conversion of the Preferred Stock immediately prior to such combination shall be
proportionately decreased by the same ratio as the combination (with appropriate
adjustments in the Conversion Price of the Preferred Stock). All such
adjustments described herein shall be effective at the close of business on the
date of such subdivision (i.e. stock split), stock dividend or combination (i.e.
reverse stock split), as the case may be.
(e) In case of any capital reorganization (other than in
connection with a merger or other reorganization in which the Corporation is not
the continuing or surviving entity) or any reclassification of the Common Stock
of the Corporation, the Preferred Stock shall thereafter be convertible into
that number of shares of stock or other securities or property to which a holder
of the number of shares of Common Stock of the Corporation deliverable upon
conversion of the shares of Preferred Stock immediately prior to such
reorganization or recapitalization would have been entitled upon such
reorganization or reclassification. In any such case, appropriate adjustment (as
determined by the Board of Directors) shall be made in the application of the
provisions herein set forth with respect to the rights and interests thereafter
of the holders of Preferred Stock, such that the provisions set forth herein
shall thereafter be applicable, as nearly as reasonably may be, in relation to
any share of stock or other property thereafter deliverable upon the conversion.
(f) In case:
(i) the Corporation shall take a record of the holders of
its Common Stock for the purpose of entitling them to receive a dividend, or any
other distribution payable otherwise than in cash; or
(ii) the Corporation shall take a record of the holders of
its Common Stock for the purpose of entitling them to subscribe for or purchase
any shares of stock of any class or to receive any other rights; or
(iii) the Corporation shall effect a capital reorganization of
the Corporation, reclassification of the capital stock of the Corporation (other
than a subdivision or combination of its outstanding Common Stock),
consolidation or merger of the Corporation (other than a merger or other
reorganization in which the Corporation is not the continuing surviving entity);
then, and in any such case, the Corporation shall cause to be mailed to the
holders of its outstanding Preferred Stock, at least twenty (20) days prior to
the date hereinafter specified, a notice stating the date on which a record is
to be taken for the purpose of such dividend, distribution or rights, or such
action is to be taken in connection with such reorganization, reclassification,
merger or consolidation.
(g) The Corporation shall at all times reserve and keep available,
out of its authorized but unissued Common Stock, solely for the purpose of
effecting the conversion of the Preferred Stock, the full number of shares of
Common Stock deliverable upon the
<PAGE>
conversion of all Preferred Stock from time to time outstanding. The Corporation
shall from time to time (subject to obtaining necessary director and stockholder
action), in accordance with the laws of the State of Delaware, increase the
authorized amount of its Common Stock if at any time the authorized number of
shares of Common Stock remaining unissued shall not be sufficient to permit the
conversion of all of the shares of Preferred Stock at the time outstanding.
(h) Upon the issuance by the Corporation of Common Stock, or any
right or option to purchase Common Stock, or any obligation or any shares of
stock convertible into or exchangeable for Common Stock for a consideration per
share less than the Conversion Price of a series of Preferred Stock in effect
immediately prior to the time of such issue or sale other than the issuance of
shares of Common Stock upon conversion of such series of Preferred Stock, then
forthwith upon such issue or sale, the Conversion Price of such series of
Preferred Stock shall be reduced to a price (calculated to nearest cent)
determined by dividing:
(i) an amount equal to the sum of (x) the number of shares of
Common Stock outstanding immediately prior to such issue or sale multiplied by
the then existing Conversion Price of the affected series of Preferred Stock,
(y) the number of shares of Common Stock issuable upon conversion of any shares
of stock of the Corporation outstanding immediately prior to such issue or sale
multiplied by the then existing Conversion Price of the affected series of
Preferred Stock, and (z) an amount equal to the aggregate consideration received
by the Corporation upon such issue or sale, by
(ii) the sum of the number of shares of Common Stock
outstanding immediately after such issue or sale and the number of shares of
Common Stock (without taking into account any adjustment in such number
resulting from such issue or sale) issuable upon conversion of any shares of
stock of the Corporation outstanding immediately after such issue or sale.
For purposes of this subsection (h) the following provisions shall be
applicable:
(1) In the case of an issue or sale for cash of shares
of Common Stock, the consideration received by the Corporation therefor shall be
deemed to be the amount of cash received, before deducting therefrom any
commissions or expenses paid or incurred by the Corporation.
(2) In case of the issuance (otherwise than upon
conversion or exchange of obligations or shares of stock of the Corporation) of
additional shares of Common Stock for a consideration other than cash or a
consideration partly other than cash, the amount of the consideration other than
cash received by the Corporation for such shares shall be deemed to be the value
of such consideration as reasonably determined by the Board of Directors.
(3) In case of the issuance by the Corporation in any
manner of any rights to subscribe for or to purchase shares of Common Stock, at
a consideration per share (as computed below) less than the Conversion Price in
effect for a series of Preferred Stock immediately prior to the date of the
offering of such rights or the granting of such options, as the case may be, the
maximum number of shares of Common Stock to which the holders of
<PAGE>
such rights or options shall be entitled to subscribe for or purchase pursuant
to such rights or options shall be deemed to be issued or sold as of the date of
the offering of such right or the granting of such options, as the case may be,
and the minimum aggregate consideration named in such rights or options for the
shares of Common Stock covered thereby, plus the consideration, if any, received
by the Corporation for such rights or options, shall be deemed to be the
consideration actually received by the Corporation (as of the date of the
offering of such rights or the granting of such options, as the case may be) for
the issuance of such shares.
(4) In case of the issuance or issuances by the
Corporation in any manner of any obligations or of any shares of stock of the
Corporation that shall be convertible into or exchangeable for Common Stock, at
a consideration per share (as computed below) less than the Conversion Price in
effect for a series of Preferred Stock immediately prior to the date such
obligation or shares are issued, the maximum number of shares of Common Stock
issuable upon the conversion or exchange of such obligations or shares shall be
deemed issued as of the date such obligations or shares are issued, and the
amount of the consideration received by the Corporation for such additional
shares of Common Stock shall be deemed to be the total of the amount of
consideration received by the Corporation upon the issuance of such obligations
or shares, as the case may be, plus the minimum aggregate consideration, if any,
other than such obligations or shares, receivable by the Corporation upon such
conversion of exchange, except in adjustment of dividends.
(5) The amount of the consideration received by the
Corporation upon the issuance of any rights or options refereed to in subsection
(3) above or upon the issuance of any obligations or shares which are
convertible or exchangeable as described in subsection (4) above, and the amount
of the consideration, if any, other than such obligations or shares so
convertible or exchangeable, receivable by the Corporation upon the exercise,
conversion or exchange thereof shall be determined in the same manner provided
in subsections (h)(1) and (2) above with respect to the consideration received
by the Corporation in case of the issuance of additional shares of Common Stock.
On the expiration of any rights or options referred to in subsection (3), or the
termination of any right of conversion or exchange referred to in subsection
(4), the Conversion Price then in effect for a series of Preferred Stock shall
forthwith be readjusted to such Conversion Price as would have been obtained had
the adjustments made upon the issuance of such option, right or convertible or
exchangeable securities been made upon the basis of the delivery of only the
number of shares of Common Stock actually delivered upon the exercise of such
rights or options or upon the conversion or exchange of such securities.
(6) Anything herein to the contrary notwithstanding,
the Corporation shall not be required to make any adjustment of the Conversion
Price in the case of (A) the sale and issuance by the Corporation of up to
2,994,909 shares of Common Stock or rights or options to purchase shares of
Common Stock, net of repurchases and expired or canceled options, (as adjusted
for stock splits, stock dividends, reorganizations and the like) to officers,
directors, employees, consultants and equipment lessors to the Corporation; (B)
the issuance of Common Stock upon the conversion of outstanding Preferred Stock;
or (C) the issuance of up to 723,295 shares of Common Stock upon the exercise of
Warrants issued to the holders of Preferred Stock.
<PAGE>
(i) Upon the occurrence of each adjustment or readjustment of the
Conversion Price for any series of Preferred Stock pursuant to this Subsection
5, the Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to each
holder of Preferred Stock a certificate setting forth such adjustment or
readjustment showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon the reasonable written
request at any time of any holder of Preferred Stock, furnish or cause to be
furnished to such holder a like certificate setting forth (i) such adjustments
and readjustments, and (ii) the number of shares of Common Stock and the amount,
if any, of other property which at the time would be received upon the
conversion of the Preferred Stock.
(j) In the event the Corporation at any time or from time to time
makes, or fixes a record date for the determination of holders of Common Stock
entitled to receive any distribution payable in securities or other property of
the Corporation other than Common Stock and other than as otherwise adjusted in
this Subsection 5, then and in each such event provision shall be made so that
the holders of Preferred Stock shall receive upon conversion thereof, in
addition to the number of shares of Common Stock receivable thereupon, the
amount of securities and other property of the Corporation which they would have
received had their shares of Preferred Stock been converted into shares of
Common Stock on the date of such event and had they thereafter, during the
period from the date of such event to and including the date of conversion,
retained such securities and other property receivable by them as aforesaid
during such period, subject to all other adjustments called for during such
period under this Subsection 5 with respect to the rights of the holders of
Preferred Stock.
(k) Any notices required by the provisions of this Subsection 5 to
be given to the holders of shares of Preferred Stock shall be deemed given if
deposited in the United States mail, first class, postage prepaid and addressed
to each holder of record at its address appearing on the books of the
Corporation.
6. Changes. So long as shares of Preferred Stock are outstanding, the
-------
Corporation shall not without first obtaining the approval by vote or written
consent, in the manner provided by law, of the holders of at least a majority of
the total number of shares of Series A and Series B Preferred Stock outstanding,
voting together as a single class; (1) alter or change any of the powers,
preferences, privileges or rights of any series of Preferred Stock; (2) increase
the authorized number of shares of Preferred Stock; (3) amend the provisions of
this Section 6; (4) undertake or effect any consolidation or merger of the
Corporation with or into another corporation or any acquisition by or the
conveyance of all or substantially all of the assets of the Corporation to
another person; (5) create any new series of Preferred Stock; (6) amend this
Certificate of Incorporation of the Corporation; (7) declare or pay any
dividends on the Corporation's capital stock; (8) redeem or repurchase any
outstanding stock other than from employees, consultants or directors upon the
termination of their employment or services pursuant to agreements providing for
such repurchases; or (9) increase the size of the Board of Directors to more
than four directors."
SECOND: That in lieu of a meeting and vote of stockholders, a majority of
the outstanding stock entitled to vote on this amendment and a majority of the
outstanding stock of each class entitled to vote on this amendment as a class
have given their written consent to said
<PAGE>
amendment in accordance with the provisions of Section 228 of the General
Corporation Law of the State of Delaware.
THIRD: That the aforesaid amendment was duly adopted in accordance with
Sections 242 and 228 of the General Corporation Law of the State of Delaware.
Dated: October 29, 1998 COMPS INFOSYSTEMS, INC.
By: /s/ CHRISTOPHER A. CRANE
---------------------------------
Christopher A. Crane, President
<PAGE>
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
COMPS INFOSYSTEMS, INC.
COMPS INFOSYSTEMS, INC., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of said corporation, by the unanimous
written consent of its members, filed with the minutes of the Board, adopted a
resolution proposing and declaring advisable the following amendment to the
Restated Certificate of Incorporation of said corporation:
WHEREAS, it is deemed to be in the best interest of the Corporation
and its stockholders to amend the Corporation's Restated Certificate of
Incorporation.
THEREFORE, BE IT RESOLVED, that the Corporation's Restated Certificate
of Incorporation be amended by changing Article I thereof so that, as amended,
said Article I shall read as follows:
"ARTICLE I
The name of the Corporation is COMPS.COM, INC."
SECOND: That in lieu of a meeting and vote of stockholders, a majority of
the outstanding stock entitled to vote on this amendment and a majority of the
outstanding stock of each class entitled to vote on this amendment as a class
have given their written consent to said amendment in accordance with the
provisions of Section 228 of the General Corporation Law of the State of
Delaware.
THIRD: That the aforesaid amendment was duly adopted in accordance with
Sections 242 and 228 of the General Corporation Law of the State of Delaware.
Dated: December 31, 1998
COMPS INFOSYSTEMS, INC.
By: /s/ CHRISTOPHER A. CRANE
-------------------------------
Christopher A. Crane, President
<PAGE>
EXHIBIT 3.2
FORM OF SECOND RESTATED CERTIFICATE OF INCORPORATION
OF COMPS.COM, INC.,
A DELAWARE CORPORATION
COMPS.COM, INC., a corporation organized and existing under the laws
of the State of Delaware, hereby certifies as follows:
1. The name of the corporation is COMPS.COM, INC. The original
Certificate of Incorporation of the corporation was filed with the Secretary of
State of the State of Delaware on September 1, 1994 and was amended pursuant to
a Certificate of Ownership and Merger filed with the Secretary of State of the
State of Delaware on October 4, 1994, and pursuant to a Restated Certificate of
Incorporation filed with the Secretary of State of the State of Delaware on
October 13, 1994, and pursuant to a Restated Certificate of Incorporation filed
with the Secretary of State of the State of Delaware on February 4, 1998, and
pursuant to a Certificate of Amendment of Restated Certificate of Incorporation
filed with the Secretary of State of the State of Delaware on November 5, 1998,
and pursuant to a Certificate of Amendment of the Restated Certificate of
Incorporation filed with the Secretary of State of the State of Delaware on
January 20, 1999.
2. Pursuant to Sections 242 and 245 of the General Corporation Law
of the State of Delaware, this Second Restated Certificate of Incorporation was
adopted by the corporation's Board of Directors and stockholders.
3. The text of the Certificate of Incorporation as heretofore
amended or supplemented is hereby restated and further amended to read in its
entirety as follows:
ARTICLE I
The name of this corporation is COMPS.COM, INC.
ARTICLE II
The address of this corporation's registered office in the State of
Delaware is 1050 S. State Street, City of Dover, County of Kent. The name of
its registered agent at such address is CorpAmerica, Inc.
ARTICLE III
The purpose of this corporation is to engage in any lawful act or
activity for which a corporation may now or hereafter be organized under the
Delaware General Corporation Law.
ARTICLE IV
(A) Classes of Stock. This corporation is authorized to issue two
----------------
classes of stock, denominated Common Stock and Preferred Stock. The Common
Stock shall have a par value of $0.01 per share and the Preferred Stock shall
have a par value of $0.01 per share. The total number of shares of Common Stock
which the Corporation is authorized to issue is seventy-five
<PAGE>
million (75,000,000), and the total number of shares of Preferred Stock which
the Corporation is authorized to issue is five million (5,000,000), which shares
of Preferred Stock shall be undesignated as to series.
(B) Issuance of Preferred Stock. The Preferred Stock may be issued
---------------------------
from time to time in one or more series. The Board of Directors is hereby
authorized, by filing one or more certificates pursuant to the Delaware General
Corporation Law (each, a "Preferred Stock Designation"), to fix or alter from
time to time the designations, powers, preferences and rights of each such
series of Preferred Stock and the qualifications, limitations or restrictions
thereof, including without limitation the dividend rights, dividend rate,
conversion rights, voting rights, rights and terms of redemption (including
sinking fund provisions), redemption price or prices, and the liquidation
preferences of any wholly-unissued series of Preferred Stock, and to establish
from time to time the number of shares constituting any such series and the
designation thereof, or any of them; and to increase or decrease the number of
shares of any series subsequent to the issuance of shares of that series, but
not below the number of shares of such series then outstanding. In case the
number of shares of any series shall be decreased in accordance with the
foregoing sentence, the shares constituting such decrease shall resume the
status that they had prior to the adoption of the resolution originally fixing
the number of shares of such series.
(C) Rights, Preferences, Privileges and Restrictions of Common Stock.
----------------------------------------------------------------
1. Dividend Rights. Subject to the prior or equal rights
---------------
of holders of all classes of stock at the time outstanding having prior or equal
rights as to dividends, the holders of the Common Stock shall be entitled to
receive, when and as declared by the Board of Directors, out of any assets of
the corporation legally available therefor, such dividends as may be declared
from time to time by the Board of Directors.
2. Redemption. The Common Stock is not redeemable upon
----------
demand of any holder thereof or upon demand of this corporation.
3. Voting Rights. The holder of each share of Common Stock
-------------
shall have the right to one vote, and shall be entitled to notice of any
stockholders' meeting in accordance with the Bylaws of this corporation, and
shall be entitled to vote upon such matters and in such manner as may be
provided by law.
ARTICLE V
(A) Exculpation. A director of the corporation shall not be
-----------
personally liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under Section 174 of the
Delaware General Corporation Law or (iv) for any transaction from which the
director derived any improper personal benefit. If the Delaware General
Corporation Law is hereafter amended to further reduce or to authorize, with the
approval of the corporation's stockholders, further reductions in the liability
of the corporation's directors for breach of fiduciary duty, then a director of
the corporation shall not be
2
<PAGE>
liable for any such breach to the fullest extent permitted by the Delaware
General Corporation Law as so amended.
(B) Indemnification. To the extent permitted by applicable law, this
---------------
corporation is also authorized to provide indemnification of (and advancement of
expenses to) such agents (and any other persons to which Delaware law permits
this corporation to provide indemnification) through bylaw provisions,
agreements with such agents or other persons, vote of stockholders or
disinterested directors or otherwise, in excess of the indemnification and
advancement otherwise permitted by Section 145 of the Delaware General
Corporation Law, subject only to limits created by applicable Delaware law
(statutory or non-statutory), with respect to actions for breach of duty to the
corporation, its stockholders and others.
(C) Effect of Repeal or Modification. Any repeal or modification of
--------------------------------
any of the foregoing provisions of this Article V shall be prospective and shall
not adversely affect any right or protection of a director, officer, agent or
other person existing at the time of, or increase the liability of any director
of the corporation with respect to any acts or omissions of such director
occurring prior to, such repeal or modification.
ARTICLE VI
Elections of directors need not be by written ballot except and to the
extent provided in the Bylaws of the corporation. At the next Annual Meeting of
Stockholders, the Directors shall be classified into two classes, as nearly
equal in number as possible as determined by the Board of Directors, with the
term of office of the first class to expire at the second Annual Meeting of
Stockholders and the term of office of the second class to expire at the third
Annual Meeting of Stockholders. At each Annual Meeting of Stockholders
following such initial classification and election, Directors elected to succeed
those Directors whose terms expire shall be elected for a term of office to
expire at the second succeeding Annual Meeting of Stockholders after their
election. Additional directorships resulting from an increase in the number of
Directors shall be apportioned among the classes as equally as possible as
determined by the Board of Directors.
ARTICLE VII
No holder of shares of stock of the corporation shall have any
preemptive or other right, except as such rights are expressly provided by
contract, to purchase or subscribe for or receive any shares of any class, or
series thereof, of stock of the corporation, whether now or hereafter
authorized, or any warrants, options, bonds, debentures or other securities
convertible into, exchangeable for or carrying any right to purchase any share
of any class, or series thereof, of stock; but such additional shares of stock
and such warrants, options, bonds, debentures or other securities convertible
into, exchangeable for or carrying any right to purchase any shares of any
class, or series thereof, of stock may be issued or disposed of by the Board of
Directors to such persons, and on such terms and for such lawful consideration
as in its discretion it shall deem advisable or as the corporation shall have by
contract agreed.
ARTICLE VIII
The corporation is to have a perpetual existence.
3
<PAGE>
ARTICLE IX
The corporation reserves the right to repeal, alter, amend or rescind
any provision contained in this Second Restated Certificate of Incorporation
and/or any provision contained in any amendment to or restatement of this Second
Restated Certificate of Incorporation, in the manner now or hereafter prescribed
by statute, and all rights conferred on stockholders herein are granted subject
to this reservation.
ARTICLE X
The Board of Directors may from time to time make, amend, supplement
or repeal the Bylaws by the requisite affirmative vote of Directors as set forth
in the Bylaws; provided, however, that the stockholders may change or repeal any
bylaw adopted by the Board of Directors by the requisite affirmative vote of
stockholders as set forth in the Bylaws; and, provided further, that no
amendment or supplement to the Bylaws adopted by the Board of Directors shall
vary or conflict with any amendment or supplement thus adopted by the
stockholders.
ARTICLE XI
No action shall be taken by the stockholders of the corporation except
at an annual or special meeting of stockholders called in accordance with the
Bylaws, and no action shall be taken by the stockholders by written consent.
ARTICLE XII
Advance notice of stockholder nominations for the election of
directors and of business to be brought by stockholders before any meeting of
the stockholders of the corporation shall be given in the manner provided in the
Bylaws of the corporation.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
4
<PAGE>
IN WITNESS WHEREOF, this Second Restated Certificate of Incorporation
has been signed under the seal of the corporation as of this ___ day of
____________, 1999.
COMPS.COM, INC., a Delaware corporation
By: ___________________________________
Christopher A. Crane,
President and Chief Executive Officer
ATTEST:
_______________________________
Robert C. Beasley, Secretary
[SIGNATURE PAGE TO SECOND RESTATED CERTIFICATE OF INCORPORATION OF COMPS.COM,
INC.]
<PAGE>
Exhibit 3.3
BY-LAWS
OF
COMPS INFOSYSTEMS, INC.
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I................................................................ 1
Section 1. Registered Office.......................................... 1
Section 2. Other Offices.............................................. 1
ARTICLE II............................................................... 1
Section 1. Place of Meetings.......................................... 1
Section 2. Annual Meetings of Stockholders............................ 1
Section 3. Quorum, Adjourned Meetings and Notice Thereof.............. 1
Section 4. Voting..................................................... 2
Section 5. Proxies.................................................... 2
Section 6. Special Meetings........................................... 2
Section 7. Notice of Stockholders Meetings............................ 2
Section 8. Maintenance and Inspection of Stockholder List............. 3
Section 9. Stockholder Action by Written Consent Without a Meeting.... 3
ARTICLE III.............................................................. 3
Section 1. The Number of Directors.................................... 3
Section 2. Vacancies.................................................. 3
Section 3. Powers..................................................... 4
Section 4. Place of Directors' Meetings............................... 4
Section 5. Regular Meetings........................................... 4
Section 6. Special Meetings........................................... 4
Section 7. Quorum..................................................... 4
Section 8. Action Without Meeting..................................... 5
Section 9. Telephonic Meetings........................................ 5
Section 10. Committees of Directors................................... 5
Section 11. Minutes of Committee Meetings............................. 5
Section 12. Compensation of Directors................................. 5
Section 13. Indemnification........................................... 6
ARTICLE IV............................................................... 8
Section 1. Officers................................................... 8
Section 2. Election of Officers....................................... 8
Section 3. Subordinate Officers....................................... 8
Section 4. Compensation of Officers................................... 8
Section 5. Term of Office; Removal and Vacancies...................... 8
Section 6. Chairman of the Board...................................... 9
Section 7. President.................................................. 9
Section 8. Vice Presidents............................................ 9
Section 9. Secretary and Assistant Secretary.......................... 9
Section 10. Assistant Secretaries..................................... 9
Section 11. Treasurer................................................. 10
Section 12. Assistant Treasurer....................................... 10
</TABLE>
i
<PAGE>
ARTICLE V................................................................ 10
Section 1. Certificates............................................... 10
Section 2. Signatures on Certificates................................. 10
Section 3. Statement of Stock Rights, Preferences, Privileges......... 11
Section 4. Lost, Stolen or Destroyed Certificates..................... 11
Section 5. Transfers of Stock......................................... 11
Section 6. Fixing Record Date......................................... 11
Section 7. Registered Stockholders.................................... 12
ARTICLE VI............................................................... 12
Section 1. Dividends.................................................. 12
Section 2. Payment of Dividends; Director's Duties.................... 12
Section 3. Checks..................................................... 12
Section 4. Fiscal Year................................................ 12
Section 5. Seal....................................................... 12
Section 6. Notices.................................................... 13
Section 7. Waiver of Notice........................................... 13
Section 8. Annual Statement........................................... 13
ARTICLE VII.............................................................. 13
Section 1. Amendment by Directors or Stockholders..................... 13
ii
<PAGE>
BY-LAWS
OF
COMPS INFOSYSTEMS, INC.
ARTICLE I
OFFICES
-------
Section 1. Registered Office. The registered office shall be in the
--------- -----------------
City of Dover, County of Kent, State of Delaware.
Section 2. Other Offices. The corporation may also have offices at
--------- -------------
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
------------------------
Section 1. Place of Meetings. Meetings of stockholders shall be held
--------- -----------------
at any place within or outside the State of Delaware designated by the Board of
Directors. In the absence of any such designation, stockholders' meetings shall
be held at the principal executive office of the corporation.
Section 2. Annual Meetings of Stockholders. The annual meeting of
--------- -------------------------------
stockholders shall be held each year on a date and a time designated by the
Board of Directors. At each annual meeting directors shall be elected and any
other proper business may be transacted.
Section 3. Quorum; Adjourned Meetings and Notice Thereof. A majority
--------- ---------------------------------------------
of the stock issued and outstanding and entitled to vote at any meeting of
stockholders, the holders of which are present in person or represented by
proxy, shall constitute a quorum for the transaction of business except as
otherwise provided by law, by the Certificate of Incorporation, or by these By-
Laws. A quorum, once established, shall not be broken by the withdrawal of
enough votes to leave less than a quorum and the votes present may continue to
transact business until adjournment. If, however, such quorum shall not be
present or represented at any meeting of the stockholders, a majority of the
voting stock represented in person or by proxy may adjourn the meeting from time
to time, without notice other than announcement at the meeting, until a quorum
shall be present or represented. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which might have
been transacted at the meeting as originally notified. If the adjournment is for
more than thirty days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote thereat.
<PAGE>
Section 4. Voting. When a quorum is present at any meeting, the vote
--------- ------
of the holders of a majority of the stock having voting power present in person
or represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes, or
the Certificate of Incorporation, or these By-Laws, a different vote is required
in which case such express provision shall govern and control the decision of
such question.
Section 5. Proxies. At each meeting of the stockholders, each
--------- -------
stockholder having the right to vote may vote in person or may authorize another
person or persons to act for him by proxy appointed by an instrument in writing
subscribed by such stockholder and bearing a date not more than three years
prior to said meeting, unless said instrument provides for a longer period. All
proxies must be filed with the Secretary of the corporation at the beginning of
each meeting in order to be counted in any vote at the meeting. Each stockholder
shall have one vote for each share of stock having voting power, registered in
his name on the books of the corporation on the record date set by the Board of
Directors as provided in Article V, Section 6 hereof. All elections shall be had
and all questions decided by a plurality vote.
Section 6. Special Meetings. Special meetings of the stockholders,
--------- ----------------
for any purpose, or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, may be called by the President and shall be called
by the President or the Secretary at the request in writing of a majority of the
Board of Directors, or at the request in writing of stockholders owning a
majority in amount of the entire capital stock of the corporation issued and
outstanding, and entitled to vote. Such request shall state the purpose or
purposes of the proposed meeting. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.
Section 7. Notice of Stockholders Meetings. Whenever stockholders are
--------- -------------------------------
required or permitted to take any action at a meeting, a written notice of the
meeting shall be given which notice shall state the place, date and hour of the
meeting, and, in the case of a special meeting, the purpose or purposes for
which the meeting is called. The written notice of any meeting shall be given to
each stockholder entitled to vote at such meeting not less than ten nor more
than sixty days before the date of the meeting. If mailed, notice is given when
deposited in the United States mail, postage prepaid, directed to the
stockholder at his address as it appears on the records of the corporation.
Section 8. Maintenance and Inspection of Stockholder List. The
--------- ----------------------------------------------
officer who has charge of the stock ledger of the corporation shall prepare and
make, at least ten days before every meeting of stockholders, a complete list of
the stockholders entitled to vote at the meeting, arranged in alphabetical
order, and showing the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten days prior to the meeting,
either at a place within the city where the meeting is to be held, which place
shall be specified in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held. The list shall also be produced and kept
at the time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
2
<PAGE>
Section 9. Stockholder Action by Written Consent Without a Meeting.
--------- -------------------------------------------------------
Unless otherwise provided in the Certificate of Incorporation, any
action required to be taken at any annual or special meeting of stockholders of
the corporation, or any action which may be taken at any annual or special
meeting of such stockholders, may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted. Prompt notice of the taking of the corporate action without a
meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
ARTICLE III
DIRECTORS
---------
Section 1. The Number of Directors. The number of directors which
--------- -----------------------
shall constitute the whole Board shall be four (4). The directors need not be
stockholders. The directors shall be elected at the annual meeting of the
stockholders, except as provided in Section 2 of this Article, and each director
elected shall hold office until his successor is elected and qualified;
provided, however, that unless otherwise restricted by the Certificate of
Incorporation or by law, any director or the entire Board of Directors may be
removed, either with or without cause, from the Board of Directors at any
meeting of stockholders by a majority of the stock represented and entitled to
vote thereat.
Section 2. Vacancies. Vacancies on the Board of Directors by reason
--------- ---------
of death, resignation, retirement, disqualification, removal from office, or
otherwise, and newly created directorships resulting from any increase in the
authorized number of directors may be filled by a majority of the directors then
in office, although less than a quorum, or by a sole remaining director. The
directors so chosen shall hold office until the next annual election of
directors and until their successors are duly elected and shall qualify, unless
sooner displaced. If there are no directors in office, then an election of
directors may be held in the manner provided by statute. If, at the time of
filling any vacancy or any newly created directorship, the directors then in
office shall constitute less than a majority of the whole Board (as constituted
immediately prior to any such increase), the Court of Chancery may, upon
application of any stockholder or stockholders holding at least ten percent of
the total number of the shares at the time outstanding having the right to vote
for such directors, summarily order an election to be held to fill any such
vacancies or newly created directorships, or to replace the directors chosen by
the directors then in office.
Section 3. Powers. The property and business of the corporation
--------- ------
shall be managed by or under the direction of its Board of Directors. In
addition to the powers and authorities by these By-Laws expressly conferred upon
them, the Board may exercise all such powers of the corporation and do all such
lawful acts and things as are not by statute or by the Certificate of
Incorporation or by these By-Laws directed or required to be exercised or done
by the stockholders.
3
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Section 4. Place of Directors' Meetings. The directors may hold their
--------- ----------------------------
meetings and have one or more offices, and keep the books of the corporation
outside of the State of Delaware.
Section 5. Regular Meetings. Regular meetings of the Board of
--------- ----------------
Directors may be held without notice at such time and place as shall from time
to time be determined by the Board.
Section 6. Special Meetings. Special meetings of the Board of
--------- ----------------
Directors may be called by the President on forty-eight hours' notice to each
director, either personally or by mail or by telegram; special meetings shall be
called by the President or the Secretary in like manner and on like notice on
the written request of two directors unless the Board consists of only one
director; in which case special meetings shall be called by the President or
Secretary in like manner or on like notice on the written request of the sole
director.
Section 7. Quorum. At all meetings of the Board of Directors a
--------- ------
majority of the authorized number of directors shall be necessary and sufficient
to constitute a quorum for the transaction of business, and the vote of a
majority of the directors present at any meeting at which there is a quorum,
shall be the act of the Board of Directors, except as may be otherwise
specifically provided by statute, by the Certificate of Incorporation or by
these By-Laws. If a quorum shall not be present at any meeting of the Board of
Directors the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present. If only one director is authorized, such sole director shall
constitute a quorum.
Section 8. Action Without Meeting. Unless otherwise restricted by
--------- ----------------------
the Certificate of Incorporation or these By-Laws, any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting, if all members of the Board or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board or committee.
Section 9. Telephonic Meetings. Unless otherwise restricted by the
--------- -------------------
Certificate of Incorporation or these By-Laws, members of the Board of
Directors, or any committee designated by the Board of Directors, may
participate in a meeting of the Board of Directors, or any committee, by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at such meeting.
Section 10. Committees of Directors. The Board of Directors may, by
---------- -----------------------
resolution passed by a majority of the whole Board, designate one or more
committees, each such committee to consist of one or more of the directors of
the corporation. The Board may designate one or more directors as alternate
members of any committee, who may replace any absent or disqualified member at
any meeting of the committee. In the absence or disqualification of a member of
a committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the Board of Directors,
shall have and may exercise all the powers and authority of
4
<PAGE>
the Board of Directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers which may require it; but no such committee shall have the power or
authority in reference to amending the Certificate of Incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the sale,
lease or exchange of all or substantially all of the corporation's property and
assets, recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or amending the By-Laws of the corporation; and,
unless the resolution or the Certificate of Incorporation expressly so provide,
no such committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock.
Section 11. Minutes of Committee Meetings. Each committee shall
---------- -----------------------------
keep regular minutes of its meetings and report the same to the Board of
Directors when required.
Section 12. Compensation of Directors. Unless otherwise restricted
---------- -------------------------
by the Certificate of Incorporation or these By-Laws, the Board of Directors
shall have the authority to fix the compensation of directors. The directors may
be paid their expenses, if any, of attendance at each meeting of the Board of
Directors and may be paid a fixed sum for attendance at each meeting of the
Board of Directors or a stated salary as director. No such payment shall
preclude any director from serving the corporation in any other capacity and
receiving compensation therefor. Members of special or standing committees may
be allowed like compensation for attending committee meetings.
Section 13. Indemnification. The corporation shall indemnify any
---------- ---------------
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contenders or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(a) The corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment in
its favor by reason of the fact that he is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best
5
<PAGE>
interests of the corporation and except that no such indemnification shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the corporation unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such Court of Chancery or such
other court shall deem proper.
(b) To the extent that a director, officer, employee or agent of the
corporation shall be successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in paragraphs (a) and (b), or in defense
of any claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(c) Any indemnification under paragraphs (a) and (b) (unless ordered
by a court) shall be made by the corporation only as authorized in the specific
case upon a determination that indemnification of the director, officer,
employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in paragraphs (a) and (b). Such
determination shall be made (1) by the Board of Directors by a majority vote of
a quorum consisting of directors who were not parties to such action, suit or
proceeding, or (2) if such a quorum is not obtainable, or, even if obtainable a
quorum of disinterested directors so directs, by independent legal counsel in a
written opinion, or (3) by the stockholders.
(d) Expenses incurred in defending a civil or criminal action, suit
or proceeding may be paid by the corporation in advance of the final disposition
of such action, suit or proceeding as authorized by the Board of Directors in
the manner provided in paragraph (d) upon receipt of an undertaking by or on
behalf of the director, officer, employee or agent to repay such amount unless
it shall ultimately be determined that he is entitled to be indemnified by the
corporation as authorized in this Section 13.
(e) The indemnification provided by this Section 13 shall not be
deemed exclusive of any other rights to which those indemnified may be entitled
under any by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
(f) The Board of Directors may authorize, by a vote of a majority of
a quorum of the Board of Directors, the corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not the corporation would have the power to indemnify him
against such liability under the provisions of this Section 13.
6
<PAGE>
(g) For the purposes of this Section 13, references to "the
corporation" shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent) absorbed in
a consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, and employees
or agents, so that any person who is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at the request of
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under the provisions of this Section with
respect to the resulting or surviving corporation as he would have with respect
to such constituent corporation if its separate existence had continued.
(h) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the corporation" shall include service
as a director, officer, employee or agent of the corporation which imposes
duties on, or involves services by, such director, officer, employee or agent
with respect to an employee benefit plan, its participants or beneficiaries; and
a person who acted in good faith and in a manner he reasonably believed to be in
the interest of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best interests of
the corporation" as referred to in this section.
ARTICLE IV
OFFICERS
--------
Section 1. Officers. The officers of this corporation shall be
--------- --------
chosen by the Board of Directors and shall include a President, a Secretary, and
a Treasurer. The corporation may also have at the discretion of the Board of
Directors such other officers as are desired, including a Chairman of the Board,
one or more Vice Presidents, one or more Assistant Secretaries and Assistant
Treasurers, and such other officers as may be appointed in accordance with the
provisions of Section 3 hereof. In the event there are two or more Vice
Presidents, then one or more may be designated as Executive Vice President,
Senior Vice President, or other similar or dissimilar title. At the time of the
election of officers, the directors may by resolution determine the order of
their rank. Any number of offices may be held by the same person, unless the
Certificate of Incorporation or these By-Laws otherwise provide.
Section 2. Election of Officers. The Board of Directors, at its
--------- --------------------
first meeting after each annual meeting of stockholders, shall choose the
officers of the corporation.
Section 3. Subordinate Officers. The Board of Directors may appoint
--------- --------------------
such other officers and agents as it shall deem necessary who shall hold their
offices for such terms and shall exercise such powers and perform such duties as
shall be determined from time to time by the Board.
Section 4. Compensation of Officers. The salaries of all officers
--------- ------------------------
and agents of the corporation shall be fixed by the Board of Directors.
7
<PAGE>
Section 5. Term of Office; Removal and Vacancies. The officers of
--------- -------------------------------------
the corporation shall hold office until their successors are chosen and qualify
in their stead. Any officer elected or appointed by the Board of Directors may
be removed at any time by the affirmative vote of a majority of the Board of
Directors. If the office of any officer or officers becomes vacant for any
reason, the vacancy shall be filled by the Board of Directors.
Section 6. Chairman of the Board. The Chairman of the Board, if such
--------- ---------------------
an officer be elected, shall, if present, preside at all meetings of the Board
of Directors and exercise and perform such other powers and duties as may be
from time to time assigned to him by the Board of Directors or prescribed by
these By-Laws. If there is no President, the Chairman of the Board shall in
addition be the Chief Executive Officer of the corporation and shall have the
powers and duties prescribed in Section 7 of this Article IV.
Section 7. President. Subject to such supervisory powers, if any, as
--------- ---------
may be given by the Board of Directors to the Chairman of the Board, if there be
such an officer, the President shall be the Chief Executive Officer of the
corporation and shall, subject to the control of the Board of Directors, have
general supervision, direction and control of the business and officers of the
corporation. He shall preside at all meetings of the stockholders and, in the
absence of the Chairman of the Board, or if there be none, at all meetings of
the Board of Directors. He shall be an ex-officio member of all committees and
shall have the general powers and duties of management usually vested in the
office of President and Chief Executive Officer of corporations, and shall have
such other powers and duties as may be prescribed by the Board of Directors or
these By-Laws.
Section 8. Vice Presidents. In the absence or disability of the
--------- ---------------
President, the Vice Presidents in order of their rank as fixed by the Board of
Directors, or if not ranked, the Vice President designated by the Board of
Directors, shall perform all the duties of the President, and when so acting
shall have all the powers of and be subject to all the restrictions upon the
President. The Vice Presidents shall have such other duties as from time to time
may be prescribed for them, respectively, by the Board of Directors.
Section 9. Secretary and Assistant Secretary. The Secretary shall
--------- ---------------------------------
attend all sessions of the Board of Directors and all meetings of the
stockholders and record all votes and the minutes of all proceedings in a book
to be kept for that purpose; and shall perform like duties for the standing
committees when required by the Board of Directors. He shall give, or cause to
be given, notice of all meetings of the stockholders and of the Board of
Directors, and shall perform such other duties as may be prescribed by the Board
of Directors or these By-Laws. He shall keep in safe custody the seal of the
corporation, and when authorized by the Board, affix the same to any instrument
requiring it, and when so affixed it shall be attested by his signature or by
the signature of an Assistant Secretary. The Board of Directors may give general
authority to any other officer to affix the seal of the corporation and to
attest the affixing by his signature.
Section 10. Assistant Secretaries. The Assistant Secretary, or if
---------- ---------------------
there be more than one, the Assistant Secretaries in the order determined by the
Board of Directors, or if there be no such determination, the Assistant
Secretary designated by the Board of Directors, shall, in the absence or
disability of the Secretary, perform the duties and exercise the powers of the
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<PAGE>
Secretary and shall perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.
Section 11. Treasurer. The Treasurer shall have the custody of the
---------- ---------
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all moneys, and other valuable effects in the name and to the credit of
the corporation, in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the corporation as may be ordered by
the Board of Directors, taking proper vouchers for such disbursements, and shall
render to the Board of Directors, at its regular meetings, or when the Board of
Directors so requires, an account of all his transactions as Treasurer and of
the financial condition of the corporation. If required by the Board of
Directors, he shall give the corporation a bond, in such sum and with such
surety or sureties as shall be satisfactory to the Board of Directors, for the
faithful performance of the duties of his office and for the restoration to the
corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the corporation.
Section 12. Assistant Treasurer. The Assistant Treasurer, or if
---------- -------------------
there shall be more than one, the Assistant Treasurers in the order determined
by the Board of Directors, or if there be no such determination, the Assistant
Treasurer designated by the Board of Directors, shall, in the absence or
disability of the Treasurer, perform the duties and exercise the powers of the
Treasurer and shall perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.
ARTICLE V
CERTIFICATES OF STOCK
---------------------
Section 1. Certificates. Every holder of stock of the corporation
--------- ------------
shall be entitled to have a certificate signed by, or in the name of the
corporation by, the Chairman or Vice Chairman of the Board of Directors, or the
President or a Vice President, and by the Secretary or an Assistant Secretary,
or the Treasurer or an Assistant Treasurer of the corporation, certifying the
number of shares represented by the certificate owned by such stockholder in the
corporation.
Section 2. Signatures on Certificates. Any or all of the signatures
--------- --------------------------
on the certificate may be a facsimile. In case any officer, transfer agent, or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent, or registrar
before such certificate is issued, it may be issued by the corporation with the
same effect as if he were such officer, transfer agent, or registrar at the date
of issue.
Section 3. Statement of Stock Rights, Preferences, Privileges.
--------- --------------------------------------------------
If the corporation shall be authorized to issue more than one class of stock or
more than one series of any class, the powers, designations, preferences and
relative, participating, optional or other special rights of each class of stock
or series thereof and the qualification, limitations or restrictions of such
preferences and/or rights shall be set forth in full or summarized on the face
or back of the certificate which the corporation shall issue to represent such
class or series of stock, provided that, except as otherwise provided in section
202 of the General Corporation Law of Delaware,
9
<PAGE>
in lieu of the foregoing requirements, there may be set forth on the face or
back of the certificate which the corporation shall issue to represent such
class or series of stock, a statement that the corporation will furnish without
charge to each stockholder who so requests the powers, designations, preferences
and relative, participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or restrictions of
such preferences and/or rights.
Section 4. Lost, Stolen or Destroyed Certificates. The Board of
--------- --------------------------------------
Directors may direct a new certificate or certificates to be issued in place of
any certificate or certificates theretofore issued by the corporation alleged to
have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the person claiming the certificate of stock to be lost, stolen or
destroyed. When authorizing such issue of a new certificate or certificates, the
Board of Directors may, in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost, stolen or destroyed
certificate or certificates, or his legal representative, to advertise the same
in such manner as it shall require and/or to give the corporation a bond in such
sum as it may direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been lost, stolen or
destroyed.
Section 5. Transfers of Stock. Upon surrender to the corporation, or
--------- ------------------
the transfer agent of the corporation, of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignation or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 6. Fixing Record Date. In order that the corporation may
--------- ------------------
determine the stockholders entitled to notice of or to vote at any meeting of
the stockholders, or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix a
record date which shall not be more than sixty nor less than ten days before the
date of such meeting, nor more than sixty days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.
Section 7. Registered Stockholders. The corporation shall be
--------- -----------------------
entitled to treat the holder of record of any share or shares of stock as the
holder in fact thereof and accordingly shall not be bound to recognize any
equitable or other claim or interest in such share on the part of any other
person, whether or not it shall have express or other notice thereof, save as
expressly provided by the laws of the State of Delaware.
ARTICLE VI
GENERAL PROVISIONS
------------------
Section 1. Dividends. Dividends upon the capital stock of the
--------- ---------
corporation, subject to the provisions of the Certificate of Incorporation, if
any, may be declared by the Board
10
<PAGE>
of Directors at any regular or special meeting, pursuant to law. Dividends may
be paid in cash, in property, or in shares of the capital stock, subject to the
provisions of the Certificate of Incorporation.
Section 2. Payment of Dividends; Director's Duties. Before payment
--------- ---------------------------------------
of any dividend there may be set aside out of any funds of the corporation
available for dividends such sum or sums as the directors from time to time, in
their absolute discretion, think proper as a reserve fund to meet contingencies,
or for equalizing dividends, or for repairing or maintaining any property of the
corporation, or for such other purpose as the directors shall think conducive to
the interests of the corporation, and the directors may abolish any such
reserve.
Section 3. Checks. All checks or demands for money and notes of the
--------- ------
corporation shall be signed by such officer or officers as the Board of
Directors may from time to time designate.
Section 4. Fiscal Year. The fiscal year of the corporation shall be
--------- -----------
fixed by resolution of the Board of Directors.
Section 5. Seal. The corporate seal shall have inscribed thereon the
--------- ----
name of the corporation, the year of its organization and the words "Corporate
Seal, Delaware". Said seal may be used by causing it or a facsimile thereof to
be impressed or affixed or reproduced or otherwise.
Section 6. Notices. Whenever, under the provisions of the statutes
--------- -------
or of the Certificate of Incorporation or of these By-Laws, notice is required
to be given to any director or stockholder, it shall not be construed to mean
personal notice, but such notice may be given in writing, by mail, addressed to
such director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also be given by telegram.
Section 7. Waiver of Notice. Whenever any notice is required to be
--------- ----------------
given under the provisions of the statutes or of the Certificate of
Incorporation or of these By-Laws, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed to be equivalent.
Section 8. Annual Statement. The Board of Directors shall present at
--------- ----------------
each annual meeting, and at any special meeting of the stockholders when called
for by vote of the stockholders, a full and clear statement of the business and
condition of the corporation.
ARTICLE VII
AMENDMENTS
----------
Section 1. Amendment by Directors or Stockholders. These By-Laws may
--------- --------------------------------------
be altered, amended or repealed or new By-Laws may be adopted by the
stockholders or by the Board of Directors, when such power is conferred upon the
Board of Directors by the Certificate
11
<PAGE>
of Incorporation, at any regular meeting of the stockholders or of the Board of
Directors or at any special meeting of the stockholders or of the Board of
Directors if notice of such alteration, amendment, repeal or adoption of new By-
Laws be contained in the notice of such special meeting. If the power to adopt,
amend or repeal By-Laws is conferred upon the Board of Directors by the
Certificate of Incorporation it shall not divest or limit the power of the
stockholders to adopt, amend or repeal By-Laws.
12
<PAGE>
Exhibit 3.4
FORM OF RESTATED BYLAWS
OF
COMPS.COM, INC.
ARTICLE I
OFFICES
-------
Section 1. Registered Office. The registered office shall be in the
-----------------
City of Dover, County of Kent, State of Delaware.
Section 2. Other Offices. The corporation may also have offices at
-------------
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the corporation may
require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
------------------------
Section 1. Place of Meetings. All meetings of the stockholders for
-----------------
the election of Directors shall be held in the City of San Diego, State of
California, at such place as may be fixed from time to time by the Board of
Directors, or at such other place either within or without the State of
California as shall be designated from time to time by the Board of Directors
and stated in the notice of the meeting. Meetings of stockholders for any other
purpose may be held at such time and place, within or without the State of
California, as shall be stated in the notice of the meeting or in a duly
executed waiver of notice thereof.
Section 2. Annual Meeting.
--------------
(a) The annual meeting of the stockholders of the corporation,
for the purpose of election of Directors and for such other business as may
lawfully come before it, shall be held on such date and at such time as may be
designated from time to time by the Board of Directors.
(b) At an annual meeting of the stockholders, only such
business shall be conducted as shall have been properly brought before the
meeting. To be properly brought before an annual meeting, business must be: (A)
specified in the notice of meeting (or any supplement thereto) given by or at
the direction of the Board of Directors, (B) otherwise properly brought before
the meeting by or at the direction of the Board of Directors, or (C) otherwise
properly brought before the meeting by a stockholder. For business to be
properly brought before an annual meeting by a stockholder, the stockholder must
have given timely notice thereof in writing to the Secretary of the corporation.
To be timely, a stockholder's notice must be delivered to or mailed and received
at the principal executive offices of the corporation no later than the date
specified in the corporation's proxy statement released to stockholders in
connection with the previous year's annual meeting of stockholders, which date
shall be not less
<PAGE>
than one hundred twenty (120) calendar days in advance of the date of such proxy
statement; provided, however, that in the event that no annual meeting was held
in the previous year or the date of the annual meeting has been changed by more
than thirty (30) days from the date contemplated at the time of the previous
year's proxy statement, notice by the stockholder to be timely must be so
received a reasonable time before the solicitation is made. A stockholder's
notice to the Secretary shall set forth as to each matter the stockholder
proposes to bring before the annual meeting: (i) a brief description of the
business desired to be brought before the annual meeting and the reasons for
conducting such business at the annual meeting, (ii) the name and address, as
they appear on the corporation's books, of the stockholder proposing such
business, (iii) the class and number of shares of the corporation which are
beneficially owned by the stockholder, (iv) any material interest of the
stockholder in such business and (v) any other information that is required to
be provided by the stockholder pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), in such stockholder's
capacity as a proponent to a stockholder proposal. In addition to the foregoing,
in order to include information with respect to a stockholder proposal in the
proxy statement and form of proxy for a stockholder's meeting, stockholders must
provide notice as required by the regulations promulgated under the 1934 Act to
the extent such regulations require notice that is different from the notice
required above. Notwithstanding anything in these Bylaws to the contrary, no
business shall be conducted at any annual meeting except in accordance with the
procedures set forth in this paragraph (b) of this Section 2. The chairman of
the annual meeting shall, if the facts warrant, determine and declare at the
meeting that business was not properly brought before the meeting and in
accordance with the provisions of this paragraph (b), and, if he or she should
so determine, the chairman shall so declare at the meeting that any such
business not properly brought before the meeting shall not be transacted.
(c) Only persons who are nominated in accordance with the
procedures set forth in this paragraph (c) shall be eligible for election as
Directors. Nominations of persons for election to the Board of Directors of the
corporation may be made at a meeting of stockholders by or at the direction of
the Board of Directors or by any stockholder of the corporation entitled to vote
in the election of Directors at the meeting who complies with the notice
procedures set forth in this paragraph (c). Such nominations, other than those
made by or at the direction of the Board of Directors, shall be made pursuant to
timely notice in writing to the Secretary of the corporation in accordance with
the provisions of paragraph (b) of this Section 2. Timely notice shall also be
given of any stockholder's intention to cumulate votes in the election of
Directors at a meeting if cumulative voting is available. Such stockholder's
notice shall set forth (i) as to each person, if any, whom the stockholder
proposes to nominate for election or re-election as a Director: (A) the name,
age, business address and residence address of such person, (B) the principal
occupation or employment of such person, (C) the class and number of shares of
the corporation that are beneficially owned by such person, (D) a description of
all arrangements or understandings between the stockholder and each nominee and
any other person or persons (naming such person or persons) pursuant to which
the nominations are to be made by the stockholder, and (E) any other information
relating to such person that is required to be disclosed in solicitations of
proxies for election of Directors, or is otherwise required, in each case
pursuant to Regulation 14A under the 1934 Act (including without limitation such
person's written consent to being named in the proxy statement, if any, as a
nominee and to serving as a Director if elected); and (ii) as to such
stockholder giving notice, the information required to be provided pursuant to
subitems (ii), (iii) and (iv) of paragraph (b) of this Section 2 and, if
-2-
<PAGE>
cumulative voting is available to such stockholder, whether such stockholder
intends to request cumulative voting in the election of Directors at the
meeting. At the request of the Board of Directors, any person nominated by a
stockholder for election as a Director shall furnish to the Secretary of the
corporation that information required to be set forth in the stockholder's
notice of nomination which pertains to the nominee. No person shall be eligible
for election as a Director of the corporation unless nominated in accordance
with the procedures set forth in this paragraph (c). The chairman of the meeting
shall, if the facts warrant, determine and declare at the meeting that a
nomination was not made in accordance with the procedures prescribed by these
Bylaws, and if the chairman should so determine, he or she shall so declare at
the meeting, and the defective nomination shall be disregarded.
Section 3. Notice of Annual Meeting. Written notice of the annual
------------------------
meeting stating the place, date and hour of the meeting shall be given to each
stockholder entitled to vote at such meeting not less than ten (10) nor more
than sixty (60) days before the date of the meeting.
Section 4. Voting List. The officer who has charge of the stock
-----------
ledger of the corporation shall prepare and make, or have prepared and made, at
least ten (10) days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical order,
and showing the address of each stockholder and the number of shares registered
in the name of each stockholder. Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten (10) days prior to the meeting,
either at a place within the city where the meeting is to be held, which place
shall be specified in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held. The list shall also be produced and kept
at the time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
Section 5. Special Meetings. Special meetings of the stockholders,
----------------
for any purpose or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, as amended from time to time, may only be called
as provided in this Section 5 by the President, Chief Executive Officer or
Chairman of the Board and shall be called by the President or Secretary at the
request in writing of a majority of the Board of Directors. Such request shall
state the purpose or purposes of the proposed meeting. The place, date and time
of any special meeting shall be determined by the Board of Directors. Such
determination shall include the record date for determining the stockholders
having the right of and to vote at such meeting.
Section 6. Notice of Special Meeting. Written notice of a special
-------------------------
meeting stating the place, date and hour of the meeting and the purpose or
purposes for which the meeting is called shall be given not less than ten (10)
nor more than sixty (60) days before the date of the meeting, to each
stockholder entitled to vote at such meeting.
Section 7. Action at Special Meeting. Business transacted at any
-------------------------
special meeting of stockholders shall be limited to the purposes stated in the
notice.
-3-
<PAGE>
Section 8. Quorum and Adjournments.
-----------------------
(a) The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
Certificate of Incorporation, as amended. If, however, such quorum shall not be
present or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy, shall have
the power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified. If the adjournment is for more than thirty (30) days, or if
after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting.
(b) When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of statute or of the
Certificate of Incorporation, as amended, a different vote is required, in which
case such express provision shall govern and control the decision of such
question.
Section 9. Voting Rights. Unless otherwise provided in the
-------------
Certificate of Incorporation, as amended, each stockholder shall at every
meeting of the stockholders be entitled to one (1) vote in person or by proxy
for each share of the capital stock having voting power held by such
stockholder, but no proxy shall be voted on after three (3) years from its date,
unless the proxy provides for a longer period.
Section 10. Action Without Meeting. No action shall be taken by the
----------------------
stockholders of the corporation except at an annual or special meeting of
stockholders called in accordance with these Bylaws, and no action shall be
taken by the stockholders by written consent.
ARTICLE III
DIRECTORS
---------
Section 1. Classes, Number, Term of Office and Qualification. At
-------------------------------------------------
the next annual meeting of stockholders following the adoption of these Bylaws,
the Directors shall be classified into two classes, as nearly equal in number as
possible as determined by the Board of Directors, with the term of office of the
first class to expire at the second annual meeting of stockholders following the
adoption of these Bylaws and the term of office of the second class to expire at
the third annual meeting of stockholders following the adoption of these Bylaws.
At each annual meeting of stockholders following such initial classification and
election, Directors elected to succeed those Directors whose terms expire shall
be elected for a term of office to expire at the second succeeding annual
meeting of stockholders after their election. Additional directorships
resulting from an increase in the number of Directors shall be apportioned among
the classes as equally as possible as determined by the Board of Directors. The
number of directors that shall constitute the whole board shall not be less than
four (4) nor more than seven (7). The number of
-4-
<PAGE>
Directors which shall constitute the whole Board shall be fixed by resolution of
the Board of Directors, with the number initially fixed at five (5). The number
of Directors shall be determined by resolution of sixty-six and two-thirds
percent (66-2/3%) of the Directors then in office or by sixty-six and two-thirds
percent (66-2/3%) of the stockholders at the annual meeting of the stockholders,
and each Director elected shall hold office until his or her successor is
elected and qualified. Directors need not be stockholders.
Section 2. Vacancies. Vacancies may be filled only by a two-thirds
---------
majority of the Directors then in office or by a sole remaining Director. Each
Director so chosen shall hold office until a successor is duly elected and shall
qualify or until his or her earlier death, resignation or removal. If there are
no Directors in office, then an election of Directors may be held in the manner
provided by statute; provided, however, that each Director shall be elected by
an affirmative vote of at least two-thirds of the stockholders. If, at the time
of filling any vacancy, the Directors then in office shall constitute less than
a majority of the whole Board (as constituted immediately prior to any such
increase), the Court of Chancery may, upon application of any stockholder or
stockholders holding at least ten percent of the total number of the shares at
the time outstanding having the right to vote for such Directors, summarily
order an election to be held to fill any such vacancies, or to replace the
Directors chosen by the Directors then in office.
Section 3. Powers. The business of the corporation shall be managed
------
by or under the direction of its Board of Directors which may exercise all such
powers of the corporation and do all such lawful acts and things as are not by
statute or by the Certificate of Incorporation, as amended, or by these Bylaws
directed or required to be exercised or done by the stockholders.
Section 4. Regular and Special Meetings. The Board of Directors of
----------------------------
the corporation may hold meetings, both regular and special, either within or
without the State of California.
Section 5. Annual Meeting. The annual meeting of the Board of
--------------
Directors shall be held without notice other than this Bylaw immediately after,
and at the same place as, the annual meeting of stockholders. In the event the
annual meeting of the Board of Directors shall not be held immediately after,
and at the same place as, the annual meeting of stockholders, the meeting may be
held at such time and place as shall be specified in a notice given as
hereinafter provided for special meetings of the Board of Directors.
Section 6. Notice of Regular Meetings. Regular meetings of the Board
--------------------------
of Directors may be held without notice at such time and at such place as shall
from time to time be determined by the Board.
Section 7. Notice of Special Meetings. Special meetings of the Board
--------------------------
may be called by the Chief Executive Officer or President on no less than forty-
eight (48) hours notice to each Director either personally, or by telephone,
mail, telegram or facsimile; special meetings shall be called by the Chief
Executive Officer, President or Secretary in like manner and on like notice on
the written request of two Directors unless the Board consists of only one
Director, in which case special meetings shall be called by the Chief Executive
Officer, President or Secretary in like manner and on like notice on the written
request of the sole Director. A written waiver of notice,
-5-
<PAGE>
signed by the person entitled thereto, whether before or after the time of the
meeting stated therein, shall be deemed equivalent to notice.
Section 8. Quorum. At all meetings of the Board a majority of the
------
Directors shall constitute a quorum for the transaction of business and the act
of a majority of the Directors present at any meeting at which there is a quorum
shall be the act of the Board of Directors, except as may be otherwise
specifically provided by these Bylaws, by statute or by the Certificate of
Incorporation, as amended. If a quorum shall not be present at any meeting of
the Board of Directors, the Directors present thereat may adjourn the meeting
from time to time, without notice other than announcement at the meeting, until
a quorum shall be present.
Section 9. Action Without Meeting. Unless otherwise restricted by
----------------------
the Certificate of Incorporation, as amended, or these Bylaws, any action
required or permitted to be taken at any meeting of the Board of Directors or of
any committee thereof may be taken without a meeting, if all members of the
Board or committee, as the case may be, consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the Board or
committee.
Section 10. Meetings by Telephone Conference Calls. Unless otherwise
--------------------------------------
restricted by the Certificate of Incorporation, as amended, or these Bylaws,
members of the Board of Directors, or any committee designated by the Board of
Directors, may participate in a meeting of the Board of Directors, or any
committee, by means of conference telephone, video conference or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.
Section 11. Committees. The Board of Directors may, by resolution
----------
passed by a majority of the whole Board, designate one or more committees, each
committee to consist of one or more of the Directors of the corporation. The
Board may designate one or more Directors as alternate members of any committee,
who may replace any absent or disqualified member at any meeting of the
committee.
In the absence of disqualification of a member of a committee, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he, she or they constitute a quorum, may unanimously
appoint another member of the Board of Directors to act at the meeting in the
place of any such absent or disqualified member.
Any such committee, to the extent provided in the resolution of the
Board of Directors, shall have and may exercise all the powers and authority of
the Board of Directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers which may require it; but no such committee shall have the power or
authority in reference to amending the Certificate of Incorporation, as amended,
adopting an agreement of merger or consolidation, recommending to the
stockholders the sale, lease or exchange of all or substantially all of the
corporation's property and assets, recommending to the stockholders a
dissolution of the corporation or a revocation of a dissolution, or amending the
Bylaws of the corporation; and, unless the resolution or the Certificate of
Incorporation, as amended, expressly so provide, no such committee shall have
the power or authority to declare a dividend or to authorize the issuance of
stock. Such committee or
-6-
<PAGE>
committees shall have such name or names as may be determined from time to time
by resolution adopted by the Board of Directors.
Each committee shall keep regular minutes of its meetings and report
the same to the Board of Directors when required.
Section 12. Fees and Compensation. Unless otherwise restricted by
---------------------
the Certificate of Incorporation, as amended, or these Bylaws, the Board of
Directors shall have the authority to fix the compensation of Directors. The
Directors may be paid their expenses, if any, of attendance at each meeting of
the Board of Directors and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a stated salary as Director. No such
payment shall preclude any Director from serving the corporation in any other
capacity and receiving compensation therefor. Members of special or standing
committees may be allowed like compensation for attending committee meetings.
Section 13. Removal. Subject to any limitations imposed by law or
-------
the Certificate of Incorporation, as amended, the Board of Directors, or any
individual Director, may be removed from office at any time only with cause by
the affirmative vote of the holders of at least a majority of shares entitled to
vote at an election of Directors.
ARTICLE IV
NOTICES
-------
Section 1. Notice. Whenever, under the provisions of statute or of
------
the Certificate of Incorporation, as amended, or of these Bylaws, notice is
required to be given to any Director or stockholder, it shall not be construed
to mean personal notice, but such notice may be given in writing, by mail,
addressed to such Director or stockholder, at his, her or its address as it
appears on the records of the corporation, with postage thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail. Notice to Directors may also be given
personally, by telephone, including a voice messaging system or other system or
technology designed to record and communicate messages, telegram, facsimile
electronic mail or other electronic means.
Section 2. Waiver of Notice. Whenever any notice is required to be
----------------
given under the provisions of statute or of the Certificate of Incorporation, as
amended, or of these Bylaws, a waiver thereof in writing, signed by the person
or persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent thereto.
ARTICLE V
OFFICERS
--------
Section 1. Enumeration. The officers of the corporation shall be
-----------
chosen by the Board of Directors and shall include a Chief Executive Officer, a
Chief Financial Officer and a Secretary. The Board of Directors may elect from
among its members a Chairman of the Board and a Vice Chairman of the Board. The
Board of Directors may also choose a President, one or more Vice Presidents and
one or more Assistant Secretaries. Any number of offices may be held by the
same person, unless the Certificate of Incorporation, as amended, or these
Bylaws otherwise provide.
-7-
<PAGE>
The compensation of all officers and agents of the corporation shall
be fixed by the Board of Directors, and no officer shall be prevented from
receiving such compensation by virtue of such officer also being a Director of
the corporation.
Section 2. Election or Appointment. The Board of Directors at its
-----------------------
first meeting after each annual meeting of stockholders shall choose a Chief
Executive Officer, a Chief Financial Officer and a Secretary and may choose a
President, one or more Vice Presidents and one or more Assistant Secretaries.
The Board of Directors may appoint such other officers and agents as
it shall deem necessary who shall hold their offices for such terms and shall
exercise such powers and perform such duties as shall be determined from time to
time by the Board.
Section 3. Tenure, Removal and Vacancies. The officers of the
-----------------------------
corporation shall hold office until their successors are chosen and qualified.
Any officer elected or appointed by the Board of Directors may be removed at any
time by the affirmative vote of a majority of the Board of Directors. Any
vacancy occurring in any office of the corporation shall be filled by the Board
of Directors.
Section 4. Chairman of the Board. The Chairman of the Board, if any,
---------------------
shall preside at all meetings of the Board of Directors and of the stockholders
at which he or she shall be present. The Chairman of the Board shall have and
may exercise such powers as are, from time to time, assigned to him or her by
the Board and as may be provided by law.
Section 5. Vice Chairman of the Board. In the absence of the
--------------------------
Chairman of the Board, the Vice Chairman of the Board, if any, shall preside at
all meetings of the Board of Directors and of the stockholders at which he or
she shall be present. The Vice Chairman of the Board shall have and may
exercise such powers as are, from time to time, assigned to him or her by the
Board and as may be provided by law.
Section 6. Chief Executive Officer. The Chief Executive Officer of
-----------------------
the corporation shall, subject to the control of the Board of Directors, have
general supervision, direction and control of the business and the officers of
the corporation. In the absence or nonexistence of a Chairman of the Board and
a Vice Chairman of the Board, the Chief Executive Officer shall preside at all
meetings of the Board of Directors and of the stockholders. The Chief Executive
Officer shall have the general powers and duties of management usually vested in
the Chief Executive Officer of a corporation, including general supervision,
direction and control of the business and supervision of other officers of the
corporation, and shall have such other powers and duties as may be prescribed by
the Board of Directors or these Bylaws.
The Chief Executive Officer shall, without limitation, have the
authority to execute bonds, mortgages and other contracts requiring a seal,
under the seal of the corporation, except where required or permitted by law to
be otherwise signed and executed and except where the signing and execution
thereof shall be expressly delegated by the Board of Directors to some other
officer or agent of the corporation.
Section 7. President. Subject to such supervisory powers as may be
---------
given by these Bylaws or the Board of Directors to the Chairman of the Board or
the Chief Executive Officer, if
-8-
<PAGE>
there be such officers, the President shall have general supervision, direction
and control of the business and supervision of other officers of the
corporation, and shall have such other powers and duties as may be prescribed by
the Board of Directors or these Bylaws. In the event a Chief Executive Officer
shall not be appointed, the President shall have the duties of such office.
Section 8. Vice Presidents. The Vice President, or if there shall be
---------------
more than one, the Vice Presidents in the order determined by the Board of
Directors, shall, in the absence or disability of the President, act with all of
the powers and be subject to all the restrictions of the President. The Vice
Presidents shall also perform such other duties and have such other powers as
the Board of Directors, the Chief Executive Officer, the President or these
Bylaws may, from time to time, prescribe.
Section 9. Secretary. The Secretary shall attend all meetings of the
---------
Board of Directors, all meetings of the committees thereof and all meetings of
the stockholders and record all the proceedings of the meetings in a book or
books to be kept for that purpose. Under the Chief Executive Officer's or
President's supervision, the Secretary shall give, or cause to be given, all
notices required to be given by these Bylaws or by law; shall have such powers
and perform such duties as the Board of Directors, the Chief Executive Officer,
the President or these Bylaws may, from time to time, prescribe; and shall have
custody of the seal of the corporation. The Secretary, or an Assistant
Secretary, shall have authority to affix the seal of the corporation to any
instrument requiring it and when so affixed, it may be attested by his or her
signature or by the signature of such Assistant Secretary. The Board of
Directors may give general authority to any other officer to affix the seal of
the corporation and to attest the affixing by his or her signature.
Section 10. Assistant Secretary. The Assistant Secretary, if any, or
-------------------
if there be more than one, the Assistant Secretaries in the order determined by
the Board of Directors, shall, in the absence, disability or refusal to act of
the Secretary, perform the duties and exercise the powers of the Secretary and
shall perform such other duties and have such other powers as the Board of
Directors, the Chief Executive Officer, the President, the Secretary or these
Bylaws may, from time to time, prescribe.
Section 11. Chief Financial Officer. The Chief Financial Officer
-----------------------
shall act as Treasurer and shall have the custody of the corporate funds and
securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the Board of Directors. The Chief
Financial Officer may alternatively be designated by the title "Treasurer."
The Chief Financial Officer shall disburse the funds of the
corporation as may be ordered by the Board of Directors, taking proper vouchers
for such disbursements, and shall render to the Chief Executive Officer or, if
there be no Chief Executive Officer, the President and the Board of Directors,
at its regular meetings, or when the Board of Directors so requires, an account
of all his or her transactions as Chief Financial Officer and of the financial
condition of the corporation.
-9-
<PAGE>
If required by the Board of Directors, the Chief Financial Officer
shall give the corporation a bond (which shall be renewed every six years) in
such sum and with such surety or sureties as shall be satisfactory to the Board
of Directors for the faithful performance of the duties of his or her office and
for the restoration to the corporation, in case of his or her death,
resignation, retirement or removal from office, of all books, papers, vouchers,
money and other property of whatever kind in the Chief Financial Officer's
possession or under his or her control belonging to the corporation.
Section 12. Other Officers, Assistant Officers and Agents. Officers,
---------------------------------------------
assistant officers and agents, if any, other than those whose duties are
provided for in these Bylaws, shall have such authority and perform such duties
as may from time to time be prescribed by the Board of Directors, the Chief
Executive Officer or the President.
Section 13. Absence or Disability of Officers. In the case of the
---------------------------------
absence or disability of any officer of the corporation and of any person hereby
authorized to act in such officer's place during such officer's absence or
disability, the Board of Directors may delegate the powers and duties of such
officer to any officer or to any Director, or to any other person who it may
select.
ARTICLE VI
CERTIFICATES OF STOCK
---------------------
Section 1. Certificates of Stock. Every holder of stock in the
---------------------
corporation shall be entitled to have a certificate, signed by, or in the name
of the corporation by, the Chairman or Vice Chairman of the Board of Directors,
or the Chief Executive Officer or the President or a Vice President and the
Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary
of the corporation, certifying the number of shares owned by him in the
corporation.
Certificates may be issued for partly paid shares and in such case
upon the face or back of the certificates issued to represent any such partly
paid shares, the total amount of the consideration to be paid therefor, and the
amount paid thereon shall be specified.
If the corporation shall be authorized to issue more than one class of
stock or more than one series of any class, the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate which the corporation shall
issue to represent such class or series of stock, provided that, except as
otherwise provided in Section 202 of the General Corporation Law of Delaware, in
lieu of the foregoing requirements, there may be set forth on the face or back
of the certificate which the corporation shall issue to represent such class or
series of stock, a statement that the corporation will furnish without charge to
each stockholder who so requests the powers, designations, preferences and
relative, participating, optional or other special rights of each class of stock
or series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights.
Section 2. Execution of Certificates. Any or all of the signatures
-------------------------
on the certificate may be facsimile. In case any officer, transfer agent or
registrar who has signed or whose
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facsimile signature has been placed upon a certificate shall have ceased to be
such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the corporation with the same effect as if he or she were such
officer, transfer agent or registrar at the date of issue.
Section 3. Lost Certificates. The Board of Directors may direct a
-----------------
new certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or the owner's legal representative, to advertise the same in such
manner as it shall require and/or to give the corporation a bond in such sum as
it may direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been lost, stolen or
destroyed.
Section 4. Transfer of Stock. Upon surrender to the corporation or
-----------------
the transfer agent of the corporation of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignation or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 5. Fixing Record Date. In order that the corporation may
------------------
determine the stockholders entitled to notice of or to vote at any meeting of
stockholder or any adjournment thereof, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than sixty (60) nor less than
ten (10) days before the date of such meeting, nor more than sixty (60) days
prior to any other action. A determination of stockholders of record entitled
to notice of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of Directors may
fix a new record date for the adjourned meeting.
Section 6. Registered Stockholders. The corporation shall be
-----------------------
entitled to recognize the exclusive right of a person registered on its books as
the owner of shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the owner
of shares and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise provided by
the laws of Delaware.
ARTICLE VII
INDEMNIFICATION
---------------
Section 1. Indemnification of Directors and Executive Officers.
---------------------------------------------------
The corporation shall indemnify its Directors and executive officers to the
fullest extent not prohibited by the Delaware General Corporation Law; provided,
however, that the corporation may limit the extent
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<PAGE>
of such indemnification by individual contracts with its Directors and executive
officers; and, provided, further, that the corporation shall not be required to
indemnify any Director or executive officer in connection with any proceeding
(or part thereof) initiated by such person or any proceeding by such person
against the corporation or its Directors, officers, employees or other agents
unless (i) such indemnification is expressly required to be made by law, (ii)
the proceeding was authorized by the Board of Directors of the corporation and
(iii) such indemnification is provided by the corporation, in its sole
discretion, pursuant to the powers vested in the corporation under the Delaware
General Corporation Law.
Section 2. Indemnification of Other Officers, Employees and Other
------------------------------------------------------
Agents. The corporation shall have power to indemnify its other officers,
- ------
employees and other agents as set forth in the Delaware General Corporation Law.
Section 3. Good Faith.
----------
(a) For purposes of any determination under this Bylaw, a
Director or executive officer shall be deemed to have acted in good faith and in
a manner he or she reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, to have had no reasonable cause to believe that his or her conduct
was unlawful, if his or her action is based on information, opinions, reports
and statements, including financial statements and other financial data, in each
case prepared or presented by:
(1) one or more officers or employees of the corporation
whom the Director or executive officer believed to be reliable and competent in
the matters presented;
(2) counsel, independent accountants or other persons as
to matters which the Director or executive officer believed to be within such
person's professional competence; and
(3) with respect to a Director, a committee of the Board
upon which such Director does not serve, as to matters within such committee's
designated authority, which committee the Director believes to merit confidence;
so long as, in each case, the Director or executive officer acts without
knowledge that would cause such reliance to be unwarranted.
(b) The termination of any proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its equivalent shall
not, of itself, create a presumption that the person did not act in good faith
and in a manner which such person reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal
proceeding, that such person had reasonable cause to believe that his or her
consent was unlawful.
(c) The provisions of this Section 3 shall not be deemed to be
exclusive or to limit in any way the circumstances in which a person may be
deemed to have met the applicable standard of conduct set forth by the Delaware
General Corporation Law.
Section 4. Expenses. The corporation shall advance, prior to the
--------
final disposition of any proceeding, promptly following request therefor, all
expenses incurred by any Director or
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<PAGE>
executive officer in connection with such proceeding upon receipt of an
undertaking by or on behalf of such person to repay said amounts if it should be
determined ultimately that such person is not entitled to be indemnified under
this Bylaw or otherwise.
Notwithstanding the foregoing, unless otherwise determined pursuant to
Section 4 of this Bylaw, no advance shall be made by the corporation if a
determination is reasonably and promptly made (i) by the Board of Directors by a
majority vote of a quorum consisting of Directors who were not parties to the
proceeding or (ii) if such quorum is not obtainable, or, even if obtainable, a
quorum of disinterested Directors so directs, by independent legal counsel in a
written opinion, that the facts known to the decision-making party at the time
such determination is made demonstrate clearly and convincingly that such person
acted in bad faith or in a manner that such person did not believe to be in or
not opposed to the best interests of the corporation.
Section 5. Enforcement. Without the necessity of entering into an
-----------
express contract, all rights to indemnification and advances to Directors and
executive officers under this Bylaw shall be deemed to be contractual rights and
be effective to the same extent and as if provided for in a contract between the
corporation and the Director or executive officer. Any right to indemnification
or advances granted by this Bylaw to a Director or executive officer shall be
enforceable by or on behalf of the person holding such right in any court of
competent jurisdiction if (i) the claim for indemnification or advances is
denied, in whole or in part or (ii) no disposition of such claim is made within
ninety (90) days of request therefor. The claimant in such enforcement action,
if successful in whole or in part, shall be entitled to be paid also the expense
of prosecuting such claim. The corporation shall be entitled to raise as a
defense to any such action that the claimant has not met the standards of
conduct that make it permissible under the Delaware General Corporation Law for
the corporation to indemnify the claimant for the amount claimed. Neither the
failure of the corporation (including its Board of Directors, independent legal
counsel or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he or she has met the applicable standard of conduct
set forth in the Delaware General Corporation Law, nor an actual determination
by the corporation (including its Board of Directors, independent legal counsel
or its stock-holders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
Section 6. Non-Exclusivity of Rights. The rights conferred on any
-------------------------
person by this Bylaw shall not be exclusive of any other right which such person
may have or hereafter acquire under any statute, provision of the Certificate of
Incorporation, as amended, Bylaws, agreement, vote of stockholders or
disinterested Directors or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding office.
The corporation is specifically authorized to enter into individual contracts
with any or all of its Directors, officers, employees or agents respecting
indemnification and advances, to the fullest extent not prohibited by the
Delaware General Corporation Law.
Section 7. Survival of Rights. The rights conferred on any person by
------------------
this Bylaw shall continue as to a person who has ceased to be a Director,
officer, employee or other agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
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<PAGE>
Section 8. Insurance. To the fullest extent permitted by the
---------
Delaware General Corporation Law, the corporation, upon approval by the Board of
Directors, may purchase insurance on behalf of any person required or permitted
to be indemnified pursuant to this Bylaw.
Section 9. Amendments. Any repeal or modification of this Bylaw
----------
shall only be prospective and shall not affect the rights under this Bylaw in
effect at the time of the alleged occurrence of any action or omission to act
that is the cause of any proceeding against any agent of the corporation.
Section 10. Saving Clause. If this Bylaw or any portion hereof shall
-------------
be invalidated on any ground by any court of competent jurisdiction, then the
corporation shall nevertheless indemnify each Director and executive officer to
the full extent not prohibited by any applicable portion of this Bylaw that
shall not have been invalidated or by any other applicable law.
Section 11. Certain Definitions. For the purposes of this Bylaw, the
-------------------
following definitions shall apply:
(a) The term "proceeding" shall be broadly construed and shall
include, without limitation, the investigation, preparation, prosecution,
defense, settlement, arbitration and appeal of, and the giving of the testimony
in, any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative.
(b) The term "expenses" shall be broadly construed and shall
include, without limitation, court costs, attorneys' fees, witness fees, fines,
amounts paid in settlement or judgment and any other costs and expenses of any
nature or kind incurred in connection with any proceeding.
(c) The term the "corporation" shall include, in addition to
the resulting corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger which, if
its separate existence had continued, would have had power and authority to
indemnify its Directors, officers, and employees or agents, so that any person
who is or was a Director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a Director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, shall stand in the same position under
the provisions of this Bylaw with respect to the resulting or surviving
corporation as such person would have with respect to such constituent
corporation if its separate existence had continued.
(d) References to a "Director," "officer," "employee," or
"agent" of the corporation shall include, without limitation, situations where
such person is serving at the request of the corporation as a Director, officer,
employee, trustee or agent of another corporation, partnership, joint venture,
trust or other enterprise.
(e) References to "other enterprises" shall include employee
benefit plans; references to "fines" shall include any excise taxes assessed on
a person with respect to an employee benefit plan; and references to "serving at
the request of the corporation" shall include any service as a Director,
officer, employee or agent of the corporation which imposes duties on,
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<PAGE>
or involves services by, such Director, officer, employee, or agent with respect
to an employee benefit plan, its participants, or beneficiaries; and a person
who acted in good faith and in a manner such person reasonably believed to be in
the interest of the partic-ipants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best interests of
the corporation" as referred to in this Bylaw.
ARTICLE VIII
LOANS TO OFFICERS
-----------------
Section 1. Loans to Officers. The corporation may lend money to,
-----------------
or guarantee any obligation of, or otherwise assist any officer or other
employee of the corporation or of its subsidiaries, including any officer or
employee who is a Director of the Corporation or its subsidiaries, whenever, in
the judgment of the Board of Directors, such loan, guarantee or assistance may
reasonably be expected to benefit the corporation. The loan, guarantee or other
assistance may be with or without interest and may be unsecured, or secured in
such manner as the Board of Directors shall approve, including, without
limitation, a pledge of shares of stock of the corporation. Nothing in this
Bylaw shall be deemed to deny, limit or restrict the powers of guaranty or
warranty of the corporation at common law or under any statute.
ARTICLE IX
GENERAL PROVISIONS
------------------
Section 1. Declaration of Dividends. Dividends upon the capital
------------------------
stock of the corporation, subject to the provisions of the Certificate of
Incorporation, as amended, if any, may be declared by the Board of Directors at
any regular or special meeting, pursuant to law. Dividends may be paid in cash,
in property, or in shares of the capital stock, subject to the provisions of the
Certificate of Incorporation, as amended.
Section 2. Dividend Reserve. Before payment of any dividend, there
----------------
may be set aside out of any funds of the corporation available for dividends
such sum or sums as the Directors from time to time, in their absolute
discretion, think proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
corporation, or for such other purposes as the Directors shall think conducive
to the interest of the corporation, and the Directors may modify or abolish any
such reserve in the manner in which it was created.
Section 3. Execution of Corporate Instruments. All checks or demands
----------------------------------
for money and notes of the corporation shall be signed by such officer or
officers or such other person or persons as the Board of Directors may from time
to time designate.
Section 4. Fiscal Year. The fiscal year of the corporation shall be
-----------
fixed by resolution of the Board of Directors.
Section 5. Corporate Seal. The Board of Directors may adopt a
--------------
corporate seal having inscribed thereon the name of the corporation, the year of
its organization and the words "Corporate Seal, Delaware." The seal may be used
by causing it or a facsimile thereof to be impressed or affixed or reproduced or
otherwise.
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<PAGE>
ARTICLE X
AMENDMENTS
----------
Section 1. Amendments.
----------
(a) Except as otherwise set forth in Section 9 of Article VII
of these Bylaws, the Bylaws may be altered or amended or new Bylaws adopted by
the affirmative vote of a majority of the voting power of all of the then-
outstanding shares of capital stock of the corporation entitled to vote
generally in the election of Directors (the "Voting Stock"). The Board of
Directors shall also have the power, if such power is conferred upon the Board
of Directors by the Certificate of Incorporation, as amended, to adopt, amend or
repeal Bylaws by a vote of the majority of the Board of Directors unless a
greater or different vote is required pursuant to the provisions of the Bylaws,
the Certificate of Incorporation or any applicable provision of law.
(b) Notwithstanding any other provisions of these Bylaws or
any provision of law which might otherwise permit a lesser vote or no vote, but
in addition to any affirmative vote of the holders of any particular class or
series of the Voting Stock required by law, the Certificate of Incorporation, as
amended, or any Preferred Stock Designation (as the term is defined in the
Certificate of Incorporation, as amended), the affirmative vote of the holders
of at least sixty-six and two-thirds percent (66-2/3%) of the voting power of
all of the then-outstanding shares of the Voting Stock, voting together as a
single class, shall be required to alter, amend or repeal this paragraph (b) or
Section 2, Section 5 or Section 10 of Article II or Section 1, Section 2 or
Section 13 of Article III of these Bylaws.
(c) Notwithstanding any other provisions of these Bylaws or
any provision of law which might otherwise permit a lesser vote or no vote, but
in addition to any affirmative vote of the holders of any particular class or
series of the Voting Stock required by law, the Certificate of Incorporation, as
amended, or any Preferred Stock Designation (as the term is defined in the
Certificate of Incorporation, as amended), the affirmative vote of at least
sixty-six and two-thirds percent (66-2/3%) of the Directors shall be required to
alter, amend or repeal this paragraph (c) or Section 2, Section 5 or Section 10
of Article II or Section 1, Section 2 or Section 13 of Article III of these
Bylaws.
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<PAGE>
CERTIFICATE OF SECRETARY
The undersigned, being the Secretary of COMPS.COM , Inc., a Delaware
corporation, does hereby certify the foregoing to be the Bylaws of said
Corporation, as adopted by a majority of the stockholders and Directors of the
Corporation and which remain in full force and effect as of the date hereof.
Executed at San Diego, California effective as of February ___, 1999.
__________________________________
Robert C. Beasley, Secretary
<PAGE>
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:
--------
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:
---------
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:
-----------
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.
<PAGE>
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.
-------------------
1. Request for Registration. In case the Company shall receive from
------------------------
the Initiating Holders a written request that the Company effect any
registration with respect to all or part of the Registrable Securities, the
Company will:
2
<PAGE>
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
------------
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
3
<PAGE>
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.
--------------------
1. Registration. If at any time or from time to time, the Company
------------
shall determine to register any of its securities, for its own account or the
account of any of its stockholders, other than a registration on Form S-8
relating solely to employee stock option or purchase plans, or a registration on
Form S-4 relating solely to an SEC Rule 145 transaction, or a registration on
any other form (other than Form 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
------------
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
4
<PAGE>
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
--------
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
5
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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
------------------------
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,
-----------------------
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
6
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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.
---------------
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
7
<PAGE>
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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<PAGE>
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
-----------------
by its underwriters, the Holders shall not sell, sell short, grant an option to
buy, or otherwise dispose of shares of the Company's Common Stock or other
securities (except for any such shares included in the registration) for a
period of one hundred and eighty (180) days following the effective date of the
initial registration of the Company's securities; provided, however, that such
Holder shall have no obligation to enter into the agreement described in this
Section II(G) unless all executive officers, directors and holders of three
percent (3%) or more of the outstanding voting securities of the Company and all
other Holders and holders of other registration rights from the Company enter
into similar agreements. The Company may impose stop-transfer instructions with
respect to the shares (or securities) subject to the foregoing restriction until
the end of said 120-day period.
H. Information by Holder. The Holder or Holders of Registrable Securities
---------------------
included in any registration shall promptly furnish to the Company such
information regarding such Holder or Holders and the distribution proposed by
such Holder or Holders as the Company may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to herein.
I. Rule 144 Reporting. With a view to making available to Holders of
------------------
Registrable Securities the benefits of certain rules and regulations of the SEC
which may permit the sale of the Registrable Securities to the public without
registration, at all times after 90 days after the effective date of the first
registration filed by the Company for an offering of its securities to the
general public the Company agrees to:
1. Make and keep public information available, as those terms are
understood and defined in SEC Rule 144.
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<PAGE>
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
-------------------------------
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
---------------------------------------------
of this Agreement, the Company shall not, without the prior written consent of
the Holders of a majority of the outstanding Registrable Securities, enter into
any agreement with any holder or prospective holder of any securities of the
Company which would allow such holder or prospective holder (a) to include such
securities in any registration filed under Section II(A), II(B) or II(C) hereof,
unless under the terms of such agreement, such holder or prospective holder may
include such securities in any such registration only to the extent that the
inclusion of its securities will not reduce the number of amount of the
Registrable Securities of the Holders which are included or (b) to make a demand
registration which could result in such registration statement being declared
effective prior to the earlier of either of the dates set forth in Subsection
II(A)(1)(b)(i).
L. Termination. The rights of all Holders under this Agreement shall
-----------
terminate on the fifth anniversary of the closing of the Company's first
registered public offering of its securities; provided however, that the
--------
Company's reporting obligations under SEC Rule 144 as set forth in Section 10
above, shall survive the termination of this Agreement.
III. RIGHT OF FIRST REFUSAL
If, at any time prior to the expiration of the period set forth in Section
IV(B) below, the Company should desire to issue in any transaction not
registered under the Securities Act in reliance upon a claimed exemption
thereunder, any Equity Securities (as defined in Subsection
10
<PAGE>
(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
-------
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
-------
purchase any of the Equity Securities offered by the Company, payment for the
Equity Securities shall be by check, or wire transfer, against delivery of the
securities at the executive offices of the Company within ten (10) days after
giving the Company such notice, or, if later, the closing date for the sale of
such Equity Securities to third parties. The Company shall take all such action
as may be required by any regulatory authority in connection with the exercise
by the Stockholder of the right to purchase Equity Securities as set forth in
this Section III.
D. Exceptions. The right of first refusal contained in this Section III
----------
shall not apply to (i) the issuance by the Company of Equity Securities
exclusively to employees or directors of, or consultants to the Company pursuant
to the approval of the Board of Directors, (ii) the issuance of Common Stock of
the Company upon conversion of Preferred Stock, (iii) the issuance of Class A
Common Stock upon conversion of Class B Common Stock, or (iv) any Equity
Securities issued in connection with an acquisition or SEC Rule 145 transaction.
E. "Equity Securities". The term "Equity Securities" shall mean (i)
-------------------
Common Stock, rights, options or warrants to purchase Common Stock; (ii) any
other instrument convertible into Common Stock; (iii) any security convertible
into or exchangeable for any of the foregoing.
F. Assignment. A Purchaser's right to purchase any Equity Securities
----------
pursuant to this Section III may be assigned by the Purchaser to an affiliate of
the Purchaser. For the purposes of this subparagraph (F), an "affiliate" shall
mean any partner or shareholder of the
11
<PAGE>
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.
----------
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
<PAGE>
American Arbitration Association upon the request of either party. If, following
the conclusion of any appraisal referred to above, a Purchaser shall choose not
to sell any or all of its Securities, then it shall so notify the Company,
within twenty (20) days following receipt of the appraisal. If the Purchaser
chooses not to sell any or all of its Securities and after the initiation of the
procedures outlined in Section IV(A), then its rights hereunder shall terminate
with respect to all such securities not offered to the Company. The expenses of
the appraiser chosen by the Company will be borne by it, the expenses of the
appraiser chosen by the Purchasers will be borne by the Purchasers and the
expenses of the third appraiser will be borne 50% by the Company and 50% by the
Purchasers.
3. Payment. The Company shall, within sixty (60) days following
-------
either the agreement, as provided above, with the Purchasers concerning the fair
market value of the Securities or the receipt of the results of the appraisal
referred to above, to the extent permitted 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.
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<PAGE>
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
<PAGE>
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
<PAGE>
Schedule A
----------
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
<PAGE>
Exhibit 10.2
COMPS INFOSYSTEMS, INC.
STOCK AND WARRANT PURCHASE AGREEMENT
THIS AGREEMENT is made as of October 14, 1994, by and among COMPS
Infosystems, Inc., a Delaware corporation (the "Company"), those entities,
severally and not jointly, whose names are set forth on the Schedule of
Purchasers attached hereto as Exhibit A (collectively, "Purchasers," and
---------
individually, a "Purchaser") and Christopher A. Crane and Robert C. Beasley (the
"Stockholders"). The parties hereby agree as follows:
1. Sale and Issuance of the Shares and Warrants.
--------------------------------------------
1.1 Sale and Issuance of the Series A Preferred Shares. Subject to
--------------------------------------------------
the terms and conditions hereof, the Company will issue and sell to each
Purchaser and each Purchaser will purchase the number of shares of the Company's
Series A Preferred Stock (the "Shares") specified opposite the Purchaser's name
on Exhibit A, at a price of $1.17087 per Share.
---------
1.2 Issuance of Warrants. In consideration for the purchase by the
--------------------
Purchasers of the Shares, the Company will issue to each Purchaser a warrant in
the form attached hereto as Exhibit B (individually, a "Warrant" and
collectively, the "Warrants"), to purchase up to the number of shares of the
Company's non-voting Class B Common Stock (the "Warrant Shares") set forth
opposite such Purchaser's name on Exhibit A at an exercise price of $.01 per
---------
share.
2. Closing Date; Delivery.
----------------------
2.1 Closing Date.
------------
(a) Purchase and Sale. The closing of the purchase and sale of
-----------------
an aggregate of 4,270,336 Shares and of the issuance of the Warrants to purchase
379,869 shares of Class B Common Stock shall be held at the offices of Latham &
Watkins, 701 B Street, Suite 2100, San Diego, CA 92101 at 1:00 p.m. on October
14, 1994, or at such other time and place as the Company and the Purchasers may
agree in writing.
(b) Closing. The closing referred to in Subsection (a) above is
-------
hereinafter referred to as the "Closing" and the date of the Closing is
hereinafter referred to as the "Closing Date".
2.2 Delivery. Subject to the terms of this Agreement, at the Closing
--------
the Company will deliver to each Purchaser a certificate representing the Shares
to be purchased by and the Warrant to be issued to such Purchaser from the
Company, against payment of the purchase price for the Shares by a check or
checks payable to the order of the Company, or by wire transfer.
3. Representations and Warranties of the Company. The Company and the
---------------------------------------------
Stockholders hereby represent and warrant to the Purchasers that except as set
forth on a Schedule of Exceptions attached hereto as Exhibit C, which exceptions
---------
shall be deemed to be representations and warranties as if made hereunder:
-1-
<PAGE>
3.1 Organization and Standing; Articles and By-Laws. The Company is
-----------------------------------------------
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to carry on its businesses as now conducted and as proposed to be
conducted. The Company is qualified or licensed to do business as a foreign
corporation in all jurisdictions where such qualification or licensing is
required, except where the failure to so qualify would not have a material
adverse effect upon the Company. Complete copies of the Company's Certificate of
Incorporation, Bylaws, minutes and consents of stockholders and of the Board of
Directors are available for inspection at the Company's offices and have been
previously provided to special counsel for the Purchasers.
3.2 Corporate Power. The Company has now, or will have at the
---------------
Closing Date, all requisite corporate power to enter into this Agreement, the
Investor Rights Agreement (the "Investor Rights Agreement") in the form attached
hereto as Exhibit D, the Right of First Refusal and Co-Sale Agreement attached
---------
hereto as Exhibit E (the "Co-Sale Agreement"), and the Shareholder Buy-Out and
---------
Voting Agreement attached hereto as Exhibit F (the "Shareholder Buy-Out and
---------
Voting Agreement") (together, the "Collateral Agreements") and to sell and issue
the Shares and Warrants and the Warrant Shares upon exercise of the Warrants and
to issue the Company's Class A Common Stock upon conversion of the Shares. This
Agreement and each of the Collateral Agreements is a valid and binding
obligation of the Company enforceable in accordance with its terms, except as
the same may be limited by bankruptcy, insolvency, moratorium, and other laws of
general application affecting the enforcement of creditors' rights.
3.3 Subsidiaries. The Company does not control, directly or
indirectly, any other corporation, association or business entity.
3.4 Capitalization. The authorized capital stock of the Company is
--------------
25,000,000 shares of Common Stock of which 22,500,000 shares are designated as
Class A Common Stock and 2,500,000 shares are designated as Class B Common Stock
and 5,000,000 shares of preferred stock ("Preferred Stock") of which 4,270,336
shares are designated as Series A Preferred Stock. There are issued and
outstanding 6,482,000 shares of the Company's Class A Common Stock. All issued
and outstanding shares have been duly authorized and validly issued, are fully
paid and nonassessable, and were issued in compliance with all applicable state
and federal laws concerning the issuance of securities. There are 811,160 shares
of Class B Common Stock reserved for issuance to the Company's officers,
directors, employees and consultants pursuant to Company compensation plans, and
379,869 shares of Class B Common Stock reserved for issuance to holders of the
Warrants upon exercise of the Warrants. The Company has provided the Purchasers
with a complete and accurate list, as of immediately prior to the Closing, of
all holders of any and all rights, options, warrants or conversion rights to
purchase or acquire from the Company any of its capital stock, along with the
number of shares of capital stock issuable upon exercise of such rights. Except
for such rights, there are no outstanding rights, options, warrants, conversion
rights or agreements for the purchase or acquisition from the Company of any
shares of its capital stock.
3.5 Authorization.
-------------
(a) Corporate Action. All corporate action on the part of the
----------------
Company, its officers, directors and stockholders necessary for the sale and
issuance of the
-2-
<PAGE>
Shares and Warrants pursuant hereto, the issuance of the Warrant Shares upon the
exercise of the Warrants, the issuance of the Class A Common Stock issuable upon
conversion of the Shares and the performance of the Company's obligations
hereunder and under each of the Collateral Agreements has been taken or will be
taken prior to the Closing. The Company has duly reserved an aggregate of
379,869 shares of Class B Common Stock for issuance upon exercise of the
Warrants, and 4,270,336 shares of Class A Common Stock for issuance upon
conversion of the Shares.
(b) Valid Issuance. The Shares and Warrants, when issued in
--------------
compliance with the provisions of this Agreement, the Warrant Shares, when
issued in accordance with the terms of the Warrants and each of the Collateral
Agreements, and the shares of Class A Common Stock issued upon conversion of the
Shares when issued in accordance with the provisions of the Company's
Certificate of Incorporation, will be validly issued, fully paid and
nonassessable and will be free of any liens or encumbrances other than those
created by the Purchasers; provided, however, that all such shares may be
subject to restrictions on transfer under state and/or federal securities laws
as set forth herein, and as may be required by future changes in such laws. The
rights, preferences, privileges and restrictions of the Series A Preferred Stock
are as set forth in the Restated Certificate of Incorporation, the form of which
is attached hereto as Exhibit G (the "Restated Certificate").
(c) No Preemptive Rights. No person has any right of first
--------------------
refusal or any preemptive rights in connection with the issuance of the Shares
or Warrants, the issuance of the Warrant Shares upon exercise of the Warrants,
the issuance of the Class A Common Stock upon conversion of the Shares or any
future issuances of securities by the Company other than those held by the
Purchasers or those contemplated by the Collateral Agreements.
3.6 Patents, Trademarks, etc. The Company owns and possesses or is
------------------------
licensed under all patents, patent applications, licenses, trademarks, trade
names, brand names, inventions and copyrights employed in the operation of its
business as now conducted and as proposed to be conducted, with no infringement
of or conflict with the rights of others respecting any of the same. The
operation of the Company's business as now conducted or as proposed to be
conducted does not and will not infringe any patent or other proprietary rights
of others respecting any of the same. The Company is not obligated to make any
payments by way of royalties, fees or otherwise to any owner, licensor of, or
other claimant to any patent, trademark, trade name, copyright or other
intangible asset, with respect to the use thereof or in connection with the
conduct of its business, or otherwise. The Company has not received any
communications alleging that it has violated or, by conducting its business as
proposed, would violate any of the patents, trademarks, service marks, trade
names, copyrights or trade secrets or other proprietary rights of any other
person or entity, nor is the Company aware of any basis for the foregoing.
3.7 Compliance with Other Instruments, None Burdensome, Etc. The
-------------------------------------------------------
Company is not in violation of any term of its Restated Certificate or Bylaws,
nor is the Company in violation of or in default in any material respect under
the terms of any mortgage, indenture, contract, agreement, instrument, judgment
or decree, the violation of which would have a material adverse effect on the
Company as a whole, and is not in violation of any order, statute, rule or
regulation applicable to the Company, the violation of which would have a
-3-
<PAGE>
material adverse effect on the Company. The execution, delivery and performance
of and compliance with this Agreement and each of the Collateral Agreements, and
the issuance and sale of the Shares and Warrants pursuant hereto or of the
Warrant Shares pursuant to the terms of the Warrants, will not (a) result in any
such violation, or (b) be in conflict with or constitute a default under any
such term, or (c) result in the creation of any mortgage, pledge, lien,
encumbrance or charge upon any of the properties or assets of the Company
pursuant to any such term. To the best knowledge of the Company, there is no
such term which materially adversely affects, or in the future may materially
adversely affect, the business, prospects, condition, affairs or operations of
the Company or any of its properties or assets.
3.8 Proprietary Agreements; Employees. Each employee of the Company
---------------------------------
has executed an agreement regarding confidentiality and proprietary information,
the form of which has been provided to special counsel to the Purchasers. The
Company is not aware that any of its employees is in violation thereof and will
use its best efforts to prevent any such violation. The Company is not aware
that any of its employees is obligated under any contract (including licenses,
covenants or commitments of any nature) or other agreement, or subject to any
judgment, decree or order of any court or administrative agency, that would
interfere with the use of his or her best efforts to promote the interests of
the Company or that would conflict with the Company's business as conducted or
as proposed to be conducted or that would prevent any such employee from
assigning inventions to the Company. Neither the execution nor delivery of this
Agreement or the Collateral Agreements, nor the carrying on of the Company's
business as proposed, will, to the Company's knowledge, conflict with or result
in a breach of the terms, conditions or provisions of, or constitute a default
under, any contract, covenant or instrument under which any of such employees is
now obligated. The Company does not believe that it is or will be necessary for
the Company to utilize any inventions of any of its employees (or people it
currently intends to hire) made prior to their employment by the Company.
3.9 Litigation, Etc. There is no action, proceeding or investigation
---------------
pending against the Company or its officers, directors or stockholders, or to
the best of the Company's knowledge, against employees or consultants of the
Company (or, to the best of the Company's knowledge, any basis therefor or
threat thereof): (1) which might result, either individually or in the
aggregate, in (a) any material adverse change in the business, prospects,
conditions, affairs or operations of the Company or in any of its properties or
assets, or (b) any material impairment of the right or ability of the Company to
carry on its business as now conducted or as proposed to be conducted, or (c)
any material liability on the part of the Company; or (2) which questions the
validity of this Agreement, the Collateral Agreements or any action taken or to
be taken in connection herewith or thereunder, including in each case, without
limitation, actions pending or threatened involving the prior employment of any
of the Company's employees, the use in connection with the Company's business of
any information or techniques allegedly proprietary to any of its former
employees, or their obligations under any agreements with prior employers. The
Company is not a party to or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or investigation by the
Company currently pending or which the Company currently intends to initiate.
3.10 Governmental Consent, Etc. No consent, approval or authorization
-------------------------
of or designation, declaration or filing with any governmental authority on the
part of the Company is
-4-
<PAGE>
required in connection with: (a) the valid execution and delivery of this
Agreement or either of the Collateral Agreements; or (b) the offer, sale or
issuance of the Shares and Warrants, the issuance of the Warrant Shares upon
exercise of the Warrants, or the issuance of the shares of Common Stock issuable
upon conversion of the Preferred Stock or (c) the obtaining of the consents,
permits and waivers specified in Subsection 5.1(b) hereof, except the filing of
the Restated Articles and, if required, filings or qualifications under the
California Corporate Securities Law of 1968, as amended (the "California Law"),
or other applicable blue sky laws, which filings or qualifications, if required,
will have been timely filed or obtained after the sale of the Shares and
Warrants.
3.11 Offering. In reliance in part on the representations and
--------
warranties of the Purchasers in Section 4 hereof, the offer, sale and issuance
of the Shares and Warrants in conformity with the terms of this Agreement will
not result in a violation of the requirements of Section 5 of the Securities Act
of 1933, as amended (the "Securities Act") or the qualification or registration
requirements of the California Law or other applicable blue sky laws.
3.12 Taxes. The Company has filed all tax returns that are required
-----
to have been filed with appropriate federal, state, county and local
governmental agencies or instrumentalities, except where the failure to do so
would not have a material adverse effect upon the Company, taken as a whole. The
Company has paid or established reserves for all income, franchise and other
taxes, assessments, governmental charges, penalties, interest and fines due and
payable by them on or before the Closing. There is no pending dispute with any
taxing authority relating to any of such returns and the Company has no
knowledge of any proposed liability for any tax to be imposed upon the
properties or assets of the Company for which there is not an adequate reserve
reflected in the Financial Statements (as defined below).
3.13 Title. The Company owns its property and assets, including the
-----
properties and assets reflected in the Financial Statements, free and clear of
all liens, mortgages, loans or encumbrances except liens for current taxes, and
such encumbrances and liens which arise in the ordinary course of business and
do not materially impair the Company's ownership or use of such property or
assets. With respect to the property and assets leased by the Company, the
Company is in compliance with such leases and, to the best of the Company's
knowledge, holds valid leasehold interests free and clear of any liens, claims
or encumbrances.
3.14 Material Contracts and Commitments. All of the contracts,
----------------------------------
mortgages, indentures, agreements, instruments and transactions to which the
Company is a party or by which it is bound (including purchase orders to the
Company or placed by the Company) which involve obligations of, or payments to,
the Company in excess of Twenty-Five Thousand Dollars ($25,000) and all
agreements between the Company and its stockholders, officers, directors,
consultants and employees are either (i) attached as exhibits to this Agreement,
or (ii) set forth on the list attached hereto as Exhibit H (the "Contracts"),
---------
copies of which have been delivered to special counsel to the Purchasers. All of
the Contracts are valid, binding and in full force and effect and enforceable by
the Company in accordance with their respective terms in all material respects,
subject to the effect of applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application relating to or affecting
enforcement of creditors' rights and rules or laws concerning equitable
remedies. The Company is not in material default under any
-5-
<PAGE>
of such Contracts. To the best of the Company's knowledge, no other party to any
of the Contracts is in material default thereunder.
3.15 Financial Statements. The Company has delivered to each
--------------------
Purchaser its audited balance sheets as of December 31, 1992 and December 31,
1993 and its unaudited balance sheet as of August 31, 1994, (the "Balance
Sheets") and its audited consolidated income statements and cash flow statements
for the five month period ended December 31, 1992 and the twelve month period
ended December 31, 1993 and its unaudited consolidated income statement and cash
flow statement for the period ended August 31, 1994 (the above financial
statements are hereinafter collectively referred to as the "Financial
Statements"). The Financial Statements are complete and correct in all material
respects and have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the relevant period. The
Financial Statements accurately set out and describe the financial condition and
operating results of the Company as of the date, and during the period,
indicated therein. Except as set forth in the Financial Statements, the Company
has no liabilities of any nature (matured or unmatured, fixed or contingent),
other than (i) liabilities incurred in the ordinary course of business
subsequent to August 31, 1994, and (ii) obligations under contracts and
commitments incurred in the ordinary course of business and not required under
generally accepted accounting principles to be reflected in the Financial
Statements, which, individually or in the aggregate, are not material to the
financial condition or operating results of the Company. The Company maintains
and will continue to maintain a standard system of accounting established and
administered in accordance with generally accepted accounting principles.
3.16 Absence of Changes. Since December 31, 1993: (a) the Company has
------------------
not entered into any transaction which was not in the ordinary course of
business, (b) there has been no material adverse change in the condition
(financial or otherwise) of the business, property, assets or liabilities of the
Company other than changes in the ordinary course of its business, none of
which, individually or in the aggregate, has been materially adverse, (c) there
has been no damage to, destruction of or loss of physical property (whether or
not covered by insurance) materially and adversely affecting the assets,
prospects, financial condition, operating results. business or operations of the
Company, (d) the Company has not declared or paid any dividend or made any
distribution on its stock, or redeemed, purchased or otherwise acquired any of
its stock, (e) the Company has not materially changed any compensation
arrangement or agreement with any of its key employees or executive officers, or
materially changed the rate of pay of its employees as a group, (f) the Company
has not received notice that there has been a cancellation of an order for the
Company's products or a loss of a customer of the Company, the cancellation or
loss of which would materially adversely affect the business of the Company, (g)
the Company has not changed or amended any material contract by which the
Company or any of its assets are bound or subject, except as contemplated by
this Agreement, (h) there has been no resignation or termination of employment
of any key officer or employee of the Company and the Company does not know of
any impending resignation or termination of employment of any such officer or
employee that if consummated would have a material adverse effect on the
business of the Company, (i) there has been no labor dispute involving the
Company or its employees and none is pending or, to the best of the Company's
knowledge, threatened, (j) there has been no change, except in the ordinary
course of business, in the material contingent obligations of the Company (nor
in any continent obligation of the Company regarding any
-6-
<PAGE>
director, shareholder or key employee or officer of the Company) by way of
guaranty, endorsement, indemnity, warranty or otherwise, (k) there have been no
loans made by the Company to any of its employees, officers or directors other
than travel advances and other advances made in the ordinary course of business,
(1) there has been no waiver by the Company of a valuable right or of a material
debt owing to it, (m) there has not been any satisfaction or discharge of any
lien, claims or encumbrance or any payment of any obligation by the Company,
except in the ordinary course of business and which is not material to the
assets, properties, financial condition, operating results or business of the
Company, and (n) to the best of the knowledge of the Company, there has been no
other event or condition of any character pertaining to and materially adversely
affecting the assets or business of the Company.
3.17 Outstanding Indebtedness. Except as disclosed in the Balance
------------------------
Sheets, the Company has no indebtedness for borrowed money which it has directly
or indirectly created, incurred, assumed or guaranteed, or with respect to which
it has otherwise become liable, directly or indirectly.
3.18 Registration Rights. Other than as granted pursuant to the
-------------------
Investor Rights Agreement, the Company has not granted or agreed to grant any
rights to register, as that term is defined in the Investor Rights Agreement of
the Company's presently outstanding securities or any of its securities that may
hereafter be issued.
3.19 Certain Transactions. The Company is not indebted, directly or
--------------------
indirectly, to any of its officers, directors or stockholders or to their
spouses or children, in any amount whatsoever; and none of said officers,
directors or, to the best of the Company's knowledge, stockholders, or any
member of their immediate families, are indebted to the Company or have any
direct or indirect ownership interest in any firm or corporation with which the
Company is affiliated or with which the Company has a business relationship
(except as a holder of securities of a corporation whose securities are publicly
traded and which is subject to the reporting requirements of the Securities
Exchange Act of 1934, to the extent of owning not more than two percent (2%) of
the issued and outstanding securities of such corporation). No such officer,
director or stockholder, or any member of their immediate families, is, directly
or indirectly, interested in any material contract with the Company. The Company
is not guarantor or indemnitor of any indebtedness of any other person, firm or
corporation.
3.20 Corporate Documents. Minute Books. Except for amendments
-------------------
necessary to satisfy representations and warranties or conditions contained
herein (the form of which amendments has been approved by the Purchaser), the
Certificate of Incorporation and Bylaws of the Company are in the form
previously provided to special counsel to the Purchaser. The minute books of the
Company previously provided to special counsel to the Purchasers contain a
complete summary of all meetings and corporate actions of directors and
shareholders since the time of incorporation of the Company.
3.21 Employee Benefit Plans. With the exception of a 401(k) plan, the
----------------------
Company does not have any "employee benefit plan" as defined in the Employee
Retirement Income Security Act of 1974, as amended.
-7-
<PAGE>
3.22 Real Property Holding Corporation. The Company is not a "real
---------------------------------
property holding corporation" within the meaning of Section 897(c)(2) of the
United States Internal Revenue Code of 1986, as amended.
3.23 Qualified Small Business. The Company is a "qualified small
------------------------
business" within the meaning of Section 1202(d) of the Internal Revenue Code of
1986, as amended, as of the date of issuance of the Shares. The Company will use
reasonable efforts to comply with the reporting and recordkeeping, requirements
of Section 1202 and any regulations promulgated thereunder if and for so long as
it appears to the Company that the Purchasers may be able to obtain the benefits
of Section 1202 and any such regulations.
3.24 Disclosure. No representation or warranty by the Company in this
----------
Agreement, or in any document or certificate furnished or to be furnished to the
Purchasers pursuant hereto or in connection with the transactions contemplated
hereby, when taken together, contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements made herein and therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that with regard to the
operating projections which have been delivered to the Purchaser, the Company
represents only that such projections were prepared in good faith and that the
Company reasonably believes there is a reasonable basis for such projections.
4. Representations and Warranties of Purchasers and Restrictions on
----------------------------------------------------------------
Transfer Imposed by the Securities Act.
- --------------------------------------
4.1 Representations and Warranties by the Purchaser. Each Purchaser
-----------------------------------------------
represents and warrants to the Company as of the date hereof and as of the
Closing Date as follows:
(a) Investment Intent. This Agreement is made with the
-----------------
Purchasers in reliance upon their representation to the Company, evidenced by
each Purchaser's execution of this Agreement, that each Purchaser is acquiring
the Shares and Warrants, and will acquire the Warrant Shares issuable upon
exercise of the Warrants and the Class A Common Stock issuable upon conversion
of Shares (collectively the "Securities") for investment for such Purchaser's
own account, not as nominee or agent, for investment and not with a view to, or
for resale in connection with, any distribution or public offering thereof
within the meaning of the Securities Act and the California Law. Each Purchaser
has the full right, power and authority to enter into and perform this Agreement
and the Collateral Agreements and this Agreement and each of the Collateral
Agreements constitute valid and binding obligations upon it.
(b) Shares Not Registered. Each Purchaser understands and
---------------------
acknowledges that the offering of the Securities pursuant to this Agreement will
not be registered under the Securities Act or qualified under the California Law
on the grounds that the offering and sale of securities contemplated by this
Agreement are exempt from registration under the Securities Act and exempt from
qualification pursuant to Section 25102(f) of the California Law, and that the
Company's reliance upon such exemptions is predicated upon such Purchaser's
representations set forth in this Agreement.
-8-
<PAGE>
(c) No Transfer. Each Purchaser covenants that in no event will
-----------
such Purchaser dispose of any of the Securities (other than in conjunction with
an effective registration statement for the Securities under the Securities Act
or in compliance with Rule 144 promulgated under the Securities Act) unless and
until (i) such Purchaser shall have notified the Company of the proposed
disposition and shall have furnished the Company with a statement of the
circumstances surrounding the proposed disposition, and (ii) if reasonably
requested by the Company, such Purchaser shall have furnished the Company with
an opinion of counsel satisfactory in form and substance to the Company to the
effect that (x) such disposition will not require registration under the
Securities Act and (y) appropriate action necessary for compliance with the
Securities Act, the California Law and any other applicable state, local or
foreign law has been taken. It is agreed that the Company will not require
opinions of counsel for transactions made pursuant to Rule 144, other than
opinions with regard to sales under Rule 144(k) as stated in Section 4.3 of this
Agreement.
(d) Permitted Transfers. Notwithstanding the provisions of
-------------------
Subsection (c) above, no registration statement or opinion of counsel shall be
necessary for a transfer by a Purchaser which is a partnership to a partner of
such partnership or a former partner of such partnership who leaves such
partnership after the date hereof, or to the estate of any such partner or
former partner or the transfer by gift, will or intestate succession of any
partner to his spouse or lineal descendants or ancestors, if the transferee
agrees in writing to be bound by the terms of this Agreement to the same extent
as if he were an original Purchaser hereunder.
(e) Knowledge and Experience. Each Purchaser represents that it
------------------------
(i) has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of such Purchaser's prospective
investment in the Securities; (ii) has the ability to bear the economic risks of
such Purchaser's prospective investment; (iii) has been furnished with and has
had access to such information as such Purchaser has considered necessary to
make a determination as to the purchase of the Securities; (iv) has had all
questions which have been asked by such Purchaser satisfactorily answered by the
Company; and (v) has not been offered the Securities by any form of
advertisement, article, notice or other communication published in any
newspaper, magazine, or similar media or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any such media.
(f) Accredited Investor. Each Purchaser is an "accredited
-------------------
investor" within the meaning of Securities and Exchange Commission ("SEC") Rule
501 of Regulation D, as presently in effect.
(g) Not Organized to Purchase. The Purchaser has not been
-------------------------
organized for the purpose of purchasing the Securities.
(h) Holding Requirements. Each Purchaser understands that if the
--------------------
Company does not (i) register its Common Stock with the SEC pursuant to Section
12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), (ii)
become subject to Section 15(d) of the Exchange Act, (iii) supply information
pursuant to Rule 15c2-11 thereunder, or (iv) have a registration statement
covering the Securities (or a filing pursuant to the exemption from registration
under Regulation A of the Securities Act covering the Securities) under the
-9-
<PAGE>
Securities Act in effect when it desires to sell the Securities, such Purchaser
may be required to hold the Securities for an indeterminate period. Each
Purchaser also understands that any sale of the Securities that might be made by
such Purchaser in reliance upon Rule 144 under the Securities Act may be made
only in limited amounts in accordance with the terms and conditions of that
rule.
4.2 Legends. Each certificate representing the Securities may be
-------
endorsed with the following legends:
(a) Federal Legend. THE SECURITIES REPRESENTED BY THIS
--------------
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") AND ARE "RESTRICTED SECURITIES" AS DEFINED IN RULE 144
PROMULGATED UNDER THE ACT. THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE OR
OTHERWISE DISTRIBUTED EXCEPT (i) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SHARES UNDER THE ACT OR (ii) IN COMPLIANCE WITH RULE 144, OR
(iii) PURSUANT TO AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH
REGISTRATION OR COMPLIANCE IS NOT REQUIRED AS TO SAID SALE, OFFER OR
DISTRIBUTION.
(b) Other Legends. Any other legends required by the Law or
-------------
other applicable state blue sky laws.
The Company need not register a transfer of legended Securities, and may also
instruct its transfer agent not to register the transfer of the Securities,
unless the conditions specified in each of the foregoing legends are satisfied.
4.3 Removal of Legend and Transfer Restrictions. Any legend endorsed
-------------------------------------------
on a certificate pursuant to Subsection 4.2(a) and the stop transfer
instructions with respect to such legended Securities shall be removed, and the
Company shall issue a certificate without such legend to the holder of such
Securities if such Securities are registered under the Securities Act and a
prospectus meeting the requirements of Section 10 of the Securities Act is
available or if such holder satisfies the requirements of Rule 144(k) and, where
reasonably deemed necessary by the Company, provides the Company with an opinion
of counsel for such holder of the Securities, reasonably satisfactory to the
Company, to the effect that (i) such holder, meets the requirements of Rule
144(k) or (ii) a public sale, transfer or assignment of such Securities may be
made without registration.
4.4 Rule 144. Each Purchaser is aware of the adoption of Rule 144 by
--------
the SEC promulgated under the Securities Act, which permits limited public
resales of securities acquired in a nonpublic offering, subject to the
satisfaction of certain conditions. Each Purchaser understands that under Rule
144, the conditions include, among other things: the availability of certain
current public information about the issuer and the resale occurring not less
than two years after the party has purchased and paid for the securities to be
sold.
-10-
<PAGE>
5. Conditions to Closing.
---------------------
5.1 Conditions to Purchasers' Obligations. The obligation of each
------------------------
Purchaser to purchase the Shares at the Closing is subject to the fulfillment to
its satisfaction, on or prior to the Closing Date, of the following conditions,
any of which may be waived in accordance with the provisions of Subsection 8.1
hereof:
(a) Representations and Warranties Correct; Performance of
------------------------------------------------------
Obligations. The representations and warranties made by the Company in Section 3
- -----------
hereof shall be true and correct when made, and shall be true and correct in all
material respects on the Closing Date with the same force and effect as if they
had been made on and as of said date. The Company's business and assets shall
not have been adversely affected in any material way prior to the Closing Date.
The Company shall have performed in all material respects all obligations and
conditions herein required to be performed or observed by it on or prior to the
Closing Date.
(b) Consents and Waivers. The Company shall have obtained in a
--------------------
timely fashion any and all consents, permits and waivers necessary or
appropriate for consummation of the transactions contemplated by this Agreement.
(c) Amendment of Bylaws; Board of Directors. On or prior to the
---------------------------------------
Closing Date the Company shall have amended its Bylaws to provide for a fixed
Board of Directors set at four (4). Effective upon the Closing, Walter G.
Kortschak shall have been appointed to the Company's Board of Directors. The
Company and Walter G. Kortschak shall have entered into an indemnification
agreement reasonably acceptable to special counsel to the Purchasers. The
Compensation Committee of the Board of Directors shall consist, effective upon
the Closing, of those persons described in Section 6.7 hereof.
(d) Filing of the Restated Certificate; Effectiveness of Merger.
-----------------------------------------------------------
The Restated Certificate shall have been filed with the Delaware Secretary of
State, and the merger of Business Real Estate Information Corporation, a
California corporation, with and into the Company, shall be effective in each of
Delaware and California.
(e) Investor Rights Agreement. The Company and each Purchaser
-------------------------
shall have executed and delivered the Investor Rights Agreement in the form
attached as Exhibit E hereto.
---------
(f) Co-Sale Agreement. The Company, the Purchasers and the
-----------------
Stockholders shall have executed and delivered the Co-Sale Agreement in the form
attached as Exhibit G hereto.
---------
(g) Shareholder Buy-Out and Voting Agreement. The Purchasers,
----------------------------------------
the Company, Christopher A. Crane and Robert C. Beasley shall have executed and
delivered the Shareholder Buy-Out and Voting Agreement.
(h) Compliance Certificate. The Company shall have delivered a
----------------------
Certificate, executed by the President of the Company, dated the Closing Date,
certifying to the fulfillment of the conditions specified in Subsections (a),
(b), (c) and (d) of this section 5.1.
-11-
<PAGE>
(i) Opinion of Counsel. The Purchasers shall have received an
------------------
opinion from the Company's counsel, in substantially the form attached hereto as
Exhibit J.
- ---------
(j) Employment Agreement. The Company shall have entered into an
--------------------
Employment Agreement with Christopher A. Crane in a form reasonably acceptable
to the Purchasers.
5.2 Conditions to Obligations of the Company. The Company's
----------------------------------------
obligation to sell and issue the Shares and Warrants at the Closing is subject
to the fulfillment to the satisfaction of the Company on or prior to the Closing
Date of the following conditions, any of which may be waived by the Company:
(a) Representations and Warranties Correct. The representations
--------------------------------------
and warranties made by each Purchaser in Section 4 hereof shall be true and
correct when made, and shall be true and correct on the Closing Date with the
same force and effect as if they had been made on and as of said date.
(b) Conditions Fulfilled. The conditions set forth in
--------------------
Subsections (b) and (d) of Section 5.1 shall have been fulfilled.
6. Covenants of the Company. The Company hereby covenants and agrees as
------------------------
follows:
6.1 Financial Information. Until the first to occur of (a) the date
---------------------
on which the Company is required to file a report with the SEC pursuant to
Section 13(a) of the Exchange Act, by reason of the Company having registered
any of its securities pursuant to Section 12(g) of the Exchange Act or (b)
quotations for the Common Stock of the Company are reported by the automated
quotations system operated by the National Association of Securities Dealers,
Inc. or by an equivalent quotations system or (c) shares of the Common Stock of
the Company are listed on a national securities exchange registered under
Section 6 of the Exchange Act, the Company will furnish to each Purchaser:
(i) as soon as practicable after the end of each fiscal year,
and in any event within 150 days thereafter, consolidated balance sheets of the
Company and its subsidiaries, if any, as at the end of such fiscal year, and
consolidated statements of operations and consolidated statements of cash flow
of the Company and its subsidiaries, if any, for such year, prepared in
accordance with generally accepted accounting principles, all in reasonable
detail and certified by a "Big Six" accounting firm selected by the Board of
Directors, and
(ii) as soon as practicable after the end of each month, and in
any event within 30 days thereafter, consolidated balance sheets of the Company
and its subsidiaries, if any, as of the end of such month; and consolidated
statements of income and consolidated cash flow statements, for such month and
for the current fiscal year to date, prepared in accordance with generally
accepted accounting principles (except for required footnotes), all in
reasonable detail and signed, subject to changes resulting from year-end audit
adjustments, by the principal financial officer or chief executive officer of
the Company, and
-12-
<PAGE>
(iii) as soon as practicable after its adoption or approval by the
Company's Board of Directors, but not later than the commencement of such fiscal
year, an annual budget and operating plan for each fiscal year which shall
include monthly capital and operating expense budgets, cash flow statements,
projected balance sheets and profit and loss projections for each such month and
for the end of the year, itemized in such detail as the Board of Directors may
reasonably determine.
Each Purchaser agrees not to disclose the information provided it pursuant
to this Section to any person, real or legal, except as provided or authorized
herein. The Purchasers may disclose such information to persons who have a need
to know, such as limited partners, directors, trustees, management employees,
witnesses, experts, investors, attorneys, lenders, and insurers. Notwithstanding
the foregoing, the Purchasers may disclose such information pursuant to the
requirement of a governmental agency or operation of law, provided that the
Purchasers are obligated to use reasonable efforts to prevent disclosure under
such circumstance.
6.2 Conflicts of Interests. The Company shall use its best efforts to
----------------------
ensure that the Company's employees, during the term of their employment with
the Company, do not engage in activities which would result in a conflict of
interest with the Company. The Company's obligations hereunder include, but are
not limited to, requiring that the Company's full-time employees devote their
primary productive time, ability and attention to the business of the Company
(provided, however, the Company's employees may engage in other professional
activity if such activity does not materially interfere with their obligations
to the Company), requiring that the Company's employees enter into agreements
regarding proprietary information and confidentiality and preventing the
Company's employees from engaging or participating in any business that is in
competition with the business of the Company.
6.3 Key-Man and D&O Insurance. The Company shall use ts best efforts
-------------------------
to obtain within thirty (30) days of the Closing and maintain in force, until
canceled or modified with the written consent of Purchasers holding more than
fifty percent (50%) of the Securities or their transferees, an insurance policy
on the life of Christopher A. Crane, in the amount of $1,000,000, naming the
Company as holder and beneficiary. The Company will use its best efforts to
obtain Directors and Officers insurance provided that such insurance is
available at a reasonable cost.
6.4 Proprietary Agreements. The Company will use its best efforts to
----------------------
prevent any employee from violating the confidentiality and proprietary
information agreement entered into between the Company and each of its
employees.
6.5 Future Stock Issuances. The Company will not issue any shares of
----------------------
Common Stock (or grant any options, warrants or other rights to purchase the
same) to any employee, officer, director or consultant (i) except pursuant to
written agreements which provide for vesting over a period of at least forty-
eight (48) months (with the initial vesting date to occur at least after twelve
(12) months) and a right of first refusal in favor of the Company in the event
of any proposed transfer, or (ii) if such issuance or grant causes the aggregate
number of shares of Common Stock issued and granted to the Company's employees,
officers, directors or consultants to exceed 811,160; provided further that no
----------------
more than 341,159 shares of Common Stock (or options, warrants or other rights
to purchase the same) may be granted to employees,
-13-
<PAGE>
officers, directors or consultants of the Company who are employed, elected or
retained by the Company as of the date of this Agreement, unless such issuance
or grant is approved by the Purchasers holding a majority of the Shares.
6.6 Use of Proceeds. The Company may use up to $2,000,000 of the
---------------
proceeds hereunder to repurchase shares of the Company's Common Stock held by
existing shareholders of the Company. The remaining proceeds shall be used for
working capital purposes.
6.7 Compensation Committee. The compensation for the Company's
----------------------
officers shall be determined by a Compensation Committee of the Board of
Directors. The Compensation Committee shall initially consist of (a) Christopher
A. Crane, Chairman (b) Walter G. Kortschak or such other director as is elected
by the holders of the Shares, and (c) the director elected pursuant to the
Voting Agreement attached hereto as Exhibit I. The director elected by the
---------
holders of the Shares shall not be removed from the Compensation Committee
without the prior written consent of the Purchasers.
6.8 Inspection Rights. Each Purchaser shall have the right to visit
-----------------
and inspect any of the properties of the Company or any of its subsidiaries, and
to discuss the affairs, finances and accounts of the Company or any of its
subsidiaries with its officers, all at such reasonable times and as often as may
be reasonably requested; provided, however, that the Company shall not be
obligated under this Section 6.8 with respect to a competitor of the Company or
with respect to information which the Board of Directors determines in good
faith is confidential and should not, therefore, be disclosed.
6.9 Reservation of Common Stock. The Company will at all times
---------------------------
reserve and keep available, solely for issuance and delivery upon the conversion
of the Shares and exercise of the Warrants, all Class A and Class B Common Stock
issuable from time to time upon such conversion or exercise.
6.10 Dealings with Affiliates and Others. The Company will not enter
-----------------------------------
into any transaction, including, without limitation, any loans or extensions of
credit or royalty agreements, with any officer or director of the Company or any
subsidiary or holder of any class of capital stock of the Company, or any member
of their respective immediate families or any corporation or other entity
directly or indirectly controlled by one or more of such officers, directors or
stockholders or members of their immediate families (other than any such
transactions in the ordinary course of business which are in an amount not in
excess of $25,000) unless such transaction is approved in advance by a majority
of the members of the Board of Directors who are disinterested with respect to
that transaction.
6.11 Termination of Covenants. All covenants of the Company contained
------------------------
in Section 6 of this Agreement shall expire and terminate as to each Purchaser
after the time of effectiveness of the Company's first underwritten public
offering registered under the Securities Act.
-14-
<PAGE>
7. Dispute Resolution.
------------------
7.1 Arbitration. The parties acknowledge and agree that time is of
-----------
the essence in resolving any dispute that may arise in connection with this
Agreement. Except as set forth herein, any controversy or claim arising out of
or relating to this Agreement, or the breach thereof, that cannot be resolved
between the parties in a timely manner shall be settled by binding arbitration
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association ("AAA"). The expenses of the arbitration, including the arbitrator's
fees, expert witness fees. and attorney's fees, may be awarded to the prevailing
party, in the discretion of the arbitrator, or may be apportioned between the
parties in any manner deemed appropriate by the arbitrator. Unless and until the
arbitrator decides that one party is to pay for all (or a share) of such
expenses, the Company shall pay all reasonable expenses, including legal and
accounting fees and costs arising in connection with enforcement of this
Agreement or the Collateral Agreements. The parties shall keep confidential the
decision of the arbitrator. Notwithstanding the foregoing, the parties may
disclose information about such decision to persons who have a need to know,
such as limited partners, directors, trustees, management employees, witnesses,
experts, investors, attorneys, lenders, insurers, and others who may be
affected. Additionally, if a party has stock which is publicly traded, the party
may make such disclosures as are required by applicable securities laws. Once
the arbitration award has become final, if the arbitration award is not promptly
satisfied, then these confidentiality provisions shall no longer be applicable.
7.2 Specific Performance. Notwithstanding Section 7.1 hereof, the
--------------------
parties will be entitled to enforce their rights under this Agreement
specifically (without posting a bond or other security). The parties hereto
agree and acknowledge that money damages may not be an adequate remedy for any
breach of the provisions of this Agreement and any party may in its sole
discretion apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive relief in order to enforce or prevent any
violation of the provisions of this Agreement.
8. Miscellaneous.
-------------
8.1 Waivers and Amendments. With the written consent of the Company
----------------------
and the record holders of at least a majority of the Shares, the obligations of
the Company and Purchasers under this Agreement may be waived or amended (either
generally or in a particular instance). Upon the effectuation of each such
waiver or amendment, the Company shall promptly give written notice thereof to
the record holders of the Shares who have not previously consented thereto in
writing. Except to the extent provided in this Subsection 8.1, this Agreement or
any provision hereof may be amended, waived, discharged or terminated only by a
statement in writing signed by the party against which enforcement of the
amendment, waiver, discharge or termination is sought.
8.2 Governing Law. This Agreement shall be governed in all respects
-------------
by the laws of the State of California as such laws are applied to agreements
between California residents entered into and to be performed entirely within
California.
-15-
<PAGE>
8.3 Survival. The representations, warranties, covenants and
--------
agreements made herein shall survive the Closing, notwithstanding any
investigation made by the Purchaser. All statements as to factual matters
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant hereto or in connection with the transactions contemplated
hereby shall be deemed to be representations and warranties by the Company
hereunder as of the date of such certificate or instrument.
8.4 Successors and Assigns. Except as otherwise expressly provided
----------------------
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
8.5 Entire Agreement. This Agreement and the Collateral Agreements
----------------
and other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof and they supersede, merge and render void every other prior
written and/or oral understanding or agreement among or between the parties
hereto. Notwithstanding the foregoing, the obligation set forth in the third
sentence of Section X(B) of that certain Letter of Intent between the parses
dated as of August 8, 1994, shall not be merged with this Agreement and shall
survive until the Closing.
8.6 Notices, Etc. All notices and other communications required or
------------
permitted hereunder shall be in writing and shall be delivered personally,
mailed by first class mail, postage prepaid, or delivered by courier or
overnight delivery, addressed (a) if to a Purchaser, at such Purchaser's address
set forth in the Schedule of Purchasers, or at such other address as such
Purchaser shall have furnished to the Company in writing or (b) if to the
Company, at its address set forth at the beginning of this Agreement, or at such
other address as the Company shall have furnished to each Purchaser in writing.
Notices that are mailed shall be deemed received five (5) days after deposit in
the United States mail.
8.7 Severability. In case any provision of this Agreement shall be
------------
found by a court of law to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not in any way be affected or impaired thereby.
8.8 Finder's Fees and Other Fees.
----------------------------
(a) The Company (i) represents and warrants that it has retained
no finder or broker in connection with the transactions contemplated by this
Agreement and, (ii) hereby agrees to indemnify and to hold Purchasers harmless
from and against any liability for commission or compensate on in the nature of
a finder's fee to any broker or other person or firm (and the costs and expenses
of defending against such liability or asserted liability) for which the
Company, or any of its employees or representatives, is responsible.
(b) Each Purchaser (i) represents and warrants that it has
retained no finder or broker in connection with the transactions contemplated by
this Agreement and (ii) hereby agrees to indemnify and to hold the Company
harmless from and against any liability for any commission or compensation in
the nature of a finder's fee to any broker or other person or firm (and the
costs and expenses of defending against such liability or asserted liability)
for which Purchaser, or any of its employees or representatives, are
responsible.
-16-
<PAGE>
8.9 Expenses. The Company and the Purchasers shall each bear their
--------
own expenses and legal fees in connection with the consummation of this
transaction; provided, however, that the Company will pay the reasonable fees of
one special counsel for the Purchaser, together with disbursements and expenses
incurred by special counsel in connection with all transactions leading up to
and including the Closing. Upon and following the Closing, and subject to the
provisions of Section 7 hereof, the Company shall pay all reasonable expenses,
including legal and accounting fees and costs arising in connection with
enforcement of this Agreement or the Collateral Agreements.
8.10 Titles and Subtitles. The titles of the sections and subsections
--------------------
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
8.11 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
8.12 Delays or Omissions. No delay or omission to exercise any right,
-------------------
power or remedy accruing to the Company or to any holder of any securities
issued or to be issued hereunder shall impair any such right, power or remedy of
the Company or such holder, nor shall it be construed to be a waiver of any
breach or default under this Agreement, or an acquiescence therein, or of or in
any similar breach or default thereafter occurring; nor shall any delay or
omission to exercise any right, power or remedy or any waiver of any single
breach or default be deemed a waiver of any other right, power or remedy or
breach or default theretofore or thereafter occurring. All remedies, either
under this Agreement, or by law otherwise afforded to the Company or any holder,
shall be cumulative and not alternative.
8.13 Publicity. The Company and each of the Purchasers agree that they
---------
will not issue any press release or other public announcement regarding the
execution of this Agreement and the closing of the transactions contemplated
hereunder, without the prior written consent of the other parties to this
Agreement.
-17-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
COMPS INFOSYSTEMS, INC.
By: /s/ Christopher A. Crane
-----------------------------------------
Christopher A. Crane
President
SUMMIT VENTURES III, L.P.
By: Summit Partners III, L.P.
General Partner
By: Stamps, Woodsum & Co. III,
General Partner
By: /s/ Walter Kortschak
------------------------------------
General Partner
SUMMIT INVESTORS II, L.P.
By: /s/ Walter Kortschak
----------------------------------------
General Partner
STOCKHOLDERS:
/s/ Christopher A. Crane
--------------------------------------------
Christopher A. Crane
/s/ Robert C. Beasley
--------------------------------------------
Robert C. Beasley
-18-
<PAGE>
Exhibit A
---------
COMPS INFOSYSTEMS, INC.
STOCK AND WARRANT PURCHASE AGREEMENT
October __, 1994
Schedule of Purchasers
----------------------
<TABLE>
<CAPTION>
Series A Warrants Purchase Price
-------- -------- --------------
<S> <C> <C> <C>
Summit Ventures III, L.P.
499 Hamilton Ave., Suite 200
Palo Alto, CA 94301
Attention: Walter Kortschak 4,184,929 372,272 $4,900,000
- ----------------------------
Summit Investors, II, L.P.
499 Hamilton Ave., Suite 200
Palo Alto, CA 94301
Attention: Walter Kortschak 85,407 7,597 $ 100,000
- ---------------------------- ---------- -------- ----------
Totals 4,270,336 379,869 $5,000,000
</TABLE>
<PAGE>
EXHIBIT B
Warrant
<PAGE>
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT") AND ARE "RESTRICTED SECURITIES" AS DEFINED IN RULE
144 PROMULGATED UNDER THE ACT. THE SECURITIES MAY NOT BE
SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT (i)
IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SHARES UNDER THE ACT OR (ii) IN COMPLIANCE WITH RULE
144, OR (iii) PURSUANT TO AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION OR
COMPLIANCE IS NOT REQUIRED AS TO SAID SALE, OFFER OR
DISTRIBUTION.
Warrant No. W-1
CLASS B COMMON STOCK WARRANT
OF
COMPS INFOSYSTEMS, INC.
-----------------------
THIS CERTIFIES THAT, for value received, Summit Ventures III, L.P.
(the "Holder") is entitled to subscribe for and to purchase from COMPS
INFOSYSTEMS INC., a Delaware corporation (the "Company"), 372,272 shares of the
non-voting Class B Common Stock of the Company, at the price per share set forth
in Section 1 hereof, payable in cash or check (such price being referred to
herein as the "Exercise Price" and subject to adjustment as set forth Section 2
below), at any time or from time to time following the occurrence of any of the
events described in Section 3 hereof and during the term as set forth below.
1. Exercise Price. The Exercise Price shall be $.01 per share.
--------------
2. Adjustments for Subdivisions, Dividends, Combinations or
--------------------------------------------------------
Consolidation of Common Stock.
- -----------------------------
a. Subdivisions, Dividends, Consolidations. In the event (i) the
---------------------------------------
outstanding shares of the Class B Common Stock shall be increased (by stock
split, stock dividend or otherwise), into a greater number of shares of Class B
Common Stock, the Exercise Price then in effect shall, concurrently with the
effectiveness of such increase, be proportionately decreased; and (ii) the
outstanding shares of Class B Common Stock shall be decreased, by
reclassification or otherwise, into a lesser number of shares of Class B Common
Stock, the Exercise Price then in effect shall, concurrently with the
effectiveness of such decrease, be proportionately increased. In the event that
the Exercise Price is adjusted pursuant to this Subsection, the number of shares
of Class B Common Stock issuable pursuant to this Warrant shall be increased or
decreased to a number determined by multiplying (1) the number of shares of
Class B Common Stock issuable pursuant to this Warrant immediately prior to the
adjustment by (2) a fraction, the numerator of which shall equal the Exercise
Price in effect immediately
-1-
<PAGE>
prior to the adjustment and the denominator of which shall equal the Exercise
Price in effect immediately after the adjustment.
b. Reclassification, Reorganization and Consolidation. In case of
--------------------------------------------------
any reclassification, capital reorganization or change in the Class B Common
Stock of the Company (other than as a result of a subdivision, combination or
stock dividend provided for in Section 2(a) above), then, as a condition of such
reclassification, reorganization or change, lawful provision shall be made, and
duly executed documents evidencing the same from the Company or its successor
shall be delivered to the holder of this Warrant, so that the holder of this
Warrant shall have the right, commencing upon the times set forth in Section 3,
and prior to the expiration of this Warrant, to purchase, at a total price equal
to that payable upon the exercise of this Warrant, the kind and amount of shares
of stock and other securities and property receivable in connection with such
reclassification, reorganization or change by a holder of the same number of
shares of Class B Common Stock as were subject to this Warrant immediately prior
to such reclassification, reorganization or change. In any such, case
appropriate provisions shall be made with respect to the rights and interests of
the holder of this Warrant so that the provisions hereof shall thereafter be
applicable with respect to any shares of stock or other securities and property
deliverable upon exercise hereof, and appropriate adjustments shall be made to
the purchase price per share payable hereunder, provided the aggregate purchase
price shall remain the same.
c. Conversion of Class B Common Stock. If at any time prior to the
----------------------------------
expiration of this Warrant, all of the Company's then outstanding Class B Common
Stock is converted into shares of the Company's Class A Common Stock, then this
Warrant shall immediately become exercisable for that number of shares of Class
A Common Stock receivable upon conversion by a holder of the same number of
shares of Class B Common Stock as were subject to this Warrant immediately prior
to such conversion, and the Exercise Price shall be immediately adjusted to
equal the quotient obtained by dividing (x) the aggregate Exercise Price of the
maximum number of shares of Class B Common Stock for which this Warrant was
exercisable immediately prior to such conversion, by (y) the number of shares of
Class A Common Stock for which this Warrant is exercisable immediately after
such conversion. After any such conversion, all references herein to Class B
Common Stock shall be deemed to be references to Common Stock.
d. Notice of Adjustment. When any adjustment is required to be made
--------------------
in the number or kind of shares purchasable upon exercise of the Warrant, or in
the Exercise Price, the Company shall promptly notify the Holder of such event
and of the number of shares of Common Stock or other securities or property
thereafter purchasable upon exercise of the Warrant.
3. Exercise of Warrant. This Warrant may be exercised in whole or in
-------------------
part, commencing (i) one day prior to the earlier of the closing or the
effective time of a "Liquidity Event," as defined herein; or, (ii) if earlier,
October 14, 2001, by the surrender of this Warrant and payment to the Company by
cash or check of the Exercise Price for all of the Shares purchased. The
Company shall, within ten (10) days after such delivery, (a) prepare and issue a
certificate for the Shares purchased in the name of the Holder of this Warrant,
or as such Holder may direct (subject to the restrictions upon transfer
contained herein and upon payment by such
-2-
<PAGE>
Holder hereof of any applicable transfer taxes) and (b) prepare and issue a new
warrant of like terms if this Warrant is exercised for less than all of the
Shares subject hereto. "Liquidity Event" shall mean (i) an acquisition,
consolidation or merger of the Company with or into any other corporation or
corporations unless the stockholders of the Company prior to such transaction
directly or indirectly own more than fifty percent (50%) of the voting stock of
the surviving or accruing corporation or corporations; (ii) the sale, transfer
or other disposition of all or substantially all of the assets of the Company to
a person other than a corporation or partnership controlled by the Company or
its stockholders; (iii) the effectuation by the Company of a transaction or
series of related transactions in which more than fifty percent (50%) of the
outstanding voting power of the Company prior to such transaction or series of
related transactions, is disposed of; and (iv) the closing of the sale of the
Company's securities pursuant to an underwritten public offering.
a. Net Issue Exercise. Notwithstanding any provisions herein to the
------------------
contrary, in lieu of exercising this Warrant for cash, the Holder may elect to
receive shares equal to the value (as determined below) of this Warrant (or the
portion thereof being canceled) by surrender of this Warrant at the principal
office of the Company together with a properly endorsed notice of exercise and
notice of such election in which event the Company shall issue to the Holder a
number of shares of Clm B Common Stock computed using the following formula:
Y (A - B)
X = ---------
A
Where X = the number of shares of Class B Common Stock to be issued to the
Holder,
Y = the number of shares of Class B Common Stock purchasable under
the Warrant or, if only a portion of the Warrant is being
exercised, the portion of the Warrant being canceled (at the date
of such calculation),
A = the fair market value of one share of the Company's Class A
Common Stock (at the date of such calculation), and
B = the Exercise Price (as adjusted to the date of such calculation).
For purposes of the above calculation, fair market value of one
share of Class A Common Stock shall be determined by the Company's Board of
Directors in good faith; provided, however, that where there exists a public
market for the Company's Class A Common Stock at the time of such exercise, fair
market value shall mean the average over the preceding twenty (20) trading days
(or such fewer number of days as such public market has existed) of the mean of
the high closing bid and asked prices on the over-the-counter market as reported
by Nasdaq, or if then traded on a national securities exchange or the Nasdaq
National Market, the average over the preceding twenty (20) trading days (or
such fewer number of days as the Class A Common Stock has been so traded) of the
mean of the high and low prices on the principal national securities exchange or
the National Market on which it is so traded. Notwithstanding the foregoing, in
the event the Warrant is exercised in connection with the Company's initial
-3-
<PAGE>
public offering of Common Stock, the fair market value per share shall be the
per share offering price to the public of the Company's initial public offering.
4. Term of Warrant. This Warrant expires and shall no longer be
---------------
exercisable as of 11:59 p.m. Pacific standard time, October 14, 2004, and shall
be void thereafter.
5. Conditions to Exercise of Warrant or Transfer of the Shares. It
-----------------------------------------------------------
shall be a condition to any exercise of this Warrant that the Company shall have
received, at the time Shares being issued upon such exercise of such exercise, a
representation in writing that the are being acquired for investment and not
with a view to any sale or distribution thereof, or a statement of the pertinent
facts covering any proposed distribution thereof. It shall be a condition to
any transfer of any or all of the Shares issued upon exercise of this Warrant,
other than a transfer registered under the Securities Act of 1933, as amended
(the "Act"), that the Company shall have received a legal opinion, in form and
substance reasonably satisfactory to the Company and its counsel, reciting the
pertinent circumstances surrounding the proposed transfer and stating that such
transfer is exempt from the prospectus and the registration requirement of the
Act Each certificate evidencing the Shares issued upon exercise of this Warrant,
or upon any transfer of such shares (other than a transfer registered under the
Act or any subsequent transfer of shares so registered) shall, at the option of
the Company, contains a legend, in form and substance satisfactory to the
Company and its counsel, restricting the transfer of such shares to sales or
other dispositions exempt from the requirements of the Act. It is agreed that
the Company will not require opinions of counsel for transactions made pursuant
to Rule 144, other than opinions with regard to sales under Rule 144(k).
6. Fractional Shares. This Warrant shall in no event be exercisable
-----------------
for fractional shares, and in lieu thereof, the number of shares which would
otherwise be purchased under this Warrant shall be rounded up to the nearest
whole share of Common Stock.
7. Miscellaneous.
-------------
a. The Company covenants that it will at all times reserve and
keep available, solely for the purpose of issuance upon the exercise hereof, a
sufficient number of shares of Class A or Class B Common Stock, as applicable,
to permit the exercise hereof in full. Such shares when issued in compliance
with the provisions of this Warrant and the Certificate of Incorporation, as
amended, will be duly authorized, validly issued, fully paid and nonassessable.
b. The terms of this Warrant shall be binding upon and shall
inure to the benefit of any successors or assigns of the Holder hereof and of
the Shares issued or issuable upon the exercise hereto.
c. The Holder, as such, shall not be entitled to vote or receive
dividends or be deemed to be a shareholder of the Company for any purpose, nor
shall anything contained in this Warrant be construed to confer upon the Holder,
is such, any rights of a shareholder of the Company or any right to vote, give
or withhold consent to any corporate action, receive notice of meetings, receive
dividends or subscription rights, or otherwise.
d. Receipt of this Warrant by the Holder shall constitute
acceptance of and agreement to the foregoing terms and conditions.
-4-
<PAGE>
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:_____________________________
Christopher A. Crane
President
-5-
<PAGE>
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
("THE ACT") AND ARE "RESTRICTED SECURITIES" AS DEFINED IN
RULE 144 PROMULGATED UNDER THE ACT. THE SECURITIES MAY NOT
BE SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT
(i) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SHARES UNDER THE ACT OR (ii) IN COMPLIANCE WITH RULE
144, OR (iii) PURSUANT TO AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION OR
COMPLIANCE IS NOT REQUIRED AS TO SAID SALE, OFFER OR
DISTRIBUTION.
Warrant No. W-2
CLASS B COMMON STOCK WARRANT
OF
COMPS INFOSYSTEMS, INC.
-----------------------
THIS CERTIFIES THAT, for value received, Summit Investors II, L.P.
(the "Holder") is entitled to subscribe for and to purchase from COMPS
INFOSYSTEMS INC., a Delaware corporation (the "Company"), 7,597 shares of the
non-voting Class B Common Stock of the Company, at the price per share set forth
in Section 1 hereof, payable in cash or check (such price being referred to
herein as the "Exercise Price" and subject to adjustment as set forth Section 2
below), at any time or from time to time following the occurrence of any of the
events described in Section 3 hereof and during the term as set forth below.
1. Exercise Price. The Exercise Price shall be $.0l per share.
--------------
2. Adjustments for Subdivisions, Dividends, Combinations or
--------------------------------------------------------
Consolidation of Common Stock.
- -----------------------------
a. Subdivisions, Dividends, Consolidations. In the event (i)
---------------------------------------
the outstanding shares of the Class B Common Stock shall be increased (by stock
split, stock dividend or otherwise), into a greater number of shares of Class B
Common Stock, the Exercise Price then in effect shall, concurrently with the
effectiveness of such increase, be proportionately decreased; and (ii) the
outstanding shares of Class B Common Stock shall be decreased, by
reclassification or otherwise, into a lesser number of shares of Class B Common
Stock, the Exercise Price then in effect shall, concurrently with the
effectiveness of such decrease, be proportionately increased. In the event that
the Exercise Price is adjusted pursuant to this Subsection, the number of shares
of Class B Common Stock issuable pursuant to this Warrant shall be increased or
decreased to a number determined by multiplying (1) the number of shares of
Class B Common Stock issuable pursuant to this Warrant immediately prior to the
adjustment
-1-
<PAGE>
by (2) a fraction, the numerator of which shall equal the Exercise Price in
effect immediately prior to the adjustment and the denominator of which shall
equal the Exercise Price in effect immediately after the adjustment.
b. Reclassification, Reorganization and Consolidation. In case of
--------------------------------------------------
any reclassification, capital reorganization or change in the Class B Common
Stock of the Company (other than as a result of a subdivision, combination or
stock dividend provided for in Section 2(a) above), then, as a condition of such
reclassification, reorganization or change, lawful provision shall be made, and
duly executed documents evidencing the same from the Company or its successor
shall be delivered to the holder of this Warrant, so that the holder of this
Warrant shall have the right, commencing upon the times set forth in Section 3,
and prior to the expiration of this Warrant, to purchase, at a total price equal
to that payable upon the exercise of this Warrant, the kind and amount of shares
of stock and other securities and property receivable in connection with such
reclassification, reorganization or change by a holder of the same number of
shares of Class B Common Stock as were subject to this Warrant immediately prior
to such reclassification, reorganization or change. In any such case
appropriate provisions shall be made with respect to the rights and interests of
the holder of this Warrant so that the provisions hereof shall thereafter be
applicable with respect to any shares of stock or other securities and property
deliverable upon exercise hereof, and appropriate adjustments shall be made to
the purchase price per share payable hereunder, provided the aggregate purchase
price shall remain the same.
c. Conversion of Class B Common Stock. If at any time prior to the
----------------------------------
expiration of this Warrant, all of the Company's then outstanding Class B Common
Stock is converted into shares of the Company's Class A Common Stock, then this
Warrant shall immediately become exercisable for that number of shares of Class
A Common Stock receivable upon conversion by a holder of the same number of
shares of Class B Common Stock as were subject to this Warrant immediately prior
to such conversion, and the Exercise Price shall be immediately adjusted to
equal the quotient obtained by dividing (x) the aggregate Exercise Price of the
maximum number of shares of Class B Common Stock for which this Warrant was
exercisable immediately prior to such conversion, by (y) the number of shares of
Class A Common Stock for which this Warrant is exercisable immediately after
such conversion. After any such conversion, all references herein to Class B
Common Stock shall be deemed to be references to Common Stock.
d. Notice of Adjustment. When any adjustment is required to be made
--------------------
in the number or kind of shares purchasable upon exercise of the Warrant, or in
the Exercise Price, the Company shall promptly notify the Holder of such event
and of the number of shares of Common Stock or other securities or property
thereafter purchasable upon exercise of the Warrant.
3. Exercise of Warrant. This Warrant may be exercised in whole or in
-------------------
part, commencing (i) one day prior to the earlier of the closing or the
effective time of a "Liquidity Event," as defined herein; or, (ii) if earlier,
October 14, 2001, by the surrender of this Warrant and payment to the Company by
cash or check of the Exercise Price for all of the Shares purchased. The Company
shall, within ten (10) days after such delivery, (a) prepare and issue a
certificate for the Shares purchased in the name of the Holder of this Warrant,
or as such Holder may direct (subject to the restrictions upon transfer
contained herein and upon payment by such
-2-
<PAGE>
Holder hereof of any applicable transfer taxes and (b) prepare and issue a new
warrant of like terms if this Warrant is exercised for less than all of the
Shares subject hereto. "Liquidity Event" shall mean (i) an acquisition,
consolidation or merger of the Company with or into any other corporation or
corporations unless the stockholders of the Company prior to such transaction
directly or indirectly own more than fifty percent (50%) of the voting stock of
the surviving or acquiring corporation or corporations; (ii) the sale, transfer
or other disposition of all or substantially all of the assets of the Company to
a person other than a corporation or partnership controlled by the Company or
its stockholders; (iii) the effectuation by the Company of a transaction or
series of related transactions in which more than fifty percent (50%) of the
outstanding voting power of the Company prior to such transaction or series of
related transactions, is disposed of; and (iv) the closing of the sale of the
Company's securities pursuant to an underwritten public offering.
a. Net Issue Exercise. Notwithstanding any provisions herein to the
------------------
contrary, in lieu of exercising this Warrant for cash, the Holder may elect to
receive shares equal to the value (as determined below) of this Warrant (or the
portion thereof being canceled) by surrender of this Warrant at the principal
office of the Company together with a properly endorsed notice of exercise and
notice of such election in which event the Company shall issue to the Holder a
number of shares of Class B Common Stock computed using the following formula:
Y (A - B)
X = ---------
A
Where X = the number of shares of Class B Common Stock to be issued to the
Holder,
Y = the number of shares of Class B Common Stock purchasable under
the Warrant or, if only a portion of the Warrant is being
exercised , the portion of the Warrant being canceled (at the
date of such calculation),
A = the fair market value of one share of the Company's Class A
Common Stock (at the date of such calculation), and
B = the Exercise Price (as adjusted to the date of such calculation).
For purposes of the above calculation, fair market value of one
share of Class A Common Stock shall be determined by the Company's Board of
Directors in good faith; provided, however, that where there exists a public
market for the Company's Class A Common Stock at the time of such exercise, fair
market value shall mean the average over the preceding twenty (20) trading days
(or such fewer number of days as such public market has existed) of the mean of
the high closing bid and asked prices on the over-the-counter market as reported
by Nasdaq, or if then traded on a national securities exchange or the Nasdaq
National Market, the average over the preceding twenty (20) trading days (or
such fewer number of days as the Class A Common Stock has been so traded) of the
mean of the high and low prices on the principal national securities exchange or
the National Market on which it is so traded. Notwithstanding
-3-
<PAGE>
the foregoing, in the event the Warrant is exercised in connection with the
Company's initial public offering of Common Stock, the fair market value per
share shall be the per share offering price to the public of the Company's
initial public offering.
4. Term of Warrant. This Warrant expires and shall no longer be
---------------
exercisable as of 11:59 p.m. Pacific standard time, October 14, 2004, and shall
be void thereafter.
5. Conditions to Exercise of Warrant of Transfer of Shares. It
-------------------------------------------------------
shall be a condition to any exercise of this Warrant that the Company shall have
received, at the time of such exercise, a representation in writing that the
Shares being issued upon such exercise are being acquired for investment and not
with a view to any sale or distribution thereof, or a statement of the pertinent
facts covering any proposed distribution thereof. It shall be a condition to
any transfer of any or all of the Shares issued upon exercise of this Warrant,
other than a transfer registered under the Securities Act of 1933, as amended
(the "Act"), that the Company shall have received a legal opinion, in form and
substance reasonably satisfactory to the Company and its counsel, reciting the
pertinent circumstances surrounding the proposed transfer and stating that such
transfer is exempt from the prospectus and the registration requirement of the
Act. Each certificate evidencing the Shares issued upon exercise of this
Warrant, or upon any transfer of such shares (other than a transfer registered
under the Act or any subsequent transfer of shares so registered) shall, at the
option of the Company, contain a legend, in form and substance satisfactory to
the Company and its counsel, restricting the transfer of such shares to sales or
other dispositions exempt from the requirements of the Act. It is agreed that
the Company will not require opinions of counsel for transactions made pursuant
to Rule 144, other dm opinions with regard to sales under Rule 144(k).
6. Fractional Shares. This Warrant shall in no event be exercisable
-----------------
for fractional shares, and in lieu thereof, the number of shares which would
otherwise be purchased under this Warrant shall be rounded up to the nearest
whole share of Common Stock.
7. Miscellaneous.
-------------
a. The Company covenants that it will at all times reserve and
keep available, solely for the purpose of issuance upon the exercise hereof, a
sufficient number of shares of Class A or Class B Common Stock, as applicable,
to permit the exercise hereof in full. Such shares when issued in compliance
with the provisions of this Warrant and the Certificate of Incorporation, as
amended, win be duly authorized, validly issued, fully paid and nonassessable.
b. The terms of this Warrant shall be binding upon and shall
inure to the benefit of any successors or assigns of the Holder hereof and of
the Shares issued or issuable upon the exercise hereto.
c. The Holder, as such, shall not be entitled to vote or receive
dividends or be deemed to be a shareholder of the Company for any purpose, nor
shall anything contained in this Warrant be construed to confer upon the Holder,
as such, any rights of a shareholder of the Company or any right to vote, give
or withhold consent to any corporate action, receive notice of meetings, receive
dividends or subscription rights, or otherwise.
-4-
<PAGE>
d. Receipt of this Warrant by the Holder shall constitute
acceptance of and agreement to the foregoing terms and conditions.
e. Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in
the case of any such loss, theft or destruction, upon delivery of an indemnity
agreement reasonably satisfactory in form and amount to the Company or, in the
case of any such mutilation, upon surrender and cancellation of such Warrant,
the Company at its expense will execute and deliver, in lieu thereof, a new
Warrant of like date and tenor.
f. This Warrant shall be governed by the internal laws of the
State of California.
-5-
<PAGE>
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: __________________________________
Christopher A. Crane
President
-6-
<PAGE>
EXHIBIT C
Schedule of Exceptions
<PAGE>
EXHIBIT C TO PURCHASE AGREEMENT
-------------------------------
3.1. Organization and Standing; Articles and Bylaws. The Company is
----------------------------------------------
intentionally not qualified to do business in Arizona, due to that state's
policy of requiring and publishing full financial statements. Based on advice
received from Arizona legal counsel, the Company believes that its failure to
qualify in Arizona does not have a material adverse effect upon the Company.
The Company intends to qualify the Delaware corporation to do business in such
states as it deems necessary.
3.5 Authorization; Pre-emptive Right. Pursuant to the terms of a
--------------------------------
Stockholder Buyout and Voting Agreement among Beasley, Crane and Summit, Crane
and Summit have certain rights of first refusal with respect to Beasley's shares
of Series A Common Stock. The Company has a right of first refusal with respect
to shares of Common Stock issuable upon the exercise of options under the
Company's Stock Option Plan.
3.6 Patents, Trademarks.
-------------------
3.6.1. Royalty Payments: The Company purchased a customer list
----------------
and database from a competitor (Pathways Commercial Data Services, Inc.) in
September, 1993. Under the terms of the Purchase and Sale Agreement, the Company
pays a 50% royalty on actual cash receipts from certain customers to the former
owners of Pathways. The payments continue until September 30, 1997.
3.6.2 Infringement: The Company occasionally discovers minor
------------
infringement on its copyright (i.e.. persons photocopying reports). Confronting
infringers generally has been successful in causing them to cease. The Company
has not had to file any suits in this regard.
3.6.3 Trademark Protection. The Company has trademark
--------------------
protection on the name "COMPS," but has not obtained such protection on its full
corporate name, "COMPS InfoSystems, Inc." Post-Closing, the Company will
investigate the feasibility of obtaining such protection on its corporate name.
3.8 Proprietary Agreements; Employees: A list of the employees that
---------------------------------
have not executed non-disclosure/confidentiality agreements is attached hereto
as Exhibit 3.8.
3.9 Litigation, etc.
----------------
3.9.1 Crane is on the board of two publicly traded companies
which have been sued in connection with a recent tender offer. Corporate counsel
to such companies has indicated that the plaintiff's case has little merit.
Board members are indemnified by the corporations, which have more than adequate
net worth to adequately indemnify the directors.
3.6.2 The Company recently settled for a nominal amount
litigation by an employee who was terminated.
<PAGE>
3.6.3 The Company recently terminated a vice president who was
employed less than 3 months and had been a consultant for 3 1/2 months prior to
that time. The employee believes the Company should buy his business from him
and has asked $150,000 for it. The Company has offered $50,000. The employee has
not threatened litigation, and has specifically stated he wishes to avoid it.
Negotiations are underway. The Company does not believe that this situation will
have a material adverse effect. The Employee has recently expressed flexibility
in arriving at a compromise in the near future.
3.6.3 A Company salesman has said he will request arbitration
over a claim for approximately $12,000 in pay. While acknowledging the Company's
right to change his compensation, the salesman claims he did not receive notice
of an April, 1994 change in his compensation. Other Company employees have
verified in writing that they delivered the new commission structure to the
salesman. The Company does not believe that this situation will have a material
adverse effect.
3.13. Title. Union Bank holds a first lien on all assets as a result
-----
of the line of credit and term loan facility Union Bank has provided to the
Company in the ordinary course of business.
3.15 Financial Statements.
--------------------
3.15.1 Beasley Loan. The Financial Statements reflect notes
------------
from stockholder Beasley of approximately $190,000. Such loans will be forgiven
immediately after closing.
3.15.2. Beasley Non-Compete. Beasley will be paid $4,336 per
-------------------
month in no-compete payments through May of 1996.
3.16 Absence of Changes
------------------
3.16.1. Dividends, Redemptions. In June 1994, the Company
----------------------
declared a dividend of $7,000 which was paid in September, 1994. The Company has
redeemed stock on a monthly basis from Beasley in exchange for payments of
$5,800. Such redemption and payments will stop at closing.
3.16.2 Employees and Compensation. Summit and Crane have agreed
--------------------------
on changed compensation for him after closing. Certain employment agreements
with four vice presidents expired in July 1994. New employment agreements have
been or will be executed by all officers. The Company will enter into
indemnification agreements with each of its officers and directors. See attached
Exhibit "H'.
3.16.3 Resignations, Terminations. The Company terminated a
--------------------------
vice president in August, 1994 (see 3.6.3 above). In January, 1994, the Company
terminated the position of Vice President -- Electronic Sales.
2
<PAGE>
3.16.4 Loans to Employees, Officers, Directors.
---------------------------------------
a. The Company has loaned $4,336 per month since May
1993 to Beasley (this amount is included in the $190,000 loan referenced in
Section 3.15.1 above).
b. In September, 1994 the Company loaned Beasley
$79,294.04. The principal amount of such loans are due in October, 1994, and it
is anticipated that Mr. Beasley will repay the Company with proceeds he receives
when the Company repurchases certain of his shares shortly after the Closing.
3.16.5 Waiver of material debt. Following the closing the
-----------------------
Company will forgive a loan to Beasley in the amount of approximately $190,000.
See 3.15.1 above.
3.16.6 Payment of finder's Fee. Veronis Suhler and Associates
-----------------------
has requested a $25,000 finder's fee in connection with the transaction, which
the Company will pay upon the closing.
No higher amount will be paid to Veronis Suhler without Summit's
express permission. In addition, the Company paid consultant's fees to Steve
James of approximately $18,000 ($150 per hour) for advice given in connection
with the transaction.
3.19 Certain Transactions.
--------------------
3.19.1 Loans to Beasley. Beasley is indebted to the Company
----------------
for approximately $190,000, which amount will be forgiven following the closing.
See 3.15.1 above. In addition, in September, 1994 the Company loaned Beasley
$79,294. The principal amount of such loan is due in October, 1994, and it is
anticipated that Mr. Beasley will repay the Company with proceeds he receives
when the Company repurchases certain of his shares shortly after the Closing.
See 3.16.4 above.
3.19.2 COMPS Plaza. Beasley 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 Beasley nor Crane are guarantors on the debt on the building.
3.24 Disclosure; Projections. This representation does not apply to
-----------------------
any post-1995 projections delivered to Purchaser.
3.25 Other. With Summit's consent, (i) Steve James will be appointed
-----
to the Board as of the Closing as "Crane's designated director," (ii) Walter
Kortschak will be appointed to the Board as of the Closing as "Summit's
designated director," and (iii) the fourth Board member, (the "Mutual Director")
will be appointed to the Board of Directors post-closing. The Compensation
Committee will be comprised of Crane, Kortschak and, when appointed, the Mutual
Director.
3
<PAGE>
"Exhibit 3.8"
Following is a list of current employees without signed Non-Disclosure,
--------------
Confidentiality Agreements on file.
Adams, Ross
Alling, Robert
Aspiras, Gloria
August, Caroline
Becker, Aaron
Clarkson, Heather
Cole, Terry
DeMonsco, Tracy
Donado, Cresenciana
Euler, Paul
Fernandez, Michael
Gertos, Michelle
Hitch, Jeffrey
Huys, Kathryn
Mannina, Joseph
Meile, Craig
Nelson, Lora
Panganiban, Mark
Pierce, Jeffrey
Pittman, Matthew
Provo, Daniel
Quindara, Belinda
Radovich, Marcella
Reisinger, Lori
Ruiz, Rance
Ryan, Spencer
Schroeder, Karen
Signer, Debra
Stevens, Mark
Strong, Elizabeth
Umali, Charlie
Wilson, Diana
Yee, David
10/5/94
<PAGE>
EXHIBIT D
Investor Rights Agreement
<PAGE>
INVESTOR RIGHTS AGREEMENT
-------------------------
THIS INVESTOR RIGHTS AGREEMENT is made and entered into as of October 14,
1994 by and among COMPS Infosystems, Inc., a Delaware corporation (the
"Company") and the undersigned purchasers (the "Purchasers") of the Company's
Series A Preferred Stock and Class B Common Stock Warrants (the "Purchased
Securities'), and Christopher A. Crane and Robert C. Beasley (the "Founders").
RECITALS:
--------
WHEREAS, as a condition to purchasing the Purchased Securities, the
Purchasers have requested that the Company extend to them registration rights, a
right of first refusal, repurchase rights and certain other rights as set forth
below.
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement and in the
Stock and Warrant Purchase Agreement of even date herewith among the Company and
the Purchasers (the "Purchase Agreement"), the parties mutually agree as
follows:
I GENERAL
A. Definitions. As used herein:
-----------
1. The terms "register", "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act of 1933, as amended (the "Securities Act"),
and the declaration or ordering of the effectiveness of such registration
statement.
2. For the purposes hereof, the term "Registrable Securities" means
shares of (i) any and all Common Stock of the Company issued or issuable upon
conversion of shares of the Series A Preferred Stock of the Company and any and
all Common Stock issued as of or upon the date hereof to the Purchasers; (ii)
any and all Common Stock issued or issuable upon exercise of Class B Common
Stock Warrants issued to the Purchasers as of the date hereof; (iii) any and all
Common Stock issued or issuable upon exercise of the Director options (as
defined in subsection 6. below); (iv) stock issued with respect to or in any
exchange for or in replacement of stock included in subparagraph (i), (ii), or
(iii) above; (iv) stock issued in respect of the stock referred to in (i), (ii),
(iii) and (iv) above as a result of a stock split, stock dividend,
recapitalization or similar event or the like.
3. The terms "Holder" or "Holders" mean any person or persons to
whom Registrable Securities were originally issued and who execute this
Agreement or qualifying transferees under Section II(J) hereof who hold
Registrable Securities.
4. The term "Initiating Holders" means any Holder or Holders of not
less than 50% of the aggregate of Registrable Securities.
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5. The term "Form S-3" means such form under the Securities Act as
in effect on the date hereof or any successor registration form under the
Securities Act subsequently adopted by the SEC which permits inclusion or
incorporation of substantial information by reference to other documents filed
by the Company with the SEC.
6. The term "Securities" shall mean the Company's Series A Preferred
Stock, Class B Common Stock Warrants, any options to purchase shares of the
Company's equity securities issued to Walter G. Kortschak (or his successor as
representative of the Purchasers) in his role as outside director ("Director
Options"), and the Class A Common Stock issuable upon conversion of the Series A
Preferred Stock, the Class B Common Stock issuable upon exercise of the Class B
Common Stock Warrants, the Class A Common Stock issuable upon conversion of the
Class B Common Stock and any equity securities issuable upon exercise of the
Director Options.
7. The term "Securities Act" shall mean the Securities Act of 1933,
as amended.
8. The term "SEC" or "Commission" means the Securities and Exchange
Commission.
II REGISTRATION
A. Demand Registration.
-------------------
1. Request for Registration. In case the Company shall receive from
------------------------
the Initiating Holders a written request that the Company effect any
registration with respect to all or part of the Registrable Securities, the
Company will:
a. within ten (10) days after its receipt thereof give written
notice of the proposed registration to all other Holders; and
b. as soon as practicable, use its best efforts to effect such
registration (including, without limitation, the execution of an undertaking to
file post-effective amendments, appropriate qualifications under the applicable
blue sky or other state securities laws and appropriate compliance with
exemptive regulations issued under the Securities Act and any other governmental
requirements or regulations) as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's or
Holders' Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any Holder or Holders
joining in such request as are specified in a written request given within 20
days after receipt of such written notice from the Company; provided, that the
Company shall not be obligated to take any action to effect such registration
pursuant to this Section II(A)(1):
i. Prior to 180 days following the effective date of the
Company's first registered offering to the general public of its securities for
its own account; or
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ii. In any particular jurisdiction in which the Company
would be required to qualify to do business or execute a general consent to
service of process in effecting such registration; or
iii. After the Company has effected two (2) such
registrations pursuant to this Subsection II(A)(1) and such registrations have
been declared or ordered effective; or
iv. If the Company qualifies to register the Registrable
Securities pursuant to Form S-3.
Subject to the foregoing clauses (i) through (iv), the Company shall file a
registration statement covering the Registrable Securities so requested to be
registered as soon as practical, but in any event within ninety (90) days after
receipt of the request or requests of the Initiating Holders; provided, however,
that if the Company shall furnish to such Holders a certificate signed by the
President or Chief Executive Officer of the Company stating that in the
reasonable judgment of the Board of Directors it would be seriously detrimental
to the Company and its shareholders for such registration statement to be filed
at the date filing would be required and it is therefore essential to defer the
filing of such registration statement, the Company shall be entitled to delay
the filing of such registration statement not more than once in any twelve month
period for an additional period of up to sixty (60) days.
2. Underwriting. If the Initiating Holders intend to distribute the
------------
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
Section II(A)(1) and the Company shall include such information in the written
notice referred to in Subsection II(A)(1)(a). The right of any Holder to
registration pursuant to Section II(A)(1) shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder) to the extent
provided herein. The Company shall (together with all Holders proposing to
distribute their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by a majority in interest of the Initiating
Holders. Notwithstanding any other provision of this Section 2, if the
underwriter advises the Initiating Holders in writing that marketing factors
require a limitation of the number of shares to be underwritten, the Initiating
Holders shall so advise all Holders of Registrable Securities who have elected
to participate in such offering, and the number of shares of Registrable
Securities that may be included in the registration and underwriting shall be
allocated among all such Holders thereof in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities held by such
Holders. If any Holder of Registrable Securities disapproves of the terms of the
underwriting, he may elect to withdraw therefrom by written notice to the
Company, the underwriter and the Initiating Holders. Any Registrable Securities
which are excluded from the underwriting by reason of the underwriter's
marketing limitation or withdrawn from such underwriting shall be withdrawn from
such registration. If the underwriter has not limited the number of Registrable
Securities to be underwritten, the Company, employees of the Company and other
holders of the Company's Common Stock may include securities for its (or their)
own account in such registration if the
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underwriter so agrees and if the number of Registrable Securities which would
otherwise have been included in such registration and underwriting will not
thereby be limited.
B. Company Registration.
--------------------
1. Registration. If at any time or from time to time, the Company
------------
shall determine to register any of its securities, for its own account or the
account of any of its stockholders, other than a registration on Form S-8
relating solely to employee stock option or purchase plans, or a registration on
Form S-4 relating solely to an SEC Rule 145 transaction, or a registration on
any other form (other than Form 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 taws), and in any
underwriting involved therein, all the Registrable Securities specified in a
written request or requests, made within 70 days after receipt of such written
notice from the Company, by any Holder or Holders to be included in any such
registration, except as set forth in Subsection II(B)(2) below.
2. Underwriting. If the registration of which the Company gives
------------
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Subsection II(B)(1)(a). In such event the right of any Holder to
registration pursuant to Section II(B) shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company and the other holders distributing their securities
through such underwriting) enter into an underwriting agreement in customary
form with the underwriter or underwriters selected for such underwriting by the
Company. Notwithstanding any other provision of this Section II(B), if the
underwriter determines that marketing factors require a limitation of the number
of shares to be underwritten, the underwriter may limit the number of
Registrable Securities to be included in the registration and underwriting.
Notwithstanding the foregoing, in no event shall the amount of securities of the
selling Holders included in the offering be reduced below thirty percent (30%)
of the total amount of the securities included in such offering, unless such
offering is the initial public offering of the Company's securities, in which
case the selling Holders may be excluded if the underwriters make the
determination described above and no other shareholders' securities are
included. In the event of a cutback by the underwriters of the number of
Registrable Securities to be included in the registration and underwriting, the
Company shall advise all Holders of Registrable Securities which would otherwise
be registered and underwritten pursuant hereto, and the number of shares of
Registrable Securities that may be included in the registration and underwriting
shall be allocated among all of such Holders in proportion, as nearly as
practicable, to the respective amounts of Registrable Securities held by such
Holders. If any Holder disapproves of the terms of any such underwriting, he may
elect to withdraw therefrom by
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<PAGE>
written notice to the Company and the underwriter. Any Registrable Securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
C. Form S-3. After the Company has qualified for the use of Form S-3, or
--------
its successor form, Holders of at least ten percent (10%) of the outstanding
Registrable Securities shall have the right to request an unlimited number of
registrations on Form S-3 (such requests shall be in writing and shall state the
number of shares of Registrable Securities to be disposed of and the intended
method of disposition of shares by such Holders), subject only to the following:
1. The Company shall not be required to effect a registration
pursuant to this Section II(C) within 180 days of the effective date of any
registration referred to in Sections II(A) or II(B) above.
2. The Company shall not be required to effect more than one such
registration in any consecutive 6-month period.
3. The Company shall not be required to effect a registration unless
the anticipated aggregate gross proceeds from the requested registration will
equal or exceed one hundred thousand dollars ($100,000).
The Company shall promptly give written notice to all Holders of
Registrable Securities of the receipt of a request for registration pursuant to
this Section II(C) and shall provide a reasonable opportunity for other Holders
to participate in the registration, provided that if the registration is for an
underwritten offering, the terms of Subsection II(A)(2) shall apply to all
participants in such offering. Subject to the foregoing, the Company will use
its best efforts to effect promptly the registration of all shares of
Registrable Securities on Form S-3 to the extent requested by the Holder or
Holders thereof for purposes of disposition; provided, however, that if the
Company shall furnish to such Holders a certificate signed by the President or
Chief Executive Officer of the Company stating that in the good faith judgement
of the Board of Directors it would be seriously detrimental to the Company for
such registration statement to be filed at the date filing would be required and
it is therefore essential to defer the filing of such registration statement,
the Company shall be entitled to delay the filing of such registration statement
not more than once in any 12 month period for an additional period of up to
sixty (60) days. Any registration pursuant to this Section II(C) shall not be
counted as a registration pursuant to Section II(A).
D. Expenses of Registration. All expenses incurred in connection with any
------------------------
registration, qualification or compliance pursuant to this Agreement, including
without limitation, all registration, filing and qualification fees, printing
expenses, fees and disbursements of counsel for the Company and expenses of any
special audits incidental to or required by such registration, shall be borne by
the Company except as follows:
1. The Company shall not be required to pay for expenses of any
registration proceeding begun pursuant to Sections II(A) or II(C), the request
for which has been subsequently withdrawn by the Initiating Holders, in which
case, such expenses shall be borne by the Holders requesting such withdrawal;
provided, however, that in lieu of paying such expenses a majority in interest
of the Initiating Holders may elect to forfeit the right of the
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<PAGE>
holders of Registrable Securities to request one registration pursuant to
Section II(A) or II(C). Notwithstanding the foregoing, if at the time of such
withdrawal (i) the Holder has learned of a material adverse change in the
condition, business or prospects of the Company from that known to the Holder at
the time of its request, and (ii) the Company knew or had reason to know of the
likelihood of such material adverse change at the time of its request and did
not inform the Holder thereof, then the Company shall be required to pay such
expenses and the Holder shall retain its rights pursuant to Section II(A) or
II(C).
2. The Company shall not be required to pay reasonable fees of legal
counsel of a Holder except for a single counsel acting on behalf of all selling
Holders.
3. The Company shall not be required to pay underwriters' fees,
discounts or commissions relating to the Registrable Securities.
E. Registration Procedures. In the case of each registration,
-----------------------
qualification or compliance effected by the Company pursuant to this Agreement,
the Company will keep each Holder participating therein advised in writing as to
the initiation of each registration, qualification and compliance and as to the
completion thereof. At its expense the Company will:
1. Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and, upon the request of the Holders
of a majority of the Registrable Securities registered thereunder, keep such
registration statement effective for up to one hundred twenty (120) days.
2. Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.
3. Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
4. Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders,
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
5. In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Each Holder participating
in such underwriting shall also enter into and use best efforts to perform its
obligations under such an agreement.
6. Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the
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<PAGE>
Securities Act of the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing.
7. Furnish, at the request of any Holder, on the date that the
securities are delivered to the underwriters for sale in connection with a
registration being sold through underwriters, (i) an opinion, if any, dated such
date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to the underwriters
in an underwritten public offering, addressed to the underwriters and to the
Holders and (ii) a letter dated such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to the Holders
requesting of Registrable Securities.
F. Indemnification.
---------------
1. The Company will indemnify and hold harmless each Holder of
Registrable Securities, each of its officers, directors and partners, and each
person controlling such Holder within the meaning of Section 15 of the
Securities Act, with respect to which such registration, qualification or
compliance has been effected pursuant to this Agreement, and each underwriter,
if any, and each person who controls any underwriter of the Registrable
Securities held by or issuable to such Holder, against all claims, losses,
expenses, damages and liabilities (or actions in respect thereto) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any registration statement, preliminary or final prospectus,
or any amendment or supplement thereto, offering circular or other document
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any violation or alleged violation by the Company relating to action or inaction
required of the Company in connection with any rule or regulation promulgated
under the Securities Act or any state securities law applicable to the Company
and will reimburse each such Holder within the meaning of Section 15 of the
Securities Act, each of its officers, directors and partners, and each person
controlling such Holder, each such underwriter and each person who controls any
such underwriter, for any reasonable legal and any other expenses, as incurred,
in connection with investigating, defending or settling any such claim, loss,
damage, liability or action; provided, however, that the Company will not be
liable in any such case to the extent that any such claim, loss, damage or
liability arises out of or is based on any untrue statement or omission based
upon written information furnished to the Company in an instrument duly executed
by such Holder or underwriter specifically for use therein, and provided further
that the agreement of the Company to indemnify any underwriter and any person
who controls such underwriter contained herein with respect to any such
preliminary prospectus shall not inure to the benefit of any underwriter, from
whom the person asserting any such claim, loss, damage, liability or action
purchased the stock which is the subject thereof, if at or prior to the written
confirmation of the sale of such stock, a copy of the prospectus (or the
prospectus as amended or supplemented) was not sent or delivered to such person,
excluding the documents incorporated therein by reference, and the untrue
statement or omission of a material fact contained in such
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<PAGE>
preliminary prospectus was corrected in the prospectus (or the prospectus as
amended or supplemented).
2. Each Holder will, if Registrable Securities held by or issuable
to such Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify and hold harmless the
Company, each of its directors and officers, each underwriter, if any, of the
Company's securities covered by such a registration statement, each person who
controls the Company within the meaning of the Securities Act, and each other
such Holder, each of its officers, directors and partners and each person
controlling such Holder, against all claims, losses, expenses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any preliminary or final prospectus, offering circular or other document
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse the Company, such Holders, such directors, officers, partners,
persons or underwriters for any reasonable legal or any other expenses incurred
in connection with investigating, defending or settling any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company in an instrument duly executed by such Holder
specifically for use therein, and provided further that the agreement of the
Holder to indemnify any underwriter and any person who controls such underwriter
contained herein with respect to any such preliminary prospectus shall not inure
to the benefit of any underwriter, from whom the person asserting any such
claim, loss, damage, liability or action purchased the stock which is the
subject thereof, if at or prior to the written confirmation of the sale of such
stock, a copy of the prospectus (or the prospectus as amended or supplemented)
was not sent or delivered to such person, excluding the documents incorporated
therein by reference, and the untrue statement or omission of a material fact
contained in such preliminary prospectus was corrected in the prospectus (or the
prospectus as amended or supplemented). Notwithstanding the foregoing, in no
event shall the indemnification provided by any Holder hereunder exceed the
gross proceeds received by such Holder for the sale of such Holder's securities
pursuant to such registration.
3. Each party entitled to indemnification under this Section II(F)
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought. The
Indemnified Party shall promptly permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense of such claim
or litigation, shall be approved by the Indemnified Party (whose approval shall
not be unreasonably be withheld). The Indemnified Party may participate in such
defense and hire counsel at such party's own expense. The failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations hereunder, unless such failure is
materially prejudicial to an Indemnifying Party's ability to defend such action.
No Indemnifying Party, in the defense of any such claim or litigation, shall,
except with the consent of the Indemnified Party, consent to entry of any
judgment or enter into any settlement which does not
-8-
<PAGE>
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect to such
claim or litigation. Any Indemnified Party shall cooperate with the Indemnifying
Party in the defense of any claim or litigation brought against such Indemnified
Party.
G. Lock-Up Provision. Upon receipt of a written request by the Company or
-----------------
by its underwriters, the Holders shall not sell, sell short, grant an option to
buy, or otherwise dispose of shares of the Company's Common Stock or other
securities (except for any such shares included in the registration) for a
period of one hundred and eighty (180) days following the effective date of the
initial registration of the Company's securities; provided, however, that such
Holder shall have no obligation to enter into the agreement described in this
Section II(G) unless all executive officers, directors and holders of three
percent (3%) or more of the outstanding voting securities of the Company and all
other Holders and holders of other registration rights from the Company enter
into similar agreements. The Company may impose stop-transfer instructions with
respect to the shares (or securities) subject to the foregoing restriction until
the end of said 120-day period.
H. Information by Holder. The Holder or Holders of Registrable Securities
---------------------
included in any registration shall promptly furnish to the Company such
information regarding such Holder or Holders and the distribution proposed by
such Holder or Holders as the Company may request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to herein.
I. Rule 144 Reporting. With a view to making available to Holders of
------------------
Registrable Securities the benefits of certain rules and regulations of the SEC
which may permit the sale of the Registrable Securities to the public without
registration, at all times after 90 days after the effective date of the first
registration filed by the Company for an offering of its securities to the
general public the Company agrees to:
1. Make and keep public information available, as those terms are
understood and defined in SEC Rule 144.
2. File with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
3. So long as a Holder owns any Registrable Securities, to furnish
to such Holder forthwith upon such Holder's request a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144
(at any time after 90 days after the effective date of the first registration
statement filed by the Company for an offering of its securities to the public)
and of the Securities Act and the Exchange Act (at any time after it has become
subject to such reporting requirements), a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so filed
by the Company as such Holder may reasonably request in availing itself of any
rule or regulation of the SEC allowing such Holder to sell any such securities
without registration.
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J. Transfer of Registration Rights. A Holder's rights under Sections
-------------------------------
II(A), II(B), II(C) and II(l) may be assigned by any Holder to a transferee or
assignee of at least 10% of a Holder's Registrable Securities (as adjusted for
stock splits, stock dividends. recapitalizations and the like) not sold to the
public or a transferee or assignee of any shares of its Registrable Securities
not sold to the public that is a partner or affiliate of such Holder, provided,
that the Company is given written notice by the Holder at the time of or within
thirty (30) days after said transfer, stating the name and address of said
transferee or assignee and identifying the securities with respect to which such
registration rights are being assigned. No such transfer or assignment shall be
effective until such transferee or assignee agrees in writing to become subject
to the obligations of the transferring Holder hereunder.
K. Limitations on Subsequent Registration Rights. From and after the date
---------------------------------------------
of this Agreement, the Company shall not, without the prior written consent of
the Holders of a majority of the outstanding Registrable Securities, enter into
any agreement with any holder or prospective holder of any securities of the
Company which would allow such holder or prospective holder (a) to include such
securities in any registration filed under Section II(A), II(B) or II(C) hereof,
unless under the terms of such agreement, such holder or prospective holder may
include such securities in any such registration only to the extent that the
inclusion of its securities will not reduce the number of amount of the
Registrable Securities of the Holders which are included or (b) to make a demand
registration which could result in such registration statement being declared
effective prior to the earlier of either of the dates set forth in Subsection
II(A)(1)(b)(i).
L. Termination. The rights of all Holders under this Agreement shall
-----------
terminate on the fifth anniversary of the closing of the Company's first
registered public offering of its securities; provided however, that the
--------
Company's reporting obligations under SEC Rule 144 as set forth in Section 10
above, shall survive the termination of this Agreement.
III RIGHT OF FIRST REFUSAL
If, at any time prior to the expiration of the period set forth in Section
IV(B) below, the Company should desire to issue in any transaction not
registered under the Securities Act in reliance upon a claimed exemption
thereunder, any Equity Securities (as defined in Subsection (E) below), it shall
give each Purchaser and each Founder (together, the Purchasers and Founders
shall be referred to in this Section III as "Stockholders") a first right of
refusal to purchase such Stockholder's pro rata share (or any part thereof) of
all of such privately offered Equity Securities on the same terms as the Company
is willing to sell such Equity Securities to any other person. The Stockholder's
pro rata share of the Equity Securities shall be equal to the percentage that
the Equity Securities of the Company held by the Stockholder on an as-converted
basis on the date of the Company's written notification referred to in
subparagraph (A) below, bears to all outstanding Equity Securities of the
Company on the date of such written notification.
A. Notices. Prior to any sale or issuance by the Company of any Equity
-------
Securities, the Company shall notify each Stockholder, in writing, of its bona
fide intention to sell and issue such Equity Securities, setting forth any
material terms under which it proposes to make such sale. Within fifteen (15)
days after receipt of such notice, each Stockholder shall notify the
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<PAGE>
Company whether the Stockholder exercises its option and elects to purchase the
Stockholder's pro rata share (or any part hereof) of the Equity Securities so
offered.
B. Procedure. If any Stockholder has failed to exercise its option to
---------
purchase all of its pro rata portion of the Equity Securities upon the terms and
conditions set forth in the Subsection (A) notice, the Company may, during the
period of ninety (90) days following the expiration of such option period, sell
and issue such securities as to which such Stockholder has not exercised its
option to any other person upon the same terms and conditions as those set forth
in the notice to the Stockholders. In the event the Company has not sold the
Equity Securities within said ninety (90) day period, the Company shall not
thereafter issue or sell any Equity Securities without first offering such
securities to the Stockholders in the manner provided above.
C. Closing. If a Stockholder gives the Company notice that it desires to
-------
purchase any of the Equity Securities offered by the Company, payment for the
Equity Securities shall be by check, or wire transfer, against delivery of the
securities at the executive offices of the Company within ten (10) days after
giving the Company such notice, or, if later, the closing date for the sale of
such Equity Securities to third parties. The Company shall take all such action
as may be required by any regulatory authority in connection with the exercise
by the Stockholder of the right to purchase Equity Securities as set forth in
this Section III.
D. Exceptions. The right of first refusal contained in this Section III
----------
shall not apply to (i) the issuance by the Company of Equity Securities
exclusively to employees or directors of, or consultants to the Company pursuant
to the approval of the Board of Directors, (ii) the issuance of Common Stock of
the Company upon conversion of Preferred Stock, (iii) the issuance of Class A
Common Stock upon conversion of Class B Common Stock, or (iv) any Equity
Securities issued in connection with an acquisition or SEC Rule 145 transaction.
E. "Equity Securities". The term "Equity Securities" shall mean (i)
-----------------
Common Stock, rights, options or warrants to purchase Common Stock; (ii) any
other instrument convertible into Common Stock; (iii) any security convertible
into or exchangeable for any of the foregoing.
F. Assignment. A Purchaser's right to purchase any Equity Securities
----------
pursuant to this Section III may be assigned by the Purchaser to an affiliate of
the Purchaser. For the purposes of this subparagraph (F), an "affiliate" shall
mean any partner or shareholder of the Purchaser, any person or entity that
director or indirectly through one or more intermediaries controls or is
controlled by or is under common control with a Purchaser. A Founder's right to
purchase any Equity Securities pursuant to this Section III shall not be
assignable.
IV REPURCHASE
A. Put Option.
----------
1. Exercise of Option. In the event that upon the earlier to occur
------------------
of (i) October 14, 2001, (ii) a liquidation, dissolution, winding-up or (iii)
the closing of an acquisition, merger. exchange of securities, sale of all or
substantially all of the assets of Company, reorganization in which the Company
is not the surviving entity or a stock issuance or "reverse merger" in which the
Company is the surviving entity but under which the holders of the
-11-
<PAGE>
Company's securities prior to such stock issuance or reverse merger do not hold
more than fifty percent (50%) of the voting securities of the Company following
such stock issuance or reverse merger, the Purchasers continue to hold any
Securities, any Purchaser may notify the Company that it intends to offer to the
Company any or all of the Securities then held by it for purchase by the
Company, and the Company shall be required to repurchase the Securities so
offered under this Agreement as provided below.
2. Price. The price to be paid by the Company for the Securities to
-----
be sold hereunder shall be the greater of (i) the Purchaser's original purchase
price of such Securities (as set forth in the Purchase Agreement) plus all
accrued and unpaid dividends through the date of the repurchase, and (ii) the
fair market value of the Securities as of the date of such proposed repurchase
as agreed upon by the Company and the Purchaser. If the Common Stock is publicly
traded, fair market value, with respect to the Common Stock, shall mean the
average over the preceding twenty (20) trading days of the mean of the closing
bid and asked prices on the over-the-counter market as reported by Nasdaq, or if
then traded on a national securities exchange or the Nasdaq National Market, the
average over the preceding twenty (20) trading days of the mean of the high and
low prices on the principal national securities exchange or the Nasdaq National
Market on which it is so traded (or, in either event, such fewer number of days
as such Common Stock has been so traded). If no such agreement is reached within
thirty (30) days, the fair market value shall be determined by appraisal as set
forth below.
All appraisals shall be undertaken by two appraisers, one selected by the
Company and one selected by the Purchasers of a majority of the Securities. The
fair market value shall be the fair market value arrived at by those appraisers
within sixty (60) days following the appointment of the last appraiser to be
appointed. In the event that the two appraisers cannot agree on such fair
market value within such a period of time, (i) if the appraisers' valuations are
within 10% of each other the fair market value shall be the mean of the two
valuations and (ii) if the differences in the valuations are greater, the
appraisers shall elect a third appraiser who will calculate fair market value
independently, and, except as provided in the next sentence, the fair market
value of the Securities shall in each case be the average of the two fair market
values arrived at by the appraisers who are closest in amount. If one
appraiser's valuation is the mean of the other two valuations, the mean
valuation shall be the fair market value. In the event that the two original
appraisers cannot agree upon a third appraiser within thirty (30) days following
the end of the sixty (60) day period referred to above, then the third appraiser
shall be appointed by the American Arbitration Association upon the request of
either party. If, following the conclusion of any appraisal referred to above, a
Purchaser shall choose not to sell any or all of its Securities, then it shall
so notify the Company, within twenty (20) days following receipt of the
appraisal. If the Purchaser chooses not to sell any or all of its Securities and
after the initiation of the procedures outlined in Section IV(A), then its
rights hereunder shall terminate with respect to all such securities not offered
to the Company. The expenses of the appraiser chosen by the Company will be
borne by it, the expenses of the appraiser chosen by the Purchasers will be
borne by the Purchasers and the expenses of the third appraiser will be borne
50% by the Company and 50% by the Purchasers.
3. Payment. The Company shall, within sixty (60) days following
-------
either the agreement, as provided above, with the Purchasers concerning the fair
market value of the Securities or the receipt of the results of the appraisal
referred to above, to the extent permitted
-12-
<PAGE>
by applicable law (the "Repurchase Date"), purchase the Securities tendered to
it at the price established by the agreement or the appraisal and the Purchasers
shall deliver to the Company, upon receipt of payment therefor, the certificates
for the Securities duly endorsed by them. Payment shall be made by certified
check or wire transfer of funds to such bank account or accounts as the
Purchaser shall direct.
B. Termination of Option. The obligation of the Company to purchase the
---------------------
Purchased Common Stock as provided in this Agreement shall terminate upon (i)
the closing of a Qualified Public Offering (as defined below); (ii) the closing
of an acquisition, merger, exchange of securities, sale of all or substantially
all of the assets of Company, reorganization in which the Company is not the
surviving entity or a stock issuance or "reverse merger" in which the Company is
the surviving entity but under which the holders of the Company's securities
prior to such stock issuance or reverse merger do not hold more than fifty
percent (50%) of the voting securities of the Company following such stock
issuance or reverse merger; provided, however, that the Purchaser shall have the
right to exercise the option granted pursuant to Section IV(A) hereof
concurrently with such closing by delivering written notice of their intention
to so exercise at least ten (10) days prior to the date of closing, and,
provided further, that the Company shall provide the Holders not less than 30
days written notice of the closing of a transaction contemplated by this Section
IV(B); or (iii) the liquidation of the Company. For purposes of this Agreement,
a "Qualified Public Offering" shall mean an underwritten public offering in
which the Company receives gross proceeds of not less than $10 million at a
purchase price per share of not less than $3.52 (as adjusted for stock splits,
dividends, recapitalization and the like).
V MISCELLANEOUS
A. Notices. All notices or other communications required or permitted to
-------
be delivered hereunder shall be in writing signed by the party giving the notice
to the Company at 9888 Carroll Center Road, Suite 200, San Diego, CA 92126-4581,
Attn: President, and to the Purchasers at 499 Hamilton Avenue, Ste. 200, Palo
Alto, CA 94301. Any Purchaser may at any time change the address to which notice
shall be mailed by giving notice of such chance to the Company and to the other
parties and such notice shall be deemed given when received by the other party
hereto.
B. Amendment. This Agreement may be amended with the written consent of
---------
the Company and the written consent of the holders of a majority of the
Securities held by the Purchasers.
C. Entire Agreement. This Agreement constitutes the entire agreement of
----------------
the parties with respect to the matters contemplated herein. This Agreement
supersedes any and all prior understandings as to the subject matter of this
Agreement.
D. Binding Effect; Assignment. This Agreement shall be binding upon and
--------------------------
inure to the benefit of the successors and assigns of the respective parties
hereto, except that the Company shall not have the right to assign its rights
hereunder or any interest herein, and the rights and interests of the Purchasers
shall be assignable, without the consent of the Company, to any assignee.
-13-
<PAGE>
E. General. The headings contained in this Agreement are for reference
-------
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement. In this Agreement the singular includes the plural, the plural
the singular, the masculine gender includes the neuter, masculine and feminine
genders. This Agreement shall be governed by and construed under the laws of the
State of California.
F. Severability. If any provision of this Agreement shall be found by any
------------
court of competent jurisdiction to be invalid or unenforceable, the parties
hereby waive such provision to the extent that it is found to be invalid or
unenforceable. Such provision shall, to the maximum extent allowable by law, be
modified by such court so that it becomes enforceable, and, as modified, shall
be enforced as any other provision hereof, all the other provisions hereof
continuing in full force and effect.
G. Counterparts. This Agreement may be executed in counterparts, all of
------------
which together shall constitute one and the same instrument.
H. Dispute Resolution. The parties acknowledge and agree that time is of
------------------
the essence in resolving any dispute that may arise in connection with this
Agreement. Except as provided herein, any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, that cannot be resolved
between the parties in a timely manner shall be settled by binding arbitration
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association ("AAA"). The expenses of the arbitration, including the arbitrator's
fees, expert witness fees, and attorneys' fees, may be awarded to the prevailing
party, in the discretion of the arbitrator, or may be apportioned between the
parties in any manner deemed appropriate by the arbitrator. Unless and until the
arbitrator decides that one party is to pay for all (or a share) of such
expenses, the Company shall pay all reasonable expenses, including legal and
accounting fees and costs arising in connection with enforcement of this
Agreement or the Collateral Agreements. The parties shall keep confidential the
decision of the arbitrator. Notwithstanding the foregoing, the parties may
disclose information about such decision to persons who have a need to know,
such as limited partners, directors, trustees, management employees, witnesses,
experts, investors, attorneys, lenders, insurers, and others who may be
affected. Once the arbitration award has become final, if the arbitration award
is not promptly satisfied, then these confidentiality provisions shall no longer
be applicable. Notwithstanding the foregoing, the parties will be entitled to
enforce their rights under this Agreement specifically (without posting a bond
or other security). The parties hereto agree and acknowledge that money damages
may not be an adequate remedy for any breach of the provisions of this Agreement
and any party may in its sole discretion apply to any court of law or equity of
competent jurisdiction for specific performance and/or injunctive relief in
order to enforce or prevent any violation of the provisions of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first above written.
COMPS INFOSYSTEMS, INC.
By:______________________________________
Christopher A. Crane, President
SUMMIT VENTURES III, L.P.
By: Summit Partners III, L.P.
General Partner
By: Stamps, Woodsum & Co. III,
General Partner
By:_________________________________
General Partner
SUMMIT INVESTORS II, L.P.
By:_____________________________________
General Partner
________________________________________
Christopher A. Crane
in his individual capacity
________________________________________
Robert C. Beasley
in his individual capacity
-15-
<PAGE>
EXHIBIT E
Co-Sale Agreement
<PAGE>
RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT
--------------------------------------------
This Agreement is made as of October 14, 1994, by and among COMPS
Infosystems, Inc., a Delaware corporation (the "Company"), Christopher A. Crane,
in his individual capacity ("Crane"), and the Purchasers listed on Exhibit A
---------
hereto.
RECITALS
--------
A. Crane currently owns shares of the Company's Common Stock (the "Common
Stock"), as set forth on Exhibit B.
---------
B. The Purchasers intend to purchase from the Company shares of its
Series A Preferred Stock and warrants to purchase shares of the Company's Class
B Common Stock ("Warrants"), pursuant to that certain Stock and Warrant Purchase
Agreement entered into by and among the Company and the Purchasers dated of even
date herewith (the "Stock and Warrant Purchase Agreement").
C. To induce the Purchasers to purchase such shares of stock and Warrants
from the Company, Crane has agreed to grant the Purchasers certain rights of
first refusal and co-sale with respect to Common Stock currently owned by Crane
and any other stock of the Company hereafter owned or acquired by Crane, all on
the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises herein contained,
and other consideration, the receipt and adequacy of which hereby is
acknowledged, the parties hereto agree as follows:
1. Certain Definitions. For purposes of this Agreement, the following
-------------------
terms have the following meanings:
(a) "IPO" means the first underwritten sale of Company securities to
---
the public pursuant to registration statement under the Securities Act of 1933,
as amended, in which the gross proceeds to the Company equal or exceed
$10,000,000.
(b) "Purchasers' Share" means as to the Right of Co-Sale, the ratio
-----------------
determined by dividing (A) the number of shares of Stock (as defined below) held
by a Purchaser by (B) the number of shares of Stock held by all Purchasers plus
the number of shares of Stock held by Crane.
(c) "Offered Stock" means all Stock proposed to be Transferred by
-------------
Crane.
(d) "Right of Co-Sale" means the right of co-sale provided to the
----------------
Purchasers in Section 4 of this Agreement.
(e) "Right of First Refusal" means the right of first refusal
----------------------
provided to the Purchasers in Section 3 of this Agreement.
-1-
<PAGE>
(f) "Stock" means and includes all shares of Common Stock issued and
-----
outstanding at the relevant time plus (i) all shares of Common Stock that may be
issued upon exercise of any options, warrants and other rights of any kind that
are then exercisable, and (ii) all shares of Common Stock that may be issued
upon conversion of (A) any convertible securities, including, without
limitation, preferred stock and debt securities then outstanding, which are by
their terms then convertible into or exchangeable for Common Stock or (B) any
such convertible securities issuable upon exercise of options, warrants or other
rights that are then exercisable.
(g) "Transfer" means and includes any sale, assignment, encumbrance,
--------
hypothecation, pledge, conveyance in trust, gift, transfer by bequest, devise or
descent, or other transfer or disposition of any kind, including but not limited
to transfers to receivers, levying creditors, trustees or receivers in
bankruptcy proceedings or general assignees for the benefit of creditors,
whether voluntary or by operation of law, directly or indirectly, except:
(i) any bona fide pledge if the pledgee executes a counterpart
copy of this Agreement and becomes bound thereby in the same manner as Crane;
(ii) any transfers of Stock by Crane to Crane's spouse, lineal
descendant or antecedent, father, mother, brother or sister of Crane, the
adopted child or adopted grandchild of Crane, or the spouse of any child,
adopted child, grandchild or adopted grandchild of Crane, or to a trust or
trusts for the exclusive benefit of Crane or Crane's family members as described
in this Section, or transfers of Stock by Crane by devise or descent, in all
cases if the transferee or other recipient executes a counterpart copy of this
Agreement and becomes bound thereby in the same manner as Crane;
(iii) any transfer of Stock by Crane made: (A) pursuant to a
merger or consolidation of the Company with or into another corporation or
corporations; (B) pursuant to the winding up and dissolution of the Company; (C)
at, and pursuant to, the IPO; or (D) to a Purchaser pursuant to this Agreement;
(iv) any bona fide gift to not-for-profit organizations; or
(v) any transfer of Stock by Crane to the Company pursuant to
the repurchase of such Stock by the Company as permitted by Section 6.6 of the
Stock and Warrant Purchase Agreement.
2. Notice of Proposed Transfer. Before Crane may effect any Transfer of
---------------------------
any Stock, Crane must give at the same time to the Company and the Purchasers a
written notice signed by Crane ("Crane's Notice") stating (a) Crane's bona fide
intention to transfer such Offered Stock; (b) the number of shares of the
Offered Stock; (c) the name, address and relationship, if any, to Crane of each
proposed purchaser or other transferee; and (d) the bona fide cash price or, in
reasonable detail, other consideration, per share for which Crane proposes to
transfer such Offered Stock (the "Offered Price"). Upon the request of a
Purchaser, Crane will promptly furnish such information, to the Purchasers, as
may be reasonably requested to establish that the offer and proposed transferee
are bona fide.
-2-
<PAGE>
3. Right of First Refusal.
----------------------
(a) Purchasers' Right. With respect to any Transfer by Crane, the
-----------------
Purchasers shall have the right of first refusal to purchase all or any part of
the Offered Stock, exercisable as set forth in Subsection (b) hereof.
(b) Exercise of Purchasers' Right of First Refusal. The Purchasers'
----------------------------------------------
Right of First Refusal may be exercised as follows:
(i) Each Purchaser shall have the opportunity to purchase all
or any part of its pro rata share of Offered Stock. A Purchaser's pro-rata share
shall be determined by dividing the number of shares of Stock held by a
Purchaser by the total number of shares of Stock held by all Purchasers. The
Purchasers shall be entitled to apportion Offered Stock to be purchased among
its partners and affiliates, provided that such Purchaser notifies Crane of such
allocation, and provided that such allocation does not threaten the Company's
ability to rely upon an exemption from the registration provisions of the Act or
the qualification provisions of applicable blue-sky laws. In addition, a
Purchaser shall be entitled to assign its rights under this Section 3 to the
Company.
(ii) If any Purchaser or its assignees desires to purchase all
or any part of the Offered Stock, such Purchaser must, within the twenty (20)
day period (the "Purchaser Refusal Period") commencing on the date of Crane's
Notice, give written notice to Crane and to the Company of such Purchaser's
election to purchase the Offered Stock. In the event that any Purchaser elects
not to purchase its pro-rata share of the Offered Stock, such shares may be
purchased by the other Purchasers.
(iii) Within ten (10) days after expiration of the Purchaser
Refusal Period, the Company will give written notice (the "Purchasers'
Expiration Notice") to Crane and to the Purchasers specifying either (A) that
Offered Stock was subscribed by the Purchasers exercising their Rights of First
Refusal or (B) that the Purchasers do not have the right to purchase any of the
Offered Stock because the Purchasers did not timely exercise their Right of
First Refusal to purchase Offered Stock, in which case the Purchasers'
Expiration Notice will specify each Purchaser's Share of the Offered Stock with
respect to the Right of Co-Sale.
(c) Purchase Price. The purchase price for the Offered Stock to be
--------------
purchased by the Purchasers exercising their Right of First Refusal under this
Agreement will be the Offered Price, but will be payable as set forth in Section
3(d) hereof. If the Offered Price includes consideration other than cash, the
cash equivalent value of the non-cash consideration will be determined by the
Board of Directors of the Company in good faith, which determination will be
binding upon the Purchasers and Crane absent fraud or error.
(d) Payment. Payment of the purchase price for the Offered Stock
-------
purchased by a Purchaser exercising its Right of First Refusal will be made
within seven days after the date of the Purchaser's Expiration Notice. Payment
of the purchase price will be made by the exercising Purchaser (i) in cash (by
check), (ii) by cancellation of all or a portion of any outstanding indebtedness
of Crane to the Purchaser or (iii) by any combination of the foregoing.
-3-
<PAGE>
(e) Rights as a Stockholder. If the Purchasers exercise their Rights
-----------------------
of First Refusal to Purchase the Offered Stock, then, upon the date the notice
of such exercise is given by the Company, Crane will have no further rights as a
holder of the Offered Stock except the right to receive payment for the Offered
Stock from the Purchasers in accordance with the terms of this Agreement, and
Crane will forthwith cause ail certificate(s) evidencing such Offered Stock to
be surrendered to the Company for transfer to the Purchasers.
(f) Crane's Right To Transfer. If the Purchasers have not elected to
-------------------------
purchase all of the Offered Stock, then, subject to the Right of Co-Sale, Crane
may transfer that portion of the Offered Stock permitted to be sold by Crane, to
any person named as a purchaser or other transferee in Crane's Notice, at the
Offered Price or at a higher price, provided that such transfer (i) is
consummated within ninety (90) days after the date of Crane's Notice and (ii) is
in accordance with all the terms of this Agreement. If the Offered Stock is not
so transferred during such 90 day period, then Crane may not transfer any of
such Offered Stock without complying again in full with the provisions of this
Agreement.
4. Right of Co-Sale.
----------------
(a) Right of Co-Sale. If the Purchasers have waived or failed to
----------------
timely exercise their Rights of First Refusal, a Purchaser may transfer to the
transferee proposed in Crane's Notice the Purchaser's Share of the Offered
Stock, as such Share is specified in the Purchaser's Expiration Notice, by
giving written notice to Crane, within ten (10) days after the date of the
Purchaser's Expiration Notice, specifying the number of shares and type of Stock
that the Purchaser desires to transfer to the transferee.
(b) Consummation of Co-Sale. A Purchaser may exercise the Right of
-----------------------
Co-Sale by delivering to Crane at the closing of the transfer of Offered Stock
to such transferee (the "Closing") one or more certificates, properly endorsed
for Transfer, representing such Stock to be Transferred by the Purchaser. At the
Closing, such certificates or other instruments will be transferred and
delivered to the transferee set forth in Crane's Notice in consummation of the
transfer of the Offered Stock pursuant to the terms and conditions specified in
such notice, and Crane will remit, or will cause to be remitted, to the
Purchaser within seven (7) days after such Closing that portion of the proceeds
of the Transfer to which the Purchaser is entitled by reason of the Purchaser's
participation in such transfer pursuant to the Right of Co-Sale.
5. Multiple Series, Class or Type of Stock. If the Offered Stock consists
---------------------------------------
of more than one series or class or type of Stock, the Purchaser has the right
to purchase or transfer hereunder, as the case may be, each such series, class
or type; provided, however, that if, as to the Right of Co-Sale, the Purchaser
does not hold any of such series, class, or type, and the proposed transferee is
not willing, at the Closing, to purchase some other series, class or type of
Stock from the Purchaser, or is unwilling to purchase any Stock from the
Purchaser at the Closing, then the Purchaser will have the put right (the "Put
Right") set forth in Section 6(b) hereof.
-4-
<PAGE>
6. Refusal to Transfer; Put Right.
------------------------------
(a) Refusal to Transfer. Any attempt by Crane to transfer any Stock
-------------------
in violation of any provision of this Agreement will be void. The Company will
not be required (i) to transfer on its books any Stock that has been sold,
gifted or otherwise transferred in violation of this Agreement, or (ii) to treat
as owner of such Stock, or to accord the right to vote or pay dividends to any
purchaser, donee or other transferee to whom such Stock may have been so
transferred.
(b) Put Right. If Crane transfers any Stock in contravention of the
---------
Purchasers' Right of Co-Sale under this Agreement (a "Prohibited Transfer"), or
if the proposed transferee of Offered Stock desires to purchase only the class,
series or type of stock offered by Crane or is unwilling to purchase any Stock
from the Purchaser and the provisions of Section 5 hereof apply, the Purchaser
may, by delivery of written notice to Crane (a "Put Notice") within ten (10)
days after (i) the Closing as defined in Subsection 4(b) above, or (ii) the date
on which the Purchaser becomes aware of the Prohibited Transfer or the terms
thereof require Crane to purchase from the Purchaser for cash or such other
consideration as Crane received in the Prohibited Transfer or at the Closing
that number of shares of Stock (of the same class, series or type as transferred
in the Prohibited Transfer or at the Closing if the Purchaser then owns Stock of
such class, series or type; otherwise of Common Stock) having a purchase price
equal to the aggregate purchase price the Purchaser would have received in the
closing of such Prohibited Transfer if the Purchaser had elected to exercise its
right of Co-Sale with respect thereto or in the Closing if the proposed
transferee had been willing to purchase the Stock of the Purchaser. The closing
of such sale to Crane will occur within seven (7) days after the date of the
Purchaser's Put Notice to Crane.
7. Restrictive Legend and Stock-Transfer Orders.
--------------------------------------------
(a) Right of First Refusal and Co-Sale Legend. Crane understands and
-----------------------------------------
agrees that the Company will cause the legend set forth below, or a legend
substantially equivalent thereto, to be placed upon any certificate(s) or other
documents or instruments evidencing ownership of Stock by Crane:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RIGHTS OF FIRST REFUSAL AND RIGHTS OF CO-SALE AS SET FORTH IN A
RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT DATED OCTOBER 14,
1994, ENTERED INTO BY THE HOLDER OF THESE SHARES, THE COMPANY AND
CERTAIN STOCKHOLDERS OF THE COMPANY. A COPY OF SUCH AGREEMENT IS
ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY. SUCH RIGHTS OF
FIRST REFUSAL AND RIGHTS OF CO-SALE ARE BINDING ON CERTAIN
TRANSFEREES OF THESE SHARES.
(b) Stop Transfer Instructions. Crane agrees, to ensure compliance
--------------------------
with the restrictions referred to herein, that the Company may issue appropriate
"stop transfer" certificates or instructions and that, if the Company transfers
its own securities, it may make appropriate notations to the same effect in its
records.
-5-
<PAGE>
8. Termination and Waiver.
----------------------
(a) Termination. The Purchasers' Right of First Refusal and the Right
-----------
of Co-Sale will terminate upon the earliest to occur of (i) the IPO, (ii) the
dissolution of the Company, or (iii) the effective date of a consolidation or
merger with or into another corporation as a result of which the stockholders of
the Company prior to such transaction own less than 50% of the outstanding stock
of the surviving corporation.
(b) Waiver. The application of the Purchasers' Right of First Refusal
------
and/or the Right of Co-Sale as to any proposed Transfer by Crane of any Stock
may be waived in advance of or after such transfer by the written agreement of
the Purchasers. The Purchasers will have the absolute right to exercise or
refrain from exercising any right or rights that such party may have by reason
of this Agreement, including without limitation the right to purchase or
participate in the sale of Offered Stock, and the Purchasers will not incur any
liability to any other party hereto with respect to exercising or refraining
from exercising any such right or rights. Any waiver by a party of its rights
hereunder will be effective only if evidenced by a written instrument executed
by such party or its authorized representative.
9. Miscellaneous Provisions.
------------------------
(a) Notice. Any notice required or permitted to be given to a party
------
pursuant to the provisions of this Agreement will be in writing and will be
effective and deemed given under this Agreement on the earliest of (i) the date
of personal delivery, or (ii) the date of delivery by facsimile, or (iii) the
business day after deposit with a nationally-recognized courier or overnight
service, including Express Mail, for United States deliveries or three (3)
business days after such deposit for deliveries outside of the United States, or
(iv) five (5) business days after deposit in the United States mail by
registered or certified mail for United States deliveries. All notices not
delivered personally or by facsimile will be sent with postage and other charges
prepaid and properly addressed to the party to be notified at the address set
forth below such party's signature on this Agreement or at such other address as
such party may designate by ten (10) days advance written notice to the other
parties hereto. All notices for delivery outside the United States will be sent
by facsimile, or by nationally recognized courier or overnight service,
including Express Mail. Any notice given hereunder to more than one person will
be deemed to have been given, for purposes of counting time periods hereunder.
on the date given to the last party required to be given such notice. Notices to
the Company will be marked to the attention of the President.
(b) Binding on Successors and Assigns; Inclusion Within Certain
-----------------------------------------------------------
Definitions. This Agreement, and the rights and obligations of the parties
- -----------
hereunder, will inure to the benefit of, and be binding upon, their respective
successors, assigns, heirs, executors, administrators and legal representatives.
Any permitted transferee of Crane who is required to become a party hereto will
be considered "Crane" for purposes of this Agreement and any permitted
transferee of Stock held by a Purchaser will be considered a "Purchaser" for
purposes of this Agreement.
(c) Severability. If any provision of this Agreement is held to be
------------
invalid, illegal or unenforceable in any respect, such provision will be
enforced to the maximum extent possible and such invalidity, illegality or
unenforceability will not affect any other provision of
-6-
<PAGE>
this Agreement, and this Agreement will be construed as if such invalid, illegal
or unenforceable provision had (to the extent not enforceable) never been
contained herein.
(d) Amendment. This Agreement may be amended only by a written
---------
instrument executed by the Company, the Purchasers holding a majority of the
Stock then held by all Purchasers and Crane.
(e) Continuity of Other Restrictions. Any Stock not purchased by a
--------------------------------
Purchaser under their Right of First Refusal hereunder will continue to be
subject to all other restrictions imposed upon such Stock by law, including any
restrictions imposed under the Company's Articles of Incorporation or By-laws,
or by agreement.
(f) Governing Law. This Agreement will be governed by and construed
-------------
in accordance with the laws of the State of California, excluding that body of
law pertaining to conflict of laws.
(g) Obligation of Company; Binding Nature of Exercise. The Company
-------------------------------------------------
agrees to use its best efforts to enforce the terms of this Agreement, to inform
Crane and the Purchasers of any breach hereof (to the extent the Company has
knowledge thereof) and to use reasonable efforts to assist Crane and the
Purchasers in the exercise of their rights and the performance of their
obligations hereunder. Any exercise of the Right of First Refusal or Right of
Co-Sale will be binding upon the party so exercising, and may not be withdrawn
without the written consent of Crane, except that such exercise may be withdrawn
unilaterally by the exercising party if there is any legal prohibition as to a
party's consummation of its purchase or sale hereunder.
(h) Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which when so executed and delivered will be deemed an
original, and all such counterparts together will constitute one and the same
instrument.
(i) Entire Agreement. This Agreement constitutes the entire agreement
----------------
of the parties with respect to the specific subject matter hereof and supersedes
in their entirety all other agreements or understandings between or among the
parties hereto with respect to such specific subject matter.
(j) Conflict. In the event of any conflict between the terms of this
--------
Agreement and the Company's Articles of Incorporation, or its By-laws, the terms
of the Company's Articles of Incorporation. or its By-laws, as the case may be,
will control. In the event of any conflict between the terms of this Agreement
and any other agreement to which Crane is a party or by which Crane is bound,
the terms of this Agreement will control. In the event of any conflict between
the Company's books and records and this Agreement or any notice delivered
hereunder, the Company's books and records will control absent fraud or error.
(k) Dispute Resolution. The parties acknowledge and agree that time
------------------
is of the essence in resolving any dispute that may arise in connection with
this Agreement. Except as set forth herein, any controversy or claim arising out
of or relating to this Agreement, or the breach thereof, that cannot be resolved
between the parties in a timely manner shall be settled by binding arbitration
in accordance with the Commercial Arbitration Rules of the American
-7-
<PAGE>
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-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
COMPS INFOSYSTEMS, INC.
By:________________________________________
Christopher A. Crane, President
Address:
9888 Carroll Center Rd., Ste. 200
San Diego, California 92126-4581
(619) 578-3000
CHRISTOPHER A. CRANE
___________________________________________
Christopher A. Crane, in his
individual capacity
Address:
c/o COMPS Infosystems, Inc.
9888 Carroll Center Road, Suite 200
San Diego, CA 92126-4581
(619) 578-3000
PURCHASERS:
SUMMIT VENTURES III, L.P.
By: Summit Partners III, L.P.
General Partner
By: Stamps, Woodsum & Co. III,
General Partner
By:___________________________________
General Partner
-9-
<PAGE>
SUMMIT INVESTORS II, L.P.
By:________________________________________
General Partner
Address:
499 Hamilton Avenue, Suite 200
Palo Alto, CA 94301
(415) 321-1166
-10-
<PAGE>
EXHIBIT F
Shareholder Buy-Out and Voting Agreement
<PAGE>
SHAREHOLDERS BUY-OUT AND VOTING AGREEMENT
-----------------------------------------
This Shareholders Buy-Out and Voting Agreement (the "Agreement") is made as
of October 14, 1994 by and between Robert Beasley, an individual ("Beasley"),
Christopher Crane, an individual ("Crane"), COMPS InfoSystems, Inc., a Delaware
corporation (the "Company"), Summit Ventures III, L.P. and Summit Investors II.
L.P. (together, "Summit"). Beasley and Crane own all of the Company's
outstanding shares of Series A Common Stock, par value $.01 per share as
follows:
<TABLE>
<CAPTION>
Shareholder Total Number of Shares Percentage
----------- ---------------------- ----------
<S> <C> <C>
Robert Beasley 1,620,500 25%
Christopher Crane 4,861,500 75%
</TABLE>
IT IS HEREBY AGREED:
ARTICLE I
---------
DEFINITIONS
-----------
As used herein, the terms set forth below shall have the following
definitions:
1.1 Shareholders shall mean Beasley, Crane, any future holder of Shares
------------
issued by the Company hereafter who joins as a party to this Agreement, and any
transferee of Shares pursuant to Section 3.3 of this Agreement. At such time as
a person sells all of his Shares in accordance with the terms and conditions of
this Agreement, that person shall no longer be deemed to be a Shareholder for
purposes of this Agreement.
1.2 Shares shall mean all of the equity securities of the Company now
------
owned or hereafter acquired by any Shareholder or a Permitted Transferee.
1.3 Permitted Transferee shall mean any transferee to whom transfer of
--------------------
Shares is permitted pursuant to Section 2.2.
1.4 Purchase Price and Payment Terms shall mean the Purchase Price, as
--------------------------------
defined in Section 8.1.1, and the Payment Terms, as defined in Section 8.2, for
the purchase by Crane of Shares referenced in Articles 3, 4, and 6.
1.5 Option Event shall mean any one or more of the events giving rise to
------------
the option to purchase Shares set forth in Article 6.
A-1
<PAGE>
ARTICLE 2
---------
RESTRICTION ON TRANSFER OF SHARES
---------------------------------
2.1
2.1.1 Restriction on Transfer. No Shareholder or Permitted
-----------------------
Transferee shall transfer, encumber or in any way dispose of any of his Shares,
or any right or interest therein, except in accordance with the provisions of
this Agreement or unless such Shareholder has obtained the prior written consent
of the Company and of the holders of a majority of the outstanding Shares. In
the event any Shareholder or Permitted Transferee shall attempt to transfer any
or all of his Shares in violation of this Agreement, such transfer shall be null
and void and of no effect.
2.1.2 Put Right. If a transferring shareholder (as defined in
---------
Section 3.1) transfers any Shares in contravention of the Right of Co-Sale
described in Section 3.6 under this Agreement (a "Prohibited Transfer"), or if
the proposed transferee of Offered Stock (as defined in Section 3.6) desires to
purchase only the class, series or type of stock offered by the transferring
shareholder or is unwilling to purchase any Shares from Summit and the
provisions of Section 3.6 apply, Summit may, by delivery of written notice to
the transferring shareholder (a "Put Notice") within ten (10) days after (i) the
Closing as defined in Section 3.6 or (ii) the date on which Summit becomes aware
of the Prohibited Transfer or the terms thereof, require the transferring
shareholder to purchase from Summit for cash or such other consideration as the
transferring shareholder received in the Prohibited Transfer or at the Closing
that number of Shares of Stock held by Summit (of the same class, series or type
as transferred in the Prohibited Transfer or at the Closing if Summit then owns
stock of such class, series or type; otherwise, of shares of Series A Common
Stock, par value $.01 per share), having a purchase price equal to the aggregate
purchase price that Summit would have received in the closing of such Prohibited
Transfer if Summit had elected to exercise its right of Co-Sale with respect
thereto or in the Closing if the proposed transferee had been willing to
purchase Shares held by Summit. The closing of such sale to the transferring
shareholder will occur within seven (7) days after the date of Summit's Put
Notice to the transferring shareholder.
2.2 Permitted Transfers. Notwithstanding anything herein to the contrary,
-------------------
any Shareholder may make a gift or gifts of any or all of his Shares to the
Shareholder's spouse, children or grandchildren, or the spouse of any one of
them or to any organization described in Section 170(c) of the Internal Revenue
Code of 1986, as amended, provided, that nothing herein shall be construed as
permitting a transfer not otherwise in compliance with provisions of Section 9.2
and provided further, that each such Permitted Transferee subscribes to this
Agreement. In the event any transfer permitted by this Section 2.2 is
consummated, each Permitted Transferee shall be bound by and subject to the
terms of this Agreement.
2.3 Repurchase by Company. Notwithstanding any other provision herein,
---------------------
the parties agree that the provisions of this Agreement shall not apply to (i)
the repurchase by the Company, on or before October 31, 1994, of up to 725,960
Shares held by Beasley or (ii) the transfer by Beasley, on or before October 31,
1994, of up to 154,000 Shares held by Beasley, to a non-profit organization.
A-2
<PAGE>
ARTICLE 3
---------
RIGHTS OF FIRST REFUSAL
-----------------------
3.1 Crane's Right of First Refusal. In the event that Beasley or any
------------------------------
other Shareholder other than Crane desires to transfer any or all of his Shares
of the Company to other than a Permitted Transferee (sometimes referred to
hereinafter as the "transferring Shareholder"), he shall first provide notice in
writing to the Secretary of the Company (sometimes referred to hereinafter as
"notice of intended transfer"). The notice shall name the proposed transferee
and specify the number of Shares to be transferred, the price per share, and the
terms of payment of the purchase price. Promptly upon receipt of said notice,
the Secretary of the Company shall notify Crane of said proposed sale or
transfer (sometimes referred to herein as the "notice to Crane.") Said notice
to Crane shall contain (i) the same information concerning the proposed sale or
transfer as received by the Company in the notice of intended transfer and (ii)
the Purchase Price and Payment Terms. Crane shall have twenty (20) days from
the date of receipt of said notice within which to exercise the option to
acquire such shares at a purchase price equal to (a) if the transferring
Shareholder is Beasley, the same price per share and upon the same terms set
forth in the notice of intended transfer, or (b) if the transferring Shareholder
is someone other than Beasley, at the lower of (i) the same price per share and
upon the same terms set forth in the notice of intended transfer filed, or (ii)
the Purchase Price and Payment Terms. Within twenty (20) days after the date of
mailing of said notice to Crane, if Crane desires to acquire any or all of the
Shares referred to in said notice, Crane shall deliver to the Secretary a
written offer to purchase (sometimes hereinafter referred to as "Crane offer to
purchase") said Shares or a specified number thereof, at Crane's discretion. In
the event Crane exercises said option within the twenty (20) day period, the
Secretary of the Company shall give notice of the exercise to the transferring
Shareholder.
3.2 Summit Right of First Refusal. If any such Shares shall not be
-----------------------------
purchased by Crane, the Secretary shall notify Summit of said proposed sale or
transfer (sometimes hereinafter referred to as "notice to Summit"). Said notice
to Summit shall contain (i) the same information concerning the proposed sale or
transfer as received by the Secretary of the Company in the notice of intended
transfer, (ii) the number of Shares, if any, which Crane has elected to
purchase. The Secretary shall notify Summit of said notice promptly upon
receipt by the Secretary of notification from Crane that Crane will not purchase
any or all of said Shares, and in no event later than thirty (30) days after
receipt by the Company of the notice of intended transfer. Summit shall have
twenty (20) days from the date of receipt of said notice within which to
exercise the option to purchase any or all of the remaining Shares at the
purchase price and on the terms stated in the notice.
3.3 Permitted Transfer Upon Failure to Buy All Shares. Subject to the
-------------------------------------------------
provisions of Section 3.6, if some or all the Shares mentioned in the notice of
intended transfer are not purchased by Crane or Summit, or both, such Shares may
be sold or transferred, at any time within six (6) months from the date of
receipt by the Company of the notice of intended transfer, to the person at the
price and terms specified therein or at a price and terms more favorable to the
transferring Shareholder, provided, that each such purchaser or transferee
subscribes to this Agreement. Each such purchaser or transferee shall receive
and hold said Shares as a Shareholder subject to all of the provisions and
restrictions herein contained and the transferring
A-3
<PAGE>
Shareholder shall no longer be deemed a Shareholder as to such Shares for
purposes of this Agreement.
3.4 Nonmonetary Consideration. Notwithstanding anything to the contrary
-------------------------
in this Agreement, in the event that part or all of the purchase price specified
in the notice of intended transfer is payable other than in money, such notice
shall also specify the fair market value in monetary terms of the property other
than money to be transferred in partial or full satisfaction of the purchase
price; and Crane and Summit, or either of them, shall have the right to exercise
their respective options to purchase said Shares by delivery of a written Offer
specifying a per share purchase price equal to the per share purchase price
specified in the notice of intended transfer, which price shall have taken into
account the fair market value of any such property to be transferred. With
regard to the term of the offer of Crane or Summit, the fair market value of
consideration other than money shall be paid in cash. As used in this
Agreement, "consideration other than money" shall not mean the proposed
purchaser's promissory note or other evidence of indebtedness where such note or
indebtedness has a fair maker value at least equal to its principal amount.
3.5 Appraisal to Determine Value of Nonmonetary Consideration. In the
---------------------------------------------------------
event Crane objects to the amount specified in the notice of intended transfer
as the fair market value of consideration other than money, Crane may give,
within twenty (20) days from the date that the Secretary gives the notice to
Crane, written notice to the Secretary of Crane's intention to submit the matter
to an appraiser for a determination of the fair market value of the
consideration Other than money. In the event Summit objects to the amount
specified in the notice of intended transfer as the fair market value of
consideration other than money, Summit may give, within thirty (30) days of the
receipt of the notice to Summit, written notice to the Secretary of Summit's
intention to submit the matter to an appraiser for a determination of the fair
market value of the consideration other than money. Pending such determination,
the time for exercising options to purchase shall be stayed. Within fifteen
(15) days from the date of delivery of such notice of submission to an
appraiser, the objector and the transferring Shareholder shall select a single,
mutually satisfactory neutral appraiser. In the event the parties are unable to
agree on the selection of such an appraiser, then (i) the transferring
Shareholder, Permitted Transferee or personal representative thereof shall
select a single neutral appraiser, on the one hand, and (ii) Crane or Summit, on
the other hand, shall select a single neutral appraiser, and the two (2)
appraisers so selected shall meet and select a single, mutually satisfactory
neutral appraiser. The third appraiser so selected shall determine the fair
market value of the consideration other than money. The decision of the
appraiser shall be final and binding upon the objector and the holder of the
Shares to be sold. As soon as the fair market value of the consideration other
than money has been determined, the appraiser shall give written notice thereof
to the objector, the holder of the Shares to be sold, and to the Secretary. All
expenses of appraisal and proceedings to appoint an appraiser shall be borne
equally by the parties who exercise their option to purchase Shares (who shall
share such expenses between themselves in proportion to the number of Shares
each elects to purchase), on the one hand, and the holder of Shares to be sold
on the other, unless Crane and Summit thereafter fails to exercise his or its
option, in which case the objector shall bear all such expenses. In the event
the objector is Summit, and the appraisal reduces the purchase price specified
in the notice of intended transfer, Crane and, if Crane does not elect to
purchase all the Shares, then Summit shall again be
A-4
<PAGE>
provided the notices pursuant to Sections 3.1 and 3.2 and the notice periods
shall commence again.
3.6 Right of Co-Sale. If Summit has waived or failed to timely exercise
----------------
its right of first refusal pursuant to Section 3.2, Summit may transfer to the
transferee proposed in notice of intended transfer Summit's Share (as defined in
the next sentence) of the shares subject to the notice of intended transfer (the
"Offered Stock"), by giving written notice to the transferring shareholder,
within ten (10) days after the date that Summit's right of first refusal
specified in Section 3.2 expires, specifying the number of Shares that Summit
desires to transfer to the transferee. For purposes of this Section 3.6,
"Summit's Share" shall mean: the ratio determined by dividing (A) the number of
Shares held by Summit by (B) the number of Shares held by Summit plus the number
of Shares held by the transferring shareholder. Summit may exercise its right
of co-sale by delivering to the transferring shareholder at the closing of the
transfer of Offered Stock to such transferee (the "Closing") one or more
certificates, properly endorsed for transfer, representing such Shares to be
transferred by Summit. At the Closing, such certificates or other instruments
will be transferred and delivered to the transferee set forth in the notice of
entitled transfer in consummation of the transfer of the Offered Stock pursuant
to the terms or conditions specified in such notice, and the transferring
shareholder will remit, or will cause to be remitted, to Summit within seven (7)
days after such Closing that portion of the proceeds of the Transfer to which
Summit is entitled by reason of Summit's participation in such transfer pursuant
to the right of co-sale.
3.7 Multiple Series, Class or Type. If the Offered Stock consists of more
------------------------------
than one series or type of the Company's stock, Crane and Summit have the right
to purchase or transfer hereunder, as the case may be, each such series, class
or type; provided, however, that if, as to the Right of Co-Sale, Summit does not
hold any of such series, class or type, and the proposed transferee is not
willing, at the Closing, to purchase some other series, class or from Summit, or
is unwilling to purchase any Shares from Summit at the Closing, then Summit will
have the put right (the "Put Right") set forth in Section 2.1.2 hereof.
ARTICLE 4
---------
PURCHASE ON DEATH
-----------------
4.1 Crane Purchase on Death of Beasley or a Permitted Transferee. Within
------------------------------------------------------------
a period commencing with the death of Beasley or a Permitted Transferee and
ending 180 days following the death of the Beasley or a Permitted Transferee,
but in no event sooner than ninety (90) days following written notice of such
death delivered to the Company, Crane shall have the option to purchase all or a
portion of the Shares owned by the decedent and his Permitted Transferees at the
Purchase Price and Payment Terms.
4.2 Summit Purchase Upon Crane Restriction. In the event that Crane does
--------------------------------------
not elect to repurchase any or all of the Shares owned by a decedent and his
Permitted Transferees, as referenced in Section 4.1, Crane shall purchase as
many Shares as he elects to purchase, and Summit shall have the option to
purchase the remainder of the Shares of the decedent and his Permitted
Transferees at the Purchase Price and Payment Terms.
A-5
<PAGE>
4.3 Failure to Buy All Shares. If all of the Shares of Beasley or a
-------------------------
Permitted Transferee that are available for purchase by Crane or Summit, or
both, pursuant to this Article 4 are not purchased by Crane or Summit, or both,
the personal representative of Beasley or a Permitted Transferee shall continue
to hold the Shares subject to the provisions or this Agreement.
ARTICLE 5
---------
[INTENTIONALLY DELETED]
ARTICLE 6
---------
OPTION TO PURCHASE ON OTHER EVENTS
----------------------------------
6.1 Option Events. The occurrence of any one or more of the following
-------------
Option Events shall give rise to the options to purchase Shares set forth in
Sections 6.2 and 6.3 herein:
6.1.1 The adjudication as a bankrupt (in voluntary or involuntary
proceedings) of Beasley or Permitted Transferee; or
6.1.2 The filing by Beasley or Permitted Transferee of a petition
under the Federal Bankruptcy Code or comparable state laws for a reorganization,
arrangement or other judicial protection upon insolvency; or
6.1.3 The assignment by Beasley or Permitted Transferee for the
benefit of creditors; or
6.1.4 The Shares owned by Beasley or Permitted Transferee become the
subject of a judgment, lien. assignment by operation of law, or writ of
attachment, which is not released within thirty (30) days (unless a supersede
bond is filed).
6.2 Crane Option to Purchase. Upon the occurrence of any one or more of
------------------------
the Option Events, Crane shall have an option to purchase the Shares owned by
the affected Permitted Transferee or Beasley and his Permitted Transferees, if
any, as the case may be. Promptly upon the occurrence of an Option Event, the
affected Permitted Transferee or Beasley and his Permitted Transferees shall
provide the Secretary of the Company with notice of the occurrence of such event
(sometimes hereinafter referred to as "notice of Option Event"), with an
informational copy for Crane. Promptly on receipt of said notice, the Secretary
of the Company shall forward a copy of the notice to Crane. Crane shall have
thirty (30) days from the date of receipt of said notice by the Secretary within
which to exercise the option to purchase the Shares at the Purchase Price and
Payment Terms. In the event that Crane exercises said option within the thirty
(30) day period, the Secretary of the Company shall give notice of the fact to
the affected Permitted Transferee or Beasley and his Permitted Transferees, if
any.
6.3 Summit Option to Purchase. If any such Shares shall not be purchased
-------------------------
by Crane, the Secretary shall notify Summit of the occurrence of an Option Event
(sometimes referred to as "Summit notice of Option Event"). The Summit notice
of Option Event shall contain (i) the
A-6
<PAGE>
statement that an Option Event has occurred, (ii) the Purchase Price and (iii)
the number of Shares, if any, which Crane has elected to purchase. The Secretary
shall mail to Summit said notice promptly upon receipt by the Secretary of
notification from Crane that Crane will not purchase any or all of said Shares,
and in no event later than forty (40) days after receipt by the Secretary of the
notice of Option Event. Summit shall have twenty (20) days from the date of
receipt of such notice within which to purchase any or all of said Shares at the
Purchase Price and Payment Terms.
6.4 Failure to Buy All Shares. If all the Shares of the affected
-------------------------
Permitted Transferee or Beasley and his permitted Transferees, if any, as the
case may be, are not purchased by Crane or Summit, or both, Beasley, Permitted
Transferees, or his personal representative, if any, shall continue to hold the
Shares subject to the provisions of this Agreement.
ARTICLE 7
---------
CRANE OPTIONS
-------------
TO PURCHASE UPON CERTAIN EVENTS
-------------------------------
7.1 Events Triggering Crane's Options. The occurrence of any one or more
---------------------------------
of the following events commencing with the date of this Agreement will give
rise to the options to purchase Shares set forth in Section 7.2:
7.1.1 The Company enters into a definitive agreement for the sale of
all or substantially all of its assets; or
7.1.2 The holders of a majority in interest of the Company's
outstanding capital stock enter into a definitive agreement for the sale of such
stock to a party other than a Shareholder.
7.2 Crane's Options to Purchase. Upon the occurrence of any one or more
---------------------------
of the events set forth in Section 7.1, Crane, for as long as he is a
Shareholder, shall have the option to purchase the Shares owned by each of the
other Shareholders and their Permitted Transferees at a purchase price equal to
the same price per share and upon the same term as those of the transaction
involving the sale of the Company's assets or stock. The options arising by
reason of Section 7.1.1 or 7.1.2 shall be exercisable immediately before the
closing of the transaction involving the sale of the Company's assets or stock.
ARTICLE 8
---------
PURCHASE PRICE, PAYMENT TERMS AND TRANSFER OF SHARES
----------------------------------------------------
8.1 Purchase Price. The purchase price on the purchase of Shares, whereby
--------------
the price is the Purchase Price, shall be determined as follows:
8.1.1 Value. The Purchase Price to be paid for each of the Shares
-----
shall be equal to the "Fair Market Value" of the Company, divided by the total
number of Shares outstanding as of the date the Purchase Price is to be
determined. As used herein, prior to the time when the Company's equity
securities are publicly held, the "Fair Market Value" shall be the highest of
(i)
A-7
<PAGE>
the "Earnings Price" (ii) the "Book Value Price" or (iii) $3,000,000. The
"Earnings Price" shall be a value determined by multiplying the Company's
average earnings (defined as net income before taxes) for the preceding three
(3) fiscal years by five (5); provided, however, that in determining net income
for such three (3) fiscal years, any amounts paid as total compensation to
Beasley and Crane in any such year which exceeds an aggregate of $300,000 (which
amount shall be adjusted each year to reflect changes in the Consumer Price
Index for San Diego County) shall be added back to earnings for such year (with
a concurrent adjustment for any expense deduction taken by the Company on
account of the payment thereof). The "Book Value Price" shall be the book value
of the Company, determined in accordance with generally accepted accounting
principals, as of the end of the immediately preceding fiscal year. For
purposes of calculating "Fair Market Value" under this section, any insurance
proceeds received by the Company on account of the death or disability of a
Shareholder or Permitted Transferee to the extent of any such proceeds which
must be paid as a cash down payment for the purchase of Shareholders pursuant to
Section 8.2.1, shall not be included in the calculation of "Fair Market Value."
As used herein, after the time when the Company's equity securities are publicly
held, the "Fair Market Value" shall be the mean 30-day price of the Shares for
the period ending 5 days prior to the proposed transfer or sale of Shares, based
upon the following: (i) the 30 day average closing price of the Shares on the
principal exchange on which the Shares are then trading; or (ii) if the Shares
are not traded on an exchange but are quoted on Nasdaq or a successor quotation
system, the 30 day average of (1) the last sales price (if the Shares are then
used as a National Market Issue under the NASD National Market System) or (2)
the mean between the closing representative bid and asked prices (in all other
cases) for the Shares as reported by Nasdaq or such successor quotation system;
or (iii) if not publicly traded on an exchange and not quoted on Nasdaq or a
successor quotation system, the 30-day mean between the closing bid and asked
prices for the Shares, as determined in good faith by the Company's Board of
Directors.
8.1.2 Disputes. In the event of any disputes in the computation of
--------
the Company's Fair Market Value pursuant to the terms of Section 8.1.1, a
statement prepared by the Company's accountants as to the Fair Market Value (as
determined pursuant to Section 8.1.1 shall be conclusive and binding on the
parties. At such time the parties shall sign a statement agreeing to hold such
accountants harmless for their role in the preparation of such valuation.
8.2 Payment Terms. The Payment Terms on the purchase of Shares, whereby
-------------
the purchase price is the Purchase Price and this Agreement provides that the
Shares may be purchased pursuant to the Payment Term, shall be as follows:
8.2.1 Downpayment. A cash downpayment in the amount of 20% of the
-----------
Purchase Price; provided, that in the event the purchaser's option to purchase
arises by virtue of the death or disability of a Shareholder or Permitted
Transferee, the greater of (i) 20% of the Purchase Price or (ii) the full amount
of any insurance proceeds received by such purchaser as a lump sum payment on
account of such death or disability (up to a maximum of the total Purchase
Price) shall be paid as a cash downpayment hereunder. The cash downpayment
shall be payable upon delivery by the transferring Shareholder, Permitted
Transferee, or the estate, as the case may be, of (i) an appropriate receipt,
(ii) certified copy of a court order confirming the sale and the consent of the
inheritance tax appraiser to such transfer, if applicable, (iii) the consent of
any
A-8
<PAGE>
state or federal authorities, if required, and (iv) any other documents the
purchaser or purchaser's counsel may reasonably require to effect a lawful and
valid transfer of the Shares.
8.2.2 Promissory Note. Any unpaid balance of the Purchase Price
---------------
shall be evidenced by a negotiable promissory note in the form of Exhibit "A"
attached hereto, and, in the event the Company is the transferee, the promissory
note shall contain on its face a legend in the form Set forth on the top of
Exhibit "A."
8.2.3 Pledge of Shares. The promissory note delivered pursuant to
----------------
Section 8.2.2 herein shall be secured by a Security Agreement in the form
attached hereto as Exhibit "B," and the purchaser shall execute and deliver such
agreement with the consideration for the sale.
8.3 Transfer. On the occurrence of any event that leads to the purchase
--------
of Shares under this Agreement, the consideration to be paid for the Shares
shall be forthwith paid to the transferring Shareholder or Permitted Transferee,
or his estate, as the case may be. If the event that leads to the purchase is
the death of any Shareholder or Permitted Transferee, the decedent's personal
representative shall apply for and obtain any necessary court approval or
confirmation of the sale of the decedent's Shares pursuant to this Agreement.
In all events, consideration for the Shares purchased shall be delivered as soon
as practicable to the person entitled to it, and the Secretary shall cause the
certificates representing the purchased Shares to be properly endorsed and shall
issue new certificate(s) in the names of the purchaser or purchasers.
ARTICLE 9
---------
SUMMIT'S ASSIGNMENT TO THE COMPANY;
-----------------------------------
COMPANY RESTRICTIONS
--------------------
9.1 Assignment by Summit. Summit shall be entitled to assign its rights
--------------------
to purchase Shares under Sections 3. 4 and 6 to the Company.
9.2 Limitation on Repurchase of Shares. In the event that, pursuant to
----------------------------------
the terms of Section 9.1, Summit assigns its right to purchase Shares to the
Company, the right of the Company to exercise the option and to purchase such
Shares is subject to and conditioned upon compliance with the restrictions, if
any, governing the right of a corporation to purchase its own shares or make
distributions to shareholders, contained in such applicable governmental or
judicial restrictions as may from time to time be effective.
9.3 Order of Combined Purchase. In the event that some but less than all
--------------------------
of Shares to be purchased pursuant to the terms of this Agreement are to be
purchased by the Company, with the remaining Shares owned by the transferring
Shareholder to be purchased by Crane or Summit or both, the parties shall
consummate the purchase of Shares by Crane or Summit or both prior to or
simultaneously with the purchase of Shares by the Company. The prior or
simultaneous purchase by Crane or Summit or both, as applicable, shall be a
condition to the consummation of the purchase by the Company.
A-9
<PAGE>
ARTICLE 10
-----------
SHARE CERTIFICATES
------------------
10.1 Share Certificates. Upon execution of this Agreement, each
------------------
Shareholder except Crane (and thereafter, each Permitted Transferee) shall have
placed on the certificates representing his Shares, the following legend:
"Sale, transfer or hypothecation of the shares
represented by this certificate is restricted by the
provisions of a Buy-Out and Voting Agreement among the
Shareholders and the Company dated October 14, 1994, a
copy of which may be inspected at the principal office of
the Company, and all of the provisions of which are
incorporated by reference in this certificate."
A copy of this Agreement shall be delivered to the Secretary of the Company and
shall be shown by the Secretary to any interested person making proper inquiry
about it. Subject to the terms of Article II of this Agreement, each
Shareholder and Permitted Transferee of record shall have the right to vote his
Shares and receive any distributions with respect to them until his Shares are
sold or transferred as provided in this Agreement.
10.2 Restrictions on New Certificates. Any new certificates issued by the
--------------------------------
Company upon cancellation of Shares or any newly issued Shares shall be likewise
issued subject to the terms of this Agreement. Such certificates shall bear the
endorsement set forth in Section 10.1 hereof, and as a condition of issuance of
such new certificates the Secretary of the Company shall first obtain a written
acceptance of the terms of this Agreement from the proposed transferee or new
issue.
10.3 Warranty of Title. Each Shareholder hereby warrants and represents
-----------------
that he has good and marketable title to his Shares and that his Shares may be
transferred free and clear of any lien, encumbrance or restriction, except those
imposed by the terms of this Agreement, and if applicable, any lien, encumbrance
or restriction imposed by applicable governmental or judicial entities provided,
however, that the parties acknowledge that Crane's Shares are subject to certain
transfer restrictions pursuant to that certain Right of First Refusal and Co-
sale Agreement between Crane, Summit and the Company dated as of October 14,
1994.
ARTICLE 11
----------
VOTING AGREEMENT
----------------
11.1 Crane's Right to Vote Beasley's Shares. Until the termination of
--------------------------------------
this Agreement in accordance with Section 12.1 below, Crane or Crane's designee
shall have the exclusive right to vote all Shares held by (i) Beasley. (ii)
Beasley's Permitted Transferees, or (iii) any transferee of the Shares held by
Beasley as of the date of this Agreement, (collectively, the "Beasley Shares")
in person or by proxy at all shareholder meetings and in all proceedings in
which the vote or consent of the shareholders may be required or authorized, and
shall have all the rights, privileges and powers of a shareholder except as,
otherwise provided in this Section 11.
A-10
<PAGE>
11.2 No Sale of Beasley Shares. Crane shall not have authority to sell or
-------------------------
otherwise dispose of the Beasley Shares.
11.3 Dividends; Distributions. Crane shall have no right to receive
------------------------
dividends or other distributions on the Beasley Shares.
11.4 Application of Voting Agreement to After-Acquired Shares. After the
--------------------------------------------------------
date of this Agreement, the provisions of this Section 11 shall apply to all
Shares issued to Beasley, his Permitted Transferees, or any other transferee of
the Shares, and all securities issued as a replacement for the Beasley Shares or
with respect to the Beasley Shares as a result of any stock dividend, stock
split or other similar event.
ARTICLE 12
----------
MISCELLANEOUS
-------------
12.1 Termination of Agreement. This Agreement shall terminate on any of
------------------------
the following events:
12.1.1 The written agreement of all the then Shareholders; or
12.1.2 The dissolution, bankruptcy or insolvency of the Company; or
12.1.3 At such time as only one Shareholder remains; or
12.1.4 October 1, 2004.
provided, however, that all rights of Summit under this Agreement shall
terminate upon the earliest to occur of (i) the completion by the Company of an
underwritten sale of Company securities to the public pursuant to a registration
statement under the Securities Act of 1933, as amended, in which the gross
proceeds to the Company equal or exceed $10,000,000; (ii) the dissolution of the
Company; or (iii) the effective date of a consolidation or merger with or into
another corporation as a result of which the stockholders of the Company prior
to such transaction own less dm 50% of the outstanding stock of the surviving
corporation.
12.2 Necessary Acts. Each party to this Agreement agrees to perform any
--------------
further acts and execute and deliver any documents that may be reasonably
necessary to carry out the provisions of this Agreement.
12.3 Amendments. The provisions of this Agreement may be waived, altered,
----------
amended or repealed in whole or in part only upon the written consent of all the
parties to this Agreement provided, however, that the provisions of Article 7
and Article11 may be waived, altered, amended, or repealed in whole or in part
upon the written consent of all the parties to this Agreement except for Summit.
12.4 Successors and Assigns. This Agreement shall be binding on and shall
----------------------
inure to the benefit of the parties to it and their respective heirs, legal
representatives, successors and assigns.
<PAGE>
12.5 Validity of Agreement. Each provision of this Agreement shall be
---------------------
viewed as separate and divisible, and in the event that any such provisions
shall be held to be invalid, the remaining provisions shall continue to be in
full force and effect.
12.6 Notices. All notices, requests, demands and other communications
-------
under this Agreement shall be in writing and shall be deemed to have been duly
given and received on the date of service if personally served on the party to
whom notice is to be given, or seventy-two (72) hours after mailing, if mailed
to the party to whom notice is to be given by first class mail, postage prepaid,
and properly addressed to the party at his address set forth on the signature
pages of this Agreement, or any other address that any party may designate by
written notice to the other parties.
12.7 Governing Law. This Agreement shall be construed in accordance with
-------------
and governed by the laws of the State of Delaware.
12.8 Timing. Time is of the essence in the performance of all provisions
------
under this Agreement.
12.9 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one and the same instrument.
12.10 Arbitration. The parties acknowledge and agree that time is of the
-----------
essence in resolving any dispute that may arise in connection with this
Agreement. Except as set forth herein, any controversy or claim arising out of
or relating to this Agreement, or the breach thereof, that cannot be resolved
between the parties in a timely manner shall be settled by binding arbitration
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association ("AAA"). The expenses of the arbitration, including the
arbitrators' fees, expert witness fees, and attorneys' fees, may be awarded to
the prevailing party, in the discretion of the arbitrator, or may be apportioned
among the parties in any manner deemed appropriate by the arbitrator. Unless
and until the arbitrator decides that one party is to pay for all (or a share)
of such expenses, each party to the dispute shall bear its own fees and costs
arising in connection with enforcement of the Agreement. Not withstanding the
foregoing, any parry may seek equitable enforcement of the term of this
Agreement in any court of competent jurisdiction.
12.11 Legal Expenses. In the event that any party institutes a
--------------
negotiation or proceeding to enforce the provisions of this Agreement, the
prevailing party or parties in such negotiation or proceeding, whether such
party or parties shall have instituted the negotiation or proceeding, shall be
entitled to reasonable attorneys' fees in addition to costs and necessary
disbursements.
12.12 Specific Performance. The parties hereby declare that it is
--------------------
impossible to measure in money the damage which will accrue to a party hereto,
or to the personal representative of a deceased Shareholder or Permitted
Transferee by reason of a failure to perform any of the obligations provided for
in this Agreement. If any party hereto or the personal representative of a
deceased Shareholder or Permitted Transferee shall institute any negotiation or
proceeding to enforce the provisions hereof, any person (including the Company)
against whom such
A-12
<PAGE>
negotiation or proceeding is brought hereby waives any claim of defense therein
based on an allegation that such party or such personal representative has or
had an adequate remedy at law, and such person shall not urge in any such
negotiation or proceeding the claim or defense that such remedy at law exists.
12.13 Confidentiality. The parties shall keep the terms of this Agreement
---------------
confidential until a mutual agreement is reached regarding publicity or as
otherwise required by law.
12.14 Shareholder Wills. Each Shareholder and Permitted Transferee agrees
-----------------
to prepare and execute his last will and testament, and to include in such will
or living trust a direction and authorization to the personal representative or
trustee to comply with the provisions of this Agreement and to sell his Shares
in accordance with this Agreement; however, the failure of any Shareholder or
Permitted Transferee to do so shall not affect the validity or enforceability of
this Agreement.
12.15 Effect of Headings; Constructions Exhibits. The subject headings of
------------------------------------------
the sections of this Agreement are included for purposes of convenience only,
and shall not affect the construction or interpretation of any of its
provisions. The parties acknowledge that each party and its counsel have
reviewed and revised this Agreement, and the rule of construction to the effect
that any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement, any exhibits hereto, or any
documents executed in connection herewith. All exhibits to this Agreement are
incorporated herein in their entirety.
A-13
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first shown above.
SHAREHOLDERS: COMPANY:
COMPS InfoSystems, Inc.
______________________________________
Robert Beasley
______________________________________ By:_______________________________
Christopher Crane Its: President
------------------------------
SUMMIT
SUMMIT VENTURES III, L.P.
By: Summit Partners III, L.P.
General Partner
By: Stamps, Woodsum & Co. III,
General Partner
By:______________________________
General Partner
SUMMIT INVESTORS II, L.P.
By:______________________________
General Partner
Address: 499 Hamilton Avenue, Suite 200
Palo Alto, CA 94301
(415) 321-1166
Additional Shareholders
Agreeing to Join This Agreement
______________________________________
______________________________________
______________________________________
A-14
<PAGE>
EXHIBIT "A"
THIS NOTE HAS BEEN ISSUED IN PARTIAL PAYMENT OF THE PURCHASE BY THE UNDERSIGNED
OF SHARES OF COMPS INFOSYSTEMS, INC., AND THE VALIDITY OF THIS NOTE MAY BE
CONTROLLED BY, AND ENFORCEMENT AND PAYMENT PURSUANT TO THE TERMS HEREOF MAY BE
AFFECTED BY, CHAPTER V OF THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE,
OR THE LIMITATION SET FORTH IN THAT CERTAIN SHAREHOLDERS BUY-OUT AND VOTING
AGREEMENT, DATED OCTOBER __-, 1994, OR BOTH. (For use only for Company
repurchase.)
PROMISSORY NOTE
$________________ _______________, 19____
San Diego, California
1. FOR VALUE RECEIVED, ____________________ ("Payor") promises to
pay to the order of ____________________, the principal sum of ________________
dollars ($_________________), with interest on the unpaid principal amount owing
from time to time at the rate of ___________ percent (__%) per annum,
compounded annually, commencing with the date hereof and continuing on the
unpaid principal until paid. Principal shall be payable in 60 equal monthly
installments commencing on the first day of the month next succeeding the date
hereof. All accrued interest shall be payable with each principal payment.
2. All payments of interest and principal shall be in lawful money
of the United States of America, payable on the due date by wire transfer or
funds which are good and fully collectible at a bank or other financial
institution in San Diego County, California. The holder of this Note shall
specify the manner and place in San Diego County at which such payments are to
be made. All payments shall be applied first to accrued interest, and
thereafter to principal. Any delinquent installment of interest shall bear
interest at the same rate as principal bears interest. Notwithstanding anything
to the contrary contained in this Note, in no event shall the interest payable
hereunder exceed the maximum amount of interest permissible under applicable
law.
3. Upon receiving written approval of the holder of this Note, Payor
may prepay this Note in whole or in part at any time or from time to time,
without penalty or additional fees.
4. If any payment of principal or interest is not paid when due and
continues unpaid for a period of five days after its scheduled due date, then at
the option of the holder of this Note, this Note shall become due and payable in
full upon the holder of this Note so notifying the Payor.
5. In the event of any default hereunder, Payor shall pay all
reasonable attorneys' fees and court costs incurred by holder in enforcing and
collecting this Note.
6. This note is secured in part by a Security Agreement of even date
herewith. This Note remains a full recourse obligation of Payor.
_____________________________
_____________________________
A-1
<PAGE>
EXHIBIT "B"
SECURITY AGREEMENT
------------------
This Security Agreement is entered into as of the ___ day of
__________, 19__, by and between ____________ ("Debtor"), ______________
("Creditor"), with respect to the following facts:
A. Contemporaneously with the entering into of this Security
Agreement, Debtor has purchased from Creditor _________ shares ("Shares") of the
stock of COMPS InfoSystems, Inc., a Delaware corporation ("Corporation") for a
total purchase price of $_________, of which $__________ has been paid in cash
and the balance of $_________ is evidenced by a Promissory Note-("Note")
executed by Debtor to Creditor of even date herewith.
B. The parties hereto desire to secure the repayment of said Note
with a pledge of said Shares.
WHEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
1. Grant of Security Interest. Debtor hereby grants to Creditor
-------------------------
a security interest pursuant to the Delaware Uniform Commercial Code in all of
said Shares to secure the repayment of said Note and any and all obligations
under this Security Agreement.
2. Perfecting Security Interest. Upon full payment of all
----------------------------
obligations of said Note and this Security Agreement, Pledgeholder shall
immediately deliver the certificate or certificates representing said Shares to
Debtor, or as Debtor otherwise instructs. There shall be no partial release of
any of said Shares on account of part payment on said Note.
3. Default by Debtor. In the event of any default by Debtor
-----------------
under said Note or this Security Agreement, if said default is not cured within
ten (10) days after Creditor has delivered written notice of such default to
Debtor, Creditor shall be entitled to declare the full amount of unpaid
principal and interest owed by Debtor immediately due and payable, to take legal
action to collect such amounts, and to exercise any and all rights and remedies
available to Creditor as the secured party under the Delaware Commercial Code,
including without limitation, the right to take said Shares in full repayment of
said Note, the right to sell said Shares at public or private sale, and the
right to recover from Debtor any deficiency if the net proceeds from such sale
are less than the unpaid balance owed under said Note.
4. Recapitalization of the Corporation. In the event of any
-----------------------------------
recapitalization of the Corporation, whether by stock split, merger,
consolidation, sale of assets, exchange of stock, or any other manner
whatsoever, Creditor's security interest as set forth herein shall automatically
without need of any further action attach to the stock or property into which
said Shares have been converted.
5. Rights of Shareholder. So long as no default occurs under
---------------------
said Note or this Security Agreement, Debtor shall be entitled to receive all
dividends paid on said Shares, to vote said Shares in all matters, and to
otherwise be entitled to all rights of ownership of said Shares; provided,
however, notwithstanding the foregoing, that Creditor shall retain
B-1
<PAGE>
possession of said Shares and any transfer or grant of a security interest in
said Shares by Debtor shall at all times remain subject and subordinate to
Creditor's prior security interest, and provided further, that Debtor shall not
vote said Shares for any plan to terminate, liquidate, dissolve, merge,
consolidate, reorganize, or otherwise alter the form of the Corporation, or to
authorize any stock dividends or to alter or amend the Articles of
Incorporation, without first receiving prior written consent from Creditor.
6. Expenses of Litigation. In the event of any default under
----------------------
said Note or this Security Agreement, Debtor agrees to pay to Creditor all of
Creditor's costs, including the reasonable attorneys' fees and court costs
incurring in enforcing this Security Agreement and collecting said Note.
7. Securities Laws. The Debtor acknowledges that the various
---------------
federal and state securities laws may prohibit or prevent the advertising for
sale of the Shares as required by a public sale as described in Paragraph 3
hereof. Therefore, the Debtor consents to a private sale by the Creditor upon
the occurrence of an event of default and expressly acknowledges that such a
private sale is commercially reasonable, given the nature and circumstances of
the transaction contemplated by this Agreement.
8. Miscellaneous. The rights of the Creditor hereunder shall
-------------
inure to the benefit of its successors and assigns, and the obligations of the
Debtor hereunder shall bind its successors and assigns.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as
of the date set forth above.
___________________________________
DEBTOR
___________________________________
CREDITOR
B-2
<PAGE>
EXHIBIT G
Restated Certificate
<PAGE>
RESTATED
CERTIFICATE OF INCORPORATION
OF
COMPS INFOSYSTEMS, INC.
The undersigned, Christopher A. Crane and Robert C. Beasley, hereby certify
that:
A. They are the duly elected and acting President and Secretary,
respectively, of COMPS InfoSystems, Inc., a Delaware corporation (the
"Corporation").
B. The original Certificate of Incorporation of the Corporation was filed
with the Secretary of State on September 1, 1994.
C. The Certificate of Incorporation is restated to read in full as
follows:
FIRST: The name of the Corporation is COMPS InfoSystems, Inc. (hereinafter
-----
sometimes referred to as the "Corporation").
SECOND: The address of the registered office of the Corporation in the
------
State of Delaware is 32 Loockerman Square, Suite L-100, Dover, Delaware 19904.
The name of the registered agent at that address is The Prentice-Hall
Corporation System, Inc.
THIRD: The purpose of the Corporation is to engage in any lawful act or
-----
activity for which a corporation may be organized under the General Corporation
Law of Delaware.
FOURTH: The Corporation is authorized to issue two classes of shares to be
------
designated respectively "Preferred Stock" and "Common Stock." The total number
of shares of Preferred Stock, par value $.01 per share, which are authorized is
5,000,000. The total number of shares of Common Stock, par value $.01 per
share, which are authorized is 25,000,000. Upon the filing of this Restated
Certificate of Incorporation, each of this Corporation's outstanding shares is
split up and converted into one hundred (100) shares of Class A Common Stock, as
herein defined.
A. Common Stock. The first series of Common Stock shall be comprised of
------------
22,500,000 shares designated "Class A Common Stock." The second series of Common
Stock shall be comprised of 2,500,000 shares of Common Stock designated "Class B
Common Stock." The Class A and Class B Common Stock shall have the same rights
and privileges except as provided below:
1. Voting. The Class B Common Stock shall not have any right to
------
vote unless otherwise required by law.
2. Conversion. Each share of Class B Common Stock shall
----------
automatically convert into one share of Class A Common Stock upon the earlier to
occur of (i) the time the
-1-
<PAGE>
consent of at least 66 2/3% of the outstanding Class A Common Stock to such
conversion is obtained, or (ii) closing of the sale of the Corporation's
securities pursuant to an underwritten public offering. Upon conversion of the
Class B Common Stock, the Class A Common Stock shall be renamed "Common Stock."
(a) In case the Corporation shall at any time (i) subdivide the
outstanding Class A Common Stock, or (ii) issue a stock dividend on its
outstanding Class A Common Stock, the number of shares of Class B Common Stock
issuable upon conversion of the Class B Common Stock immediately prior to such
subdivision or the issuance of such stock dividend shall be proportionately
increased by the same ratio as the subdivision or dividend. In case the
Corporation shall at any time combine its outstanding Class A Common Stock, the
number of shares of Class B Common Stock issuable upon conversion of the Class B
Common Stock immediately prior to such combination shall be proportionately
decreased by the same ratio as the combination. All such adjustments described
herein shall be effective at the close of business on the date of such
subdivision, stock dividend or combination, as the case may be.
(b) In case of any capital reorganization (other than in
connection with a merger or other reorganization which the Corporation is not
the continuing or surviving entity) or any reclassification of the Common Stock
of the Corporation, the Class B Common Stock shall thereafter be convertible
into that number of shares of stock or other securities or property to which a
holder of the number of shares of Class A Common Stock of the Corporation
deliverable upon conversion of the shares of Class B Common Stock immediately
prior to such reorganization or recapitalization would have been entitled upon
such reorganization or reclassification.
B. Preferred Stock. The first series of Preferred Stock shall be
---------------
comprised of 4,270,336 shares designated as "Series A Preferred Stock." The
relative rights, preferences, restrictions and other matters relating to the
Series A Preferred Stock are as follows:
1. Dividend Rights of Preferred. The holders of Preferred Stock
----------------------------
shall be entitled to receive, out of any assets at the time legally available
therefore, cumulative noncompounded dividends from the date of issuance at the
rate per annum of $0.07025 per share (subject to adjustments for stock splits,
dividends, recapitalization and the like) of Series A Preferred Stock, payable
immediately prior to the effective time of (i) any repurchase of the Series A
Preferred Stock; (ii) any liquidation pursuant to Section B(2)(b) of this
Article FOURTH; or (iii) any sale of the Corporation's securities pursuant to an
underwritten public offering; provided, however, that the right to receive such
-------- -------
accrued and unpaid dividends shall be forfeited in the event of (x) a repurchase
of all of the outstanding Series A Preferred stock or a liquidation pursuant to
Section B(2)(b) of this Article FOURTH, if the aggregate amount to be received
by the holders of the Series A Preferred Stock prior to the payment of such
accrued and unpaid dividends would exceed $3.52 per share (as adjusted for
stock-splits, combinations, reorganizations and the like) or (y) an underwritten
public offering of the Corporation's securities if the Corporation receives
gross proceeds of not less than $10,000,000 at a purchase price of not less than
$3.52 per share (as adjusted for stock splits, stock dividends, reorganizations
and the like). Upon conversion of the Series A Preferred Stock any accrued but
unpaid dividends shall remain accrued and shall remain payable pursuant to this
Section B(l) of this Article FOURTH. In addition to the cumulative dividends
specified above, no cash
-2-
<PAGE>
dividends shall be paid on any Common Stock unless an equal dividend is paid
with respect to all outstanding shares of Preferred Stock in an amount for each
such share of Preferred Stock equal to the aggregate amount of such dividends
for all Common Stock into which each such share of Preferred Stock could then be
converted.
2. Preference on Liquidation.
-------------------------
(a) In the event of any liquidation, dissolution or winding up
of the Corporation, distributions to the stockholders of the Corporation shall
be made in the following manner:
(i) The holders of the Preferred Stock shall be entitled
to receive, prior and in preference to any distribution of any of the assets or
surplus funds of the Corporation to the holders of the Common Stock by reason of
their ownership of such stock, the amount of (A) $1.17087 per share for each
share of Series A Preferred Stock then held by them, adjusted for any stock
split, combination, consolidation, or stock distributions or stock dividends
with respect to such shares, and (B) an amount equal to all accumulated but
unpaid dividends on the Preferred Stock as provided in Subsection 1 above. If
the assets and funds thus distributed among the holders of the Preferred Stock
shall be insufficient to permit the payment to such holders of the full
aforesaid preferential amount, then the entire assets and funds of the
Corporation legally available for distribution shall be distributed ratably
among the holders of the Preferred Stock in proportion to their aggregate
preferential amounts.
(ii) The remaining assets of the Corporation, after payment
in full to the holders of Preferred Stock of all amounts exclusively payable on
or with respect to said shares, shall be distributed ratably among the holders
of the Common Stock.
(b) The following shall be deemed to be a liquidation,
dissolution or winding up within the meaning of this Subsection: (i) an
acquisition, consolidation or merger of this Corporation with or into any other
corporation or corporations unless the stockholders of the Corporation prior to
such transaction directly or indirectly own more than fifty percent (50%) of the
voting stock of the surviving or acquiring corporation or corporations; (ii) the
sale, transfer or other disposition of all or substantially all of the assets of
this Corporation to a person other than a corporation or partnership controlled
by the Corporation or its stockholders; and (iii) the effectuation by the
Corporation of a transaction or series of related transactions in which more
than 50% of the outstanding voting power of the Corporation prior to such
transaction or series of related transactions is disposed of.
(c) In the event the Corporation shall propose to take any
action of the type described in subsection (a) or (b) of this Subsection 2, the
Corporation shall, within ten (10) days after the date the Board of Directors
approves such action or twenty (20) days prior to any stockholders' meeting
called to approve such action, whichever is earlier, give each holder of shares
of the Preferred Stock written notice of the proposed action. Such written
notice shall describe the material terms and conditions of such proposed action,
including a description of the stock, cash and property to be received by the
holders of shares of the Preferred Stock upon consummation of the proposed
action and the proposed date of delivery thereof. If any material
-3-
<PAGE>
change in the facts set forth in the notice shall occur, the Corporation shall
promptly give written notice to each holder of shares of the Preferred Stock of
such material change.
(d) The Corporation shall not consummate any proposed action of
the type described in subsection (a) or (b) of this Subsection 2 before the
expiration of thirty (30) days after the mailing of the initial written notice
or ten (10) days after the mailing of any subsequent written notice, whichever
is later; provided, however, that any such 30-day or 10-day period may be
shortened upon the written consent of the holders of a majority of the
outstanding shares of the Preferred Stock.
(e) If the Corporation shall propose to take any action of the
type described in subsection (a) or (b) of this Subsection 2 which will involve
the distribution of assets other than cash, the Corporation shall, if requested
by the holders of a majority of the Preferred Stock, promptly engage independent
competent appraisers to determine the value of the assets to be distributed to
the holders of shares of the Preferred Stock and the Common Stock. The
Corporation shall, upon receipt of such appraiser's valuation, give prompt
written notice of the appraiser's valuation to each holder of shares of the
Preferred Stock.
3. Voting.
------
(a) Except as set forth in paragraph (b) of this Subsection 3
and in Subsection 6 hereof, or as otherwise required by law, the shares of the
Preferred Stock shall be voted together with the Corporation's Class A Common
Stock at any annual or special meeting of the stockholders of the Corporation,
or may act by written consent in the same manner as the Corporation's Class A
Common Stock, and shall have the voting rights and powers equal to the voting
rights of the Class A Common Stock, upon the following basis: each holder of
shares of Preferred Stock shall be entitled to such number of votes for the
Preferred Stock held by him on the record date fixed for such meeting, or, if no
record date is established, at the date such vote is taken or on the effective
date of any such written consent, as shall be equal to the nearest whole number
of shares of the Corporation's Common Stock into which his shares of Preferred
Stock are convertible immediately after the close of business on the record date
fixed for such meeting, the date of such vote or the effective date of such
written consent.
(b) The holders of Series A Preferred Stock, voting as a
separate class, shall be entitled to elect one director. The election of a
director by the Series A Preferred Stock shall occur at the annual meeting of
holders of Common Stock or at any special meeting of holders of Series A
Preferred Stock called by holders of a majority of the outstanding shares of
Series A Preferred Stock or by the written consent of all such holders. If the
person elected by the holders of Series A Preferred Stock should cease to be a
director for any reason, the vacancy shall only be filled by the vote or written
consent of holders of a majority of the outstanding shares of Series A Preferred
Stock. The holders of the Common Stock shall be entitled to elect the remaining
directors.
4. Status of Converted or Redeemed Stock. In the event that any
-------------------------------------
shares of Preferred Stock shall be converted pursuant to Subsection 5 hereof or
shall be repurchased or otherwise acquired by the Corporation in any manner
whatsoever, such shares shall be retired and canceled promptly after the
acquisition thereof. Such shares shall not be reissued as shares
-4-
<PAGE>
of Series A Preferred Stock or shares of any other series of Preferred Stock.
Upon such cancellation, and upon the filing of any certificates required or
appropriate under applicable law, the number of authorized shares of Preferred
Stock as set forth in Article FOURTH, shall be reduced by the number of such
shares so canceled.
5. Conversion Rights. The holders of Preferred Stock shall have
-----------------
conversion rights as follows:
(a) Each share of Preferred Stock shall be convertible, at the
option of the holder thereof, at any time at the principal office of the
Corporation or any transfer agent for such shares, into fully paid and
nonassessable shares of Class A Common Stock of the Corporation. The number of
shares of Class A Common Stock into which each share of Preferred Stock may be
converted shall be determined by dividing $1.17087 for the Series A Preferred
Stock by the Conversion Price determined as hereinafter provided in effect at
the time of the conversion. The Conversion Price per share at which shares of
Class A Common Stock shall be initially issuable upon conversion of any shares
of Preferred Stock shall be $1.17087 for the Series A Preferred Stock, subject
to adjustment as provided herein.
(b) Each share of Preferred Stock shall be converted into Class
A Common Stock automatically in the manner provided herein upon the earlier to
occur of (i) the time the consent of at least 66-2/3% of the outstanding
Preferred Stock to such conversion is obtained, or (ii) the closing of the sale
of the Corporation's securities pursuant to an underwritten public offering from
which the Corporation receives gross proceeds of not less than $10,000,000 at a
purchase price of not less than $3.52 per share (as adjusted for stock splits,
stock dividends, reorganizations and the like).
(c) Before any holder of Preferred Stock shall be entitled to
convert the same into Common Stock, such holder shall surrender the certificate
or certificates therefor, duly endorsed in blank or accompanied by proper
instruments of transfer, at the principal office of the Corporation or of any
transfer agent for the Preferred Stock, and shall give written notice to the
Corporation at such office that such holder elects to convert the same and shall
state in writing therein the name or names in which such holder wishes the
certificate or certificates for Common Stock to be issued. As soon as
practicable thereafter, the Corporation shall issue and deliver at such office
to such holder's nominee or nominees, certificates for the number of whole
shares of Common Stock to which such holder shall be entitled. No fractional
shares of Common Stock shall be issued by the Corporation and all such
fractional shares shall be disregarded. In lieu thereof, the corporation shall
pay in cash the fair market value of such fractional share as determined by the
Board of Directors of the Corporation. Such conversion shall be deemed to have
been made as of the date of such surrender of the Preferred Stock to be
converted, and the person or persons entitled to receive the Common Stock
issuable upon such conversion shall be treated for all purposes as the record
holder or holders of such Common Stock on said date.
(d) In case the Corporation shall at any time (i) subdivide the
outstanding Common Stock, or (ii) issue a stock dividend on its outstanding
Common Stock, the number of shares of Common Stock issuable upon conversion of
the Preferred Stock immediately prior to such subdivision or the issuance of
such stock dividend shall be
-5-
<PAGE>
proportionately increased by the same ratio as the subdivision or dividend (with
appropriate adjustments in the Conversion Price of the Preferred Stock). In case
the Corporation shall at any time combine its outstanding Common Stock, the
number of shares of Common Stock issuable upon conversion of the Preferred Stock
immediately prior to such combination shall be proportionately decreased by the
same ratio as the combination (with appropriate adjustments in the Conversion
Price of the Preferred Stock). All such adjustments described herein shall be
effective at the close of business on the date of such subdivision, stock
dividend or combination, as the case may be.
(e) In case of any capital reorganization (other than in
connection with a merger or other reorganization in which the Corporation is not
the continuing or surviving entity) or any reclassification of the Common Stock
of the Corporation, the Preferred Stock shall thereafter be convertible into
that number of shares of stock or other securities or property to which a holder
of the number of shares of Common Stock of the Corporation deliverable upon
conversion of the shares of Preferred Stock immediately prior to such
reorganization or recapitalization would have been entitled upon such
reorganization or reclassification. In any such case, appropriate adjustment (as
determined by the Board of Directors) shall be made in the application of the
provisions herein set forth with respect to the rights and interests thereafter
of the holders of Preferred Stock, such that the provisions set forth herein
shall thereafter be applicable, as nearly as reasonably may be, in relation to
any share of stock or other property thereafter deliverable upon the conversion.
(f) In case:
(i) the Corporation shall take a record of the holders of
its Common Stock for the purpose of entitling them to receive a dividend, or any
other distribution, payable otherwise than in cash; or
(ii) the Corporation shall take a record of the holders of
its Common Stock for the purpose of entitling them to subscribe for or purchase
any shares of stock of any class or to receive any other rights; or
(iii) the Corporation shall effect a capital reorganization
of the Corporation, reclassification of the capital stock of the Corporation
(other than a subdivision or combination of its outstanding Common Stock),
consolidation or merger of the Corporation (other than a merger or other
reorganization in which the Corporation is not the continuing or surviving
entity); then, and in any case, the Corporation shall cause to be mailed to the
holders of its Preferred Stock, at least twenty (20) days prior to the date
hereinafter specified, a notice stating the date on which a record is to be
taken for the purpose of such dividend, distribution or rights, or such action
is to be taken in connection with such reorganization, reclassification, merger
or consolidation.
(g) The Corporation shall at all times reserve and keep
available, out of its authorized but unissued Common Stock, solely for the
purpose of effecting the conversion of the Preferred Stock, the full number of
shares of Common Stock deliverable upon the conversion of all Preferred Stock
from time to time outstanding. The Corporation shall from time to time (subject
to obtaining necessary director and stockholder action), in accordance with
-6-
<PAGE>
the laws of the State of Delaware, increase the authorized amount of its Common
Stock if at any time the authorized number of shares of Common Stock remaining
unissued shall not be sufficient to permit the conversion of all of the shares
of Preferred Stock at the time outstanding.
(h) Upon the issuance by the Corporation of Common Stock, or any
right or option to purchase Common Stock, or any obligation or any shares of
stock convertible into or exchangeable for Common Stock for a consideration per
share less than the Conversion Price of the Series A Preferred Stock in effect
immediately prior to the time of such issue or sale other than the issuance of
shares of Common Stock upon conversion of any Series A Preferred Stock, then
forthwith upon such issue or sale, the Conversion Price of the Series A
Preferred Stock shall be reduced to a price (calculated to nearest cent) by
dividing:
(i) an amount equal to the sum of (x) the number of shares
of Common Stock outstanding immediately prior to such issue or sale multiplied
by the then existing Conversion Price of the Series A Preferred Stock, (y) the
number of shares of Common Stock issuable upon conversion of any shares of stock
of the Corporation outstanding immediately prior to such issue or sale
multiplied by the then existing Conversion Price of the Series A Preferred
Stock, and (z) an amount equal to the aggregate consideration received by the
Corporation upon such issue or sale by,
(ii) the sum of the number of shares of Common Stock
outstanding immediately after such issue or sale and the number of shares of
Common Stock (without taking into account any adjustment in such number
resulting from such issue or sale) issuable upon conversion of any shares of
stock of the Corporation outstanding immediately after such issue or sale.
For purposes of this subsection (h) the following provisions shall be
applicable:
(1) In the case of an issue or sale for cash of
shares of Common Stock, the consideration received by the Corporation therefor
shall be deemed to be the amount of cash received, before deducting therefrom
any commissions or expenses paid or incurred by the Corporation.
(2) In case of the issuance (otherwise than upon
conversion or exchange of obligations or shares of stock of the Corporation) of
additional shares of Common Stock for a consideration other than cash or a
consideration partly other than cash, the amount of the consideration other than
cash received by the Corporation for such shares shall be deemed to be the value
of such consideration as reasonably determined by the Board of Directors.
(3) In case of the issuance by the Corporation in
any manner of any rights to subscribe for or to purchase shares of Common Stock,
at a consideration per share (as computed below) less than the Conversion Price
in effect for the Series A Preferred Stock immediately prior to the date of the
offering of such rights or the granting of such options, as the case may be, the
maximum number of shares of Common Stock to which the holders of such rights or
options shall be entitled to subscribe for or purchase pursuant to such rights
or options shall be deemed to be issued or sold as of the date of the offering
of such rights or the
-7-
<PAGE>
granting of such options, as the case may be, and the minimum aggregate
consideration named in such rights or options for the shares of Common Stock
covered thereby, plus the consideration, if any, received by the Corporation for
such rights or options, shall be deemed to be the consideration actually
received by the Corporation (as of the date of the offering of such rights or
the granting of such options, as the case may be) for the issuance of such
shares.
(4) In case of the issuance or issuances by the
Corporation in any manner of any obligations or of any shares of stock of the
Corporation that shall be convertible into or exchangeable for Common Stock, at
a consideration per share (as computed below) less than the Conversion Price in
effect for the Series A Preferred Stock immediately prior to the date such
obligation or shares are issued, the maximum number of shares of Common Stock
issuable upon the conversion or exchange of such obligations or shares shall be
deemed issued as of the date such obligations or shares are issued, and the
amount of the consideration received by the Corporation for such additional
shares of Common Stock shall be deemed to be the total of the amount of
consideration received by the Corporation upon the issuance of such obligations
or shares, as the case may be, plus the minimum aggregate consideration, if any,
other than such obligations or shares, receivable by the Corporation upon such
conversion or exchange, except in adjustment of dividends.
(5) The amount of the consideration received by the
Corporation upon the issuance of any rights or options referred to in subsection
(3) above or upon the issuance of any obligations or shares which are
convertible or exchangeable as described in subsection (4) above, and the amount
of the consideration, if any, other than such obligations or shares so
convertible or exchangeable, receivable by the Corporation upon the exercise,
conversion or exchange thereof shall be determined in the same manner provided
in subsections (h)(1) and (2) above with respect to the consideration received
by the Corporation in case of the issuance of additional shares of Common Stock.
On the expiration of any rights or options referred to in subsection (3), or the
termination of any right of conversion or exchange referred to in subsection
(4), the Conversion Price then in effect for the Series A Preferred Stock shall
forthwith be readjusted to such Conversion Price as would have obtained had the
adjustments made upon the issuance of such option, right or convertible or
exchangeable securities been made upon the basis of the delivery of only the
number of shares of Common Stock actually delivered upon the exercise of such
rights or options or upon the conversion or exchange of such securities.
(6) Anything herein to the contrary notwithstanding,
the Corporation shall not be required to make any adjustment of the Conversion
Price in the case of (A) the sale and issuance by the Corporation of up to
811,160 shares of Common Stock or rights or options to purchase shares of Common
Stock, net of repurchases and expired or canceled options, (as adjusted for
stock splits, stock dividends, reorganizations and the like) to officers,
directors, employees and consultants of the Corporation; (B) the issuance of
Common Stock upon the conversion of outstanding Series A Preferred Stock; or (C)
the issuance of up to 379,869 shares of Common Stock upon the exercise of
Warrants issued to the holders of Series A Preferred Stock.
(i) Upon the occurrence of each adjustment or readjustment of
the Conversion Price for any series of Preferred Stock pursuant to this
Subsection 5, the Corporation
-8-
<PAGE>
at its expense shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and prepare and furnish to each holder of
Preferred Stock a certificate setting forth such adjustment or readjustment
showing in detail the facts upon which such adjustment or readjustment is based.
The Corporation shall, upon the reasonable written request at any time of any
holder of Preferred Stock, furnish or cause to be furnished to such holder a
like certificate setting forth (i) such adjustments and readjustments, and (ii)
the number of shares of Common Stock and the amount, if any, of other property
which at the time would be received upon the conversion of the Preferred Stock.
(j) In the event the Corporation at any time or from time to
time makes, or fixes a record date for the determination of holders of Common
Stock entitled to receive any distribution payable in securities or other
property of the Corporation other than Common Stock and other than as otherwise
adjusted in this Subsection 5, then and in each such event provision shall be
made so that the holders of Preferred Stock shall receive upon conversion
thereof, in addition to the number of shares of Common Stock receivable
thereupon, the amount of securities and other property of the Corporation which
they would have received had their shares of Preferred Stock been converted into
shares of Common Stock on the date of such event and had they thereafter, during
the period from the date of such event to and including the date of conversion,
retained such securities and other property receivable by them as aforesaid
during such period, subject to all other adjustments called for during such
period under this Subsection 5 with respect to the rights of the holders of
Preferred Stock.
(k) Any notices required by the provisions of this Subsection 5
to be given to the holders of shares of Preferred Stock shall be deemed given if
deposited in the United States mail, first class, postage prepaid and addressed
to each holder of record at its address appearing on the books of the
Corporation.
6. Changes. So long as shares of Series A Preferred Stock are
-------
outstanding, the Corporation shall not, without first obtaining the approval by
vote or written consent, in the manner provided by law, of the holders of at
least a majority of the total number of shares of Series A Preferred Stock
outstanding, voting separately as a class: (1) alter or change any of the
powers, preferences, privileges or rights of the Series A Preferred Stock; (2)
increase the authorized number of shares of Preferred Stock; (3) amend the
provisions of this Section 6; (4) undertake or effect any consolidation or
merger of the Corporation with or into another corporation or any acquisition by
or the conveyance of all or substantially all of the assets of the Corporation
to another person; (5) create any new series of Preferred Stock; (6) amend this
Certificate of Incorporation of the Corporation; (7) declare or pay any
dividends on the Corporation's capital stock; (8) redeem or repurchase any
outstanding stock other than (i) from employees, consultants or directors upon
the termination of their employment or services pursuant to agreements providing
for such repurchases; and (ii) up to 1,708,140 shares of Common Stock to be
repurchased on or before October 31, 1994; or (9) increase the size of the Board
of Directors to more than four directors.
FIFTH: The following provisions are inserted for the management of the
-----
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
-9-
<PAGE>
A. The business and affairs of the Corporation shall be managed by
or under the direction of the Board of Directors. In addition to the powers and
authority expressly conferred upon them by statute or by this Certificate of
Incorporation or the By-Laws of the Corporation, the directors are hereby
empowered to exercise all such powers and do all such acts and things as may be
exercised or done by the Corporation.
B. The directors of the Corporation need not be elected by written
ballot unless the By-Laws so provide.
SIXTH:
-----
A. The number of directors shall initially be four (4) and,
thereafter, subject to the rights of the holders of any outstanding series of
Preferred Stock, shall be fixed from time to time exclusively by the Board of
Directors pursuant to a resolution adopted by a majority of the total number of
authorized directors (whether or not there exist any vacancies in previously
authorized directorships at the time any such resolution is presented to the
Board for adoption). Subject to the rights of the holders of any series of
Preferred Stock then outstanding, a vacancy resulting from the removal of a
director by the stockholders as provided in Article SIXTH, Section C below may
be filled at a special meeting of the stockholders held for that purpose. All
directors shall hold office until the expiration of the term for which elected,
and until their respective successors are elected, except in the case of the
death, resignation, or removal of any director.
B. Subject to the rights of the holders of any series of Preferred
Stock then outstanding, newly created directorships resulting from any increase
in the authorized number of directors or any vacancies in the Board of Directors
resulting from death, resignation or other cause (other than removal from office
by a vote of the stockholders) may be filled only by a majority vote of the
directors then in office, though less than a quorum, and directors so chosen
shall hold office for a term expiring at the next annual meeting of stockholders
at which the term of office of the class to which they have been elected
expires, and until their respective successors are elected, except in the case
of the death, resignation, or removal of any director. No decrease in the
number of directors constituting the Board of Directors shall shorten the term
of any incumbent director.
C. Subject to the rights of the holders of any series of Preferred
Stock then outstanding, any directors, or the entire Board of Directors, may be
removed from office at any time, with or without cause, but only by the
affirmative vote of the holders of at least a majority of the voting power of
all of the then outstanding shares of capital stock of the Corporation entitled
to vote generally in the election of directors, voting together as a single
class. Vacancies in the Board of Directors resulting from such removal may be
filled by a majority of the directors then in office, though less than a quorum,
or by the stockholders as provided in Article SIXTH, Section A above. Directors
so chosen shall hold office for a term expiring at the next annual meeting of
stockholders at which the term of office of the class to which they have been
elected expires, and until their respective successors are elected, except in
the case of the death, resignation, or removal of any director.
-10-
<PAGE>
SEVENTH: The Board of Directors is expressly empowered to adopt, amend or
-------
repeal By-Laws of the Corporation. Any adoption, amendment or repeal of By-Laws
of the Corporation by the Board of Directors shall require the approval of a
majority of the total number of authorized directors (whether or not there exist
any vacancies in previously authorized directorships at the time any resolution
providing for adoption, amendment or repeal is presented to the Board). The
stockholders shall also have power to adopt, amend or repeal the By-Laws of the
Corporation. Any adoption, amendment or repeal of By-Laws of the Corporation by
the stockholders shall require, in addition to any vote of the holders of any
class or series of stock of the Corporation required by law or by this
Certificate of Incorporation, the affirmative vote of the holders of at least
sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the
then outstanding shares of the capital stock of the Corporation entitled to vote
generally in the election of directors, voting together as a single class.
EIGHTH: A director of the Corporation shall not be personally liable to
------
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involved intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit.
If the Delaware General Corporation Law is hereafter amended to
authorize the further elimination or limitation of the liability of a director,
then the liability of a director of the Corporation shall be eliminated or
limited to the fullest extent permitted by the Delaware General Corporation Law,
as so amended.
Any repeal or modification of the foregoing provisions of this Article
EIGHTH by the stockholders of the Corporation shall not adversely affect any
right or protection of a director of the Corporation existing at the time of
such repeal or modification.
NINTH: The Corporation shall, to the fullest extent permitted by Section
-----
145 of the General Corporation Law of the State of Delaware, as the same may be
amended and supplemented, indemnify any and all persons whom it shall have power
to indemnify under said section from and against any and all of the expenses,
liabilities or other matters referred to in or covered by said section, and the
indemnification provided for herein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under by bylaw, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such person.
TENTH: The Corporation reserves the right to amend or repeal any provision
-----
contained in this Certificate of Incorporation in the manner prescribed by the
laws of the State of Delaware and all rights conferred upon stockholders are
granted subject to this reservation; provided, however, that, notwithstanding
-------- -------
any other provision of this Certificate of Incorporation or any provision of law
which might otherwise permit a lesser vote or no vote, but in addition to any
vote of the holders of any class or series of the stock of this Corporation
required by law or by this Certificate of Incorporation, the affirmative vote of
the holders of at least 66-2/3% of the
-11-
<PAGE>
voting power of all of the then outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class, shall be required to amend or repeal this Article
TENTH, Article FIFTH, Article SIXTH, Article SEVENTH, Article EIGHTH, or Article
NINTH.
The foregoing Restated Certificate of Incorporation has been approved by
the Board of Directors of the Corporation.
The foregoing Restated Certificate of Incorporation has been approved by
the outstanding shares of the Corporation in accordance with Sections 242 and
245 of the Delaware General Corporation Law.
-12-
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by Christopher A. Crane, its President, and attested to by Robert C.
Beasley, its secretary, on October ___, 1994.
_____________________________________________
Christopher A. Crane, President
ATTEST: _____________________________________________
Robert C. Beasley, Secretary
-13-
<PAGE>
EXHIBIT H
Schedule of Contracts
<PAGE>
SCHEDULE H
----------
Material Contracts
Attached
Agreements with Officers, Directors, Stockholders, Consultants, Employees.
1. Employment Agreements with each of the following:
a. Chris Crane
b. Karen Goodrum*
c. Craig Farrington*
d. Chris Fenton*
e. David Webb*
f. Lori Reisinger*
g. Robert Beasley*
2. Confidentiality and Proprietary Information Agreements with all
employees, except those employees listed on Exhibit 3.8 to
Exhibit B.
3. Indemnification Agreements with all Directors and the following
officers:
a. Chris Crane*
b. Karen Goodrum*
c. Craig Farrington*
d. Chris Fenton*
e. David Webb*
f. Lori Reisinger*
g. Robert Beasley*
4. Stockholder Buy-out and Voting Rights Agreement dated as of
October 14, 1994 among the Company, Beasley, Crane and Summit.
5. $79,294 loans from the Company to Beasley, which are payable
October, 1994 and are expected to be repaid by Beasley with
proceeds he receives when the Company repurchases certain of his
Shares.
6. $190,000 loan from the Company to Beasley, which is expected to
be forgiven immediately after the Closing.
7. Non-compete Agreement between the Company and Beasley.
_____________
* Form of agreement has been provided to Summit. It is anticipated that the
actual agreements will be executed shortly after the closing.
4
<PAGE>
Business Real Estate Information Corp.
Leases, Contracts, Commitments
Page 2
EQUIPMENT LEASES (Cont')
- ----------------
Ford Motor Corp.
Acct. No. FN A321 335R
Term: 48 months
Start: 01/26/94
Vehicle: FORD Escort 1993
Lease Payment: $277.30/month
Original Loan: $12,305.65
G.E. Capital
Lease No. 6519146-001
Term: 60 Months
Start: 5/16/94
Equipment: Executone Telephone Equipment
Lease Payment: $1,521.89/month
Original Loan: $64,805.00
Avnet/AT&T Capital Corporation
Lease No.
Term: 60 months
Start: 07/25/94
Equipment: HP 9000 Computer
Lease Payment: $744.57/ month
Original Loan: $32.121.40
Sybuse Financial Services, Inc.
Agreement # 509662
Term: 36 months
Start: 7/15/94
Equipment: Sybase Software
Lease Payment: $916.91/month
Original Loan: $26,120.00
Sybase Financial Services, Inc.
Agreement #
Term: 36 months
Start: 10/21/94
Equipment: Sybuse Software
Term Payment: $1,025.39/month
Original Loan: $29,255.00
<PAGE>
Business Real Estate Information Corp.
Leases, Contracts, Commitments
Page 3
EQUIPMENT LEASES (Cont')
- ----------------
Canon Financial Service
Lease No. 001-0050913-001
Term: 60 Months
Start: 09/20/94
Equipment: 3 Canon Copiers
Lease Payment: $457.18/month
Original Loan: $20,628.00
OFFICE LEASES
- -------------
Lessor: Mutual Benefit Life Insurance Co.
c/o Vestar Property Management
Lease Address: 5060 N. 40th Street #111
Phoenix, AZ 95018
Start: 11/15/93
Term: 49 months
Effective Rent: $1,109.63/month
Lessor: Hugh W. Klebahn as Trustee for the
Jane K. Molyneux Trust
c/o Hanford, Freund & Company
Lease Address: 870 Mitten Road
Burlingame, CA 94010
Start: 05/01/94
Term: 64 months
Effective Rent: $2,967.00/month
Lessor: COMPS Plaza Associates, Ltd.
c/o McKellar Properties
Lease Address: 9888 Carroll Centre Road
San Diego, CA 92126
Start: 07/01/94
Term: 96 months
Effective Rent/Month: $22,287.00*
*Reflects $4.00/sf tenant improvement expense; TI expense above that amount will
be amortized over the life of the lease at an additional amount or approximately
$1,800 - $2,000 per month.
<PAGE>
Business Real Estate Information Corp.
Leases, Contracts, Commitments
Page 4
OFFICE LEASES (Cont')
- -------------
Lessor: Suite 900 Associates
Lease Address: 7799 Leesburg Pike, Suite 900N
Falls Church, VA 22043
Start: 11/01/94
Term: 6 months
Effective Rent/Month: $825.00
NOTES RECEIVABLE
- ----------------
Robert C. Beasley
3411-A Reynard Way
San Diego, CA 92103
$75,294.04
Robert C. Beasley
3411-A Reynard Way
San Diego, CA 92103
$83,837.15
Robert C. Beasley
341 1-A Reynard Way
San Diego, CA 92103
$116,038.00
CONTRACTS
- ---------
DataQuick Information Systems
9171 Town Centre Drive, Suite 600
San Diego, CA 92122
Don Cohn, President
(619) 455-6900
Insurance Services Office, Inc. (ISO)
7 World Trade Centre
New York, NY 10048
Carole Banfield, Senior Vice President
<PAGE>
Business Real Estate Information Corp.
Leases, Contracts, Commitments
Page 5
CONTRACTS (Con't)
- ---------
Grubb & Ellis
500 N. State College Blvd., #100
Orange, CA 92668
Contact: John Allen
Contract Amount: $25,000.00
BANKING RELATIONSHIPS
- ---------------------
Bank: Union Bank
7907 Girard Avenue
La Jolla, CA 92037
Randall T. Vogan, Commercial Loan Officer
(619) 551-4764
Current Facility
----------------
Current Line of Credit: Renews 11/01/94
Total Amount: $ 90,000.00
Total Available $ 90,000.00
Term Loan:
Total Amount $175,000.00
Advances: $134,076.87
Amount Available: $ 40,923.13
Requested Facility
------------------
Line of Credit: $300,000.00
Term Loan: $460,000.00
<PAGE>
EXHIBIT I
Voting Agreement
<PAGE>
VOTING AGREEMENT
----------------
THIS VOTING AGREEMENT (the "Agreement") is entered into as of October 14,
1994, by and among COMPS InfoSystems, Inc., a Delaware corporation (the
"Company"), Christopher A. Crane ("Crane"), and the purchasers (the
"Purchasers") of Series A Preferred Stock of the Company pursuant to the Stock
and Warrant Purchase Agreement dated as of even date herewith (the "Stock and
Warrant Purchase Agreement").
RECITALS
--------
1. Crane is the holder of a majority of the Company's Common Stock. The
Purchasers are the holders of all of the Company's Series A Preferred Stock.
2. As an inducement to the Purchasers to purchase the Series A Preferred
Stock of the Company, Crane is executing this Agreement. As an inducement to
Crane to execute this Agreement, the Purchasers are executing this Agreement.
AGREEMENT
---------
NOW, THEREFORE, the parties hereto agree as follows:
1. Voting of Shares. Until the termination of this Agreement in
----------------
accordance with Section 4 below, Crane will vote all shares of Common Stock of
the Company then within his control, at any annual or special meeting of the
stockholders of the Company, or in any action by written consent of the
stockholders of the Company in order to cause and maintain the election to the
Board of Directors of one director to be elected by the holders of the Company's
Common Stock who is mutually acceptable to Crane and the Purchasers holding a
majority of the outstanding Series A Preferred Stock. A nominee shall be deemed
to be acceptable to the Purchasers if they have consented in writing to his or
her election.
2. Legends on Stock Certificates. The certificates representing shares
-----------------------------
held by Crane shall bear the following legend:
"The shares represented by this certificate are subject to the
limitations, restrictions and other terms and conditions of a
Voting Agreement dated October 14, 1994, on file with the
Company."
3. Application of Agreement to After-Acquired Shares. All of the
-------------------------------------------------
provisions of this Agreement shall apply to, and the term "Shares" as used
herein shall include, all of the shares of Common Stock and Preferred Stock of
the Company, whether issued before or after the Closing Date (as defined in the
Stock and Warrant Purchase Agreement) and all securities issued as a replacement
for the Shares or with respect to the Shares as a result of any stock dividend,
stock split or other similar event.
4. Term of the Agreement. This Agreement shall terminate on the earlier
---------------------
of (a) the consummation by the Company of any underwritten public offering of
the Company's securities in which the gross proceeds to the Company equal or
exceed $10,000,000 at a purchase price of
1
<PAGE>
$3.52 per share (as adjusted for stock splits, stock dividends, reorganizations
and the like), (b) the sale of the Company (through a merger, consolidation,
sale of all or substantially all of its assets or stock), or (c) the effective
time of the liquidation of the Company.
5. Binding Effect on Transferees. This Agreement and all of the terms,
-----------------------------
covenants, and conditions herein contained, shall be binding upon and inure to
the benefit of all of the parties hereto and their respective transferees,
successors, heirs, executors, administrators and assigns. A condition precedent
to the transfer of any of the Common Stock of the Company to any third party by
Crane is that the transferee shall become a party to this Agreement and shall
execute any and all instruments, and take all other actions, necessary to carry
out the purposes of this Agreement. Notwithstanding the foregoing, this
Agreement shall not bind any transferee of Crane that is a not-for-profit
charitable organization, provided, however, that the foregoing exception shall
-------- -------
no longer apply following the transfer by Crane of an aggregate of up to 257,000
of the Company's common stock by Crane to not-for-profit charitable
organizations.
6. Severability. Wherever there is any conflict between any provision of
------------
this Agreement and statute, law, regulation or judicial precedent, the latter
shall prevail, but in such event the provisions of this Agreement thus affected
shall be curtailed and limited only to the extent necessary to bring it within
the requirement of the law. In the event that any part, section, paragraph, or
clause of this Agreement shall be held by a court of proper jurisdiction to be
indefinite, invalid or otherwise unenforceable, the entire Agreement shall not
fail on account thereof, but the balance of the Agreement shall continue in full
force and effect unless such construction would clearly be contrary to the
intentions of the parties.
7. Miscellaneous.
-------------
(a) Waivers and Amendments. With the written consent of Crane, the
----------------------
holders of a majority of the Series A Preferred Stock purchased by the
Purchasers and the Company, this Agreement may be amended and the obligations of
Crane under this Agreement may be waived (either generally or in a particular
instance, either retroactively or prospectively, and either for a specified
period of time or indefinitely).
(b) Governing Law. This Agreement shall be executed and entered into
-------------
in the State of Delaware and is to be governed by and interpreted under the laws
of the that state.
(c) Entire Agreement. This Agreement constitutes the entire
----------------
agreement between the parties with respect to the matters referred to herein,
and no prior or contemporaneous agreement or understanding shall be effective
for any purpose.
(d) Heading. The paragraph headings herein have been inserted for
-------
convenience only, and are not intended to restrict, construe, or modify in any
manner any of the terms and provisions hereof.
(e) Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
2
<PAGE>
(f) Delays or Omissions. It is agreed that no delay or omission to
-------------------
exercise any right, power or remedy accruing to any party hereto, upon any
breach or default of any other party hereto shall impair such right, power or
remedy, nor shall it be construed to be a waiver of any such breach or default,
or any acquiescence herein, or of or in any similar breach or default thereafter
occurring. It is further agreed that any waiver, permit, consent or approval of
any kind or character on the part of the party hereto of any breach or default
under this Agreement, or any waiver of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing and that all remedies, either under this
Agreement, or by law or otherwise afforded to such party, shall be cumulative
and not alternative.
(g) Specific Performance. The parties will be entitled to enforce
--------------------
their rights under this Agreement specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provision of this
agreement and to exercise all other rights existing in their favor. The parties
hereto agree and acknowledge that money damages may not be an adequate remedy
for any breach of the provisions of this Agreement and any party may in its sole
discretion apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive relief in order to enforce or prevent any
violation of the provisions of this Agreement.
(h) Dispute Resolution. The parties acknowledge and agree that time
------------------
is of the essence in resolving any dispute that may arise in connection with
this Agreement. Except as set forth herein, any controversy or claim arising
out of or relating to this Agreement, or the breach thereof, that cannot be
resolved between the parties in a timely manner shall be settled by binding
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association ("AAA"). The expenses of the arbitration, including the
arbitrator's fees, expert witness fees, and attorneys' fees, may be awarded to
the prevailing party, in the discretion of the arbitrator, or may be apportioned
between the parties in any manner deemed appropriate by the arbitrator. Unless
and until the arbitrator decides that one party is to pay for all (or a share)
of such expenses, the Company shall pay all reasonable expenses, including legal
and accounting fees and costs arising in connection with enforcement of this
Agreement or the Collateral Agreements. The parties shall keep confidential the
decision of the arbitrator. Notwithstanding the foregoing, the parties may
disclose information about such decision to persons who have a need to know,
such as directors, trustees, management employees, witnesses, experts,
investors, attorneys, lenders, insurers, and others who may be affected. Once
the arbitration award has become final, if the arbitration award is not promptly
satisfied, then these confidentiality provisions shall no longer be applicable.
Notwithstanding the foregoing, any party may seek equitable
3
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
COMPS INFOSYSTEMS, INC.
By:__________________________________________
Title:_______________________________________
_____________________________________________
Christopher A. Crane, in his individual capacity
PURCHASERS:
SUMMIT VENTURES III, L.P.
By: Summit Partners III, L.P.
General Partner
By: Stamps, Woodsum & Co. III,
General Partner
By:_____________________________________
General Partner
SUMMIT INVESTORS II, L.P.
By:__________________________________________
General Partner
4
<PAGE>
EXHIBIT J
Form of Opinion of Counsel
<PAGE>
October 14, 1994
Summit Ventures III, L.P.
Summit Investors II, L.P.
409 Hamilton Avenue, Suite 200
Palo Alto, California 94301
Re: COMPS InfoSystems, Inc.: 4,270,336 Shares of Series A Preferred
----------------------------------------------------------------
Stock and 379,869 Warrants to Purchase Shares of Class B Common
---------------------------------------------------------------
Stock
-----
Ladies and Gentlemen:
We have acted as counsel to COMPS InfoSystems, Inc., a Delaware
corporation (the "Company"), in connection with the sale to Summit Ventures III,
L.P. and Summit Investors II, L.P. (together, "Summit") on the date hereof by
the Company of 4,270,336 shares (the "Shares"), of Series A Preferred Stock of
the Company, par value $.01 per share (the "Preferred Stock"), and warrants (the
`Warrants'), to purchase 379,869 shares of the Class B Common Stock of the
Company, par value $.01 per share (the "Class B Common Stock"), pursuant to that
certain Stock and Warrant Purchase Agreement dated as of October 14, 1994 (the
"Agreement") among Summit and the Company. This opinion is being rendered to
you pursuant to Section 5.1(i) of the Agreement. Capitalized terms used in the
Agreement, used herein, and not otherwise defined herein shall have the meanings
given them in the Agreement.
As such counsel, we have made such legal and factual examinations and
inquiries as we have deemed necessary or appropriate for purposes of this
opinion, except where a statement is qualified as to knowledge or awareness, in
which case we have made no or limited inquiry as specified below. We have
examined, among other things, the following:
(a) The Agreement;
(b) The Voting Agreement, the Warrants, the Right of First Refusal
and Co-Sale Agreement, and the Investors Right Agreement, each between
Summit and the Company and each dated as of October 14, 1994 and the
Shareholders' Buy-out and Voting Agreement among Summit, the Company and
the Shareholders named therein, dated as of October 14, 1994;
(c) The notes, loan agreements, mortgages, deeds of trust, security
agreements and other written agreements and instruments creating,
evidencing or securing indebtedness of the Company for borrowed money,
identified to us by an officer of the
<PAGE>
Summit Ventures III, L.P.
Summit Investors II, L.P.
October 14, 1994
Page 2
Company as material to the Company, and the other agreements listed on
Exhibit H to the Agreement (the "Material Agreements");
(d) The Restated Certificate of Incorporation (the "Restated
Certificate") and Bylaws of the Company (together, the "Governing
Documents");
(e) Court and administrative orders, writs, judgments, injunctions
and decrees specifically directed to the Company and identified to us by an
officer of the Company as material to the Company (the "Court Orders");
(f) Records of the Company with respect to the issuance and transfer
of capital stock and options;
(g) Minutes of the meetings of the Board of Directors and
Stockholders of the Company and various written consents provided to us by
the officers of the Company;
(h) A certificate of good standing from the Secretary of State of
Delaware;
(i) A certificate of good standing from the Secretary of State of
California; and
(j) A certificate from certain of the Company's officers as of the
date hereof.
(k) The Agreement and Plan of Merger between the Company and Business
Real Estate Information Corp.. a California corporation ("BREIC"), dated as
of September 29, 1994 (the "Merger Agreement"), relating to the statutory
merger of BREIC with the Company on the terms and conditions set forth in
the Merger Agreement (the "Merger"); and
(l) The Certificate of Ownership and Merger of BREIC into the
Company, dated September 29, 1994 (the "Merger Certificate").
The documents described in subsections (a) - (b) above are referred to
herein collectively as the "Documents." In such examination, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, and the conformity to authentic original documents of all
documents submitted to us as copies. In rendering this opinion, we have relied
on and assumed the correctness and completeness of certificates of government
officials and reports of professional filing service companies. As to questions
of fact, we have been furnished with, and with your consent have exclusively
relied upon, certificates of officers and representatives of the Company. In
addition, we assumed that the representations and warranties of Summit set forth
in the Documents are true and correct as of the date hereof, including without
limitation the representation that each of the Purchasers is an "accredited
investor" as defined under Regulation D pursuant to the Securities Act of 1933,
as amended (the "Act").
<PAGE>
Summit Ventures III, L.P.
Summit Investors II, L.P.
October 14, 1994
Page 3
To the extent that the obligations of the Company may be dependent
upon such matters, we assume for purposes of this opinion that: all parties to
the Documents other than the Company have complied with any applicable
requirement to file returns and pay taxes under the Franchise Tax Law of the
State of California; all parties to the Documents other than the Company are
duly organized, validly existing and in good standing under the laws of their
respective jurisdictions of organization; all parties to the Documents other
than the Company have the requisite power and authority to execute and deliver
the Documents and to perform their respective obligations under the Documents to
which they are a party; and the Documents to which such parties other than the
Company are a party have been duly authorized, executed and delivered by such
parties and constitute their legally valid and binding obligations, enforceable
against them in accordance with their terms. We express no opinion as to
compliance by all parties to the Documents other than the Company with any state
or federal laws or regulations applicable to the subject transactions because of
the nature of their business.
Where statements in our opinion are qualified by the term "material,"
those statements involve judgments and opinions as to the materiality or lack of
materiality of any matter to the Company or its business, prospects, assets or
financial condition, which are entirely those of the Company and its officers,
after having been advised by us as to the legal effect of such matters; however,
such opinions and judgments are not known by us to be incorrect.
Whenever a statement herein is qualified by `to the best of our
knowledge" or a similar phrase, it is intended to indicate that those attorneys
in this firm who have rendered legal services in connection with the sale of the
Shares and the Warrants do not have current actual knowledge of the inaccuracy
of such statement. However, except as otherwise expressly indicated, we have
not undertaken any independent investigation to determine the accuracy of any
such statement, and no inference that we have any knowledge of any matters
pertaining to such statement should be drawn from our representation of the
Company.
The opinions hereinafter expressed below are subject to the following
qualifications:
(a) Our opinion is qualified and no opinion is given to the extent
that the enforceability of any agreement entered into by the Company, including
the Documents, may be limited by, or such agreements and the transactions
contemplated thereby may be subject to or affected by, the effect of general
principles of equity, including without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible unavailability of
specific performance or injunctive relief (regardless of whether considered in a
proceeding in equity or at law), or that may otherwise contravene public policy;
(b) Our opinion is qualified and no opinion is given to the extent
that the enforceability of any agreement entered into by the Company, including
the Documents, may be limited by, or such agreements and the transactions
contemplated thereby may be subject to or affected by: (i) the effect of
bankruptcy, reorganization, insolvency, liquidation, readjustment of debt,
arrangement, moratorium or other similar laws now or hereinafter in effect
relating to or
<PAGE>
Summit Ventures III, L.P.
Summit Investors II, L.P.
October 14, 1994
Page 4
affecting the rights of creditors or (ii) any other laws or statutes which
modify, affect or invalidate any remedial, contribution or indemnification
provisions set forth in such agreements;
(c) We express no opinion with respect to the enforceability of
Section II(F) of the Investors Rights Agreement;
(d) Our opinion is qualified and no opinion is given to the extent
that certain rights, remedies and waivers contained in the Documents may be
limited or rendered ineffective by applicable California laws or judicial
decisions governing such provisions, but such laws or judicial decisions do not
render the Documents invalid or unenforceable as a whole;
(e) We express no opinion as to the Company's compliance with the
securities laws, rules and regulations of any state other than California, or
with the antifraud provisions of state (including California) and federal laws,
rules and regulations concerning the issuance of securities;
(f) We express no opinion as to the enforceability of any of the
agreements (other than the Documents) attached as exhibits to the Agreement;
(g) We are opining herein as to the effect on the subject transaction
only of the federal laws of the United States, the internal laws of the State of
California and the General Corporation Law of Delaware, and we express no
opinion with respect to the applicability thereto, or the effect thereon, of the
laws of any other jurisdiction or in the case of Delaware, any other laws, or as
to any matters of municipal law or the laws of any other local agency within any
state;
(h) Our opinion is limited by the effect of and subject to any
disclosures or exceptions contained in or referred to in the Documents,
including, without limitation, those contained in the Officer's Certificate
delivered by the Company at the Closing pursuant to the Agreement;
(i) We express no opinion as to matters concerning intellectual
property, (including, without limitation, patents, trademarks, maskworks, trade
secrets and copyrights), real estate or employment matters;
(j) We have assumed that there are no agreements, contracts,
understandings or negotiations among the parties to any agreement as to which we
are required to opine, that would modify the terms of such agreements or the
respective rights or obligations of the parties thereunder;
(k) We express no opinion as to compliance with the antitrust
provisions of federal or state statutory or common law;
(1) With respect to our opinion in paragraph 1, we have relied solely
upon certificates (or the verbal acknowledgement) of the Secretary of State of
Delaware to the effect that the Company is duly incorporated and in good
standing under the laws of the Delaware.
<PAGE>
Summit Ventures III, L.P.
Summit Investors II, L.P.
October 14, 1994
Page 5
Based upon and subject to the foregoing, it is our opinion that, as of
the date hereof:
1. The Company has been duly incorporated and is validly existing
and in good standing under the laws of the State of Delaware with corporate
power and authority to own its properties and to conduct its business. Based
solely on certificates from public officials, we confirm that the Company is
qualified to do business in California.
2. To our knowledge, the Company does not control, directly or
indirectly, any other corporation, partnership, joint venture or business
entity.
3. The Company has the corporate power to execute and deliver the
Documents and to consummate the transactions contemplated thereby. The
execution and delivery by the Company of the Documents and the consummation of
the transactions contemplated thereby have been duly authorized by all necessary
corporate action on the part of the Company, including all necessary stockholder
approvals. Each of the Documents has been duly executed and delivered by the
Company, and constitutes a legally valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms.
4. The authorized capital stock of the Company is 25,000,000 shares
of Common Stock, par value $.01 per share (the "Common Stock") and 5,000,000
shares of Preferred Stock. The first series of common stock is comprised of
22,500,000 shares designated "Clan A Common Stock". The second series of common
stock is comprised of 2,500,000 shares designated "Class B Common Stock".
Immediately prior to the Closing (but after the filing of the Restated
Certificate), there were issued and outstanding 6,482,000 shares of Class A
Common Stock, no shares of Class B Common Stock, and no shares of Preferred
Stock. The rights of the Class A Common Stock are as set forth in the Restated
Certificate. All issued and outstanding shares of Class A Common Stock have
been duly authorized and validly issued are fully paid and nonassessable and, to
our knowledge, are free of any preemptive rights contained in the Governing
Documents of the Company. The issuance of the outstanding shares of Class A
Common Stock did not, to our knowledge, require any consents, approvals,
authorizations, registrations or filings by the Company under any Federal,
California or Delaware statute, rule or regulation applicable to the Company,
except such as have been or will be obtained or made. To our knowledge, except
for (i) the rights, preferences and privileges of the Class B Common Stock and
the Preferred Stock as set forth in the Restated Certificate of Incorporation, a
certified copy of which is being provided to you at the Closing, (ii) the rights
set forth in the Agreement and the exhibits thereto, (iii) the shares of Class B
Common Stock issuable upon the exercise of outstanding stock options under the
Company's Stock Option Plan, and (iv) the Warrants issued to you, there are no
outstanding rights, options, warrants, conversion rights or agreements for the
purchase or acquisition from the Company of any shares of its capital stock.
5. The Class A Common Stock issuable upon conversion of the Shares
and conversion of the Class B Common Stock (including the Class B Common Stock
issuable upon exercise of the Warrants) has been duly and validly reserved. The
Class B Common Stock issuable upon exercise of the Warrants has been duly and
validly reserved. The Shares, the Class
<PAGE>
Summit Ventures III, L.P.
Summit Investors II, L.P.
October 14, 1994
Page 6
A Common Stock issuable upon conversion of the Shares and upon conversion of the
Class B Common Stock, and the Class B Common Stock issuable upon exercise of the
Warrants, when issued in compliance with the provisions of the Company's
Restated Certificate or the provisions of the Warrants, will be validly issued,
fully paid and nonassessable. To our knowledge, (i) upon the issuance and
delivery by the Company of the Shares and payment by the Purchasers therefor in
accordance with the terms of the Agreement, the Purchasers will acquire such
Shares free of any lien, encumbrance or restriction on transfer (except for any
transfer restrictions arising under federal or state securities laws or any
lien, encumbrance or transfer restrictions created by the Purchasers) and (ii)
upon the issuance and delivery by the Company of the Warrants and payment by the
Purchasers therefor in accordance with the terms of the Agreement, the
Purchasers will acquire such Warrants free of any lien, encumbrance or
restriction on transfer (except for any transfer restrictions arising under
federal or state securities laws or any lien, encumbrance or transfer
restrictions created by the Purchasers). To our knowledge, except as set forth
in the Agreement and the exhibits thereto, no person has any preemptive rights
or any right of first refusal in connection with the issuance of the Shares or
any future issuances of securities by the Company other than those held by the
Purchasers.
6. The execution and delivery of the Documents do not: (i) to our
knowledge, violate any federal, California or Delaware statute, rule or
regulation applicable to the Company, (ii) violate the provisions of the
Governing Documents of the Company or, (iii) to our knowledge, conflict with or
constitute a material default under the Material Agreements or the Court Orders.
7. The execution and delivery of the Documents and the issuance and
sale of the Shares and the Warrants do not, to our knowledge, require any
consents, approvals, authorizations, registrations, declarations or filings by
the Company under any federal, California or Delaware statute, rule or
regulation applicable to the Company, except such as have been or will be
obtained.
8. To our knowledge, except as set forth in the Agreement or the
exhibits thereto, there are no actions, proceedings or investigations pending
against the Company, nor has the Company received any threat thereof, which
questions the validity of the Documents or the right of the Company to enter
into the Documents that, if adversely decided, would have a material adverse
effect upon the business or financial condition of the Company taken as a whole.
9. The offer, sale and issuance pursuant to the terms of the
Agreement of the Shares and the Warrants is exempt (i) from the registration
requirements of Section 5 of the Act, and (ii) from the qualification
requirements of the Corporate Securities Law of the State of California (the
"California Securities Law") pursuant to Section 25102 (f) of the California
Securities Law; and, under the Act and the California Securities Law as they
presently exist, the issuance of the Class A Common Stock issuable upon
conversion of the Shares and upon conversion of the Class B Common Stock, and of
the issuance of the Class B Common Stock issuable upon exercise of the Warrants,
when issued in conformity with the terms of the Restated Certificate, will be
exempt from such registration and qualification requirements.
<PAGE>
Summit Ventures III, L.P.
Summit Investors II, L.P.
October 14, 1994
Page 7
10. Upon the filing of the Merger Certificate with the Secretary of
State of Delaware, the Merger shall have been duly consummated in accordance
with the General Corporation Law of the State of Delaware with the effect
provided therein and in Article I of the Merger Agreement.
This opinion is rendered only to you and is solely for your benefit in
connection with the transactions covered hereby. This opinion may not be relied
upon by you for any other purpose, or furnished to, quoted to or relied upon by
any other person, firm or corporation for any purpose, without our prior written
consent.
Very truly yours,
<PAGE>
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"),
Christopher A. Crane ("Crane") and Merrill Oster ("Oster," 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.
--------------------------------------------
1.1. Sale and Issuance of the Series B Preferred Shares. Subject to
---------------------------------------------------
the terms and conditions hereof, the Company will issue and sell to each
Purchaser and each Purchaser will purchase the number of shares of the Company's
Series 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
--------------------
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
-----------
warrant in the form attached hereto as Exhibit B-2 (individually, a "Warrant"
-----------
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.
---------
2. Closing Date; Delivery.
----------------------
2.1. Closing Date.
------------
(a) Purchase and Sale. The closing of the purchase and sale of
-----------------
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 Gray Cary Ware & 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
-------
hereinafter referred to as the "Closing" and the date of the Closing is
hereinafter referred to as the "Closing Date".
2.2. Delivery. Subject to the terms of this Agreement, at the Closing
--------
the Company will deliver to each Purchaser a certificate representing the Shares
to be purchased by and the Warrant to be issued to such Purchaser from the
Company, against payment of the purchase price for the Shares by a check or
checks payable to the order of the Company, or by wire transfer.
<PAGE>
3. Representations and Warranties of the Company and Crane. The Company
-------------------------------------------------------
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
---------
shall be deemed to be representations and warranties as if made hereunder:
3.1. Organization and Standing: Certificate and By-laws. The Company
--------------------------------------------------
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to carry on its businesses as now conducted and as proposed to be
conducted. The Company is qualified or licensed to do business as a foreign
corporation in all jurisdictions where such qualification or licensing is
required, except where the failure to so qualify would not have a material
adverse effect upon the Company. Complete copies of the Company's 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
---------------
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
---------
(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
---------
"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
---------
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
------------
indirectly, any other corporation, association or business entity.
3.4. Capitalization. As of the Closing, and after giving effect to
--------------
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
2
<PAGE>
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.
-------------
(a) Corporate Action. All corporate action on the part of the
----------------
Company, its officers, directors and stockholders necessary for the sale and
issuance of the 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
--------------
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").
---------
(c) No Preemptive Rights. No person has any right of first
--------------------
refusal or any preemptive rights in connection with the issuance of the Shares
or Warrants, the issuance of the Warrant Shares upon exercise of the Warrants,
the issuance of the Class A Common Stock upon conversion of the Shares or any
future issuances of securities by the Company other than those held by the
Purchasers or those contemplated by the Collateral Agreements.
3.6. Patents, Trademarks, Etc. The Company owns and possesses or is
------------------------
licensed under all patents, patent applications, licenses, trademarks, trade
names, brand names, inventions and copyrights employed in the operation of its
business as now conducted and as proposed to be conducted, with no infringement
of or conflict with the rights of others respecting any of the same. The
operation of the Company's business as now conducted or as proposed to be
conducted does not and will not infringe any patent or other proprietary rights
of others
3
<PAGE>
respecting any of the same. The Company is not obligated to make any payments by
way of royalties, fees or otherwise to any owner, licensor of, or other claimant
to any patent, trademark, trade name, copyright or other intangible asset, with
respect to the use thereof or in connection with the conduct of its business, or
otherwise. The Company has not received any communications alleging that it has
violated or, by conducting its business as proposed, would violate any of the
patents, trademarks, service marks, trade names, copyrights or trade secrets or
other proprietary rights of any other person or entity, nor is the Company aware
of any basis for the foregoing.
3.7. Compliance with Other Instruments, None Burdensome, Etc. The
-------------------------------------------------------
Company is not in violation of any term of its Restated Certificate 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
---------------------------------
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
---------------
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
4
<PAGE>
operations of the Company or in any of its properties or assets, or (b) any
material impairment of the right or ability of the Company to carry on its
business as now conducted or as proposed to be conducted, or (c) any material
liability on the part of the Company; or (2) which questions the validity of
this Agreement, the Collateral Agreements or any action taken or to be taken in
connection herewith or thereunder, including in each case, without limitation,
actions pending or threatened involving the prior employment of any of the
Company's employees, the use in connection with the Company's business of any
information or techniques allegedly proprietary to any of its former employees,
or their obligations under any agreements with prior employers. The Company is
not a party to or subject to the provisions of any order, writ, injunction,
judgment or decree of any court or government agency or instrumentality. There
is no action, suit, proceeding or investigation by the Company currently pending
or which the Company currently intends to initiate.
3.10. Governmental Consent, Etc. No consent. approval or
-------------------------------------
authorization of or designation, declaration or filing with any governmental
authority on the part of the Company is 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
--------
warranties of the Purchasers in Section 4 hereof, the offer, sale and issuance
of the Shares and Warrants in conformity with the terms of this Agreement will
not result in a violation of the requirements of Section 5 of the Securities Act
of 1933, as amended (the "Securities Act") or the qualification or registration
requirements of the California Law or other applicable blue sky laws.
3.12. Taxes. The Company has filed all tax returns that are required
-----
to have been filed with appropriate federal, state, county and local
governmental agencies or instrumentalities, except where the failure to do so
would not have a material adverse effect upon the Company, taken as a whole. The
Company has paid or established reserves for all income, franchise and other
taxes, assessments, governmental charges, penalties, interest and fines due and
payable by them on or before the Closing. There is no pending dispute with any
taxing authority relating to any of such returns and the Company has no
knowledge of any proposed liability for any tax to be imposed upon the
properties or assets of the Company for which there is not an adequate reserve
reflected in the Financial Statements (as defined below).
3.13. Title. The Company owns its property and assets, including the
-----
properties and assets reflected in the Financial Statements, free and clear of
all liens, mortgages, loans or encumbrances except liens for current taxes, and
such encumbrances and liens which arise in the ordinary course of business and
do not materially impair the Company's ownership or use of such property or
assets. With respect to the property and assets leased by the Company, the
5
<PAGE>
Company is in compliance with such leases and, to the best of the Company's
knowledge, holds valid leasehold interests free and clear of any liens, claims
or encumbrances.
3.14. Material Contracts and Commitments. All of the contracts,
----------------------------------
mortgages, indentures, agreements, instruments and transactions to which the
Company is a party or by which it is bound (including purchase orders to the
Company or placed by the Company) which involve obligations of, or payments to,
the Company in excess of Twenty-Five Thousand Dollars ($25,000), 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
--------------------
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
------------------
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
6
<PAGE>
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
------------------------
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
-------------------
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
--------------------
the building currently occupied by the Company at 9888 Carroll Centre Road, San
Diego, California 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
7
<PAGE>
which the Company is affiliated or with which the Company has a business
relationship (except as a holder of securities of a corporation whose securities
are publicly traded and which is subject to the reporting requirements of the
Securities Exchange Act of 1934, to the extent of owning not more than two
percent (2%) of the issued and outstanding securities of such corporation). No
such officer, director or stockholder, or any member of their immediate
families, is, directly or indirectly, interested in any material contract with
the Company. The Company is not guarantor or indemnitor of any indebtedness of
any other person, firm or corporation.
3.20. Corporate Documents; Minute Books. Except for amendments
---------------------------------
necessary to satisfy representations and warranties or conditions contained
herein (the form of which amendments has been approved by the Purchaser), the
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,
----------------------
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
---------------------------------
property holding corporation" within the meaning of Section 897(c)(2) of the
United States Internal Revenue Code of 1986, as amended.
3.23. Qualified Small Business. The Company is a "qualified small
------------------------
business" within the meaning of Section 1202(d) of the Internal Revenue Code of
1986, as amended, as of the date of issuance of the Shares. The Company will use
reasonable efforts to comply with the reporting and recordkeeping requirements
of Section 1202 and any regulations promulgated thereunder if and for so long as
it appears to the Company that the Purchasers may be able to obtain the benefits
of Section 1202 and any such regulations.
3.24. Disclosure. No representation or warranty by the Company in
----------
this Agreement, or in any document or certificate furnished or to be furnished
to the Purchasers pursuant hereto or in connection with the transactions
contemplated hereby, when taken together, contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary to make the statements made herein and therein, in the light of the
circumstances under which they were made, not misleading; provided, however, 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.
8
<PAGE>
4. Representations and Warranties of Purchasers and Restrictions on
----------------------------------------------------------------
Transfer Imposed by the Securities Act.
- --------------------------------------
4.1. Representations and Warranties by the Purchaser. Each Purchaser
-----------------------------------------------
represents and warrants to the Company as of the date hereof and as of the
Closing Date as follows:
(a) Investment Intent. This Agreement is made with the
-----------------
Purchasers in reliance upon their representation to the Company, evidenced by
each Purchaser's execution of this Agreement, that each Purchaser is acquiring
the Shares and Warrants, and will acquire the Warrant Shares issuable upon
exercise of the Warrants and the Class A Common Stock issuable upon conversion
of Shares (collectively the "Securities") for investment for such Purchaser's
own account, not as nominee or agent, for investment and not with a view to, or
for resale in connection with, any distribution or public offering thereof
within the meaning of the Securities Act and the California Law. Each Purchaser
has the full right, power and authority to enter into and perform this Agreement
and the Collateral Agreements and this Agreement and each of the Collateral
Agreements constitute valid and binding obligations upon it.
(b) Shares Not Registered. Each Purchaser understands and
---------------------
acknowledges that the offering of the Securities pursuant to this Agreement will
not be registered under the Securities Act or qualified under the California Law
on the grounds that the offering and sale of securities contemplated by this
Agreement are exempt from registration under the Securities Act and exempt from
qualification pursuant to Section 25102(f) of the California Law, and that the
Company's reliance upon such exemptions is predicated upon such Purchaser's
representations set forth in this Agreement.
(c) No Transfer. Each Purchaser covenants that in no event will
-----------
such Purchaser dispose of any of the Securities (other than in conjunction with
an effective registration statement for the Securities under the Securities Act
or in compliance with Rule 144 promulgated under the Securities Act) unless and
until (i) such Purchaser shall have notified the Company of the proposed
disposition and shall have furnished the Company with a statement of the
circumstances surrounding the proposed disposition, and (ii) if reasonably
requested by the Company, such Purchaser shall have furnished the Company with
an opinion of counsel satisfactory in form and substance to the Company to the
effect that (x) such disposition will not require registration under the
Securities Act and (y) appropriate action necessary for compliance with the
Securities Act, the California Law and any other applicable state, local or
foreign law has been taken. It is agreed that the Company will not require
opinions of counsel for transactions made pursuant to Rule 144, other than
opinions with regard to sales under Rule 144(k) as stated in Section 4.3 of this
Agreement.
(d) Permitted Transfers. Notwithstanding the provisions of
-------------------
Subsection (c) above, no registration statement or opinion of counsel shall be
necessary for a transfer by a Purchaser which is a partnership to a partner of
such partnership or a former partner of such partnership who leaves such
partnership after the date hereof, or to the estate of any such partner or
former partner or the transfer by gift, will or intestate succession of any
partner to his spouse or lineal descendants or ancestors, if the transferee
agrees in writing to be bound by the terms of this Agreement to the same extent
as if he were an original Purchaser hereunder.
9
<PAGE>
(e) Knowledge and Experience. Each Purchaser represents that it
------------------------
(i) has such knowledge and experience In financial and business matters as to be
capable of evaluating the merits and risks of such Purchaser's prospective
investment in the Securities; (ii) has the ability to bear the economic risks of
such Purchaser's prospective investment; (iii) has been furnished with and has
had access to such information as such Purchaser has considered necessary to
make a determination as to the purchase of the Securities; (iv) has had all
questions which have been asked by such Purchaser satisfactorily answered by the
Company; and (v) has not been offered the Securities by any form of
advertisement, article, notice or other communication published in any
newspaper, magazine, or similar media or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any such media.
(f) Accredited Investor. Each Purchaser is an "accredited
-------------------
investor" within the meaning of Securities and Exchange Commission ("SEC") Rule
501 of 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
<PAGE>
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
<PAGE>
(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
<PAGE>
(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
<PAGE>
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 9888
Carroll Centre Road, San Diego, California 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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
COMPS INFOSYSTEMS, INC.
By: /s/ Christopher A. Crane
-------------------------------------
Christopher A. Crane
President
SUMMIT VENTURES III, L.P.
By: Summit Partners III L.P.,
its General Partner
By: Stamps, Woodsum & Co., III
its General Partner
By: /s/ Gregory M. Avis
------------------------------------
Gregory M. Avis, General Partner
SUMMIT INVESTORS II, L.P.
By: /s/ Gregory M. Avis
------------------------------------
Gregory M. Avis, General Partner
Christopher A. Crane
/s/ Christopher A. Crane
-----------------------------------------
Christopher A. Crane
Merrill Oster
/s/ Merrill Oster
-----------------------------------------
Merrill Oster
<PAGE>
EXHIBIT A
Schedule of Purchasers
<TABLE>
<CAPTION>
Series B Preferred Shares Subject to
------------------ -----------------
Stock Warrants Purchase Price
----- -------- --------------
<S> <C> <C> <C>
Summit Ventures III, L.P. 543,508 292,658 shares of $ 980,000
499 Hamilton Ave., Suite 200 Class B (non-voting)
Palo Alto, CA 94301 Common Stock
Attention: Greg Avis
- --------------------
Summit Investors II, L.P. 11,092 5,973 shares of $ 20,000
499 Hamilton Ave., Suite 200 Class B (non-voting)
Palo Alto, CA 94301 Common Stock
Attention: Greg Avis
- --------------------
Christopher A. Crane 69,325 37,329 shares of $ 125,000
c/o COMPS InfoSystems, Inc. Class A (voting)
9888 Carroll Centre Rd., Suite 100 Common Stock
San Diego, CA 92126-4581
Merrill Oster 13,865 7,466 shares of $ 25,000
c/o COMPS InfoSystems, Inc. Class B (non-voting)
9888 Carroll Centre Rd., Suite 100 Common Stock
San Diego, CA 92126-4581
Totals: 637,790 $1,150,000.00
</TABLE>
<PAGE>
EXHIBIT B-1
Form of Summit/Oster Warrant
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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: ____________________________
Christopher A. Crane
President
5
<PAGE>
EXHIBIT B-2
Form of Crane Warrant
<PAGE>
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, Christopher A. Crane (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
<PAGE>
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
<PAGE>
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
<PAGE>
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: ____________________________
Robert C. Beasley
Secretary
4
<PAGE>
EXHIBIT C
Schedule of Exceptions
<PAGE>
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 Beasley, Crane and Summit, Crane
and Summit have certain rights of first refusal with respect to Beasley's shares
of Series A Common Stock. Pursuant to the terms of a Stockholder Voting
Agreement among Merrill Oster and Crane, Crane has certain rights of first
refusal with respect to Mr. Oster's 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.
<PAGE>
3.19 Certain Transactions.
--------------------
3.19.1 COMPS Plaza. Beasley 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 Beasley nor Crane 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
<PAGE>
Exhibit 3.8
-----------
COMPS InfoSystems, Inc.
Employees with Whom the Company Does Not Have Confidentiality and Proprietary
Information Agreements:
Aspiras, Gloria*
August, Caroline*
Becker, Aaron*
DeMonaco, Tracy*
Donado, Cris*
Fenton, Christopher*
Hitch, Jeff*
Larkin, Deb*
Nelson, Lori*
Pierce, Jeff*
Prevo, Dan*
Quindara, Belinda*
Radovich, Marcella*
Range1, Rudolfo*
Reisinger, Lori*
Ridley, Vicki*
Ruiz, Rance*
Ryan, Heather*
Stevens, Mark*
Watson, Laura*
Whiles, Wendi*
________________
* Form of the agreement has been provided to Summit. It is anticipated that the
actual agreements will be executed shortly after the closing.
3
<PAGE>
EXHIBIT D
Amended and Restated Investor Rights Agreement
See Exhibit 10.1 to Registration Statement on Form S-1
<PAGE>
EXHIBIT E
Amended and Restated Right of First Refusal and Co-Sale Agreement
<PAGE>
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"), Christopher A. Crane,
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
<PAGE>
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
<PAGE>
(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
<PAGE>
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 la Crane's Notice in consummation of the
transfer of the Offered Stock pursuant to the terms and conditions specified in
such notice, and
4
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the date first written above.
COMPS INFOSYSTEMS, INC.
By: __________________________________
Christopher A. Crane, President
Address:
9888 Carroll Centre Road, Ste. 100
San Diego, California 92126-4581
(619) 578-3000
CHRISTOPHER A. CRANE
______________________________________
Christopher A. Crane, in his
individual capacity
Address:
c/o COMPS Infosystems, Inc.
9888 Carroll Centre Road, Suite 100
San Diego, CA 92126-4581
(619) 578-3000
9
<PAGE>
PURCHASERS:
SUMMIT VENTURES III, L.P.
By: Summit Partners III, L.P.
its General Partner
By: Stamps, Woodsum & Co. III,
its General Partner
By: _________________________________
Gregory M. Avis, General Partner
SUMMIT INVESTORS II, L.P.
By: _________________________________
Gregory M. Avis, General Partner
Address
499 Hamilton Avenue, Suite 200
Palo Alto, CA 94301
(415) 321-1166
10
<PAGE>
EXHIBIT F
Amended and Restated Voting Agreement
<PAGE>
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"), Christopher A. Crane ("Crane"), 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
<PAGE>
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
<PAGE>
(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
<PAGE>
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: _____________________________________
Christopher A. Crane, President
_________________________________________
Christopher A. Crane,
in his individual capacity
PURCHASERS:
SUMMIT VENTURES III, L.P.
By: Summit Partners III, L.P.
its General Partner
By: Stamps, Woodsum & Co. III,
its General Partner
By: _____________________________________
Gregory M. Avis, General Partner
SUMMIT INVESTORS II, L.P.
By: _____________________________________
Gregory M. Avis, General Partner
4
<PAGE>
EXHIBIT G
Restated Certificate of Incorporation
See Exhibit 3.1 to Registration Statement on Form S-1
<PAGE>
EXHIBIT H
Schedule of Contracts
<PAGE>
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
<PAGE>
EQUIPMENT LEASES (CON'T)
- ------------------------
Canon Financial Service
Lease No. 001-0050913-001
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. 001-0058622-001
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: Haworth 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
<PAGE>
EQUIPMENT AND WORKING CAPITAL LOANS
- -----------------------------------
Venture Lending & Leasing Inc.
Loan No. 69-001
Term: 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. 69-002
Term: 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. 69-003
Term: 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. 69-004
Term: 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. 69-005
Term: 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
<PAGE>
EQUIPMENT AND WORKING CAPITAL LOANS (CON'T)
- -------------------------------------------
Venture Lending & Leasing Inc.
Loan No. 69 006
Term: 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. 69-007
Term: 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)
<PAGE>
OFFICE LEASES
- -------------
Lessor: Mutual Benefit Life Insurance Co.
c/o Vestar Property Management
Lease Address: 5060 N. 40th Street, #106
Phoenix, AZ 85018
Start: 11/15/93
Term: 48 months
Effective Rent: $2,116.44/month
Lessor: Hugh W. Klebahn as Trustee for the
Jane K. Molyneux Trust
c/o Hanford, Freund & Company
Lease Address: 870 Mitten Road
Burlingame, CA 94010
Start: 05/05/95
Term: 60 months
Effective Rent: $2,966.56/month
Lessor: COMPS Plaza Associates, Ltd.
c/o McKellar Properties
Lease Address: 9888 Carroll Centre Road
San Diego, CA 92126
Start: 07/01/94
Term: 96 months
Effective Rent/Month: $20,508.86/month
Lessor: 8500 CDC L.P.
Lease Address: 8500 Leesburg Pike, Suite 7700
Vienna, VA 22182
Start: 3/01/95
Term: 60 months
Effective Rent/Month: $2,735.16/month
CONTRACTS
- ---------
DataQuick Information Systems
9171 Town Centre Drive, Suite 600
San Diego, CA 92122
Don Cohn, President
Insurance Services Office, Inc. (ISO)
7 World Trade Center
New York, NY 10048
Carole Banfield, Senior Vice President
<PAGE>
CONTRACTS (CON'T)
- -----------------
Qualitative Marketing Software, Inc.
28051 U.S. Highway 19 North, Suite E
Clearwater. FL 34621-2647
Paul Wray, President
BLR Data
1820 E. River Road, Suite 110
Tucson, AZ 85718
Paul M. Evans, VP of Sales
Venture Lending & Leasing Inc.
2010 North First Street, Suite 310
San Jose, CA 95131
Salvador O. Gutierrez, President
Experian RES
5601 East La Palma Avenue
Anaheim, CA 92807
George Livermoore, General Manager
BANKING RELATIONSHIPS
- ---------------------
Bank: Silicon Valley Bank
5414 Oberline Drive, Suite 230
San Diego, CA 92121
Jeffrey M. Huhn, Vice President
(619) 558-3812
Bank: Union Bank
7807 Girard Avenue
La Jolla, CA 93037
Greg Farnsworth, Vice President
(619) 230-4760
<PAGE>
EXHIBIT H
---------
Agreements with Officers, Directors, Stockholders, Consultants, Employees
1. Employment Agreements with each of the following:
a. Chris Crane
b. Karen Goodrum
c. Craig Farrington
d. Chris Fenton
e. Walter Papciak
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. Chris Crane
b. Karen Goodrum
c. Craig Farrington
d. Chris Fenton
e. Robert Beasley
e. Walter Papciak
4
<PAGE>
EXHIBIT I
Form of Opinion of Counsel
<PAGE>
[LATHAM & WATKINS LETTERHEAD]
February 9, 1998
Summit Ventures III, L.P.
Summit investors II, L.P.
409 Hamilton Avenue, Suite 200
Palo Alto, California 94301
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,
Christopher A. Crane ("Crane"), Merrill Oster ("Oster") 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
<PAGE>
(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
<PAGE>
"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
<PAGE>
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
<PAGE>
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
<PAGE>
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
6
<PAGE>
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,
7
<PAGE>
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.
-----------------------
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.
--------------
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
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<PAGE>
prior to the adjustment and the denominator of which shall equal the Exercise
Price in effect immediately after the adjustment.
b. Reclassification, Reorganization and Consolidation. In case of
--------------------------------------------------
any reclassification, capital reorganization or change in the Class B Common
Stock of the Company (other than as a result of a subdivision, combination or
stock dividend provided for in Section 2(a) above), then, as a condition of such
reclassification, reorganization or change, lawful provision shall be made, and
duly executed documents evidencing the same from the Company or its successor
shall be delivered to the holder of this Warrant, so that the holder of this
Warrant shall have the right, commencing upon the times set forth in Section 3,
and prior to the expiration of this Warrant, to purchase, at a total price equal
to that payable upon the exercise of this Warrant, the kind and amount of shares
of stock and other securities and property receivable in connection with such
reclassification, reorganization or change by a holder of the same number of
shares of Class B Common Stock as were subject to this Warrant immediately prior
to such reclassification, reorganization or change. In any such, case
appropriate provisions shall be made with respect to the rights and interests of
the holder of this Warrant so that the provisions hereof shall thereafter be
applicable with respect to any shares of stock or other securities and property
deliverable upon exercise hereof, and appropriate adjustments shall be made to
the purchase price per share payable hereunder, provided the aggregate purchase
price shall remain the same.
c. Conversion of Class B Common Stock. If at any time prior to the
----------------------------------
expiration of this Warrant, all of the Company's then outstanding Class B Common
Stock is converted into shares of the Company's Class A Common Stock, then this
Warrant shall immediately become exercisable for that number of shares of Class
A Common Stock receivable upon conversion by a holder of the same number of
shares of Class B Common Stock as were subject to this Warrant immediately prior
to such conversion, and the Exercise Price shall be immediately adjusted to
equal the quotient obtained by dividing (x) the aggregate Exercise Price of the
maximum number of shares of Class B Common Stock for which this Warrant was
exercisable immediately prior to such conversion, by (y) the number of shares of
Class A Common Stock for which this Warrant is exercisable immediately after
such conversion. After any such conversion, all references herein to Class B
Common Stock shall be deemed to be references to Common Stock.
d. Notice of Adjustment. When any adjustment is required to be made
--------------------
in the number or kind of shares purchasable upon exercise of the Warrant, or in
the Exercise Price, the Company shall promptly notify the Holder of such event
and of the number of shares of Common Stock or other securities or property
thereafter purchasable upon exercise of the Warrant.
3. Exercise of Warrant. This Warrant may be exercised in whole or in
-------------------
part, commencing (i) one day prior to the earlier of the closing or the
effective time of a "Liquidity Event," as defined herein; or, (ii) if earlier,
October 14, 2001, by the surrender of this Warrant and payment to the Company by
cash or check of the Exercise Price for all of the Shares purchased. The
Company shall, within ten (10) days after such delivery, (a) prepare and issue a
certificate for the Shares purchased in the name of the Holder of this Warrant,
or as such Holder may direct (subject to the restrictions upon transfer
contained herein and upon payment by such
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<PAGE>
Holder hereof of any applicable transfer taxes) and (b) prepare and issue a new
warrant of like terms if this Warrant is exercised for less than all of the
Shares subject hereto. "Liquidity Event" shall mean (i) an acquisition,
consolidation or merger of the Company with or into any other corporation or
corporations unless the stockholders of the Company prior to such transaction
directly or indirectly own more than fifty percent (50%) of the voting stock of
the surviving or accruing corporation or corporations; (ii) the sale, transfer
or other disposition of all or substantially all of the assets of the Company to
a person other than a corporation or partnership controlled by the Company or
its stockholders; (iii) the effectuation by the Company of a transaction or
series of related transactions in which more than fifty percent (50%) of the
outstanding voting power of the Company prior to such transaction or series of
related transactions, is disposed of; and (iv) the closing of the sale of the
Company's securities pursuant to an underwritten public offering.
a. Net Issue Exercise. Notwithstanding any provisions herein to the
------------------
contrary, in lieu of exercising this Warrant for cash, the Holder may elect to
receive shares equal to the value (as determined below) of this Warrant (or the
portion thereof being canceled) by surrender of this Warrant at the principal
office of the Company together with a properly endorsed notice of exercise and
notice of such election in which event the Company shall issue to the Holder a
number of shares of Clm B Common Stock computed using the following formula:
X = Y (A - B)
---------
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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<PAGE>
public offering of Common Stock, the fair market value per share shall be the
per share offering price to the public of the Company's initial public offering.
4. Term of Warrant. This Warrant expires and shall no longer be
---------------
exercisable as of 11:59 p.m. Pacific standard time, October 14, 2004, and shall
be void thereafter.
5. Conditions to Exercise of Warrant or Transfer of the Shares. It
-----------------------------------------------------------
shall be a condition to any exercise of this Warrant that the Company shall have
received, at the time Shares being issued upon such exercise of such exercise, a
representation in writing that the are being acquired for investment and not
with a view to any sale or distribution thereof, or a statement of the pertinent
facts covering any proposed distribution thereof. It shall be a condition to
any transfer of any or all of the Shares issued upon exercise of this Warrant,
other than a transfer registered under the Securities Act of 1933, as amended
(the "Act"), that the Company shall have received a legal opinion, in form and
substance reasonably satisfactory to the Company and its counsel, reciting the
pertinent circumstances surrounding the proposed transfer and stating that such
transfer is exempt from the prospectus and the registration requirement of the
Act Each certificate evidencing the Shares issued upon exercise of this Warrant,
or upon any transfer of such shares (other than a transfer registered under the
Act or any subsequent transfer of shares so registered) shall, at the option of
the Company, contains a legend, in form and substance satisfactory to the
Company and its counsel, restricting the transfer of such shares to sales or
other dispositions exempt from the requirements of the Act. It is agreed that
the Company will not require opinions of counsel for transactions made pursuant
to Rule 144, other than opinions with regard to sales under Rule 144(k).
6. Fractional Shares. This Warrant shall in no event be exercisable
-----------------
for fractional shares, and in lieu thereof, the number of shares which would
otherwise be purchased under this Warrant shall be rounded up to the nearest
whole share of Common Stock.
7. Miscellaneous.
-------------
a. The Company covenants that it will at all times reserve and
keep available, solely for the purpose of issuance upon the exercise hereof, a
sufficient number of shares of Class A or Class B Common Stock, as applicable,
to permit the exercise hereof in full. Such shares when issued in compliance
with the provisions of this Warrant and the Certificate of Incorporation, as
amended, will be duly authorized, validly issued, fully paid and nonassessable.
b. The terms of this Warrant shall be binding upon and shall
inure to the benefit of any successors or assigns of the Holder hereof and of
the Shares issued or issuable upon the exercise hereto.
c. The Holder, as such, shall not be entitled to vote or receive
dividends or be deemed to be a shareholder of the Company for any purpose, nor
shall anything contained in this Warrant be construed to confer upon the Holder,
is such, any rights of a shareholder of the Company or any right to vote, give
or withhold consent to any corporate action, receive notice of meetings, receive
dividends or subscription rights, or otherwise.
d. Receipt of this Warrant by the Holder shall constitute
acceptance of and agreement to the foregoing terms and conditions.
-4-
<PAGE>
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:
--------------------------
Christopher A. Crane
President
-5-
<PAGE>
Schedule of Warrant Holders
---------------------------
Name Number of Warrants
---- ------------------
Summit Ventures III, L.P. 372,272
Summit Ventures II, L.P. 7,597
<PAGE>
Exhibit 10.5
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND ARE "RESTRICTED
SECURITIES" AS DEFINED IN RULE 144 PROMULGATED UNDER THE ACT. THE SECURITIES
MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT (i) IN
CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE
ACT OR (ii) IN COMPLIANCE WITH RULE 144, OR (iii) PURSUANT TO AN OPINION OF
COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION OR COMPLIANCE IS
NOT REQUIRED AS TO SAID SALE, OFFER OR DISTRIBUTION.
Warrant No. W-A1
CLASS A COMMON STOCK WARRANT
OF
COMPS INFOSYSTEMS, INC.
-----------------------
THIS CERTIFIES THAT, for value received, Christopher A. Crane (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
<PAGE>
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),
A = the fair market value of one share of the Company's Class A Common
Stock (at the date of such calculation), and
2
<PAGE>
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 Wan-
ant, 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 Common Stock to permit the exercise
hereof in full. Such shares when issued
3
<PAGE>
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 9, 1998
COMPS INFOSYSTEMS, INC.
By: /s/ Robert C. Beasley
------------------------
Robert C. Beasley
Secretary
4
<PAGE>
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.
-----------------------
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.
--------------
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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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:
----------------------------
Christopher A. Crane
President
5
<PAGE>
Schedule to Exhibit 10.6
------------------------
Name Number of Warrants
---- ------------------
Summit Ventures III, L.P. 292,658
Summit Ventures II, L.P. 5,973
Merrill Oster 7,466
<PAGE>
Exhibit 10.7
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-_________
WARRANT TO PURCHASE
213,068 SHARES OF CLASS B COMMON STOCK OF
COMPS INFOSYSTEMS. INC.
------------------------
(Void after September 24, 2003)
This certifies that VENTURE LENDING & LEASING, INC., a Maryland
corporation, or assigns (the "Holder"), for value received, is entitled to
purchase from COMPS InfoSystems, Inc., a Delaware corporation (the "Company"),
Two Hundred Thirteen Thousand Sixty-Eight (213,068) fully paid and nonassessable
shares of the Company's non-voting Class B Common Stock ("Common Stock") at a
price of One and 76/100 Dollars ($1.76) per share (such price being referred to
herein as the "Stock Purchase Price") at any time or from time to time up to and
including 5:00 p.m. (Pacific time) on September 24, 2003 (the "Expiration Date"
and subject to adjustment as set forth herein), upon surrender to the Company at
its principal office at 9888 Carroll Centre Road, San Diego, CA 92126-4580 (or
at such other location as the Company may advise Holder in writing) of this
Warrant properly endorsed with the Form of Subscription attached hereto duly
filled in and signed and upon payment in cash or by check of the aggregate Stock
Purchase Price for the number of shares for which this Warrant is being
exercised determined in accordance with the provisions hereof.
The Stock Purchase Price and the number of shares purchasable
hereunder are subject to adjustment as provided in the following sentence of
this preamble, and in Section 4 of this Warrant. In the event the Company
closes a round of equity financing prior to close of business on the last
business day of the eighteenth full month after the issuance of this Warrant and
in which equity financing the Company issues shares of Common Stock (or
preferred stock convertible into Common Stock on a one-to-one basis) and
receives net proceeds of offering of at least $10,000,000.00, then the initial
Stock Purchase Price shall automatically be adjusted to an amount equal to the
median of the per share price in such offering and $1.17, and the number of
shares of Common Stock issuable hereunder shall be equal to 375,000 divided by
such adjusted initial Stock Purchase Price.
This Warrant is subject to the following terms and conditions:
<PAGE>
1. Exercise; Issuance of Certificates; Payment for Shares.
------------------------------------------------------
(a) Unless an election is made pursuant to clause (b) of this Section
1, this Warrant shall be exercisable at the option of the Holder, at any time or
from time to time, on or before the Expiration Date for all or any portion of
the shares of Common Stock (but not for a fraction of a share) which may be
purchased hereunder for the Stock Purchase Price multiplied by the number of
shares to be purchased. The Company agrees that the shares of Common Stock
purchased under this Warrant shall be and are deemed to be issued to the holder
hereof as the record owner of such shares as of the close of business on the
date on which this Warrant shall have been surrendered and payment made for such
shares. Subject to the provisions of Section 2, certificates for the shares of
Common Stock so purchased, together with any other securities or property to
which the Holder hereof is entitled upon such exercise, shall be delivered to
the Holder hereof by the Company at the Company's expense within a reasonable
time after the rights represented by this Warrant have been so exercised.
Except as provided in clause (b) of this Section 1, in case of a purchase of
less than all the shares which may be purchased under this Warrant, the Company
shall cancel this Warrant and execute and deliver to the Holder hereof within a
reasonable time a new Warrant or Warrants of like tenor for the balance of the
shares purchasable under the Warrant surrendered upon such purchase. Each stock
certificate so delivered shall be in such denominations of Common Stock as may
be requested by the Holder hereof and shall be registered in the name of such
Holder or such other name as shall be designated by such Holder, subject to the
limitations contained in Section 2.
(b) The Holder, in lieu of exercising this Warrant by the payment of
the Stock Purchase Price pursuant to clause (a) of this Section 1, may elect, at
any time on or before the Expiration Date, to receive, through conversion of
this Warrant or any portion hereof into that number of shares of Common Stock
equal to the quotient of: (i) the difference between (A) the Per Share Price (as
hereinafter defined) of the Common Stock, less (B) the Stock Purchase Price then
in effect, multiplied by the number of shares of Common Stock the Holder would
otherwise have been entitled to purchase hereunder pursuant to clause (a) of
this Section 1 (or such lesser number of shares as the Holder may designate in
the case of a partial exercise of this Warrant); over (ii) the Per Share Price.
(c) For purposes of clause (b) of this Section 1, "Per Share Price"
means: (i) if the Company's Common Stock is then listed or admitted to trading
on any national securities exchange or traded on any national market system, the
average of the closing bid and asked prices of the Company's Common Stock as
reported on such exchange or market system for the ten (10) consecutive trading
days prior to the date of the Holder's election to convert hereunder; (ii) if
this Warrant is being converted in conjunction with a public offering of stock,
the price to the public per share pursuant to the offering; or (iii) if no
shares of the Company's Common Stock are listed or admitted to trading on any
national securities exchange or traded on any national market system, the price
per share which the Company would obtain from a willing buyer for shares sold by
the Company from authorized but unissued shares as such price shall be agreed
upon by the Holder and the Company or, if agreement cannot be reached within ten
(10) business days of the Holder's election hereunder, as such price shall be
determined by a panel of three (3) appraisers, one (1) to be chosen by the
Company, one (1) to be chosen by the Holder and the third to be chosen by the
first two (2) appraisers. If the appraisers cannot reach agreement within 30
days of the Holder's election hereunder, then each appraiser shall deliver its
2
<PAGE>
appraisal and the appraisal which is neither the highest nor the lowest shall
constitute the Per Share Price. In the event either party fails to choose an
appraiser within 30 days of the Holder's election hereunder, then the appraisal
of the sole appraiser shall constitute the Per Share Price. Each party shall
bear the cost of the appraiser selected by such party and the cost of the third
appraiser shall be borne one-half by each party. In the event either party
fails to choose an appraiser, the cost of the sole appraiser shall be borne one-
half by each party.
(d) 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 Stock Purchase Price shall be immediately adjusted
to equal the quotient obtained by dividing (x) the aggregate Stock Purchase
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 reference's
herein to Class B Common Stock shall be deemed to be references to Class A
Common Stock.
2. Limitation on Transfer.
----------------------
(a) This Warrant and the Common Stock shall not be transferable except
upon the conditions specified in this Section 2, which conditions are intended
to insure compliance with the provisions of the Securities Act. Each holder of
this Warrant or the Common Stock issuable hereunder will cause any proposed
transferee of the Warrant or Common Stock to agree to take and hold such
securities subject to the provisions and upon the conditions specified in this
Section 2.
(b) Each certificate representing this Warrant or the Common Stock
shall (unless otherwise permitted by the provisions of this Section 2 or unless
such securities have been registered under the Securities Act or sold under Rule
144) be stamped or otherwise imprinted with a legend substantially in the form
set forth on the face of this Warrant.
(c) The Holder of this warrant and each person to whom this Warrant is
subsequently transferred represents and warrants to the Company (by acceptance
of such transfer) that it will not transfer the Warrant (or securities issuable
upon exercise hereof unless a registration statement under the Securities Act
was in effect with respect to such securities at the time of issuance thereof)
except pursuant to (i) an effective registration statement under the Securities
Act, (ii) Rule 144 under the Securities Act (or any similar rule under the
Securities Act relating to the disposition of securities), or (iii) an opinion
of counsel, reasonably satisfactory to counsel for the Company, that an
exemption from such registration is available.
3. Shares to be Fully Paid; Reservation of Shares. The Company covenants
----------------------------------------------
and agrees that all shares of Common Stock which may be issued upon the exercise
of the rights represented by this Warrant will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable and free from all
preemptive rights of any shareholder and free of all taxes,
3
<PAGE>
liens and charges with respect to the issue thereof. The Company further
covenants and agrees that during the period within which the rights represented
by this Warrant may be exercised, the Company will at all times have authorized
and reserved, for the purpose of issue or transfer upon exercise of the
subscription rights evidenced by this Warrant, a sufficient number of shares of
authorized but unissued Common Stock, or other securities and property, when and
as required to provide for the exercise of the rights represented by this
Warrant. The Company will take all such action as may be necessary to assure
that such shares of Common Stock may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of any
domestic securities exchange upon which the Common Stock may be listed. The
Company will not take any action which would result in any adjustment of the
Stock Purchase Price (as defined in Section 4 hereof) (i) if the total number of
shares of Common Stock issuable after such action upon exercise of all
outstanding warrants, together with all shares of Common Stock then outstanding
and all shares of Common Stock then issuable upon exercise of all options and
upon the conversion of all convertible securities then outstanding, would exceed
the total number of shares of Common Stock then authorized by the Company's
Articles of Incorporation.
4. Adjustment of Stock Purchase Price Number of Shares. The Stock
---------------------------------------------------
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 4. Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the number
of shares obtained by multiplying the Stock Purchase Price in effect immediately
prior to such adjustment by the number of shares purchasable pursuant hereto
immediately prior to such adjustment, and dividing the product thereof by the
Stock Purchase Price resulting from such adjustment.
4.1 Subdivision or Combination of Stock. In case the Company shall
-----------------------------------
at any time subdivide its outstanding shares of Common Stock into a greater
number of shares, the Stock Purchase Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely, in case the
outstanding shares of Common Stock of the Company shall be combined into a
smaller number of shares, the Stock Purchase Price in effect immediately prior
to such combination shall be proportionately increased.
4.2 Dividends in Preferred Stock, Other Stock, Property,
----------------------------------------------------
Reclassification. If at any time or from time to time the holders of Common
- ----------------
Stock (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or become entitled to receive,
without payment therefor,
(a) by way of dividend or other distribution, any shares of stock
or other securities, whether or not such securities are at any time directly or
indirectly convertible into or exchangeable for Common Stock, or any rights or
options to subscribe for, purchase or otherwise acquire any of the foregoing, or
(b) any cash paid or payable otherwise than as a cash dividend,
or
(c) additional stock or other securities or property (including
cash) by way of spinoff, split-up, reclassification, combination of shares or
similar corporate
4
<PAGE>
rearrangement, (other than shares of Common Stock issued as a stock split,
adjustments in respect of which shall be covered by the terms of Section 4.1
above),
then and in each such case, the Holder hereof shall, upon the exercise of this
Warrant, be entitled to receive, in addition to the number of shares of Common
Stock receivable thereupon, and without payment of any additional consideration
therefore, the amount of stock and other securities and property (including cash
in the cases referred to in clauses (b) and (c) above) which such Holder would
hold on the date of such exercise had he been the holder of record of such
Common Stock as of the date on which holders of Common Stock received or became
entitled to receive such shares and/or all other additional stock and other
securities and property.
4.3 Reorganization, Reclassification, Consolidation, Merger or Sale.
---------------------------------------------------------------
If any capital reorganization of the capital stock of the Company, or any
consolidation or merger of the Company with another corporation, or other
reorganization, or the sale of all or substantially all of its assets to another
corporation shall be effected in such a way that holders of Common Stock shall
be entitled to receive stock, securities or assets with respect to or in
exchange for Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provisions
shall be made whereby the holder hereof shall thereafter have the right to
purchase and receive (in lieu of the shares of the Common Stock of the Company
immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby) such shares of stock, securities or assets as may be
issued or payable with respect to or in exchange for a number of outstanding
shares of such Common Stock equal to the number of shares of such stock
immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby. In any such case, appropriate provision shall be
made with respect to the rights and interests of the holder of this Warrant to
the end that the provisions hereof (including, without limitation, provisions
for adjustments of the Stock Purchase Price and of the number of shares
purchasable and receivable upon the exercise of this Warrant) shall thereafter
be applicable, as nearly as may be possible, in relation to any shares of stock,
securities or assets thereafter deliverable upon the exercise hereof.
4.4 Notice of Adjustment. Upon any adjustment of the Stock Purchase
--------------------
Price, and/or any increase or decrease in the number of shares purchasable upon
the exercise of this Warrant the Company shall give written notice thereof, by
first class mail, postage prepaid, addressed to the registered holder of this
Warrant at the address of such holder as shown on the books of the Company. The
notice shall be signed by the Company's chief financial officer and shall state
the Stock Purchase Price resulting from such adjustment and the increase or
decrease, if any, in the number of shares purchasable at such price upon the
exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
4.5 Other Notices. If at any time:
-------------
(a) the Company shall declare any cash dividend upon any of its
stock;
(b) the Company shall declare any dividend upon its stock payable
in stock, or make any special dividend or other distribution to the holders of
its stock;
5
<PAGE>
(c) the Company shall offer for subscription pro rata to the holders
of its Common Stock any additional shares of stock of any class or other rights;
(d) there shall be any capital reorganization or reclassification of
the capital stock of the Company, or consolidation or merger of the Company
with, or sale of all or substantially all of its assets to, another corporation;
(e) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company; or
(f) the Company shall take or propose to take any other action, notice
of which is actually provided to holders of the Common Stock;
then, in any one or more of said cases, the Company shall give, by first class
mail, postage prepaid, addressed to the holder of this Warrant at the address of
such holder as shown on the books of the Company, (i) at least 5 business day's
prior written notice of the date on which the books of the Company shall close
or a record shall be taken for establishing the right to receive such dividend,
distribution or subscription rights and (ii) with respect to any other action,
notice of which is given to holders of the Common Stock, such notice as is
actually provided to such holders. The foregoing shall not apply with respect
to an Acquisition or Dissolution, notice of which shall be given in accordance
with Section 4.3 above. Any notice given in accordance with the foregoing
clause (i) shall also specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of stock shall be entitled
thereto. Any notice given in accordance with the foregoing clause (ii) shall,
if applicable, also specify the date on which the holders of Common Stock shall
be entitled to exchange their Common Stock for securities or other property
deliverable upon any reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding-up, or other action as the case may
be.
Notwithstanding the foregoing, with respect to any matter as to which the
consent of stockholders is solicited by the Company in lieu of a meeting in
accordance with Section 228 of the Delaware Corporation Law, the obligation of
the Company to provide notice to the holder of this Warrant shall be solely as
follows:
(a) if the Company solicits the written consent of all stockholders,
notice thereof shall be given to the holder of this Warrant at the same time
that such written consent is solicited from all stockholders, and
(b) if the Company does not solicit such written consent from all
stockholders, then notice of the taking of the corporate action without a
meeting shall be given to the holder of this Warrant no later than it is given
to those stockholders who have not consented in writing.
5. Issue Tax. The issuance of certificates for shares of Preferred Stock
---------
upon the exercise of the Warrant shall be made without charge to the Holder of
the Warrant for any issue tax in respect thereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the then Holder of the Warrant being exercised.
6
<PAGE>
6. Closing of Books. The Company will at no time close its transfer books
----------------
against the transfer of any Warrant or of any shares of Common Stock issued or
issuable upon the exercise of any warrant in any manner which interferes with
the timely exercise of this Warrant.
7. No Voting or Dividend Rights; Limitation of Liability. Nothing
-----------------------------------------------------
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent as a shareholder in respect of meetings
of shareholders for the election of directors of the Company or any other
matters or any rights whatsoever as a shareholder of the Company. No dividends
or interest shall be payable or accrued in respect of this Warrant or the
interest represented hereby or the shares purchasable hereunder until, and only
to the extent that, this Warrant shall have been exercised. No provisions
hereof, in the absence of affirmative action by the holder to purchase shares of
Common Stock, and no mere enumeration herein of the rights or privileges of the
Holder hereof, shall give rise to any liability of such Holder for the Stock
Purchase Price or as a shareholder of the Company, whether such liability is
asserted by the Company or by its creditors.
8. Registration Rights. The Company hereby grants to the Holder, with
-------------------
respect to the shares of Common Stock issuable hereunder, the piggyback
registration rights set forth in Section II.B. of that certain Investor Rights
Agreement dated as of October 14, 1994 among the Company and the purchasers of
its Series A Preferred Stock and Class B Common Stock Warrants (the "Investor
Rights Agreement". For purposes of such Section II.B., the Holder shall be
deemed a "Holder" of "Registrable Securities" as such terms are defined in the
Investor Rights Agreement.
9. Rights and Obligations Survive Exercise of Warrant. The rights and
--------------------------------------------------
obligations of the Company, of the Holder of this Warrant and of the holder of
shares of Common Stock issued upon exercise of this Warrant, contained in
Sections 6, 8 and 9 shall survive the exercise of this Warrant.
10. Modification and Waiver. This Warrant and any provision hereof may be
-----------------------
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
11. Notices. Any notice, request or other document required or permitted
-------
to be given or delivered to the holder hereof or the Company shall be deemed to
have been given (i) upon receipt if delivered personally or by courier, (ii)
upon confirmation of receipt if by telecopy, or (iii) three business days after
deposit in the U.S. mail, with postage prepaid and certified or registered, to
each such holder at its address as shown on the books of the Company or to the
Company at the address indicated therefor in the first paragraph of this
Warrant.
12. Binding Effect on Successors. This Warrant shall be binding upon any
----------------------------
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets. All of the obligations of the
Company relating to the Common Stock issuable upon the exercise of this Warrant
shall survive the exercise and termination of this Warrant. All of the
covenants and agreements of the Company shall inure to the benefit of the
successors and assign of the holder hereof. The Company will, at the time of
the exercise of this Warrant, in whole or in part, upon request of the Holder
hereof but at the
7
<PAGE>
Company's expense, acknowledge in writing its continuing obligation to the
Holder hereof in respect of any rights (including, without limitation, any right
to registration of the shares of Common Stock) to which the holder hereof shall
continue to be entitled after such exercise in accordance with this Warrant;
provided, that the failure of the holder hereof to make any such request shall
not affect the continuing obligation of the Company to the Holder hereof in
respect of such rights.
13. Descriptive Headings and Governing Law. The descriptive headings of
--------------------------------------
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of California.
14. Lost Warrants or Stock Certificates. The Company represents and
-----------------------------------
warrants to the Holder hereof that upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
any Warrant or stock certificate and, in the case of any such loss, theft or
destruction, upon receipt of an indemnity reasonably satisfactory to the
Company, or in the case of any such mutilation upon surrender and cancellation
of such Warrant or stock certificate, the Company at its expense will make and
deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant or stock certificate.
15. Fractional Shares. No fractional shares shall be issued upon exercise
-----------------
of this Warrant. The Company shall, in lieu of issuing any fractional share,
pay the holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the then effective Stock Purchase Price.
17. Representations of Holder. With respect to this Warrant, Holder
-------------------------
represents and warrants to the Company as follows:
17.1 Experience. It is experienced in evaluating and investing in
----------
companies engaged in businesses similar to that of the Company; it understands
that investment in the Warrant involves substantial risks; it has made detailed
inquiries concerning the Company, its business and services, its officers and
its personnel; the officers of the Company have made available to Holder any and
all written information it has requested; the officers of the Company have
answered to Holder's satisfaction all inquiries made by it; in making this
investment it has relied upon information made available to it by the Company;
and it has such knowledge and experience in financial and business matters that
it is capable of evaluating the merits and risks of investment in the Company
and it is able to bear the economic risk of that investment.
17.2 Investment. It is acquiring the Warrant for investment for its
----------
own account and not with a view to, or for resale in connection with, any
distribution thereof. It understands that the Warrant, the shares of Common
Stock issuable upon exercise thereof, have not been registered under the
Securities Act of 1933, as amended, nor qualified under applicable state
securities laws.
17.3 Rule 144. It acknowledges that the Warrant and the Common Stock
--------
must be held indefinitely unless they are subsequently registered under the
Securities Act or an
8
<PAGE>
exemption from such registration is available. It has been advised or is aware
of the provisions of Rule 144 promulgated under the Securities Act.
17.4 Access to Data. It has had an opportunity to discuss the
--------------
Company's business, management and financial affairs with the Company's
management and has had the opportunity to inspect the Company's facilities.
18. Additional Representations and Covenants of the Company. The Company
-------------------------------------------------------
hereby represents, warrants and agrees as follows:
18.1 Corporate Power. The Company has all requisite corporate power
---------------
and corporate authority to issue this Warrant and to carry out and perform its
obligations hereunder.
18.2 Authorization. All corporate action on the part of the Company,
-------------
its directors and shareholders necessary for the authorization, execution,
delivery and performance by the Company of this has been taken. This Warrant is
a valid and binding obligation of the Company, enforceable in accordance with
its terms.
18.3 Offering. Subject in part to the truth and accuracy of Holder's
--------
representations set forth in Section 17 hereof, the offer, issuance and sale of
the Warrant is, and the issuance of Common Stock upon exercise of the Warrant
will be exempt from the registration requirements of the Securities Act, and are
exempt from the qualification requirements of any applicable state securities
laws; and neither the Company nor anyone acting on its behalf will take any
action hereafter that would cause the loss of such exemptions.
18.4 Stock Issuance. Upon exercise of the Warrant, the Company will
--------------
use its best efforts to cause stock certificates representing the shares of
Common Stock purchased pursuant to the exercise to be issued in the individual
names of Holder, its nominees or assignees, as appropriate at the time of such
exercise.
18.5 Articles and By-Laws. The Company has provided Holder with true
--------------------
and complete copies of the Company's Certificate of Incorporation, By-Laws, and
each Certificate of Determination or other charter document setting, forth any
rights, preferences and privileges of Company's capital stock, each as amended
and in effect on the date of issuance of this Warrant.
18.6 Financial and Other Reports. From time to time up to the
---------------------------
earlier of the Expiration Date or the complete exercise of this Warrant, the
Company shall furnish to Holder (i) within 90 days after the close of each
fiscal year of the Company an audited balance sheet and statement of changes in
financial position at and as of the end of such fiscal year, together with an
audited statement of income for such fiscal year; (ii) within 45 days after the
close of each fiscal quarter of the Company, an unaudited balance sheet and
statement of cash flows at and as of the end of such quarter, together with an
unaudited statement of income for such quarter; and (iii) promptly after
sending, copies of all reports, proxy statements, and financial statements that
the Company sends to its shareholders.
9
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officers, thereunto duly authorized as of the 24th day of
September, 1996.
COMPS InfoSystems, Inc.
By: /s/ Christopher A. Crane
---------------------------
Name: C. A. Crane
--------------
Title: President
--------------
10
<PAGE>
FORM OF SUBSCRIPTION
--------------------
(To be signed only upon exercise of Warrant)
To:
________________________________
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, _________________________________ (_______) (1) shares of
Common Stock of COMPS InfoSystems, Inc. and herewith makes payment of
______________________________ Dollars ($__________) therefor, and requests t at
the certificates for such shares be issued in the name of, and delivered to,
_____________________________, whose address is
___________________________________.
The undersigned represents that it is acquiring such Common Stock for
its own account for investment and not with a view to or for sale in connection
with any distribution thereof (subject, however, to any requirement of law that
the disposition thereof shall at all times be within its control.
DATED:
___________________
______________________________________________________
(Signature must conform in all respects to name of
holder as specified on the face of the Warrant)
______________________________________________________
______________________________________________________
(Address)
________________
(1) Insert here the number of shares called for on the face of the Warrant (or,
in the case of a partial exercise, the portion thereof as to which the
Warrant is being exercised), in either case without making any adjustment
for additional Common Stock or any other stock or other securities or
property or cash which, pursuant to the adjustment provisions of the
Warrant, may be deliverable upon exercise.
<PAGE>
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned, the holder of the within Warrant,
hereby sells, assigns and transfers all of the rights of the undersigned under
the within Warrant, with respect to the number of shares of Common Stock covered
thereby set forth hereinbelow, unto:
Name of Assignee Address No. of Shares
---------------- ------- -------------
Dated:
-----------------
--------------------------------------------------
(Signature must conform in all respects to name
of holder as specified on the face of the Warrant)
<PAGE>
EXHIBIT 10.8
- --------------------------------------------------------------------------------
LOAN AGREEMENT
Dated as of September 24, 1996
between
COMPS InfoSystems, Inc.,
as Borrower,
and
VENTURE LENDING & LEASING, INC.,
as Lender
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE 1 - DEFINITIONS....................................... 1
ARTICLE 2 - THE FACILITIES AND RELATED TERMS AND CONDITIONS... 6
2.1 Term Loan........................................... 6
2.2 Equipment Loans..................................... 7
2.3 Limitations on Loans................................ 7
2.4 Notes Evidencing Loans; Repayment................... 7
2.5 Procedures for Borrowing............................ 8
2.6 Interest............................................ 8
2.7 Interest Rate Calculation........................... 8
2.8 Default Interest.................................... 8
2.9 Prepayment of Loans................................. 9
2.10 Lender's Records.................................... 9
2.11 Security............................................ 9
2.12 Issuance of Warrant to Lender; Commitment Fee....... 10
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES.................... 11
3.1 Due Organization.................................... 11
3.2 Authorization, Validity and Enforceability.......... 11
3.3 Compliance with Applicable Laws..................... 11
3.4 Copyrights, Patents, Trademarks and Licenses........ 11
3.5 No Conflict......................................... 11
3.6 No Litigation, Claims or Proceedings................ 12
3.7 Correctness of Financial Statements................. 12
3.8 No Subsidiaries..................................... 12
3.9 Environmental Matters............................... 12
3.10 No Event of Default................................. 12
3.11 Full Disclosure..................................... 12
ARTICLE 4 - CONDITIONS PRECEDENT.............................. 12
4.1 Conditions to First Loan............................ 12
4.2 Conditions to All Loans............................. 13
4.3 Condition Subsequent................................ 14
ARTICLE 5 - AFFIRMATIVE COVENANTS............................. 14
5.1 Notice to Lender.................................... 14
5.2 Financial Statements................................ 15
5.3 Managerial Assistance from Lender................... 16
5.4 Existence........................................... 16
5.5 Insurance........................................... 16
5.6 Accounting Records.................................. 16
5.7 Compliance With Laws................................ 17
<PAGE>
TABLE OF CONTENTS (CONTINUED)
Page
----
5.8 Taxes and Other Liabilities......................... 17
5.9 Use of Proceeds..................................... 17
ARTICLE 6 - NEGATIVE COVENANTS................................ 17
6.1 Indebtedness........................................ 17
6.2 Liens. 18
6.3 Dividends........................................... 18
6.4 Changes/Mergers..................................... 18
6.5 Sales of Assets..................................... 18
6.6 Loans/Investments................................... 18
6.7 Transactions With Related Persons................... 19
6.8 Other Business...................................... 19
ARTICLE 7 - EVENTS OF DEFAULT................................. 19
7.1 Events of Default................................... 19
ARTICLE 8 - GENERAL PROVISIONS................................ 20
8.1 Notices............................................. 20
8.2 Binding Effect...................................... 21
8.3 No Waiver........................................... 21
8.4 Rights Cumulative................................... 21
8.5 Unenforceable Provisions............................ 21
8.6 Accounting Terms.................................... 21
8.7 Indemnification; Exculpation........................ 22
8.8 Reimbursement....................................... 22
8.9 Execution in Counterparts........................... 22
8.10 Entire Agreement.................................... 22
8.11 Governing Law and Jurisdiction...................... 22
8.12 Waiver of Jury Trial................................ 23
LIST OF EXHIBITS
----------------
Exhibit "A" Form of Note
Exhibit "B" Form of Borrowing Request
Exhibit "C" Security Agreement
Exhibit "D" Form of Warrant
LIST OF SCHEDULES
-----------------
Schedule 3.6 Litigation
Schedule 6.1 Indebtedness
Schedule 6.2 Liens
(ii)
<PAGE>
LOAN AGREEMENT
This LOAN AGREEMENT is entered into as of September 24, 1996, between
COMPS INFOSYSTEMS, INC., a Delaware corporation ("Borrower"), and VENTURE
LENDING & LEASING, INC., a Maryland corporation ("VLLI" or "Lender").
WHEREAS, Lender has agreed to make available to Borrower a working
capital term loan, and an equipment acquisition term loan facility upon the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE 1 - DEFINITIONS
The definitions appearing in this Agreement or any supplement or
addendum to this Agreement, shall be applicable to both the singular and plural
forms of the defined terms:
"Account Debtor" means the Person obligated upon an Account.
"Accounts" means (i) all rights to the payment of money now owned or
hereafter acquired by Borrower, whether due or to become due and whether or not:
earned by performance, including but not limited to, accounts, chattel paper,
instruments, and general intangibles; and (ii) for purposes of this Agreement
amounts to become payable by existing subscribers to Borrower's database
services with respect to subscriptions which are eligible or scheduled for
renewal within ninety (90) days after any date of determination of Eligible
Accounts.
"Additional Interest" means, with respect to each Loan, an amount of
interest payable thereon, in addition to Basic Interest, payable on the Maturity
Date of such Loan in an amount equal to fifteen percent (15%) of the original
principal amount of such Loan.
"Affiliate" means any Person which directly or indirectly controls, is
controlled by, or is under common control with, Borrower. "Control,"
"controlled by" and "under common control with" means direct or indirect
possession of the power to direct or cause the direction of management or
policies (whether through ownership of voting securities, by contract or
otherwise); provided that control shall be conclusively presumed when any Person
or affiliated group directly or indirectly owns ten (10%) or more of the
securities having ordinary voting power for the election of directors of a
corporation.
"Agreement" means this Loan Agreement as it may be amended or
supplemented from time to time.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. (S)101, et seq.), as amended.
-- ---
<PAGE>
"Basic Interest" means the fixed rate of interest payable on the
outstanding balance of each Loan at the applicable Designated Rate.
"Borrowing Base" means, with respect to the Term Loan as of date of
determination, an amount at all times equal the lesser of (a) $1,500,000; or (b)
eighty percent (80%) of Borrower's Eligible Accounts.
"Borrowing Date" means the Business Day on which the proceeds of a
Loan are disbursed by Lender.
"Borrowing Request" means a written request from Borrower in
substantially the form of Exhibit "B" hereto, requesting the funding of one or
----------
more Loans on a particular Borrowing Date.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in New York City or San Francisco are authorized
or required by law to close.
"Closing Date" means the date of this Agreement.
"Collateral" has the meaning ascribed thereto in the Security
Agreement.
"Commitment" means, with respect to each of the Term Loan Facility and
the Equipment Loan Facility, the obligation of Lender to make Loans under each
Facility to Borrower in an aggregate, original principal amount not exceeding
One Million Five Hundred Thousand Dollars ($1,500,000), respectively.
"Default" means an event which with the giving of notice, passage of
time, or both would constitute an Event of Default.
"Default Rate" is defined in Section 2.8.
-----------
"Designated Rate" means a fixed rate of interest per annum applicable
to a Loan equal to eight and 75/100 percent (8.75%).
"Eligible Account" shall mean an Account:
(a) Arising from the sale or lease of goods, or the licensing of
data, or the performance of services by Borrower in the ordinary
course of Borrower's business;
(b) Against which is asserted no defense, counterclaim,
discount, or setoff;
(c) That is an accurate statement of the indebtedness incurred
by the Account Debtor;
-2-
<PAGE>
(d) Owned by Borrower free and clear of all liens, rights,
claims, and interests of others except security interests in favor of
Lender;
(e) That does not arise from a sale or lease to or performance
of services for an individual or entity employed by or having common
ownership with Borrower;
(f) That is not in default. An Account shall be deemed in
default upon the occurrence of any of the following:
(i) The Account is not paid or payable within a ninety
(90)-day period starting from the original invoice date;
(ii) The Account Debtor suspends business, becomes
insolvent, or fails to pay its debts generally as they come due;
or
(iii) Any petition is filed by or against the Account Debtor
under the Bankruptcy Reform Act, Title 11 of the United States
Code or under any other law relating to bankruptcy, insolvency,
reorganization or other relief for debtors.
(g) That is not the obligation of an Account Debtor that is the
federal government, any state or political subdivision thereof, unless
Borrower has complied in form and substance satisfactory to Lender with the
Assignment of Claims Act(s) or any successor thereof in effect from time to
time, or other applicable law(s) or regulations;
(h) That is not the obligation of an Account Debtor located in a
foreign country, unless Lender consents in writing and the Account is
insured by the Foreign Credit Insurance Association or covered by a letter
of credit issued or confirmed by a bank located in the United States of
America acceptable to Lender, each such insurance policy or letter of
credit being in form and substance satisfactory to Lender; and
(i) That is otherwise acceptable to Lender.
"Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any governmental authorities, in each case
relating to environmental, health, or safety matters.
"Equipment Loan" means an extension of credit by Lender under Section
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2.2 of this Agreement.
- ---
"Event of Default" means any event described in Article 7.
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<PAGE>
"Facility" means each credit accommodation being provided Borrower
under the terms and conditions of this Agreement, which credit accommodations
are the Term Loans and the Equipment Loans, as more fully described in Article
2.
"GAAP" means generally accepted accounting principles and practices
consistent with those principles and practices promulgated or adopted by the
Financial Accounting Standards Board and the Board of the American Institute of
Certified Public Accountants, their respective predecessors and successors.
Each accounting term used but not otherwise expressly defined herein shall have
the meaning given it by GAAP.
"Indebtedness" of any Person means at any date, without duplication
and without regard to whether matured or unmatured, absolute or contingent:
(i) all obligations of such Person for borrowed money; (ii) all obligations of
such Person evidenced by bonds, debentures, notes, or other similar instruments;
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business; (iv) all obligations of such Person as lessee under capital
leases; (v) all obligations of such Person to reimburse or prepay any bank or
other Person in respect of amounts paid under a letter of credit, banker's
acceptance, or similar instrument, whether drawn or undrawn; (vi) all
obligations of such Person to purchase securities which arise out of or in
connection with the sale of the same or substantially similar securities; (vii)
all obligations of such Person to purchase, redeem, or otherwise acquire, for
cash on a present or deferred basis, any capital stock of such Person or any
warrants, rights or options to acquire such capital stock, now or hereafter
outstanding, except to the extent that such obligations remain performable
solely at the option of such Person; (viii) all obligations to repurchase assets
previously sold (including any obligation to repurchase any accounts or chattel
paper under any factoring, receivables purchase, or similar arrangement); (ix)
obligations of such Person under interest rate swap, cap, collar or similar
hedging arrangements; and (x) all obligations of others of any type described in
clause (i) through clause (ix) above guaranteed by such Person.
- ---------- -----------
"Insolvency Proceeding" means (a) any case, action or proceeding
before any court or other governmental authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshalling of assets for creditors, or other, similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors, undertaken under U.S. Federal, state or foreign law, including
the Bankruptcy Code.
"Lien" means any voluntary or involuntary security interest, mortgage,
pledge, claim, charge, encumbrance, title retention agreement, or third party
interest, covering all or any part of the property of Borrower or any other
Person.
"Loan" means any Term Loan or any Equipment Loan.
"Loan Documents" means, individually and collectively, this Agreement,
each Note, the Security Agreement and any other security or pledge agreement(s),
and all other
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<PAGE>
contracts, instruments, addenda and documents executed in connection with this
Agreement or the extensions of credit which are the subject of this Agreement.
"Material Adverse Effect" or "Material Adverse Change" means (a) a
material adverse change in, or a material adverse effect upon, the operations,
business, properties, or condition (financial or otherwise) of Borrower; (b) a
material impairment of the ability of Borrower to perform under any Loan
Document; or (c) a material adverse effect upon the legality, validity, binding
effect or enforceability against Borrower of any Loan Document.
"Maturity Date" means, with regard to a Loan, the earlier of (i) its
maturity by reason of acceleration, or (ii) its stated maturity date, which is
the first day of the 49th full month after the Borrowing Date of an Equipment
Loan and the first day of the 37th full month after the Borrowing Date of the a
Term Loan; and is the date on which payment of all outstanding principal and
accrued interest, including Additional Interest, is due.
"Note" means a promissory note substantially in the form of Exhibit
-------
"A" hereto, executed by Borrower evidencing each Loan.
"Obligations" means all advances, debts, liabilities, obligations,
covenants and duties arising under any Loan Document, owing by Borrower to
Lender, whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or hereafter arising.
"Permitted Lien" means
(a) Involuntary Liens which, in the aggregate, would not have a
Material Adverse Effect and which in any event would not exceed One-Hundred
Thousand Dollars ($100,000);
(b) Liens for current taxes or other governmental or regulatory
assessments which are not delinquent, or which are contested in good faith
by the appropriate procedures and for which appropriate reserves are
maintained;
(c) Purchase money security interests on any property held or
acquired by Borrower in the ordinary course of business securing
Indebtedness incurred or assumed for the purpose of financing all or any
part of the cost of acquiring such property; provided, that such Lien
--------
attaches solely to the property acquired with such Indebtedness and that
the principal amount of such Indebtedness does not exceed one hundred
percent (100%) of the cost of such property; and further provided, that
------- --------
such property is not equipment with respect to which a Loan has been made
hereunder.
(d) Liens in favor of Lender;
(e) bankers' liens, rights of setoff and similar Liens incurred
on deposits made in the ordinary course of business;
-5-
<PAGE>
(f) materialmen's, mechanics', repairmen's, employees, or other
like Liens arising in the ordinary course of business and which are not
delinquent for more than 45 days or are being contested in good faith by
appropriate proceedings;
(g) any judgment, attachment or similar Lien, unless the
judgment it secures has not been discharged or execution thereof
effectively stayed and bonded against pending appeal within 30 days of the
entry thereof;
(h) licenses or sublicenses of Patents, Patent Licenses,
Trademarks or Trademark Licenses permitted under the Trademark Collateral
Assignment or the Patent Collateral Assignment (all as defined in the
Security Agreement); and .
(i) Liens which have been approved by Lender prior to the
Closing Date and disclosed on Schedule 6.2 to this Agreement.
------------
"Person" means any individual or entity.
"Qualified Public Offering" means the closing of a firmly underwritten
public offering of Borrower's common stock with aggregate proceeds of not less
than $10,000,000 (prior to underwriting expenses and commissions).
"Related Person" means any Affiliate of Borrower, or any officer,
employee, director or shareholder of Borrower or any Affiliate.
"Security Agreement" means the Security Agreement substantially in the
form of Exhibit "C" hereto, executed by Borrower.
"Term Loan" means an extension of credit by Lender under Section 2.1
-----------
of this Agreement.
"Termination Date" means the earlier of: (a) the date Lender may
terminate making Loans or extending credit pursuant to the rights of Lender
under Article 7, or (b) June 30, 1998.
"UCC" means the Uniform Commercial Code as enacted in the applicable
jurisdiction, in effect on the Closing Date and as amended from time to time.
ARTICLE 2 - THE FACILITIES AND RELATED TERMS AND CONDITIONS
Subject to the terms and conditions of this Agreement, the following
Facilities shall be available to Borrower:
2.1 Term Loan. Subject to the terms and conditions of this Agreement,
Lender agrees to make term loans to Borrower from time to time from the Closing
Date and to the Termination Date in an aggregate principal amount not exceeding
the Commitment, the proceeds of which shall be used by Borrower for working
capital and general corporate purposes.
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<PAGE>
The Commitment is not a revolving credit commitment, and Borrower shall not have
the right to repay and reborrow hereunder.
2.2 Equipment Loans. Subject to the terms and conditions of this
Agreement, Lender agrees to make term loans to Borrower from time to time from
the Closing Date and to the Termination Date in an aggregate principal amount
not exceeding the Commitment, the proceeds of which shall be used to finance
Borrower's acquisition or carrying of equipment. The Commitment is not a
revolving credit commitment, and Borrower shall not have the right to repay and
reborrow hereunder.
2.3 Limitations on Loans.
(a) Each Equipment Loan shall be in an amount not to exceed one
hundred percent (100%) of the amount paid or payable by Borrower to a non-
affiliated manufacturer, vendor or dealer for an item of equipment as shown
on an invoice therefor (excluding any commissions and any portion of the
payment which relates to the servicing of the equipment and sales taxes
payable by Borrower upon acquisition, and delivery charges).
(b) Lender shall not be obligated to make any Loan if at the
time of or after giving effect to the proposed Loan Lender would no longer
qualify as: (A) a "venture capital operating company" under U.S. Department
of Labor Regulations Section 2510.3-101(d), Title 29 of the Code of Federal
Regulations, as amended; and (B) a "business development company" under the
provisions of federal Investment Company Act of 1940, as amended; and (C) a
"regulated investment company" under the provisions of the Internal Revenue
Code of 1986, as amended.
(c) Each Loan requested by Borrower to be made on a single
Business Day shall be for a principal amount of One Hundred Thousand
Dollars ($100,000) or more, except to the extent the remaining Commitment
is a lesser amount.
2.4 Notes Evidencing Loans; Repayment. Each Loan and Basic Interest
and Additional Interest thereon shall be evidenced by a separate Note payable to
the order of Lender substantially in the form of Exhibit "A" to this Agreement,
-----------
in the principal amount of the Loan. Each Note shall be payable as follows:
Principal and Basic Interest shall be paid in forty-eight (48) (or thirty-six
(36) in the case of the Term Loan only) equal and successive monthly payments,
in advance, beginning on the Borrowing Date and continuing on the first Business
Day of each month thereafter; provided, that the first and last such
--------
amortization installment payments shall be paid in advance on the Borrowing
date. If the Borrowing Date is not the first day of a month, then the 48 (or 36,
in the case of the Term Loan) month amortization period shall commence on the
first day of the next month following the Borrowing Date, and interest only
shall accrue and be payable for the period from the Borrowing Date to the first
day of the next month. Borrower shall pay to Lender, in advance, on the
Borrowing Date a payment of Basic Interest on the amount of any Loan that is not
made on the first day of the month for interest that will accrue on such Loan
from the Borrowing Date through the last day of the same
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<PAGE>
month. The payment of amortization installments of principal of and interest on
a Loan in advance results in a higher effective rate of interest than the stated
Designated Rate applicable to such Loan.
2.5 Procedures for Borrowing.
(a) Borrower shall give Lender at least five (5) Business Days'
prior to a proposed Borrowing Date written notice of any request for
borrowing hereunder (a "Borrowing Request"). Each Borrowing Request shall
be in substantially the form of Exhibit "B" hereto, shall be executed by
-----------
the chief financial officer of Borrower, and shall state how much is
requested, and shall be accompanied by such additional information and
documentation as Lender may deem reasonably necessary to determine whether
the proposed borrowing will comply with the limitations in Section 2.2. In
-----------
the case of each Equipment Loan, the Borrowing Request therefor shall also
certify that all equipment to be financed thereby is, or will upon
acquisition be, owned by Borrower free and clear of all Liens except in
favor of Lender.
(b) No later than 1:00 p.m. Pacific Standard Time on the
Borrowing Date, if Borrower has satisfied the conditions precedent in
Article 4, Lender shall make the Loan available to Borrower in immediately
available funds, less the amount of the broker's fee described in Section
2.5(c) below.
(c) Borrower authorizes and directs Lender, and Lender agrees,
to remit directly to Mr. Doug Wall on each Borrowing Date two percent (2%)
of the proceeds of each Loan, as a broker's fee for the Facilities.
2.6 Interest. Basic Interest on the outstanding principal balance of
the each Loan shall accrue daily at the Designated Rate from the Borrowing Date
until the Maturity Date. On the Maturity Date (whether at stated maturity,
prepayment or acceleration) of a Loan, Borrower shall pay full amount of the
Additional Interest thereon.
2.7 Interest Rate Calculation. Basic Interest, along with charges and
fees under this Agreement and any Loan Document, shall be calculated for actual
days elapsed on the basis of a 360-day year, which results in higher interest,
charge or fee payments than if a 365-day year were used. In no event shall
Borrower be obligated to pay Lender interest, charges or fees at a rate in
excess of the highest rate permitted by applicable law from time to time in
effect.
2.8 Default Interest. Any unpaid payments of principal or
interest with respect to any Loan shall bear interest from their respective
maturities, whether scheduled or accelerated, at the Designated Rate for such
Loan plus five percent (5.00%) per annum, until paid in full, whether before or
----
after judgment (the "Default Rate"). Borrower shall pay such interest on demand.
-8-
<PAGE>
2.9 Prepayment of Loans.
(a) Mandatory Prepayments of Term Loan. Borrower agrees
that if the outstanding principal balance of the Term Loan on any date
exceeds the Borrowing Base on such date, then Borrower will immediately
prepay the Term Loan in an amount equal to the excess.
(b) Mandatory Prepayments of Equipment Loans. Borrower
shall be required to prepay any Equipment Loan from the net proceeds of any
insurance or condemnation awards paid in respect of the items of equipment
financed with the proceeds of such Loan; provided, that such prepayment
--------
shall not be required, so long as no Event of Default otherwise exists, (i)
if Borrower uses such net proceeds to purchase replacements of equipment
lost through casualty or condemnation and such replacement equipment is
subject to no Liens other than Lender's, or (ii) with respect to losses of
equipment which in aggregate during any consecutive twelve-month period has
a fair market value or book value, whichever is more, of $75,000 or less.
(c) Prepayments Generally. No Loan may be voluntarily
prepaid except as provided in this subsection (c). Borrower may prepay any
Loan, in whole or in part in minimum payments of $50,000 at any time after
the first anniversary of the Borrowing Date for such Loan; provided that
--------
any prepayment, whether voluntary or involuntary as a result of
acceleration or otherwise, must be accompanied by payment of: (i) a premium
equal to 2.00% of the amount of principal so prepaid if such prepayment is
made during the 12-month period between the first and second anniversaries,
or a 1.00% premium if such prepayment is made during the 12-month period
between the second and third anniversaries (there being no premium or
penalty payable after the third anniversary of the Borrowing Date of such
Loan); (ii) accrued Basic Interest to the date of such prepayment; and
(iii) all Additional Interest on the Loan so prepaid (or a ratable portion
of such Additional Interest, if less than all of the Loan is prepaid).
Unless otherwise agreed by Lender, any partial prepayment of a Loan shall
be applied in inverse order of maturity to the most remote principal
installment then unpaid on such Loan. No premium or penalty shall be
required in the case of a prepayment of all Loans following Lender's
refusal to fund any portion of the Commitment pursuant to Section 2.3(b) or
Section 4.2(b).
2.10 Lender's Records. Principal, Basic Interest, Additional Interest
and all other sums owed under any Loan Document shall be evidenced by entries in
records maintained by Lender for such purpose. Each payment on and any other
credits with respect to principal, Basic Interest, Additional Interest and all
other sums outstanding under any Loan Document shall be evidenced by entries in
such records. Absent manifest error, Lender's records shall be conclusive
evidence thereof.
2.11 Security. As security for all Obligations to Lender, Borrower
shall grant concurrently to Lender, or ensure that Lender is concurrently
granted, perfected security interests of first priority in all of the Collateral
pursuant to the Security Agreement, subject only to Liens
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<PAGE>
disclosed to and approved by Lender prior to the Closing Date. If upon payment
in full of all Obligations in respect of the Term Loan there remain outstanding
Obligations in respect of any Equipment Loans, and if no Event of Default then
exists, then Lender shall release its security interests in all Collateral
except Equipment and Proceeds and Records relating solely to Equipment. If upon
- ------
payment in full of all Obligations in respect of all Equipment Loans there
remain outstanding Obligations in respect of the Term Loan, and if no Event of
Default then exists, then Lender shall release its security interests in all
Collateral comprising Equipment and Proceeds and Records relating solely to
----------
Equipment.
2.12 Issuance of Warrant to Lender; Commitment Fee.
(a) Warrant. As additional consideration for the making of the
-------
Loans under this Agreement, upon the making of, and as a condition to, the
initial Loan, Lender shall be entitled to receive a warrant to purchase a
number of shares of common stock of Borrower ("Warrant Shares") with a
value equal to $375,000, determined on the basis of an initial exercise
price per share of common stock that is the median of (i) $1.17, and (ii)
the per share price of common stock (or other equity securities
exercisable, convertible or exchangeable for common stock) in Borrower's
next round of equity financing subsequent to the Closing Date; provided,
--------
that if no round of equity financing under the foregoing clause (ii) closes
within eighteen months after the Closing Date, then the applicable initial
exercise price per share shall be 1.76. The warrant issued under this
Agreement shall be in substantially the form attached hereto as Exhibit
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"D"; shall be transferable by Lender, subject to compliance with applicable
---
securities laws; shall expire not earlier than seven (7) years after its
date of issuance; and shall include piggy-back registration rights, "net
issuance" provisions, and antidilution protections reasonably satisfactory
to Lender and its counsel.
(b) Commitment Fee. In consideration of Lender's commitments
--------------
hereunder, Borrower shall pay Lender a fee (the "Commitment Feel") in the
amount of $30,000. Lender acknowledges prior receipt of $10,000 of the
Commitment Fee, and Borrower agrees to pay the $20,000 balance not later
than the Borrowing Date of the initial Loan.
(c) Reduction of Warrant and Fee. Notwithstanding anything to
----------------------------
the contrary in Section 2.12(a) or (b), if Lender has not made Loans in the
aggregate principal amount equal to the aggregate Commitment by June 30,
1998, solely as a result of either the limitation on Lender under Section
2.3(b) or Lender's determination that the condition precedent in Section
4.2(b) has not been satisfied, then the maximum number of shares issuable
under the Warrant shall be reduced proportionately based on the ratio of
the aggregate principal amount of Loans actually funded over the aggregate
Commitment; and VLLI shall refund to Borrower a proportionate amount of the
Commitment Fee.
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<PAGE>
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants that as of the Closing Date and each
Borrowing Date:
3.1 Due Organization. Borrower is a corporation duly organized and
validly existing in good standing under the laws of Delaware, and is duly
qualified to conduct business and is in good standing in each other jurisdiction
in which its business is conducted or its properties are located, except where
the failure to be so qualified would not reasonably be expected to have a
Material Adverse Effect.
3.2 Authorization, Validity and Enforceability. The execution,
delivery and performance of all Loan Documents executed by Borrower are within
Borrower's powers, have been duly authorized, and are not in conflict with
Borrower's certificate of incorporation or by-laws, or the terms of any charter
or other organizational document of Borrower, as amended from time to time; and
all such Loan Documents constitute valid and binding obligations of Borrower,
enforceable in accordance with their terms (except as may be limited by
bankruptcy, insolvency and similar laws affecting the enforcement of creditors'
rights in general, and subject to general principles of equity).
3.3 Compliance with Applicable Laws. Borrower has complied with all
licensing, permit and fictitious name requirements necessary to lawfully conduct
the business in which it is engaged, and to any sales, leases or the furnishing
of services by Borrower, including without limitation those requiring consumer
or other disclosures, the noncompliance with which would have a Material Adverse
Effect.
3.4 Copyrights, Patents, Trademarks and Licenses.
(a) Borrower owns or is licensed or otherwise has the right to
use all of the patents, trademarks, service marks, trade names, copyrights,
contractual franchises, authorizations and other similar rights that are
reasonably necessary for the operation of its business, without conflict
with the rights of any other Person.
(b) To Borrower's knowledge, no slogan or other advertising
device, product, process, method, substance, part or other material now
employed, or now contemplated to be employed, by Borrower infringes upon
any rights held by any other Person.
(c) No claim or litigation regarding any of the foregoing is
pending or, to Borrower's knowledge, threatened, and no patent, invention,
device, application, principle or any statute, law, rule, regulation,
standard or code is pending or proposed which, in either case, could
reasonably be expected to have a Material Adverse Effect.
3.5 No Conflict. The execution, delivery, and performance by Borrower
of all Loan Documents are not in conflict with any law, rule, regulation, order
or directive, or any
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<PAGE>
indenture, agreement, or undertaking to which Borrower is a party or by which
Borrower may be bound or affected.
3.6 No Litigation, Claims or Proceedings. There is no litigation, tax
claim, proceeding or dispute pending, or, to the knowledge of Borrower,
threatened against or affecting Borrower or its property, except as set forth in
Schedule 3.6.
- ------------
3.7 Correctness of Financial Statements. Borrower's financial
statements which have been delivered to Lender fairly and accurately reflect
Borrower's financial condition as of July 31, 1996; and, since that date there
has been no Material Adverse Change.
3.8 No Subsidiaries. Borrower is not a majority owner of or in a
control relationship with any other business entity.
3.9 Environmental Matters. Borrower has reviewed, or caused to be
reviewed on its behalf, all Environmental Laws applicable to its business
operations and materials handled therein, and as a result thereof has reasonably
concluded that Borrower is in compliance with such Environmental Laws, except to
the extent a failure to be in such compliance could not reasonably be expected
to have a Material Adverse Effect on Borrower's operations, properties or
financial condition.
3.10 No Event of Default. No Default or Event of Default has occurred
and is continuing.
3.11 Full Disclosure. None of the representations or warranties made
by Borrower in the Loan Documents as of the date such representations and
warranties are made or deemed made, and none of the statements contained in any
exhibit, report, statement or certificate furnished by or on behalf of Borrower
in connection with the Loan Documents (including disclosure materials delivered
by or on behalf of Borrower to Lender prior to the Closing Date), contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when made
or delivered.
ARTICLE 4 - CONDITIONS PRECEDENT
4.1 Conditions to First Loan. The obligation of Lender to make its
first Loan hereunder is, in addition to the conditions precedent specified in
Section 4.2, subject to the fulfillment of the following conditions and to the
- -----------
receipt by Lender of the documents described below, duly executed and in form
and substance satisfactory to Lender and its counsel:
(a) Resolutions. A certified copy of the resolutions of the
Board of Directors of Borrower authorizing the execution, delivery and
performance by Borrower of the Loan Documents.
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<PAGE>
(b) Incumbency and Signatures. A certificate of the secretary of
Borrower certifying the names of the officer or officers of Borrower
authorized to sign the Loan Documents, together with a sample of the true
signature of each such officer.
(c) Opinion of Counsel. The opinion of Latham & Watkins, counsel
for Borrower, together with any opinions, certificates and other matters on
which such opinion relies.
(d) Articles and By-Laws. Certified copies of the Certificate of
Incorporation and By-Laws of Borrower, as amended through the Closing Date.
(e) The Agreement. A counterpart of this Agreement with all
schedules completed and attached thereto, and disclosing such information
as is acceptable to Lender.
(f) Security Agreement; Financing Statements. A Security
Agreement executed by Borrower, substantially in the form of Exhibit "C",
-----------
together with filing copies (or other evidenced of filing satisfactory to
Lender and its counsel) of such Uniform Commercial Code financing
statements, collateral assignments and termination statements, with respect
to the Collateral (as defined in such Security Agreement) as Lender shall
request.
(g) Patent and Trademark Assignments. Patent and trademark
collateral assignments executed by Borrower, substantially in the forms
attached to Exhibit "C".
-----------
(h) Lien Searches. Uniform Commercial Code lien, judgment,
bankruptcy and tax lien searches of Borrower from the California Secretary
of State, and such other jurisdictions as Lender may reasonably request,
all as of a date reasonably satisfactory to Lender and its counsel.
(i) Good Standing Certificate. A Certificate of Good Standing as
of a date acceptable to Lender with respect to Borrower from the California
Secretary of State.
(j) Warrant. A warrant issued by Borrower to Lender exercisable
for the Warrant Shares, as described in Section 2.12 hereof.
------------
4.2 Conditions to All Loans. The obligation of Lender to make its
initial Loan and each subsequent Loan is subject to the following further
conditions precedent that:
(a) No Default. No Default or Event of Default has occurred and
is continuing or will result from the making of any such Loan, and the
representations and warranties of Borrower contained in Article 3 of this
Agreement are true and correct as of the Borrowing Date of such Loan.
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<PAGE>
(b) No Adverse Material Change. No Material Adverse Change shall
have occurred since the date of the most recent financial statements
submitted to Lender.
(c) Note. Borrower shall have delivered an executed Note
evidencing such Loan, in form and substance satisfactory to Lender.
(d) Borrowing Request. Borrower shall have delivered to Lender a
Borrowing Request for such Loan.
(e) VCOC Limitation. The making of the Loan will not result in a
violation of the condition applicable to Lender described in Section 2.3
-----------
(b).
---
4.3 Condition Subsequent. Not later than sixty (60) days after the
first Borrowing Date, Borrower shall have delivered or cause to be delivered to
Lender satisfactory results of searches of the records of the U.S. Patent and
Trademark Office reflecting the collateral assignments recorded in favor of
Lender, subject to no prior Liens except those permitted in Section 6.2 hereof.
-----------
ARTICLE 5 - AFFIRMATIVE COVENANTS
During the term of this Agreement and until its performance of all
obligations to Lender, Borrower will:
5.1 Notice to Lender. Promptly give written notice to Lender of:
(a) Any litigation or administrative or regulatory proceeding
affecting Borrower where the amount claimed against Borrower is Fifty
Thousand Dollars ($50,000) or more, or where the granting of the relief
requested would have a Material Adverse Effect.
(b) Any substantial dispute which may exist between Borrower or
any governmental or regulatory authority.
(c) The occurrence of any Event of Default or any event which
with the giving of notice, the passage of time, or both, would constitute
an Event of Default.
(d) Any change in the location of any of Borrower's places of
business at least thirty (30) days in advance of such change, or of the
establishment of any new, or the discontinuance of any existing, place of
business.
(e) Any dispute or default by Borrower or any other party under
any joint venture, partnering, distribution, cross-licensing, strategic
alliance, collaborative research or manufacturing, license or similar
agreement which could reasonably be expected to have a material Adverse
Effect.
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<PAGE>
(f) Any other matter which has resulted or might reasonably
result in a Material Adverse Change.
5.2 Financial Statements. Deliver to each Lender or cause to be
delivered to Lender, in form and detail satisfactory to Lender the following
financial information, which Borrower warrants shall be accurate and complete in
all material respects:
(a) Monthly Financial Statements. As soon as available but no
later than thirty (30) days after the end of each month, Borrower's balance
sheet as of the end of such period, and Borrower's income statement for
such period and for that portion of Borrower's financial reporting year
ending with such period, prepared and attested by a responsible financial
officer of Borrower as being complete and correct and fairly presenting
Borrower's financial condition and the results of Borrower's operations.
After a Qualified Public Offering, the foregoing interim financial
statements shall be delivered no later than 45 days after each fiscal
quarter and for the quarter-annual fiscal period then ended.
(b) Year-End Financial Statements. As soon as available but no
later than one hundred twenty (120) days after and as of the end of each
financial reporting year, a complete copy of Borrower's audit report, which
shall include balance sheet, income statement, statement of changes in
equity and statement of cash flows for such year, prepared and certified by
an independent certified public accountant selected by Borrower and
satisfactory to Lender (the "Accountant"). The Accountant's certification
shall not be qualified or limited due to a restricted or limited
examination by the Accountant of any material portion of Borrower's records
or otherwise.
(c) Compliance Certificates. Simultaneously with the delivery of
each set of financial statements referred to in paragraphs (a) and (b)
above, a certificate of the chief financial officer of Borrower: (i)
setting forth in reasonable detail any calculations required to establish
an aging of Accounts, the amount of Eligible Accounts as of the date of
such financial statements, and whether Borrower is in compliance with the
requirements of Sections 2.9(b), 6.1, and 6.2; and (ii) stating whether any
Default or Event of Default exists on the date of such certificate, and if
so, setting forth the details thereof and the action which Borrower is
taking or proposes to take with respect thereto.
(d) Government Required Reports; Press Releases. Promptly after
sending, issuing, making available, or filing, copies of all statements
released to any news media for publication, all reports, proxy statements,
and financial statements that Borrower sends or makes available to its
stockholders, and, not later than five (5) days after actual filing or the
date such filing was first due, all registration statements and reports
that Borrower files or is required to file with the Securities and Exchange
Commission, or any other governmental or regulatory authority.
-15-
<PAGE>
(e) Other Information. Such other statements, lists of property
and accounts, budgets, forecasts, reports, or other information as any
Lender may reasonably from time to time request.
5.3 Managerial Assistance from Lender. Permit Lender, as a "venture
capital operating company" to participate in, and influence the conduct of
management of Borrower through the exercise of "management rights," as such
terms are defined in 29 C.F.R. (S) 2510.3-101(d), by:
(a) Permitting Lender to make available to Borrower, at no cost
to Borrower, "significant managerial assistance", as defined in Section
2(a)(47) of the Investment Company Act of 1940, as amended, either in the
form of: (i) consulting arrangements with Lender or any of its officers,
directors, employees or affiliates, (ii) Borrower's allowing Lender to
provide recommendations of prospective candidates for election to
Borrower's Board of Directors, or (iii) Lender, at Borrower's request,
seeking the services of third-party consultants to aid Borrower with
respect to its management and operations;
(b) Permitting Lender to make available consulting and advisory
services to officers of Borrower regarding Borrower's equipment acquisition
and financing plans, and such other matters affecting the business,
financial condition and prospects of Borrower as Lender shall reasonably
deem relevant; and
(c) If Lender reasonably believes that financial or other
developments affecting Borrower have impaired or are likely to impair
Borrower's ability to perform its obligations under this Agreement,
permitting Lender reasonable access to Borrower's management and/or Board
of Directors and opportunity to present Lender's views with respect to such
developments.
5.4 Existence. Maintain and preserve Borrower's existence, present
form of business, and all rights and privileges necessary or desirable in the
normal course of its business; and keep all Borrower's property in good working
order and condition, ordinary wear and tear excepted.
5.5 Insurance. Maintain and keep in force insurance with an insurance
carrier having a policyholder rating of not less than "A" and financial category
rating of Class VII in "Best's Insurance Guide," unless otherwise approved by
Lender and in such amounts and types as is usual in the business carried on by
Borrower. Such insurance policies must be in form and substance satisfactory to
Lender, and shall list Lender as an additional insured or loss payee, as
applicable, on endorsements in form reasonably acceptable to Lender. Borrower
shall furnish to Lender such endorsements, and upon Lender's request, copies of
any or all such policies.
5.6 Accounting Records. Maintain adequate books, accounts and
records, and prepare all financial statements in accordance with GAAP, and in
compliance with the
-16-
<PAGE>
regulations of any governmental or regulatory authority having jurisdiction over
Borrower or Borrower's business; and permit employees or agents of Lender at
such reasonable times as Lender may request, at Borrower's expense, to inspect
Borrower's properties, and to examine, and make copies and memoranda of
Borrower's books, accounts and records.
5.7 Compliance With Laws. Comply with all laws (including
Environmental Laws), rules, regulations applicable to, and all orders and
directives of any governmental or regulatory authority having jurisdiction over,
Borrower or Borrower's business, and with all material agreements to which
Borrower is a party, except where the failure to so comply would not have a
Material Adverse Effect.
5.8 Taxes and Other Liabilities. Pay all Borrower's obligations when
due; pay all taxes and other governmental or regulatory assessments before
delinquency or before any penalty attaches thereto, except as may be contested
in good faith by the appropriate procedures and for which Borrower shall
maintain appropriate reserves; and timely file all required tax returns.
5.9 Use of Proceeds. Use the proceeds of Loans only as set forth in
Article 2 of this Agreement; and not directly or indirectly to purchase or carry
any margin stock, as defined from time to time by the Board of Governors of the
Federal Reserve System in Federal Regulation U.
ARTICLE 6 - NEGATIVE COVENANTS
During the term of this Agreement and until the performance of all
obligations to Lender, Borrower will not:
6.1 Indebtedness. Be indebted for borrowed money, the deferred
purchase price of property, or leases which would be capitalized in accordance
with GAAP; or become liable as a surety, guarantor, accommodation party or
otherwise for or upon the obligation of any other Person, except:
(a) Indebtedness incurred for the acquisition of supplies or
inventory on normal trade credit; unsecured indebtedness for money borrowed
for working capital or general corporate purposes from a commercial bank or
institutional lender up to $500,000.00 in aggregate principal amount
outstanding at any time; and other indebtedness incurred pursuant to one or
more transactions permitted under Section 6.4;
-----------
(b) Indebtedness not to exceed Two Hundred Fifty Thousand
Dollars ($250,000) in aggregate principal amount outstanding at any time
secured by purchase money security interests permitted by Section 6.2(c);
--------------
(c) Indebtedness of Borrower under this Agreement;
(d) Up to $750,000 of Indebtedness, singly or in the aggregate,
in connection with one or more business acquisitions permitted hereunder;
and
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<PAGE>
(e) Any Indebtedness approved by Lender prior to the Closing
Date and disclosed on Schedule 6.1 to this Agreement.
------------
6.2 Liens. Create, incur, assume or permit to exist any Lien, or
grant any other Person a negative pledge, on any of Borrower's property, except
Permitted Liens. Borrower and Lender agree that this covenant is not intended to
constitute a lien, deed of trust, equitable mortgage, or security interest of
any kind on any of Borrower's real property, and this Agreement shall not be
recorded or recordable. Notwithstanding the foregoing, however, violation of
this covenant by Borrower shall constitute an Event of Default.
6.3 Dividends. Except after a Qualified Public Offering, pay any
dividends or purchase, redeem or otherwise acquire or make any other
distribution with respect to any of Borrower's capital stock, except dividends
or other distributions solely of capital stock of Borrower, and except for
dividend rights of Summit Ventures III, L.P. under that certain Investor Rights
Agreement dated as of October 14, 1994.
6.4 Changes/Mergers. Without the prior written consent of Lender
(which consent shall not be unreasonably withheld and shall be deemed given if
Lender shall have failed to notify Borrower of its withholding of consent for 30
or more days after Borrower's request therefor), liquidate or dissolve, or enter
into any consolidation, merger, partnership, joint venture or other combination
except for joint ventures, strategic alliances, licensing and similar
- ------
arrangements customary in Borrower's industry for businesses in the development
stage of Borrower and which do not require Borrower to assume or otherwise
become liable for the obligations of any third party not directly related to or
arising out of such arrangement or, without the prior written consent of Lender,
require Borrower to transfer ownership of assets to such joint venture or other
entity; prepay any subordinated debt, debt for borrowed money, or debt secured
by any Permitted Lien, or enter into or modify any agreement as a result of
which the terms of payment of any such debt are waived or modified.
6.5 Sales of Assets. Sell, transfer, lease or otherwise dispose of
any of Borrower's assets except for fair consideration and in the ordinary
course of its business; or enter into any sale or leaseback agreement covering
any of Borrower's fixed or capital assets.
6.6 Loans/Investments. Make or suffer to exist any loans, guaranties,
advances, or investments, except:
(a) Accounts receivable in the ordinary course of Borrower's
business;
(b) Investments in domestic certificates of deposit issued by,
and other domestic investments with, financial institutions organized under
the laws of the United States or a state thereof, having one Hundred
Million Dollars ($100,000,000) in capital and a rating of at least
"investment grade" or "A" by Moody's or any successor rating agency;"
-18-
<PAGE>
(c) Investments in marketable obligations of the United States
of America and in open market commercial paper given the highest credit
rating by a national credit agency and maturing not more than one year from
the creation thereof;
(d) Loans to a Person or guaranties of Indebtedness of a Person
not to exceed Two Hundred Fifty Thousand Dollars ($250,000) for any one
Person and One Million Dollars ($1,000,000) in aggregate with respect to
all Persons, outstanding at any time; and
(e) Temporary advances to cover incidental expenses to be
incurred in the ordinary course of business.
6.7 Transactions With Related Persons. Directly or indirectly enter
into any transaction with or for the benefit of a Related Person on terms more
favorable to the Related Person than would have been obtainable in an "arms'
length" dealing.
6.8 Other Business. Engage in any material line of business other
than the business Borrower conducts as of the Closing Date.
ARTICLE 7 - EVENTS OF DEFAULT
7.1 Events of Default. Upon the occurrence and during the
continuation of any Default, the obligation of Lender to make any additional
Loan shall be suspended. The occurrence of any of the following shall terminate
any obligation of Lender to make any additional Loan; and shall, at the option
of Lender (1) make all sums of Basic Interest, principal, Additional Interest
and any other amounts owing under any Loan Documents immediately due and payable
without notice of default, presentment or demand for payment, protest or notice
of nonpayment or dishonor or any other notices or demands, and (2) give Lender
the right to exercise any other right or remedy provided by contract or
applicable law:
(a) Borrower shall fail to make any payment or prepayment of
principal or interest under this Agreement, or to pay any fees or other
charges when due under any Loan Document, and such failure continues for
three (3) Business Days or more after the same first becomes due; or an
Event of Default as defined in any other Loan Document shall have occurred.
(b) Any representation or warranty made, or financial statement,
certificate or other document provided, by Borrower under any Loan Document
shall prove to have been false or misleading in any material respect when
made or deemed made herein.
(c) Borrower shall fail to pay its debts generally as they
become due or shall commence any Insolvency Proceeding with respect to
itself; an involuntary Insolvency Proceeding shall be filed against
Borrower, or a custodian, receiver, trustee, assignee for the benefit of
creditors, or other similar official, shall be appointed to take
possession, custody or control of the properties of Borrower, and such
involuntary
-19-
<PAGE>
Insolvency Proceeding, petition or appointment is acquiesced to by Borrower
or is not dismissed within sixty (60) days; or the dissolution or
termination of the business of Borrower.
(d) Borrower shall be in default beyond any applicable period of
grace or cure under any other agreement involving the borrowing of money,
the purchase of property, the advance of credit or any other monetary
liability of any kind to Lender or to any Person which results in the
acceleration of payment of such obligation in an amount in excess of One
Hundred Thousand Dollars ($100,000).
(e) Any governmental or regulatory authority shall take any
judicial or administrative action, or any defined benefit pension plan
maintained by Borrower shall have any unfunded liabilities, any of which,
in the reasonable judgment of Lender, might have a Material Adverse Effect.
(f) Any judgment in excess of One Hundred Thousand Dollars
($100,000) shall be entered against Borrower which remain unsatisfied,
unvacated or unstayed pending appeal for thirty (30) or more days after
entry thereof.
(g) Any Person or two or more Persons acting in concert shall
have acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission) of forty percent (40%) or more of the
outstanding shares of voting stock of Borrower.
(h) Borrower shall fail to perform or observe any covenant
contained in Article 6 of this Agreement.
(i) Borrower shall fail to perform or observe any covenant
contained in this Agreement or any other Loan Document (other than a
covenant which is dealt with specifically elsewhere in this Article 7) and
the breach of such covenant is not cured within 30 days after the sooner to
occur of Borrower's receipt of notice of such breach from Lender or the
date on which such breach first becomes known to any officer of Borrower;
provided, however that if such breach is not capable of being cured within
-------- -------
such 30-day period and Borrower timely notifies Lender of such fact and
Borrower diligently pursues such cure, then the cure period shall be
extended to the date requested in Borrower's notice but in no event more
than 90 days from the initial breach; provided, further, that such
-------- -------
additional 60-day opportunity to cure shall not apply in the case of any
failure to perform or observe any covenant which has been the subject of a
prior failure within the preceding 180 days or which is a willful and
knowing breach by Borrower.
ARTICLE 8 - GENERAL PROVISIONS
8.1 Notices. Any notice given by any party under any Loan Document
shall be in writing and personally delivered, sent by overnight courier, or
United States mail, postage prepaid, or sent by facsimile, to be promptly
confirmed in writing, or other authenticated message, charges prepaid, to the
other party's or parties' addresses shown on the signature pages
-20-
<PAGE>
hereto. Each party may change the address or facsimile number to which notices,
requests and other communications are to be sent by giving written notice of
such change to each other party. Notice given hand delivery shall be deemed
received on the date delivered; if sent by overnight courier, on the next
business day after delivery to the courier service; if by first class mail, on
the third business day after deposit in the U.S. Mail; and if by telecopy, on
the date of transmission.
8.2 Binding Effect. The Loan Documents shall be binding upon and
inure to the benefit of Borrower and Lender and their respective successors and
assigns; provided, however, that Borrower may not assign or transfer Borrower's
rights or obligations under any Loan Document without Lender's prior written
consent. Lender reserves the right to sell, assign, transfer, negotiate or grant
participations in all or any part of, or any interest in, Lender's rights and
obligations under the Loan Documents. In connection with any of the foregoing,
Lender may disclose all documents and information which Lender now or hereafter
may have relating to the Loans, Borrower, or its business; provided that any
person who receives such information shall have agreed in writing in advance to
maintain the confidentiality of such information on terms reasonably acceptable
to Borrower.
8.3 No Waiver. Any waiver, consent or approval by Lender of any Event
of Default or breach of any provision, condition, or covenant of any Loan
Document must be in writing and shall be effective only to the extent set forth
in writing. No waiver of any breach or default shall be deemed a waiver of any
later breach or default of the same or any other provision of any Loan Document.
No failure or delay on the part of Lender in exercising any power, right, or
privilege under any Loan Document shall operate as a waiver thereof, and no
single or partial exercise of any such power, right, or privilege shall preclude
any further exercise thereof or the exercise of any other power, right or
privilege. Lender has the right at its sole option to continue to accept
interest and/or principal payments due under the Loan Documents after default,
and such acceptance shall not constitute a waiver of said default or an
extension of the Maturity Date unless Lender agrees otherwise in writing.
8.4 Rights Cumulative. All rights and remedies existing under the
Loan Documents are cumulative to, and not exclusive of, any other rights or
remedies available under contract or applicable law.
8.5 Unenforceable Provisions. Any provision of any Loan Document
executed by Borrower which is prohibited or unenforceable in any jurisdiction,
shall be so only as to such jurisdiction and only to the extent of such
prohibition or unenforceability, but all the remaining provisions of any such
Loan Document shall remain valid and enforceable.
8.6 Accounting Terms. Except as otherwise provided in this Agreement,
accounting terms and financial covenants and information shall be determined and
prepared in accordance with GAAP.
8.7 Indemnification; Exculpation. Borrower shall pay and protect,
defend and indemnify Lender and Lender's employees, officers, directors,
shareholders, affiliates, correspondents, agents and representatives (other than
Lender, collectively "Agents") against,
-21-
<PAGE>
and hold Lender and each such Agent harmless from, all claims, actions,
proceedings, liabilities, damages, losses, expenses (including, without
limitation, attorneys' fees and costs) and other amounts incurred by Lender and
each such Agent, arising from (i) the matters contemplated by this Agreement or
any other Loan Documents or (ii) any contention that Borrower has failed to
comply with any law, rule, regulation, order or directive applicable to
Borrower's business; provided, however, that this indemnification shall not
apply to any of the foregoing incurred solely as the result of Lender's or any
Agent's gross negligence or willful misconduct. This indemnification shall
survive the payment and satisfaction of all of Borrower's Obligations to Lender.
8.8 Reimbursement. Borrower shall reimburse Lender for all costs and
expenses, including without limitation reasonable attorneys' fees and
disbursements expended or incurred by Lender in any arbitration, mediation,
judicial reference, legal action or otherwise in connection with (a) the
preparation and negotiation of the Loan Documents, not to exceed $3,000.00, (b)
the amendment, interpretation and enforcement of the Loan Documents, including
without limitation during any workout, attempted workout, and/or in connection
with the rendering of legal advice as to Lender's rights, remedies and
obligations under the Loan Documents, (c) collecting any sum which becomes due
Lender under any Loan Document, (d) any proceeding for declaratory relief, any
counterclaim to any proceeding, or any appeal, or (e) the protection,
preservation or enforcement of any rights of Lender. For the purposes of this
section, attorneys' fees shall include, without limitation, fees incurred in
connection with the following: (1) contempt proceedings; (2) discovery; (3) any
motion, proceeding or other activity of any kind in connection with an
Insolvency Proceeding; (4) garnishment, levy, and debtor and third party
examinations; and (5) postjudgment motions and proceedings of any kind,
including without limitation any activity taken to collect or enforce any
judgment. All of the foregoing costs and expenses shall be payable upon demand
by Lender, and if not paid within forty-five (45) days of presentation of
invoices shall bear interest at the highest applicable Default Rate.
8.9 Execution in Counterparts. This Agreement may be executed in any
number of counterparts which, when taken together, shall constitute but one
agreement.
8.10 Entire Agreement. The Loan Documents are intended by the parties
as the final expression of their agreement and therefore contain the entire
agreement between the parties and supersede all prior understandings or
agreements concerning the subject matter hereof. This Agreement may be amended
only in a writing signed by Borrower and Lender.
8.11 Governing Law and Jurisdiction.
(a) THIS AGREEMENT AND THE LOAN DOCUMENTS SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF CALIFORNIA OR OF THE UNITED STATES
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<PAGE>
FOR THE NORTHERN, CENTRAL OR SOUTHERN DISTRICT OF CALIFORNIA, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF BORROWER AND LENDER
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH OF BORROWER AND LENDER IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR
BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN
RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. BORROWER AND
LENDER EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY CALIFORNIA LAW.
8.12 Waiver of Jury Trial. BORROWER AND LENDER EACH WAIVES ITS
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR
ANY PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE. BORROWER AND LENDER EACH AGREES THAT ANY SUCH CLAIM OR
CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING
THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL
BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEMS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
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<PAGE>
IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement
as of the date set forth in the preamble.
Addresses for Notices: COMPS INFOSYSTEMS, INC.
- ---------------------
COMPS InfoSystems, Inc. By: /s/ Christopher A. Crane
9888 Carroll Centre Road --------------------------
San Diego, CA 92126-4580 Christopher A. Crane,
Attn: Christopher A. Crane, President and CEO President and CEO
Fax No. 619-684-3292
Venture Lending & Leasing, Inc. VENTURE LENDING & LEASING, INC.
2010 North First Street, Suite 310
San Jose, CA 95131 By: /s/ Salvador O. Gutierrez
Attn: Salvador 0. Gutierrez, President --------------------------
Fax No. 408-435-8625 Salvador O. Gutierrez,
President
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<PAGE>
EXHIBIT "A"
-----------
See Exhibit 10.12 and Exhibit 10.13 to the Registration Statement on Form
S-1
<PAGE>
EXHIBIT "B"
Form of Borrowing Request
-------------------------
_____________, 199___
Venture Lending & Leasing, Inc.
2010 North First Street, Suite 310
San Jose, CA 95131
Re: COMPS InfoSystems, Inc.
-----------------------
Gentlemen:
Reference is made to the Loan Agreement dated as of September 24, 1996
(as it has been and may be amended from time to time, the "Loan Agreement", the
capitalized terms used herein as defined therein), between Venture Lending &
Leasing, Inc. and COMPS InfoSystems, Inc. (the "Company").
The undersigned is the Chief Financial Officer of the Company, and
hereby requests a Loan under the Loan Agreement, and in that connection
certifies as follows:
1. The type of the proposed Loan is [the Term Loan/an Equipment
Loan]. The amount of the proposed Loan is $____________. The Business Day of
the proposed Loan is ___________, 199___.
2. As of this date, no Default or Event of Default has occurred and
is continuing, or will result from the making of the proposed Loan, and the
representations and warranties of the Company contained in Article 3 of the Loan
Agreement are true and correct.
3. No Material Adverse Change has occurred since the date of the most
recent financial statements submitted to you by the Company.
4. As of the date hereof, the aggregate amount of the Company's
Eligible Accounts is $__________, 80% of which exceeds the outstanding principal
balance of the Term Loan [or if the Term Loan balance exceeds 80% of Eligible
Accounts, a prepayment of the Term Loan in the amount of such excess is made
herewith].
The Company shall notify you promptly before the funding of the Loan
if any of the matters to which I have certified above shall not be true and
correct on the Borrowing Date.
Very truly yours,
-------------------------------
Chief Financial Officer
<PAGE>
EXHIBIT "C"
See Exhibit 10.9 to the Registration Statement on Form S-1
<PAGE>
EXHIBIT "D"
See Exhibit 10.7 to Registration Statement on Form S-1
<PAGE>
Schedule 3.6
------------
Litigation
----------
<PAGE>
Schedule 3.6
Arbitration
-----------
COMPS InfoSystems, Inc. vs. Andrew Blount and DOES 1 - 20. San Diego Superior
- ---------------------------------------------------------
Court No. 00697714. This action was commenced on March 5, 1996. The complaint
alleges that Andrew Blount, a former employee, has engaged in unfair
competition, has misappropriated trade secrets, has intentionally interfered
with contractual relations and prospective economic advantage of the Company,
has breached his fiduciary duty, has violated Labor Code section 2860, and had
breached a contract and the covenant of good faith and fair dealing with the
Company. At the same time, the Company sought and obtained a temporary
restraining order against Mr. Blount regarding his conduct, and later, sought
and obtained a preliminary injunction.
The defendant filed a counterclaim against the company, claiming defamation of
character and unfair competition. The defendant's request for a preliminary
injunction regarding these complaints was denied.
Recently, the defendant's counsel has filed a petition to be relieved from
representing the defendant. The petition has been filed because the defendant
has breached his agreement with his attorney by failing to remit payment to him.
The Court has ordered the matter into binding arbitration in accord with the
arbitration agreement signed by the parties. The Company plans to seek a
settlement payment from the defendant prior to arbitration. Failing this, the
Company has already reserved in its projections sufficient monies to cover the
arbitration expenses.
In the Company's opinion, the outcome of the complaints should have no material
effect on the Company or the Company's financial condition because, to date, the
Court has looked favorably upon each of the Company's motions and issued
injunctions against the defendant, while the court denied the injunction against
the Company regarding the defendant's complaints.
<PAGE>
Schedule 6.1
------------
Permitted Indebtedness
----------------------
<PAGE>
Schedule 6.1
------------
Permitted Indebtedness
----------------------
EQUIPMENT LEASES
- ----------------
1. Avnet/AT&T Capital Corporation
Lease No. 424755
Term: 60 months
Start: 10/25/94
Equipment: HP 9000 Computer
Original Loan: $32,121.40
2. Canon Financial Service
Lease No. 001-0050913-001
Term: 60 Months
Start: 09/20/94
Equipment: 3 Canon Copiers
Original Loan: $20,628.00
3. Canon Financial Service
Lease No. 001-0058622-001
Term: 60 Months
Start: 04/05/95
Equipment: 1 Canon Copier
Original Loan: $7,824.00
4. Ford Motor Corp.
Acct. No. FN A321 335R
Term: 48 months
Start: 01/26/94
Vehicle: FORD Escort 1993
Original Loan: $12,305.65
5. G.E. Capital
Lease No. 6519146-001
Term: 60 Months
Start: 5/16/94
Equipment: Executone Telephone Equipment
Original Loan: $64,805.00
6. Orix USA Corporation
Lease No. 33938
Term: 36 Months
Start: 01/15/95
Equipment: Gupta Software
Original Loan: $80,296.96
<PAGE>
Schedule 6.1
------------
Permitted Indebtedness
----------------------
7. Sybase Financial Services, Inc.
Agreement # 509662
Term: 36 months
Start: 7/15/94
Equipment: Sybase Software
Original Loan: $26,160.00
8. Sybase Financial Services, Inc.
Agreement #515973
Term: 36 months
Start: 10/21/94
Equipment: Sybase Software
Original Loan: $29,255.00
9. Tokai Financial
Lease No. 24150393
Term: 60 Months
Start: 01/10/95
Equipment: Haworth Systems Furniture
Original Loan: $111,576.68
10. Xerox Corporation
Contract No. 958325383
Term: 24 months
Start: 12/94
Equipment: Xerox 5090 Copier
Original Loan: $12,780.00
11. Xerox Corporation
Contract # 903429
Term: 24 months
Start: 12/94
Equipment: Xerox 5065 Copier
Original Loan: $6,957.00
12. Xerox Corporation
Contract # 903395
Term: 24 months
Start: 12/94
Equipment: Xerox 5065 Copier
Original Loan: $6,957.00
<PAGE>
Schedule 6.1
------------
Permitted Indebtedness
----------------------
13. Xerox Corporation
Contract # 958903379
Term: 24 months
Start: 12/94
Equipment: Xerox 5046 Copier
Original Loan: $2,418.00
14. Xerox Corporation
Contract # Not Available as of 9/30/96
Term: 72 months from start of contract
Start: Quarter 4, 1996
Equipment: Xerox Docutech or 5390 Copier
Original Loan: Not more than $300,000.00
NOTES PAYABLE
- -------------
Notes Payable to Bank
- ---------------------
1. Union Bank
7807 Girard Avenue
La Jolla, CA 92037
Randall T. Vogan, Commercial Loan Officer
a. Union Bank Note 002000001 Remaining Balance at 9/30/96: $ 3,432.61
b. Union Bank Note 002000002 Remaining Balance at 9/30/96: $ 20,536.18
c. Union Bank Note 002000003 Remaining Balance at 9/30/96: $ 13,135.11
2. Bank: Silicon Valley Bank
5414 Oberlin Drive
San Diego, CA 92121
John W. Otterson, Vice President
Facility up to $750,000.00
Note payable to TRW REDI under Purchase Agreement dated August 31, 1995 between
COMPS InfoSystems, Inc. and TRW REDI Property Data.
Total Note Payable to TRW REDI $750,000.00
Due in six annual installments of $125,000.00
<PAGE>
Schedule 6.2
------------
Permitted Liens
---------------
<PAGE>
Schedule 6.2
------------
Permitted Liens
---------------
<TABLE>
<CAPTION>
<S> <C> <C>
1. Secured Party: Avnet Leasing/AT&T Capital Corporation.
Debtor: Business Real Estate Information Corp.
Financing Statement: - Any and all financing statements and/or liens filed in
any state.
2. Secured Party: Canon Financial Services
Debtor: Business Real Estate Information Corp.
Financing Statement: - Any and all financing statements and/or liens filed in
any state.
3. Secured Party: Camadon, Inc.
Debtor: COMPS InfoSystems, Inc.
Financing Statement: - Any and all financing statements and/or liens filed in
any state.
4. Secured Party: Ford Motor Corporation
Debtor: Business Real Estate Information Corp.
Financing Statement: - Any and all financing statements and/or liens filed in
any state.
5. Secured Party: G.E. Capital Corporation
Debtor: Business Real Estate Information Corp.
Financing Statement: - Any and all financing statements and/or liens filed in
any state.
6. Secured Party: ORIX USA Corporation
Debtor: COMPS InfoSystems, Inc.
Financing Statement: - File No. 9503460597 filed with California Secretary of
State
7. Secured Party: Silicon Valley Bank
Debtor: COMPS InfoSystems, Inc.
Financing Statement: - Any present and all future financing statements and/or
liens filed in any state.
8. Secured Party: Sybase Financial Services, Inc.
Debtor: Business Real Estate Information Corp.
Financing Statement: Any and all financing statements and/or liens filed in
any state.
9. Secured Party: Master Lease Division of Tokai Financial Services, Inc.
Debtor: COMPS InfoSystems, Inc.
Financing Statement: - File No. 9510760241 filed with California Secretary of
State
</TABLE>
<PAGE>
Schedule 6.2
------------
Permitted Liens
---------------
<TABLE>
<S> <C> <C>
10. Secured Party: TRW REDI Property Data
Debtor: COMPS InfoSystems, Inc.
Financing Statement: - Any present and all future financing statements and/or
liens filed in any state.
11. Secured Party: Union Bank - La Jolla Office
Debtor: Business Real Estate Information Corp.
Financing Statement: - File No. 94145123, filed with California Secretary of
State
12. Secured Party: Union Bank - La Jolla Office
Debtor: Business Real Estate Information Corp.
Financing Statement: - Any and all financing statements and/or liens filed in
any state.
13. Secured Party: Union Bank - La Jolla Office
Debtor: COMPS InfoSystems, Inc.
Financing Statement: - Any and all financing statements and/or liens filed in
any state.
14. Secured Party: Xerox Corporation
Debtor: Business Real Estate Information Corp.
Financing Statement: - Any and all financing statements and/or liens filed in
any state.
15. Secured Party: Xerox Corporation
Debtor: COMPS InfoSystems, Inc.
Financing Statement: - Any present and all future financing statements and/or
liens filed in any state.
</TABLE>
<PAGE>
Exhibit 10.9
SECURITY AGREEMENT
This Agreement is made as of September 24, 1996 by COMPS InfoSystems, Inc.,
a Delaware corporation ("Debtor"), in favor of Venture Lending & Leasing, Inc.,
a Maryland corporation ("Lender").
ARTICLE 1 - DEFINITIONS
The following definitions shall be applicable to both the singular and plural
forms of the defined terms:
"Account" means a right to payment for goods sold or leased by Debtor
or for services rendered by Debtor, which right is not evidenced by an
instrument or chattel paper, whether or not earned by performance.
"Agreement" means this Security Agreement, as it may be amended from
time to time.
"Collateral" means all Debtor's Accounts, Deposit Accounts, Equipment,
Fixtures, General Intangibles, Goods, Inventory, Rights to Payment, and
securities now owned or hereafter acquired, wherever located, and whether held
by Debtor or any third party, and all royalties, proceeds and products thereof,
including all insurance and condemnation proceeds ("Proceeds"), and all Records.
"Deposit Accounts" means all Debtor's demand, time, savings, passbook
or similar accounts maintained with a financial institution or credit union.
"Equipment" means all of Debtor's equipment now owned or hereafter
acquired, including but not limited to machinery, machine parts, furniture,
furnishings and all tangible personal property used in the business of Debtor
and all such property which is or is to become fixtures on real property, and
all improvements, replacements, accessions and additions thereto, wherever
located, and all proceeds thereof arising from the sale, lease, rental or other
use or disposition of any such property, including all rights to payment with
respect to insurance or condemnation, returned premiums, or any cause of action
relating to any of the foregoing.
"Event of Default" means an event described in Article 6.
"Fixtures" means all items of personal property of Debtor that are so
related to the real property upon which they are located that an interest in
them arises under real property law, and improvements, replacements, parts,
accessions and additions thereto, and substitutions therefor.
"General Intangibles" means all personal property of Debtor, other
than Goods, not otherwise defined as Collateral, including without limitation
all interests or claims in insurance policies; literary property; tradenames,
tradename rights; Trademarks, Trademark rights, copyrights, Patents, and all
applications therefor; licenses, permits, franchises and like privileges or
rights issued by any governmental or regulatory authority; income tax refunds;
customer lists; claims and causes of action (whether in contract, tort or
otherwise), judgments
<PAGE>
and all guaranty claims, leasehold interests in personal property, security
interests or other security held by or guaranteed to the Debtor to secure the
payment by an account debtor of any of the Accounts.
"Goods" means all money and other personal property of Debtor, other
than General Intangibles, not otherwise defined as Collateral.
"Indebtedness" means all debts, obligations and liabilities of Debtor
to Lender currently existing or now or hereafter made, incurred or created
under, pursuant to or in connection with the Loan Agreement, whether voluntary
or involuntary and however arising or evidenced, whether direct or acquired by
Lender by assignment or succession, whether due or not due, absolute or
contingent, liquidated or unliquidated, determined or undetermined, and whether
Debtor may be liable individually or jointly, or whether recovery upon such debt
may be or become barred by any statute of limitations or otherwise
unenforceable; and all renewals, extensions and modifications thereof; and all
attorneys' fees and costs incurred by Lender in connection with the collection
and enforcement thereof as provided for in any Loan Document.
"Inventory" means all Debtor's raw materials, advertising, packaging
and shipping materials, work in process, finished goods and goods held for sale
or lease or furnished under contracts of service, and all returned and
repossessed goods, and all goods covered by documents of title, including
warehouse receipts, bills of lading and all other documents of every type
covering all or any part of the Collateral.
"Lien" means any voluntary or involuntary security interest, mortgage,
pledge, claim, charge, encumbrance, title retention agreement, or third party
interest covering all or any part of the property of Debtor or any other Person.
"Loan Agreement" means that certain Loan Agreement between Debtor and
Lender of even date herewith, as amended from time to time.
"Loan Documents" means this Agreement, the Loan Agreement, any
evidence of Indebtedness, any guaranty, security or pledge agreement, or deed of
trust delivered in connection with any Indebtedness, and all other contracts,
instruments, addenda and documents executed in connection therewith.
"Patent License" means any written agreement now or hereafter in
existence granting to Debtor any right to make, use, sell or practice any
invention on which a Patent is in existence, including, without limitation, the
agreements described in Schedule 1 to Exhibit A hereto.
---------- ---------
"Patents" means all of the following: (i) all letters patent of the
United States or any other country, all registrations and recordings thereof,
and all applications for letters patent of the United States or any other
country, including, without limitation, registrations, recordings and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any state thereof or any other country or
any political subdivision thereof, including, without limitation, those referred
to in Schedule 1 to Exhibit A hereto, and (ii) all reissues, divisions,
---------- ---------
continuations, continuations-in-part, renewals or extensions thereof.
2
<PAGE>
"Patent Collateral Assignment" means the Patent Collateral Assignment
executed and delivered by Debtor in favor of Lender, substantially in the form
of Exhibit A, as the same may be amended from time to time.
---------
"Permitted Liens" is defined in the Loan Agreement.
"Person" means any individual or entity.
"Records" means all Debtor's computer programs, software, hardware,
source codes and data processing information, all written documents, books,
invoices, ledger sheets, financial information and statements, and all other
writings concerning Debtor's business.
"Rights to Payment" means all Debtor's accounts, instruments, contract
rights, documents, chattel paper and all other rights to payment, including,
without limitation, the Accounts, all negotiable certificates of deposit and all
rights to payment under any Patent License, any Trademark License, or any
commercial or standby letter of credit.
"Trademark License" means any written agreement now or hereafter in
existence granting to Debtor any right to use any Trademark, including, without
limitation, the agreements described in Schedule 1 to Exhibit B hereto.
---------- ---------
"Trademarks" means all of the following: (i) all trademarks, trade
names, corporate names, company names, business names, fictitious business
names, trade styles, service marks, logos, other source or business identifiers,
prints and labels on which any of the foregoing have appeared or will appear,
designs and general intangibles of like nature, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, including, without limitation,
registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
state thereof or any other country or any political subdivision thereof,
including, without limitation, those described in Schedule 1 to Exhibit B
---------- ---------
hereto, and (ii) all reissues, divisions, continuations, continuations-in-part,
renewals or extensions thereof.
"Trademark Collateral Assignment" means the Trademark Collateral
Assignment executed and delivered by Debtor in favor of Lender, substantially in
the form of Exhibit B hereto, as the same may be amended from time to time.
---------
"Uniform Commercial Code" means the California Uniform Commercial
Code, as amended from time to time.
Terms not specifically defined in this Agreement have the meanings ascribed
thereto in the Loan Agreement and the Uniform Commercial Code.
ARTICLE 2 - GRANT OF SECURITY INTEREST
To secure the timely payment of the Indebtedness and performance of all
obligations of Debtor to Lender, Debtor grants to Lender security interests in
the Collateral.
3
<PAGE>
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES
Debtor represents and warrants that, at all times during the term of this
Agreement:
3.1 Governmental Actions. Debtor has obtained all consents and
actions of, and has performed all filings with, any governmental or regulatory
authority that are required to authorize the execution, delivery or performance
of this Agreement or the granting or perfecting of Lender's security interest in
the Collateral.
3.2 Title. Except for the security interests created by this
Agreement, and Permitted Liens, (i) Debtor is and will be the unconditional
legal and beneficial owner of the Collateral, and (ii) the-Collateral is genuine
and subject to no Liens, rights or defenses of others. There exist no prior
assignments or encumbrances of record with the U.S. Patent and Trademark Office
affecting any Collateral in favor of any third party other than Lender.
3.3 Rights to Payment. The names of the obligors, amount owing to
Debtor, due dates and all other information with respect to the Rights to
Payment are and will be correctly stated in all material respects in all Records
relating to the Rights to Payment. Debtor further represents and warrants, to
its knowledge, that each Person appearing to be obligated on a Right to Payment
has authority and capacity to contract and is bound as it appears to be.
3.4 Chief Executive Office. Debtor's chief executive office is
located at:
<TABLE>
<CAPTION>
Address City County State Zip
------- ---- ------ ----- ---
<S> <C> <C> <C> <C>
9888 Carroll Centre Road, San Diego San Diego CA 92126
</TABLE>
3.5 Inventory Location. Other than as set forth in Section 3.4,
Inventory is located at:
<TABLE>
<CAPTION>
Address City County State Zip
-------- ---- ------ ----- ---
<S> <C> <C> <C> <C>
Same as paragraph 3.4
</TABLE>
3.6 Records Location. Other than as set forth in Section 3.4,
Records are maintained at:
<TABLE>
<CAPTION>
Address City County State Zip
-------- ---- ------ ----- ---
<S> <C> <C> <C> <C>
Same as paragraph 3.4
</TABLE>
4
<PAGE>
3.7 Equipment or Fixtures Location. Other than as set forth in
Section 3.4, Equipment or Fixtures are located at:
<TABLE>
<CAPTION>
Address City County State Zip
-------- ---- ------ ----- ---
<S> <C> <C> <C> <C>
See Schedule 3.7
</TABLE>
3.8 Other Places of Business. In addition to the locations set forth
in Sections 3.4 through 3.7, Debtor maintains the following place(s) of
business:
<TABLE>
<CAPTION>
Address City County State Zip
-------- ---- ------ ----- ---
<S> <C> <C> <C> <C>
None
</TABLE>
3.9 Business Names. Debtor has conducted business in the following
names other than the name stated in the preamble to this Agreement:
LSR/COMPS
Business Real Estate Information Co.
Commercial Property Information Services
ARTICLE 4 - AFFIRMATIVE COVENANTS
During the term of this Agreement and until payment of all the Indebtedness and
performance of all obligations to Lender, Debtor will:
4.1 Delivery of Certain Items. Deliver to Lender promptly (a) upon
Lender's request, duplicate invoices with respect to each Account bearing such
language of assignment as Lender shall reasonably specify; (b) the originals of
all commercial and standby letters of credit, instruments, documents and chattel
paper constituting Collateral, endorsed and assigned as Lender shall reasonably
specify; (c) after an Event of Default, all Proceeds; (d) upon Lender's request,
returned property resulting from, or payment equal to any allowance or credit
on, Rights to Payment; (e) such specific acknowledgments, assignments or other
agreements as Lender may reasonably request relating to the Collateral; and (f)
such Records and other reports in such form and detail and at such times as
Lender may reasonably require relating to the Collateral, including without
limitation reports of acquisition, and disposition, agings, and collection of
any Collateral. if any of the Rights to Payment become evidenced by an
instrument, Debtor will notify Lender thereof and, upon request by Lender
promptly deliver such instrument to Lender appropriately endorsed to the order
of Lender as further security for the satisfaction in full of the Indebtedness.
4.2 Maintenance of Collateral; Inspection. Do all things reasonably
necessary to maintain, preserve, protect and keep all Collateral in good working
order and salable condition, ordinary wear and tear excepted, deal with the
Collateral in all ways as are
5
<PAGE>
considered good practice by owners of like property, and use the Collateral
lawfully and, to the extent applicable, only as permitted by Debtor's insurance
policies. Upon reasonable prior notice at reasonable times during normal
business hours, Debtor hereby authorizes Lender's officers, employees,
representatives and agents to inspect the Collateral and to discuss the
Collateral and the Records relating thereto with Debtors, officers and
employees, and, in the case of any Right to Payment, with any Person which is or
may be obligated thereon.
4.3 Maintenance of Records; Inspection. maintain, or cause to be
maintained, complete and accurate Records relating to the Collateral. Upon
reasonable prior notice at reasonable times during normal business hours,
Lender, its officers, employees, agents and representatives shall have the
right, from time to time, to examine the Records and to make copies or extracts
therefrom.
4.4 Debtor's Duty to Give Notice. Give prompt notice to Lender of:
(a) except as permitted in Section 5.5, any material discount, credit, rebate or
other reduction in the amount owing on a material Right to Payment; (b) any
threatened or asserted dispute, setoff, claim, counterclaim or defense with
respect to a Right to Payment; (c) any material decrease in the value of any
Collateral and the amount of such decrease (other than depreciation calculated
in the ordinary course of business under applicable tax laws and regulations and
in accordance with generally accepted accounting principles); (d) any litigation
or administrative or regulatory proceeding which may have a material adverse
effect on Debtor or its business; (e) to the extent Debtor has actual knowledge
thereof, any change in the ownership of any property on which Debtor's chief
executive office is located; and (f) the occurrence of any Default or Event of
Default or of any other development, financial or otherwise, which might
materially adversely affect the Collateral or Debtor's ability to pay the
Indebtedness or perform its obligations to Lender. Debtor shall notify Lender
immediately if it has actual knowledge that any application or registration
relating to any Patent or Trademark may become abandoned or dedicated, or of any
adverse determination or development (including, without limitation, the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office or any court) regarding Debtor's
ownership of any Patent or Trademark, its right to register the same, or to keep
and maintain the same. In the event that any Patent, Patent License, Trademark
or Trademark License is infringed, misappropriated or diluted by a third party,
Debtor shall notify Lender promptly after it learns thereof and shall, unless
Debtor shall reasonably determine that any such action would not be of
reasonable economic value, promptly sue for infringement, misappropriation or
dilution and to recover any and all damages for such infringement,
misappropriation or dilution, and take such other actions as Debtor shall
reasonably deem appropriate under the circumstances to protect such Patent,
Patent License, Trademark or Trademark License.
4.5 Financing Statements and Other Actions. Execute and deliver to
Lender, and file or record at Debtor's expense, all financing statements,
notices and other documents (including, without limitation, any filings with the
United States Patent and Trademark Office) from time to time reasonably
requested by any Lender to maintain a first perfected security interest in the
Collateral in favor of Lender, all in form and substance satisfactory to Lender;
perform such other acts, and execute and deliver to Lender such additional
conveyances, assignments, agreements and instruments, as Lender may at any time
6
<PAGE>
request in connection with the administration and enforcement of this Agreement
or Lender's rights, powers and remedies hereunder.
ARTICLE 5 - NEGATIVE COVENANTS
During the term of this Agreement and until payment of all the Indebtedness and
performance of all obligations to Lender, Debtor will not:
5.1 Liens. Create, incur, assume or permit to exist any Lien or
grant any other Person a negative pledge on any Collateral, except Permitted
Liens.
5.2 Documents of Title. Sign or authorize the signing of any
financing statement or other document naming Debtor as debtor or obligor, or
acquiesce or cooperate in the issuance of any bill of lading, warehouse receipt
or other document or instrument of title with respect to any Collateral, except
those negotiated to Lender, or those naming Lender as secured party, or those
permitted under Section 6.2 of the Loan Agreement.
-----------
5.3 Disposition of Collateral. Sell, transfer, lease or otherwise
dispose of any Collateral except for fair consideration and in the ordinary
course of its business.
5.4 Change in Location or Name. Without at least 30 days' prior
written notice to Lender: (a) Maintain Records, its chief executive office, or a
place of business at a location other than as specified in Article 3; or (b)
change its name or mailing address.
5.5 Certain Agreements on Rights to Payment. Other than in the
ordinary course of business, make or arrange to make any material discount,
credit, rebate or other reduction in the original amount owing on a Right to
Payment or accept in satisfaction of a Right to Payment less than the original
amount thereof, except as disclosed to Lender in writing from time to time.
ARTICLE 6 - EVENTS OF DEFAULT
6.1 Event of Default. The occurrence of any "Event of Default" as
defined in the Loan Agreement.
6.2 Acceleration and Remedies. Upon the occurrence and during the
continuance of an Event of Default, Lender shall be entitled to, at its option,
(a) declare all or any part of the Indebtedness immediately due and payable; (b)
exercise any or all of the rights and remedies available to a secured party
under the Uniform Commercial Code or any other applicable law; and (c) exercise
any or all of its rights and remedies provided for in this Agreement and in any
other Loan Document. The obligations of Debtor under this Agreement shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment of any Indebtedness is rescinded or must otherwise be returned by
Lender upon, on account of, or in connection with, the insolvency, bankruptcy or
reorganization of Debtor or otherwise, all as though such payment had not been
made.
6.3 Sale of Collateral. Upon the occurrence and during the
continuance of an Event of Default, Lender may sell all or any part of the
Collateral, at public or private sales, to
7
<PAGE>
itself, a wholesaler, retailer or investor, for cash, upon credit or for future
delivery, and at such price or prices as Lender may deem commercially
reasonable. To the extent permitted by law, Debtor hereby specifically waives
all rights of redemption and any rights of stay or appraisal which it has or may
have under any applicable law in effect from time to time. Any such public or
private sales shall be held at such times and at such place(s) as Lender may
determine. In case of the sale of all or any part of the Collateral on credit or
for future delivery, the Collateral so sold may be retained by Lender until the
selling price is paid by the purchaser, but Lender shall not incur any liability
in case of the failure of such purchaser to pay for the Collateral and, in case
of any such failure, such Collateral may be resold. Lender may, instead of
exercising its power of sale, proceed to enforce its security interest in the
Collateral by seeking a judgment or decree of a court of competent jurisdiction.
Without limiting the generality of the foregoing, if an Event of Default is in
effect,
(1) Subject to the rights of any third parties, Lender may
license, or sublicense, whether general, special or otherwise, and whether
on an exclusive or non-exclusive basis, any Patents or Trademarks included
in the Collateral throughout the world for such term or terms, on such
conditions and in such manner as Lender shall in its sole discretion
determine;
(2) Lender may (without assuming any obligations or liability
thereunder), at any time and from time to time, enforce (and shall have the
exclusive right to enforce) against any licensee or sublicensee all rights
and remedies of Debtor in, to and under any Patent Licenses or Trademark
Licenses and take or refrain from taking any action under any thereof, and
Debtor hereby releases Lender from, and agrees to hold Lender free and
harmless from and against any claims arising out of, any lawful action so
taken or omitted to be taken with respect thereto other than claims arising
out of Lender's gross negligence or willful misconduct; and
(3) upon request by Lender, Debtor will execute and deliver to
Lender a power of attorney, in form and substance reasonably satisfactory
to Lender for the implementation of any lease, assignment, license,
sublicense, grant of option, sale or other disposition of a Patent or
Trademark. In the event of any such disposition pursuant to this clause 3,
--------
Debtor shall supply its know-how and expertise relating to the products or
services made or rendered in connection with Patents, the manufacture and
sale of the products bearing Trademarks, and its customer lists and other
records relating to such Patents or Trademarks and to the distribution of
said products, to Lender.
6.4 Debtor's Obligations Upon Default. Upon the request of Lender
after the occurrence and during the continuance of an Event of Default, Debtor
will:
(a) Assemble and make available to Lender the Collateral at such
place(s) as Lender shall reasonably designate, segregating all Collateral
so that each item is capable of identification; and
(b) Subject to the rights of any lessor, permit Lender, by
Lender's officers, employees, agents and representatives, to enter any
premises where any Collateral is located, to take possession of the
Collateral, to complete the processing,
8
<PAGE>
manufacture or repair of any Collateral, and to remove the Collateral, or
to conduct any public or private sale of the Collateral, all without any
liability of Lender for rent or other compensation for the use of Debtor's
premises.
ARTICLE 7 - SPECIAL COLLATERAL PROVISIONS
7.1 Compromise and Collection. Debtor and Lender recognize that
setoffs, counterclaims, defenses and other claims may be asserted by obligors
with respect to certain of the Rights to Payment; that certain of the Rights to
Payment may be or become uncollectible in whole or in part; and that the expense
and probability of success of litigating a disputed Right to Payment may exceed
the amount that reasonably may be expected to be recovered with respect to such
Right to Payment. Debtor hereby authorizes Lender, after and during the
continuance of an Event of Default, to compromise with the obligor, accept in
full payment of any Right to Payment such amount as Lender shall negotiate with
the obligor, or abandon any Right to Payment. Any such action by Lender shall
be considered commercially reasonable so long as Lender acts in good faith based
on information known to it at the time it takes any such action.
7.2 Performance of Debtor's obligations. Upon the occurrence and
during the continuance of an Event of Default, without having any obligation to
do so, upon reasonable prior notice to Debtor, Lender may perform or pay any
obligation which Debtor has agreed to perform or pay under this Agreement,
including, without limitation, the payment or discharge of taxes or Liens levied
or placed on or threatened against the Collateral. In so performing or paying,
Lender shall determine the action to be taken and the amount necessary to
discharge such obligations. Debtor shall reimburse Lender on demand for any
amounts paid by Lender pursuant to this Section, which amounts shall constitute
Indebtedness secured by the Collateral.
7.3 Power of Attorney. For the purpose of protecting and preserving
the Collateral and Lender's rights under this Agreement, Debtor hereby
irrevocably appoints Lender, with full power of substitution, as its attorney-
in-fact with full power and authority, after the occurrence and during the
continuance of an Event of Default, to do any act which Debtor is obligated to
do hereunder; to exercise such rights with respect to the Collateral as Debtor
might exercise; to use such Inventory, Equipment, Fixtures or other property as
Debtor might use; to enter Debtor's premises; to give notice of Lender's
security interest in, and to collect the Collateral; and to execute and file in
Debtor's name any financing statements, amendments and continuation statements
necessary or desirable to perfect or continue the perfection of Lender's
security interests in the Collateral. Debtor hereby ratifies all that Lender
shall lawfully do or cause to be done by virtue of this appointment.
7.4 Authorization for Lender to Take Certain Action. The power of
attorney created in Section 7.3 is a power coupled with an interest and shall be
irrevocable. The powers conferred on Lender hereunder are solely to protect its
interests in the Collateral and shall not impose any duty upon Lender to
exercise such powers. Lender shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers and in no event
shall Lender or any of its directors, officers, employees, agents or
representatives be responsible to Debtor for any act or failure to act, except
for gross negligence or willful misconduct. After the occurrence and during the
continuance of an Event of Default, Lender may exercise this power of attorney
without notice to or assent of Debtor, in the name of Debtor,
9
<PAGE>
or in Lender's own name, from time to time in Lender's sole discretion and at
Debtor's expense. To further carry out the terms of this Agreement, after the
occurrence and during the continuance of an Event of Default, Lender may:
(a) Execute any statements or documents or take possession of,
and endorse and collect and receive delivery or payment of, any checks,
drafts, notes, acceptances or other instruments and documents constituting
Collateral, or constituting the payment of amounts due and to become due or
any performance to be rendered with respect to the Collateral.
(b) Sign and endorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts; drafts, certificates and
statements under any commercial or standby letter of credit relating to
Collateral; assignments, verifications and notices in connection with
Accounts; or any other documents relating to the Collateral, including
without limitation the Records.
(c) Use or operate Collateral or any other property of Debtor for
the purpose of preserving or liquidating Collateral.
(d) File any claim or take any other action or proceeding in any
court of law or equity or as otherwise deemed appropriate by Lender for the
purpose of collecting any and all monies due or securing any performance to
be rendered with respect to the Collateral.
(e) Commence, prosecute or defend any suits, actions or
proceedings or as otherwise deemed appropriate by Lender for the purpose of
protecting or collecting the Collateral. In furtherance of this right,
upon the occurrence and during the continuance of an Event of Default,
Lender may apply for the appointment of a receiver or similar official to
operate Debtor's business.
(f) Prepare, adjust, execute, deliver and receive payment under
insurance claims, and collect and receive payment of and endorse any
instrument in payment of loss or returned premiums or any other insurance
refund or return, and apply such amounts at Lender's sole discretion,
toward repayment of the Indebtedness or replacement of the Collateral.
7.5 Application of Proceeds. Any Proceeds and other monies or
property received by Lender pursuant to the terms of this Agreement or any Loan
Document may be applied by Lender first to the payment of expenses of
collection, including without limitation reasonable attorneys' fees, and then to
the payment of the Indebtedness in such order of application as Lender may
elect.
7.6 Deficiency. If the Proceeds of any disposition of the Collateral
are insufficient to cover all costs and expenses of such sale and the payment in
full of all the Indebtedness, plus all other sums required to be expended or
distributed by Lender, then Debtor shall be liable for any such deficiency.
10
<PAGE>
7.7 Lender Transfer. Upon the transfer of all or any part of the
Indebtedness, Lender may transfer all or part of the Collateral and shall be
fully discharged thereafter from all liability and responsibility with respect
to such Collateral so transferred, and the transferee shall be vested with all
the rights and powers of Lender hereunder with respect to such Collateral so
transferred, but with respect to any Collateral not so transferred, Lender shall
retain all rights and powers hereby given.
7.8 Lender's Duties.
(a) Lender shall use reasonable care in the custody and
preservation of any Collateral in its possession. Without limitation on
other conduct which may be considered the exercise of reasonable care,
Lender shall be deemed to have exercised reasonable care in the custody and
preservation of such Collateral if such Collateral is accorded treatment
substantially equal to that which Lender accords its own property, it being
understood that Lender shall not have any responsibility for ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
declining value, tenders or other matters relative to any Collateral,
regardless of whether Lender has or is deemed to have knowledge of such
matters; or taking any necessary steps to preserve any rights against any
Person with respect to any Collateral. Under no circumstances shall Lender
be responsible for any injury or loss to the Collateral, or any part
thereof, arising from any cause beyond the reasonable control of Lender.
(b) Lender may at any time deliver the Collateral or any part
thereof to Debtor and the receipt of Debtor shall be a complete and full
acquittance for the Collateral so delivered, and Lender shall thereafter be
discharged from any liability or responsibility therefor.
(c) Neither Lender, nor any of its directors, officers,
employees, agents, attorneys or any other person affiliated with or
representing Lender shall be liable for any claims, demands, losses or
damages, of any kind whatsoever, made, claimed, incurred or suffered by
Debtor or any other party through the ordinary negligence of Lender, or any
of its directors, officers, employees, agents, attorneys or any other
person affiliated with or representing Lender.
ARTICLE 8 - GENERAL PROVISIONS
8.1 Notices. Any notice given by any party under this Agreement or
any Loan Document shall be in writing and personally delivered, deposited in the
United States mail, postage prepaid, or sent by overnight courier, or by
facsimile or other authenticated message, charges prepaid, and addressed as
follows:
11
<PAGE>
To Debtor: To Lender:
- ---------- ----------
COMPS InfoSystems, Inc Venture Lending & Leasing, Inc.
9888 Carroll Centre Road 2010 North First Street, Suite 310
San Diego, CA 92126-4580 San Jose, CA 95131
Attn: Christopher A. Crane Attn: Salvador O. Gutierrez
President and CEO President
FAX No. 619-684-3292 FAX No. 408-436-8625
Notice given hand delivery shall be deemed received on the date delivered; if
sent by overnight courier, on the next business day after delivery to the
courier service; if by first class mail, on the third business day after deposit
in the U.S. Mail; and if by telecopy, on the date of transmission. Each party
may change the address to which notices, requests and other communications are
to be sent by giving written notice of such change to each other party.
8.2 Binding Effect. This Agreement shall be binding upon Debtor, its
permitted successors, representatives and assigns, and shall inure to the
benefit of Lender and its successors and assigns.
8.3 Rights Cumulative. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any other rights or remedies
available under contract or applicable law.
8.4 Unenforceable Provisions. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall be so only as to such
jurisdiction and only to the extent of such prohibition or unenforceability, but
all the remaining provisions of this Agreement shall remain valid and
enforceable.
8.5 Governing Law. Except as may be otherwise provided by the
Uniform Commercial Code, this Agreement shall be governed by and construed in
accordance with the laws of the State of California.
8.6 Termination. Subject to Section 6.2 of this Agreement and except
-----------
as otherwise provided in Section 2.11 of the Loan Agreement, upon the payment in
full of the Indebtedness and if Lender has no further obligations under its
Commitment, the security interest granted hereby shall terminate and all rights
to the Collateral shall revert to Debtor. Upon any such termination, the Lender
shall, at Debtor's expense, execute and deliver to Debtor such documents as
Debtor shall reasonably request to evidence such termination.
8.7 Entire Agreement. This Agreement, together with the Loan
Agreement, Trademark Collateral Assignment, and Patent Collateral Assignment
executed contemporaneously herewith covering certain Collateral, is intended by
Debtor and Lender as the final expression of Debtor's obligations to Lender in
connection with the Collateral and supersedes all prior understandings or
agreements concerning the subject matter hereof. This Agreement may be amended
only by a writing signed by Debtor and accepted by Lender in writing.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth in the preamble.
COMPS InfoSystems, Inc.
By: /s/ Christopher A. Crane
---------------------------
Name: Christopher A. Crane
Title: President and CEO
Venture Lending & Leasing, Inc.
By: /s/ Salvador O. Gutierrez
---------------------------
Name: Salvador O. Gutierrez
Title: President
13
<PAGE>
SCHEDULE 3.7
3.7 Equipment or Fixtures Location. Other than as set forth in Section
3.4 of the Security Agreement, Equipment or Fixtures are located at:
<TABLE>
<CAPTION>
Address City County State Zip
- -------------------------------- ---------------- ------------------ ----------------- ----------
<S> <C> <C> <C> <C>
11630 Pleasant Hill Road Duluth Gwinnett Georgia 30136
176 Milk Street, #452 Boston Suffolk Massachussetts 02109
870 Mitten Road Burlingame San Mateo California 94010
622 Executive Drive Willowbrook DuPage Illinois 60521
5060 North 40th Street, Ste. 106 Phoenix Maricopa AZ 85018
8500 Leesburg Pike, Ste. 7700 Vienna Fairfax VA 22182
</TABLE>
<PAGE>
Exhibit A to
Security Agreement
------------------
PATENT COLLATERAL ASSIGNMENT
----------------------------
See Exhibit 10.11 to Registration Statement on Form S-1
<PAGE>
Exhibit B to
Security Agreement
------------------
TRADEMARK COLLATERAL ASSIGNMENT
-------------------------------
See Exhibit 10.10 to Registration Statement on Form S-1
<PAGE>
Exhibit 10.10
TRADEMARK COLLATERAL ASSIGNMENT
-------------------------------
THIS AGREEMENT is made on the 24th day of September, 1996, between COMPS
InfoSystems, Inc., a Delaware corporation, having a mailing address at 9888
Carroll Centre Road, San Diego, CA 92126-4580 ("Assignor"), and Venture Lending
& Leasing, Inc., ("Assignee"). Assignee's address is 2010 North First Street,
Suite 310, San Jose, California 95131.
RECITALS
--------
A. Assignor owns the Trademarks, Trademark registrations and Trademark
applications listed on Schedule 1 hereto, and is a party to the Trademark
----------
Licenses listed on Schedule 1 hereto:
----------
B. Assignor and Assignee are parties to a Loan Agreement of even date
herewith (as the same may be amended from time to time, the "Loan Agreement");
C. Pursuant to the terms of the Security Agreement of even date herewith
(as the same may be amended from time to time, the "Security Agreement"), by
Assignor in favor of Assignee, Assignor has granted to Assignee a security
interest in certain personal property assets of Assignor, including all right,
title and interest of Assignor in, to and under all Debtor's Trademarks (as
defined in the Security Agreement), Trademark registrations, Trademark
applications and Trademark Licenses (as defined in the Security Agreement),
whether presently existing or hereafter arising or acquired, together with the
goodwill of the business symbolized by the Trademarks and the applications
therefor and the registrations thereof, and all products and proceeds thereof,
including, without limitation, any and all causes of action which may exist by
reason of infringement or dilution thereof or injury to the associated goodwill,
to secure the payment of all amounts owing under the Loan Agreement.
D. Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Loan Agreement and the Security Agreement.
NOW, THEREFORE, in consideration of the premises, Assignor hereby agrees
with Assignee as follows:
1. To secure the complete and timely satisfaction of all Indebtedness
(as defined in the Loan Agreement), Assignor hereby grants, assigns and conveys
to Assignee a continuing security interest in and lien on all of Assignor's
right, title and interest in and to the Trademarks, Trademark applications and
Trademark Licenses listed on Schedule 1 hereto (as the same may be amended
----------
pursuant hereto from time to time), including, without limitation, all renewals
thereof, all proceeds of infringement suits, the right to sue for past, present
and future infringements and all rights corresponding thereto throughout the
world (all of the foregoing are collectively called the "Trademarks"), and the
goodwill of the business to which each of the Trademarks relates.
<PAGE>
2. Assignor covenants and warrants that:
(a) The Trademarks are subsisting and have not been adjudged
invalid or unenforceable;
(b) To the best of Assignor's knowledge, each of the Trademarks
is valid and enforceable;
(c) No claim has been made that the use of any of the Trademarks
does or may violate the rights of any third person;
(d) Assignor is the sole and exclusive owner of the entire and
unencumbered right, title and interest in and to each of the Trademarks, free
and clear of any liens, charges and encumbrances, including, without limitation,
pledges, assignments, licenses, registered user agreements and covenants by
Assignor not to sue third persons, except (i) Permitted indebtedness; and (ii)
any license disclosed in Schedule 1;
----------
(e) Assignor has the unqualified right to enter into this
Agreement and perform its terms;
(f) Assignor has used, and will continue to use for the duration
of this Agreement, proper statutory notice in connection with its use of the
Trademarks; and
(g) Assignor has used, and will continue to use for the duration
of this Agreement, consistent standards of quality in its manufacture of
products sold under the Trademarks.
3. Assignor hereby grants to Assignee and its employees and Assignee
the right to visit Assignor's plants and facilities which manufacture, inspect
or store products sold under any of the Trademarks, and to inspect the products
and quality control records relating thereto at reasonable times during regular
business hours. Assignor shall do any and all acts required by Assignee to
ensure Assignor's compliance with paragraph 2(g).
4. Assignor agrees that, until all of the Indebtedness shall have
been satisfied in full, it will not enter into any agreement (for example, a
license agreement) which is inconsistent with Assignor's obligations under this
Agreement, without Assignee's prior written consent; provided, that so long as
--------
no Default or Event of Default (as defined in the Loan Agreement) shall have
occurred and be continuing, Assignor may grant licenses to third parties to use
the Trademarks in the ordinary course of business of both Assignor and such
third party on arm's length and customary business terms.
5. If, before the Indebtedness shall have been satisfied in full,
Assignor shall obtain rights to any new Trademarks, the provisions of paragraph
1 shall automatically apply thereto and Assignor shall give Assignee prompt
written notice thereof.
6. Assignor authorizes Assignee unilaterally to modify this
Agreement by amending Schedule 1 to include any future Trademarks and Trademark
----------
applications covered by paragraphs 1 and 5 hereof.
2
<PAGE>
7. If any Event of Default (as defined in the Loan Agreement) shall
have occurred and be continuing, Assignee shall have, in addition to all other
rights and remedies given it by this Agreement or any other Loan Document (as
defined in the Loan Agreement), those allowed by law and the rights and remedies
of a secured party under the Uniform Commercial Code as enacted in any
jurisdiction in which the Trademarks may be located and, without limiting the
generality of the foregoing, the Assignee may immediately, without demand of
performance and without other notice (except as set forth below) or demand
whatsoever to Assignor, all of which are hereby expressly waived, and without
advertisement, sell at public or private sale or otherwise realize upon, all or
from time to time any of the Trademarks, or any interest which the Assignor may
have therein, and after deducting from the proceeds of sale or other disposition
of the Trademarks all expenses (including all reasonable expenses for brokers'
fees and legal services), shall apply the residue of such proceeds toward the
payment of the indebtedness. Any remainder of the proceeds after payment in
full of the Indebtedness shall be paid over to Assignor. Notice of any sale or
other disposition of the Trademarks shall be given to Assignor at least ten (10)
days before the time of any intended public or private sale or other disposition
of the Trademarks is to be made, which Assignor hereby agrees shall be
reasonable notice of such sale or other disposition. At any such sale or other
disposition Assignee or its assignee may, to the extent permissible under
applicable law, purchase the whole or any part of the Trademarks sold, free from
any right of redemption on the part of Assignor, which right is hereby waived
and released.
8. At such time as Assignor shall completely satisfy all of the
Indebtedness, this Agreement shall terminate and Assignee shall execute and
deliver to Assignor all assignments, reconveyances or other instruments as may
be necessary or proper to re-vest in Assignor full title to the Trademarks,
subject to any disposition thereof which may have been made by Assignee pursuant
hereto.
9. Any and all fees, costs and expenses, of whatever kind or nature,
including the reasonable attorneys' fees and legal expenses incurred by Assignee
in connection with the preparation of this Agreement and all other documents
relating hereto and the consummation of this transaction, the filing or
recording of any documents (including all taxes in connection therewith) in
public offices, the payment or discharge of any taxes, counsel fees, maintenance
fees, encumbrances or otherwise protecting, maintaining or preserving the
Trademarks, or in defending or prosecuting any actions or proceedings arising
out of or related to the Trademarks, shall be borne and paid by Assignor on
demand by Assignee and until so paid shall be added to the principal amount of
the Indebtedness and shall bear interest at the highest applicable Default Rate
(as defined in the Loan Agreement).
10. Assignor shall have the duty, through counsel reasonably
acceptable to Assignee, to prosecute diligently any Trademark applications
pending as of the date of this Agreement or thereafter until the Indebtedness
shall have been paid in full, to make federal application on registrable but
unregistered Trademarks, to file and prosecute opposition and cancellation
proceedings and to do any and all acts which are necessary or desirable to
preserve and maintain all rights in the Trademarks. Any expenses incurred in
connection with the Trademarks shall be borne by Assignor. The Assignor shall
not abandon any Trademark without the consent of Assignee, which consent shall
not be unreasonably withheld.
3
<PAGE>
11. Assignor shall have the right, with the prior written consent of
Assignee, which will not be unreasonably withheld, to bring any opposition
proceedings, cancellation proceedings or lawsuit in its own name to enforce or
protect the Trademarks, in which event Assignee may, if necessary, be joined as
a nominal party to such suit if Assignee shall have been satisfied that it is
not thereby incurring any risk of liability because of such joinder. Assignor
shall promptly, upon demand, reimburse and indemnify Assignee for all damages,
costs and expenses, including reasonable attorneys' fees incurred by Assignee,
in accordance with the Loan Agreement.
12. Assignor hereby authorizes and empowers Assignee to make,
constitute and appoint any officer or Assignee of Assignee as Assignee may
select, in its exclusive discretion, as Assignor's true and lawful attorney-in-
fact, with the power, after and during the continuance of an Event of Default,
to endorse Assignor's name on all applications, documents, papers and
instruments necessary for Assignee to use the Trademarks, or to grant or issue
any exclusive or nonexclusive license under the Trademarks to anyone else, or
necessary for Assignee to assign, pledge, convey or otherwise transfer title in
or dispose of the Trademarks to any third person as a part of Assignee's
realization on such collateral upon acceleration of the Indebtedness following
an Event of Default. Assignor hereby ratifies all that such attorney shall
lawfully do or cause to be done by virtue hereof. This power of attorney being
coupled with an interest shall be irrevocable for the life of this Agreement.
13. If Assignor fails to comply with any of its obligations
hereunder, Assignee may do so in Assignor's name or in Assignee's name, but at
Assignor's expense, and Assignor hereby agrees to reimburse Assignee in full for
all expenses, including reasonable attorneys' fees, incurred by Assignee in
protecting, defending and maintaining the Trademarks.
14. No course of dealing between Assignor and Assignee, nor any
failure to exercise, nor any delay in exercising, on the part of Assignee, any
right, power or privilege hereunder or under the Loan Agreement shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder or thereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
15. All of Assignee's rights and remedies with respect to the
Trademarks, whether established hereby or by the Security Agreement, the Loan
Agreement or any other agreements or by law, shall be cumulative and may be
exercised singularly or concurrently.
16. The provisions of this Agreement are severable, and if any clause
or provision shall be held invalid and unenforceable in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall affect only such
clause or provision, or part thereof, in such jurisdiction, and shall not in any
manner affect such clause or provision in any other jurisdiction, or any other
clause or provision of this Agreement in any jurisdiction.
17. This Agreement is subject to modification only by a writing
signed by both parties, except as provided in paragraph 6.
4
<PAGE>
18. This Agreement shall be binding upon Assignor and Assignee and
their respective permitted successors and assigns, and shall inure to the
benefit of Assignor, Assignee and the respective permitted successors and
assigns, of Assignee and Assignor.
19. The validity and interpretation of this Agreement and the rights
and obligations of the parties shall be governed by the laws of the State of
California.
WITNESS the execution hereof under seal as of the day and year first
above written.
COMPS InfoSystems, Inc.
By: /s/ Christopher A. Crane
---------------------------
Name: Christopher A. Crane
Title: President and CEO
Venture Lending & Leasing, Inc.
By: /s/ Salvador O. Gutierrez
----------------------------
Name: Salvador O. Gutierrez
Title: President
5
<PAGE>
SCHEDULE 1 TO
TRADEMARK COLLATERAL ASSIGNMENT
A. TRADEMARK AND TRADEMARK APPLICATIONS:
Application Issue or Expiration
or Trademark No. Filing Date Date Title
- ---------------- ----------- ----------- -----
T00441US0 08/06/91 08/06/01 COMPS
T00121US0 10/29/91 10/29/01 COMPSLINK
T01786US0 02/20/96 02/20/96 CALLCOMPS
T01811US0 08/15/95 N/A WINCOMPS (pending)
B. PATENT LICENSES:
Corresponding Date License Termination
Trademark No. Granted Licensee Date
- ------------- ------------- -------- -----------
T00441US0 8/25/95 DJA Partners 9/30/98
T00441US0 8/31/95 TRW REDI 8/31/00
T00441US0 1/01/96 DataQuick Information Systems 1/01/99
6
<PAGE>
Exhibit 10.11
PATENT COLLATERAL ASSIGNMENT
----------------------------
This Agreement is made on the 24th day of September, 1996, between COMPS
InfoSystems, Inc., a Delaware corporation, having a mailing address at 9888
Carroll Centre Road, San Diego, CA 92126-4580 ("Assignor"), and Venture Lending
& Leasing, Inc. ("Assignee"). Assignee's address is 2010 North First Street,
Suite 310, San Jose, California 95131.
RECITALS
--------
A. Assignor owns the Patents and Patent applications listed on Schedule 1
----------
hereto, and is a party to the Patent Licenses listed on Schedule 1 hereto;
----------
B. Assignor and Assignee are parties to a Loan Agreement of even date
herewith (as the same may be amended from time to time, the "Loan Agreement");
C. Pursuant to the terms of the Security Agreement of even date herewith
(as the same may be amended from time to time, the "Security Agreement"), by
Assignor in favor of Assignee, Assignor has granted to Assignee a security
interest in certain personal property assets of Assignor, including all right,
title and interest of Assignor in, to and under all of Assignor's Patents (as
defined in the Security Agreement), all of Assignor's Patent applications and
all of Assignor's Patent Licenses (as defined in the Security Agreement),
whether presently existing or hereafter arising or acquired, and all products
and proceeds thereof, including, without limitation, any and all causes of
action which may exist by reason of infringement thereof for the full term of
the Patents, to secure the payment of the Indebtedness (as defined in the Loan
Agreement);
D. Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Loan Agreement and the Security Agreement.
NOW, THEREFORE, in consideration of the premises, Assignor hereby agrees
with Assignee as follows:
1. To secure the complete and timely satisfaction of all
Indebtedness, Assignor hereby grants, assigns and conveys to Assignee a
continuing security interest in and lien on all of Assignor's entire right,
title and interest in and to the Patents, Patent applications and Patent
Licenses listed on Schedule 1 hereto (as the same may be amended pursuant hereto
----------
from time to time), including, without limitation, all proceeds thereof (such
as, by way of example, license royalties and proceeds of infringements, all
rights corresponding thereto throughout the world and all reissues, divisions,
continuations, renewals, extensions and continuations-in-part thereof
(collectively called the "Patents").
2. Assignor covenants and warrants that:
(a) The Patents are subsisting and have not been adjudged invalid
or unenforceable, in whole or in part;
<PAGE>
(b) To the best of Assignor's knowledge, each of the Patents is valid
and enforceable and Assignor has notified Assignee in writing of all prior art
(including public uses and sales) of which it is aware;
(c) Assignor is the sole and exclusive owner of the entire and
unencumbered right, title and interest in and to each of the Patents, free and
clear of any liens, charges and encumbrances, including, without limitation,
pledges, assignments, licenses, shop rights and covenants by Assignor not to sue
third persons, except (i) Permitted Liens; and (ii) any license disclosed in
------
schedule 1; and
- ----------
(d) Assignor has the unqualified right to enter into this
Agreement and perform its terms.
3. Assignor agrees that, until all of the Indebtedness shall have
been satisfied in full, it will not enter into any agreement (for example, a
license agreement) which is inconsistent with Assignor's obligations under this
Agreement, without Assignee's prior written consent; provided, that so long as
--------
no Default or Event of Default (as defined in the Loan Agreement) shall have
occurred and be continuing, Assignor may grant licenses to third parties to use
the Patents in the ordinary course of business of both Assignor and such third
party on arm's length and customary business terms.
4. If, before the Indebtedness shall have been satisfied in full,
Assignor shall obtain rights to any new patentable inventions, or become
entitled to the benefit of any Patent application or Patent for any reissue,
division, continuation, renewal, extension, or continuation-in-part of any
Patent or any improvement on any Patent, the provisions of paragraph 1 shall
automatically apply thereto and Assignor shall give to Assignee prompt notice
thereof in writing.
5. Assignor authorizes Assignee unilaterally to modify this Agreement
by amending Schedule 1 to include any future Patents and Patent applications
----------
which are Patents under paragraph 1 or paragraph 4 hereof.
6. If any Event of Default (as defined in the Loan Agreement) shall
have occurred and be continuing, Assignee shall have, in addition to all other
rights and remedies given it by this Agreement or any other Loan Document (as
defined in the Loan Agreement), those allowed by law and the rights and remedies
of a secured party under the Uniform Commercial Code as enacted in any
jurisdiction in which the Patents may be located and, without limiting the
generality of the foregoing, Assignee may immediately, without demand of
performance and without other notice (except as set forth below) or demand
whatsoever to Assignor, all of which are hereby expressly waived, and without
advertisement, sell at public or private sale or otherwise realize upon, the
whole or from time to time any part of the Patents, or any interest which the
Assignor may have therein, and after deducting from the proceeds of sale or
other disposition of the Patents all expenses (including reasonable expenses for
brokers' fees and legal services), shall apply the residue of such proceeds
toward the payment of the Indebtedness. Any remainder of the proceeds after
payment in full of the Indebtedness shall be paid over to Assignor. Notice of
any sale or other disposition of the Patents shall be given to Assignor at least
ten (10) days before the time of any intended public or private sale or other
disposition of the Patents is to be made, which Assignor hereby agrees shall be
reasonable notice
2
<PAGE>
of such sale or other disposition. At any such sale or other disposition
Assignee may, to the extent permissible under applicable law, purchase the whole
or any part of the Patents sold, free from any right of redemption on the part
of Assignor, which right is hereby waived and released.
7. Assignor hereby authorizes and empowers Assignee to make,
constitute and appoint any officer or agent of Assignee, as Assignee may select
in its exclusive discretion, as Assignor's true and lawful attorney-in-fact,
with the power, after and during the continuance of an Event of Default, to
endorse Assignor's name on all applications, documents, papers and instruments
necessary for Assignee to use the Patents, or to grant or issue any exclusive or
nonexclusive license under the Patents to any third person, or necessary for
Assignee to assign, pledge, convey or otherwise transfer title in or dispose of
the Patents to any third person as a part of Assignee's realization on such
collateral upon acceleration of the Indebtedness following an Event of Default.
Assignor hereby ratifies all that such attorney shall lawfully do or cause to be
done by virtue hereof. This power of attorney being coupled with an interest
shall be irrevocable for the life of this Agreement.
8. At such time as Assignor shall completely satisfy all of the
Indebtedness, this Agreement shall terminate and Assignee shall execute and
deliver to Assignor all assignments, reconveyances or other instruments as may
be necessary or proper to re-vest in Assignor full title to the Patents, subject
to any disposition thereof which may have been made by Assignee pursuant hereto.
9. Any and all fees, costs and expenses, of whatever kind or nature,
including the reasonable attorneys' fees and legal expenses incurred by Assignee
in connection with the preparation of this Agreement and all other documents
relating hereto and the consummation of this transaction, the filing or
recording of any documents (including all taxes in connection therewith) in
public offices, the payment or discharge of any taxes, counsel fees, maintenance
fees, encumbrances or otherwise protecting, maintaining or preserving the
Patents, or in defending or prosecuting any actions or proceedings arising out
of or related to the Patents, shall be borne and paid by Assignor on demand by
Assignee and until so paid shall be added to the principal amount of the
Indebtedness and shall bear interest at the highest applicable Default Rate (as
defined in the Loan Agreement).
10. Assignor shall have the duty, through counsel reasonably
acceptable to Assignee, to prosecute diligently any Patent applications pending
as of the date of this Agreement or thereafter until the Indebtedness shall have
been paid in full, to make application on unpatented but patentable inventions
and to preserve and maintain all rights in Patent applications and Patents,
including, without limitation, the payment of all maintenance fees. Any
expenses incurred in connection with such an application shall be borne by
Assignor. The Assignor shall not abandon any right to file a Patent
application, or any pending Patent application or Patent without the consent of
Assignee, which consent shall not be unreasonably withheld.
11. Assignor shall have the right, with the consent of Assignee,
which shall not be unreasonably withheld, to bring suit in its own name, and to
join Assignee, if necessary, as a party to such suit so long as Assignee is
satisfied that such joinder will not subject it to any risk of liability, to
enforce the Patents. Assignor shall promptly, upon demand, reimburse and
3
<PAGE>
indemnify Assignee for all damages, costs and expenses, including reasonable
attorneys, fees incurred by Assignee, in accordance with the Loan Agreement.
12. No course of dealing between Assignor and Assignee, nor any
failure to exercise, nor any delay in exercising, on the part of Assignee, any
right, power or privilege hereunder or under the Loan Agreement shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder or thereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
13. All of Assignee's rights and remedies with respect to the
Patents, whether established hereby or by the Security Agreement, the Loan
Agreement or any other agreements or by law shall be cumulative and may be
exercised singularly or concurrently.
14. The provisions of this Agreement are severable, and if any clause
or provision shall be held invalid and unenforceable in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall affect only such
clause or provision, or part thereof, in such jurisdiction, and shall not in any
manner affect such clause or provision in any other jurisdiction, or any clause
or provision of this Agreement in any jurisdiction.
15. This Agreement is subject to modification only by a writing
signed by both parties, except as provided in paragraph 5.
16. This Agreement shall be binding upon Assignor and Assignee and
their respective permitted successors and assigns, and shall inure to the
benefit of Assignor, Assignee and the respective permitted successors and
assigns of Assignor and Assignee.
17. The validity and interpretation of this Agreement and the rights
and obligations of the parties shall be governed by the laws of the State of
California.
4
<PAGE>
WITNESS the execution hereof under seal as of the day and year first above
written.
COMPS InfoSystems, Inc.
By: /s/ Christopher A. Crane
----------------------------
Name: Christopher A. Crane
Title: President and CEO
Venture Lending & Leasing, Inc.
By: /s/ Salvador O. Gutierrez
-----------------------------
Name: Salvador O. Gutierrez
Title: President
5
<PAGE>
SCHEDULE 1 TO
PATENT COLLATERAL ASSIGNMENT
A. PATENTS AND PATENT APPLICATIONS:
Application Issue or Expirat
or Patent No. Filing Date Date Title
------------------ -------------- ----------- -------
None.
B. PATENT LICENSES:
Corresponding Date License Termination
Patent No. Granted Licensee Date
---------------- --------------- ---------- -------------
None.
6
<PAGE>
Exhibit 10.12
Note No. ______
FORM OF PROMISSORY NOTE
(Equipment Loan)
[Principal Amount] [Date]
San Jose, California
The undersigned ("Borrower") promises to pay to the order of VENTURE
LENDING & LEASING, INC., a Maryland corporation ("Lender") at its office at 2010
North First Street, Suite 310, San Jose, California 95l3l, or at such other
place as Lender may designate in writing, in lawful money of the United States
of America, the principal sum of [Principal Amount] ($________), with Basic
Interest thereon from the date hereof until maturity, whether scheduled or
accelerated, at a fixed rate per annum of eight and 75/100 percent (8.75%), and
with Additional Interest in the sum of [15% of Principal Amount] ($_________)
payable on the Maturity Date.
This Note is one of the Notes referred to in, and is entitled to all the
benefits of, a Loan Agreement dated as of September 24, 1996, between Borrower
and Lender. Each capitalized term not otherwise defined herein shall have the
meaning set forth in the Loan Agreement. The Loan Agreement contains provisions
for the acceleration of the maturity of this Note upon the happening of certain
stated events.
Principal of and interest on this Note shall be payable as follows:
On __________, Borrower shall pay (i) a first (1st) amortization
installment of principal and Basic Interest in the amount of $_________, in
advance for the month of _________; and (ii) a 48th amortization installment
of principal and Basic Interest in the amount of $__________ in advance for the
month of _____________.
Commencing on __________, and continuing on the first day of each
consecutive month thereafter, principal and Basic Interest shall be payable, in
advance, in forty-five (45) equal consecutive installments of $_________ each,
with a 46th installment equal to the entire unpaid principal balance and accrued
Basic Interest on _____________. The Additional Interest amount shall be payable
on ______________.
Any unpaid payments of principal or interest on this Note shall bear
interest from their respective maturities, whether scheduled or accelerated, at
a rate per annum equal to the Default Rate. Borrower shall pay such interest on
demand.
Interest, charges and fees shall be calculated for actual days elapsed on
the basis of a 360-day year, which results in higher interest, charge or fee
payments than if a 365-day year were used. In no event shall Borrower be
obligated to pay interest, charges or fees at a rate in excess of the highest
rate permitted by applicable law from time to time in effect.
<PAGE>
This Note shall be governed by, and construed in accordance with, the laws
of the State of California.
COMPS InfoSystems, Inc.
By:
----------------------------
Christopher A. Crane,
President and CEO
2
<PAGE>
Schedule to Promissory Note (Equipment Loan)
--------------------------------------------
<TABLE>
<CAPTION>
Principal and Basic Additional Interest
Principal Amount Date Interest Due Date Due Date
- ---------------- ---- ----------------- --------
<S> <C> <C> <C>
$ 836,879 09/30/96 08/01/00 10/01/00
340,931 03/31/97 02/01/01 04/01/01
101,788 11/18/97 10/01/01 12/01/01
103,367 12/01/97 10/01/01 12/01/01
116,758 12/11/97 11/01/01 01/01/02
</TABLE>
<PAGE>
Exhibit 10.13
Note No. ______
FORM OF PROMISSORY NOTE
(Term Loan)
[Principal Amount] [Date]
San Jose, California
The undersigned ("Borrower") promises to pay to the order of VENTURE
LENDING & LEASING, INC., a Maryland corporation ("Lender") at its office at 2010
North First Street, Suite 310, San Jose, California 95l3l, or at such other
place as Lender may designate in writing, in lawful money of the United States
of America, the principal sum of [Principal Amount] ($__________), with Basic
Interest thereon from the date hereof until maturity, whether scheduled or
accelerated, at a fixed rate per annum of eight and 75/100 percent (8.75%), and
with Additional Interest in the sum of [15% of Principal Amount] ($________)
payable on the Maturity Date.
This Note is one of the Notes referred to in, and is entitled to all the
benefits of, a Loan Agreement dated as of September 24, 1996, between Borrower
and Lender. Each capitalized term not otherwise defined herein shall have the
meaning set forth in the Loan Agreement. The Loan Agreement contains provisions
for the acceleration of the maturity of this Note upon the happening of certain
stated events.
Principal of and interest on this Note shall be payable as follows:
On _________ Borrower shall pay (i) a first (1st) amortization installment
of principal and Basic Interest in the amount of $_________, in advance for the
month of __________; and (ii) a 36th amortization installment of principal and
Basic Interest in the amount of $__________ in advance for the month of
____________.
Commencing on ____________ and continuing on the first day of each
consecutive month thereafter, principal and Basic Interest shall be payable, in
advance, in thirty-three (33) equal consecutive installments of $__________each,
with a 34th installment equal to the entire unpaid principal balance and accrued
Basic Interest on ___________. The Additional Interest amount shall be payable
on ___________.
Any unpaid payments of principal or interest on this Note shall bear
interest from their respective maturities, whether scheduled or accelerated, at
a rate per annum equal to the Default Rate. Borrower shall pay such interest on
demand.
Interest, charges and fees shall be calculated for actual days elapsed on
the basis of a 360-day year, which results in higher interest, charge or fee
payments than if a 365-day year were used. In no event shall Borrower be
obligated to pay interest, charges or fees at a rate in excess of the highest
rate permitted by applicable law from time to time in effect.
<PAGE>
This Note shall be governed by, and construed in accordance with, the laws
of the State of California.
COMPS InfoSystems, Inc.
By:
----------------------------
Christopher A. Crane,
President and CEO
2
<PAGE>
Schedule to Promissory Note (Term Loan)
---------------------------------------
<TABLE>
<CAPTION>
Principal and Basic Additional Interest
Principal Amount Date Interest Due Date Due Date
- ---------------- ---- ----------------- -------------------
<S> <C> <C> <C>
$ 575,000 09/30/96 08/01/99 10/01/99
300,000 10/27/98 09/01/01 11/01/01
83,242 12/11/97 10/01/01 12/01/01
</TABLE>
<PAGE>
EXHIBIT 10.14
STANDARD INDUSTRIAL/COMMERCIAL MULTI-LESSEE LEASE--MODIFIED NET
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
1. BASIC PROVISIONS ("BASIC PROVISIONS").
1.1 PARTIES: This lease ("LEASE"), dated for reference purposes only,
January 31, 1999, is made by and between COMPS Plaza Associates, L.P. ("LESSOR")
and COMPS.COM, INC., a Delaware corporation ("LESSEE"), (collectively the
"PARTIES," or individually a "PARTY").
1.2 (a) PREMISES: That certain portion of the Building, including all
improvements therein or to be provided by Lessor under the terms of this Lease,
commonly known by the street address of 9888 Carroll Center Road, located in the
City of San Diego, County of San Diego, State of California, with zip code
92126, as outlined on Exhibit A attached hereto ("PREMISES"). The "BUILDING" is
that certain building containing the Premises and generally described as
(describe briefly the nature of the Building): two story office building
containing approximately 52,425 rentable square feet; stucco exterior and
central courtyard. In addition to Lessee's rights to use and occupy the
Premises as hereinafter specified, Lessee shall have non-exclusive rights to the
Common Areas (as defined in Paragraph 2.7 below) as hereinafter specified, but
shall not have any rights to the roof, exterior walls or utility raceways of the
Building or to any other buildings in the Industrial Center. The Premises, the
Building, the Common Areas, the land upon which they are located, along with all
other buildings and improvements thereon, are herein collectively referred to as
the "INDUSTRIAL CENTER." (Also see Paragraph 2).
1.2 (b) PARKING: 112 unreserved vehicle parking spaces ("UNRESERVED
PARKING SPACES"); and 1 reserved vehicle parking spaces ("RESERVED PARKING
SPACES"). (Also see Paragraph 2.6.).
1.3 TERM: Five (5) years and -0- months ("ORIGINAL TERM") commencing
February 1, 1999 ("COMMENCEMENT DATE") and ending January 31, 2009 ("EXPIRATION
DATE"). (Also see Paragraph 3.)
1.4 EARLY POSSESSION: not applicable ("EARLY POSSESSION DATE"). (Also see
Paragraphs 3.2 and 3.3.)
1.5 BASE RENT: $34,877.85 per month ("BASE RENT"), payable on the first
day of each month commencing March 1, 1999 (Also see Paragraph 4). [ X ] If this
box is checked, this Lease provides for the Base Rent to be adjusted per
Addendum 1, attached hereto.
1.6 (a) BASE RENT PAID UPON EXECUTION: $ -0- as Base Rent for the period
not applicable.
1.6 (b) LESSEE'S SHARE OF OPERATING EXPENSES: See Addendum 1 percent (%)
("LESSEE'S SHARE") as determined by [ ] prorata square footage of the Premises
as compared to the total square footage of the Building or [ XX ] other criteria
as described in Addendum 1.
1.7 SECURITY DEPOSIT: $ 37,877.85 ("SECURITY DEPOSIT"). (Also see
Paragraph 5.)
1.8 PERMITTED USE: General office, all uses incidental thereto and all
other lawful uses permitted under applicable zoning laws ("PERMITTED USE").
(Also see Paragraph 6).
1.9 INSURING PARTY. Lessor is the "INSURING PARTY." (Also see Paragraph
8.)
1.10 (a)
1.12 ADDENDA and EXHIBITS. Attached hereto is an Addendum or Addenda
consisting of Paragraphs 1 through 13 , Inserts to Lease pages 1-4 and Exhibits
A through C , all of which constitute a part of this Lease.
2. PREMISES, PARKING AND COMMON AREAS.
2.1 LETTING. Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor, the Premises, for the term, at the rental, and upon all of the terms,
covenants and conditions set forth in this Lease. Unless otherwise provided
herein, any statement of square footage set forth in this Lease, or that may
have been used in calculating rental and/or Operating Expenses, is an
approximation which Lessor and Lessee agree is reasonable and the rental and
Lessee's Share (as defined in Paragraph 1.6(b)) based thereon is not subject to
revision whether or not the actual square footage is more or less.
2.2 CONDITION. Lessor shall deliver the Premises to Lessee clean and free
of debris on the Commencement Date and warrants to Lessee that the existing
plumbing, electrical systems, fire sprinkler system, lighting, air conditioning
and heating systems and loading doors, if any, in the Premises, other than those
constructed by Lessee, shall be in good operating condition on the Commencement
Date. If a non-compliance with said warranty exists as of the Commencement Date,
Lessor shall, except as otherwise provided in this Lease, promptly after receipt
of written notice from Lessee setting forth with specificity the nature and
extent of such non-compliance, rectify same at Lessor's expense. If Lessee does
not give Lessor written notice of a non-compliance with this warranty within
thirty (30) days after the Commencement Date, correction of that non-compliance
shall be the obligation of Lessee at Lessee's sole cost and expense.
2.3 COMPLIANCE WITH COVENANTS, RESTRICTIONS AND BUILDING CODE. Lessor
warrants that any improvements (other than those constructed by Lessee or at
Lessee's direction) on or in the Premises which have been constructed or
installed by Lessor or with Lessor's consent or at Lessor's direction shall
comply with all applicable covenants or restrictions of record and applicable
building codes, regulations and ordinances in effect on the Commencement Date.
Lessor further warrants to Lessee that Lessor has no knowledge of any claim
having been made by any governmental agency that a violation or violations of
applicable building codes, regulations, or ordinances exist with regard to the
Premises as of the Commencement Date. Said warranties shall not apply to any
Alterations or Utility Installations (defined in Paragraph 7.3(a)) made or to be
made by Lessee. If the Premises do not comply with said warranties, Lessor
shall, except as otherwise provided in this Lease, promptly after receipt of
written notice from Lessee given within six (6) months following the
Commencement Date and setting forth with specificity the nature and extent of
such non-compliance, take such action, at Lessor's expense, as may be reasonable
or appropriate to rectify the non-compliance. Lessor makes no warranty that the
Permitted Use in Paragraph 1.8 is permitted for the Premises under Applicable
Laws (as defined in Paragraph 2.4).
2.4 ACCEPTANCE OF PREMISES. Lessee hereby acknowledges: (a) that it has
been advised by the Broker(s) to satisfy itself with respect to the condition of
the Premises (including but not limited to the electrical and fire sprinkler
systems, security, environmental aspects, seismic and earthquake requirements,
and compliance with the Americans with Disabilities Act and applicable zoning,
municipal, county, state and federal laws, ordinances and regulations and any
covenants or restrictions of record (collectively "APPLICABLE LAWS") and the
present and future suitability of the Premises for Lessee's intended use; (b)
that Lessee has made such investigation as it deems necessary with reference to
such matters, is satisfied with reference thereto, and assumes all
responsibility therefore as the same relate to Lessee's occupancy of the
Premises and/or the terms of this Lease; and (c) that neither Lessor, nor any of
Lessor's agents, has made any oral or written representations or warranties with
respect to said matters other than as set forth in this Lease.
2.5 LESSEE AS PRIOR OWNER/OCCUPANT. The warranties made by Lessor in this
Paragraph 2 shall be of no force or effect if immediately prior to the date set
forth in Paragraph 1.1 Lessee was the owner or occupant of the Premises. In
such event, Lessee shall, at Lessee's sole cost and expense, correct any non-
compliance of the Premises with said warranties.
2.6 VEHICLE PARKING. Lessee shall be entitled to use the number of
Unreserved Parking Spaces and Reserved Parking Spaces specified in Paragraph
1.2(b) on those portions of the Common Areas designated from time to time by
Lessor for parking. Lessee shall not use more parking spaces than said number.
Said parking spaces shall be used for parking by vehicles no larger than full-
size passenger automobiles or pick-up trucks, herein called "PERMITTED SIZE
VEHICLES." Vehicles other than Permitted Size Vehicles shall be parked and
loaded or unloaded as directed by Lessor in the Rules and Regulations (as
defined in Paragraph 40) issued by Lessor. (Also see Paragraph 2.9.)
(a) Lessee shall not permit or allow any vehicles that belong to or
are controlled by Lessee or Lessee's employees, suppliers, shippers, customers,
contractors or invitees to be loaded, unloaded, or parked in areas other than
those designated by Lessor for such activities.
(b) If Lessee permits or allows any of the prohibited activities
described in this Paragraph 2.6, then Lessor shall have the right, without
notice, in addition to such other rights and remedies that it may have, to
remove or tow away the vehicle involved and charge the cost to Lessee, which
cost shall be immediately payable upon demand by Lessor.
(c) Lessor shall at the Commencement Date of this Lease, provide the
parking facilities required by Applicable Law.
2.7 COMMON AREAS - DEFINITION. The term "COMMON AREAS" is defined as all
areas and facilities outside the Premises and within the exterior boundary line
of the Industrial Center and interior utility raceways within the Premises that
are provided and designated by the Lessor from time to time for the general non-
exclusive use of Lessor, Lessee and other lessees of the Industrial Center and
their respective employees, suppliers, shippers, customers, contractors and
invitees, including parking areas, loading and unloading areas, trash areas,
roadways, sidewalks, walkways, parkways, driveways and landscaped areas.
2.8 COMMON AREAS - LESSEE'S RIGHTS. Lessor hereby grants to Lessee, for
the benefit of Lessee and its employees, suppliers, shippers, contractors,
customers and invitees, during the term of this Lease, the non-exclusive right
to use, in common with others entitled to such use, the Common Areas as they
exist from time to time, subject to any rights, powers, and privileges reserved
by Lessor under the terms hereof or under the terms of any rules and regulations
or restrictions governing the use of the Industrial Center. Under no
circumstances shall the right herein granted to use the Common Areas be deemed
to include the right to store any property, temporarily or permanently, in the
Common Areas. Any such storage shall be permitted only by the prior
Initials: CM
----
KG
----
-1-
<PAGE>
written consent of Lessor or Lessor's designated agent, which consent may be
revoked at any time. In the event that any unauthorized storage shall occur then
Lessor shall have the right, without notice, in addition to such other rights
and remedies that it may have, to remove the property and charge the reasonable
cost to Lessee, which cost shall be immediately payable upon demand by Lessor.
2.9 COMMON AREAS - RULES AND REGULATIONS. Lessor or such other person(s) as
Lessor may appoint shall have the exclusive control and management of the Common
Areas and shall have the right, from time to time, to establish, modify, amend
and enforce reasonable and non-discriminatory Rules and Regulations with respect
thereto in accordance with Paragraph 40. Lessee agrees to abide by and conform
to all such Rules and Regulations, and to cause its employees, suppliers,
shippers, customers, contractors and invitees to so abide and conform. Lessor
shall not be responsible to Lessee for the non-compliance with said rules and
regulations by other lessees of the Industrial Center.
2.10 COMMON AREAS - CHANGES. Lessor shall have the right, in Lessor's sole
discretion, from time to time:
(a) To make changes to the Common Areas, including, without limitation,
changes in the location, size, shape and number of driveways, entrances, parking
spaces, parking areas, loading and unloading areas, ingress, egress, direction
of traffic, landscaped areas, walkways and utility raceways, provided that such
charges shall not unreasonably interfere with Lessee's business or access
thereto;
(b) To close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available;
(c) To designate other land outside the boundaries of the Industrial
Center to be a part of the Common Areas;
(d) To add additional buildings and improvements to the Common Areas;
(e) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Industrial Center, or any portion
thereof; and
(f) To do and perform such other acts and make such other changes in,
to or with respect to the Common Areas and Industrial Center as Lessor may, in
the exercise of sound business judgment, deem to be appropriate.
3. TERM.
3.1 TERM. The Commencement Date, Expiration Date and Original Term of this
Lease are as specified in Paragraph 1.3.
3.2
4. RENT.
4.1 BASE RENT. Lessee shall pay Base Rent, and other rent or charges, as the
same may be adjusted from time to time, to Lessor in lawful money of the United
States, without offset or deduction, on or before the day on which it is due
under the terms of this Lease. Base Rent and all other rent and charges for any
period during the term hereof which is for less than one full month shall be
prorated based upon the actual number of days of the month involved. Payment of
Base Rent and other charges shall be made to Lessor at its address stated herein
or to such other persons or at such other addresses as Lessor may from time to
time designate in writing to Lessee.
4.2 OPERATING EXPENSES. Lessee shall pay monthly to Lessor during the term
hereof, in addition to the Base Rent, Lessee's Share (as specified in Paragraph
1.6(b)) of all Operating Expenses, as hereinafter defined, during each calendar
year of the term of this Lease, in accordance with the following provisions:
(a) "OPERATING EXPENSES" are defined, for purposes of this Lease, as
all costs incurred by Lessor relating to the ownership and operation of the
Industrial Center, including, but not limited to, the following:
(i) The operation, repair and maintenance, in neat, clean, good
order and condition, of the following:
(aa) The Common Areas and the Building, including parking
areas, loading and unloading areas, trash areas, roadways, sidewalks, walkways,
parkways, driveways, landscaped areas, striping, bumpers, irrigation systems,
lighting, fences and gates, elevators and roof.
(bb) Exterior signs and any tenant directories.
(cc) Fire detection and sprinkler systems.
(ii) The cost of water, gas, electricity and telephone to
service the Common Areas and the Building.
(iii) Trash disposal, property management and security services
and the costs of any environmental inspections.
(iv) Reserves set aside for maintenance and repair of Common
Areas and the Building.
(v) Real Property Taxes (as defined in Paragraph 10.2).
(vi) The cost of the premiums for the insurance policies
maintained by Lessor under Paragraph 8 hereof.
(vii) Any deductible portion of an insured loss concerning the
Building or the Common Areas.
(viii) Any other services to be provided by Lessor that are stated
elsewhere in this Lease to be a Operating Expense.
(b) Any Operating Expenses and Real Property Taxes that are
specifically attributable to the Building or to any other building in the
Industrial Center or to the operation, repair and maintenance thereof, shall be
allocated entirely to the Building or to such other building. However, any
Operating Expenses and Real Property Taxes that are not specifically
attributable to the Building or to any other building or to the operation,
repair and maintenance thereof, shall be equitably allocated by Lessor to all
buildings in the Industrial Center. Insert 4.2(b)
(c) The inclusion of the improvements, facilities and services set
forth in Subparagraph 4.2(a) shall not be deemed to impose an obligation upon
Lessor to either have said improvements or facilities or to provide those
services unless the Industrial Center already has the same, Lessor already
provides the services, or Lessor has agreed elsewhere in this Lease to provide
the same or some of them.
(d) Lessee's Share of Operating Expenses shall be payable by Lessee
within ten (10) days after a reasonably detailed statement of actual expenses is
presented to Lessee by Lessor. At Lessor's option, however, an amount may be
estimated by Lessor from time to time of Lessee's Share of annual Operating
Expenses and the same shall be payable monthly or quarterly, as Lessor shall
designate, during each 12-month period of the Lease term, on the same day as the
Base Rent is due hereunder. Lessor shall deliver to Lessee within sixty (60)
days after the expiration of each calendar year a reasonably detailed statement
showing Lessee's Share of the actual Operating Expenses incurred during the
preceding year. If Lessee's payments under this Paragraph 4.2(d) during said
preceding year exceed Lessee's Share as indicated on said statement, Lessor
shall be credited the amount of such over-payment against Lessee's Share of
Operating Expenses next becoming due. If Lessee's payments under this Paragraph
4.2(d) during said preceding year were less than Lessee's Share as indicated on
said statement, Lessee shall pay to Lessor the amount of the deficiency within
ten (10) days after delivery by Lessor to Lessee of said statement. Insert
4.2(d)
5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon Lessee's execution
hereof the Security Deposit set forth in Paragraph 1.7 as security for Lessee's
faithful performance of Lessee's obligations under this Lease. If Lessee fails
to pay Base Rent or other rent or charges due hereunder, or otherwise Defaults
under this Lease (as defined in Paragraph 13.1), Lessor may use, apply or retain
all or any portion of said Security Deposit for the payment of any amount due
Lessor or to reimburse or compensate Lessor for any liability, cost, expense,
loss or damage (including attorneys' fees) which Lessor may suffer or incur by
reason thereof. If Lessor uses or applies all or any portion of said Security
Deposit, Lessee shall within ten (10) days after written request therefore
deposit monies with Lessor sufficient to restore said Security Deposit to the
full amount required by this Lease. Lessor shall not be required to keep all or
any part of the Security Deposit separate from its general accounts. Lessor
shall, at the expiration or earlier termination of the term hereof and after
Lessee has vacated the Premises, return to Lessee (or, at Lessor's option, to
the last assignee, if any, of Lessee's interest herein), that portion of the
Security Deposit not used or applied by Lessor. Unless otherwise expressly
agreed in writing by Lessor, no part of the Security Deposit shall be considered
to be held in trust, to bear interest except from and after the tenth (10) day
following the expiration or earlier termination of this Lease, the Security
Deposit shall accrue interest at the rate set forth in Paragraph 19 of this
Lease or other increment for its use, or to be prepayment for any monies to be
paid by Lessee under this Lease. Upon execution of each Amendment for expansion
space, Lessee shall deposit with Lessor a Security Deposit equal to the initial
monthly Base Rent for such expansion space.
6. USE.
6.1 PERMITTED USE.
(a) Lessee shall use and occupy the Premises only for the Permitted Use
set forth in Paragraph 1.8, or any other legal use which is reasonably
comparable thereto, and for no other purpose. Lessee shall not use or permit the
use of the Premises in a manner that is unlawful, creates waste or a nuisance,
or that disturbs owners and/or occupants of, or causes damage to the Premises or
neighboring premises or properties.
(b) Lessor hereby agrees to not unreasonably withhold or delay its
consent to any written request by Lessee, Lessee's assignees or subtenants, and
by prospective assignees and subtenants of Lessee, its assignees and subtenants,
for a modification of said Permitted Use, so long as the same will not impair
the structural integrity of the improvements on the Premises or in the Building
or the mechanical or electrical systems therein, does not conflict with uses by
other lessees, is not significantly more burdensome to the Premises or the
Building and the improvements thereon, and is otherwise permissible pursuant to
this Paragraph 6. If Lessor elects to withhold such consent, Lessor shall within
five (5) business days after such request give a written notification of same,
which notice shall include an explanation of Lessor's reasonable objections to
the change in use.
Initials: CM
----
KG
----
-2-
<PAGE>
6.2 HAZARDOUS SUBSTANCES.
(a) REPORTABLE USES REQUIRE CONSENT. The term "HAZARDOUS SUBSTANCE" as
used in this Lease shall mean any product, substance, chemical, material or
waste whose presence, nature, quantity and/or intensity of existence, use,
manufacture, disposal, transportation, spill, release or effect, either by
itself or in combination with other materials expected to be on the Premises, is
either: (i) potentially injurious to the public health, safety or welfare, the
environment, or the Premises; (ii) regulated or monitored by any governmental
authority; or (iii) a basis for potential liability of Lessor to any
governmental agency or third party under any applicable statute or common law
theory. Hazardous Substance shall include, but not be limited to, hydrocarbons,
petroleum, gasoline, crude oil or any products or by-products thereof. Lessee
shall not engage in any activity in or about the Premises which constitutes a
Reportable Use (as hereinafter defined) of Hazardous Substances without the
express prior written consent of Lessor and compliance in a timely manner (at
Lessee's sole cost and expense) with all Applicable Requirements (as defined in
Paragraph 6.3). "REPORTABLE USE" shall mean (i) the installation or use of any
above or below ground storage tank, (ii) the generation, possession, storage,
use, transportation, or disposal of a Hazardous Substance that requires a permit
from, or with respect to which a report, notice, registration or business plan
is required to be filed with, any governmental authority, and (iii) the presence
in, on or about the Premises of a Hazardous Substance with respect to which any
Applicable Laws require that a notice be given to persons entering or occupying
the Premises or neighboring properties. Notwithstanding the foregoing, Lessee
may, without Lessor's prior consent, but upon notice to Lessor and in compliance
with all Applicable Requirements, use any ordinary and customary materials
reasonably required to be used by Lessee in the normal course of the Permitted
Use, so long as such use is not a Reportable Use and does not expose the
Premises or neighboring properties to any meaningful risk of contamination or
damage or expose Lessor to any liability therefor. In addition, Lessor may (but
without any obligation to do so) condition its consent to any Reportable Use of
any Hazardous Substance by Lessee upon Lessee's giving Lessor such additional
assurances as Lessor, in its reasonable discretion, deems necessary to protect
itself, the public, the Premises and the environment against damage,
contamination or injury and/or liability therefor, including but not limited to
the installation (and, at Lessor's option, removal on or before Lease expiration
or earlier termination) of reasonably necessary protective modifications to the
Premises (such as concrete encasements) and/or the deposit of an additional
Security Deposit under Paragraph 5 hereof.
(b) DUTY TO INFORM LESSOR. If Lessee knows, or has reasonable cause to
believe, that a Hazardous Substance has come to be located in, on, under or
about the Premises or the Building, other than as previously consented to by
Lessor, Lessee shall immediately give Lessor written notice thereof, together
with a copy of any statement, report, notice, registration, application, permit,
business plan, license, claim, action, or proceeding given to, or received from,
any governmental authority or private party concerning the presence, spill,
release, discharge of, or exposure to, such Hazardous Substance including but
not limited to all such documents as may be involved in any Reportable Use
involving the Premises. Lessee shall not cause or permit any Hazardous
Substance to be spilled or released in, on, under or about the Premises
(including, without limitation, through the plumbing or sanitary sewer system)
in violation of applicable laws.
(c) INDEMNIFICATION. Lessee shall indemnify, protect, defend and hold
Lessor, its agents, employees, lenders and ground lessor, if any, and the
Premises, harmless from and against any and all damages, liabilities, judgments,
costs, claims, liens, expenses, penalties, loss of permits and attorneys' and
consultants' fees arising out of or involving any Hazardous Substance brought
onto the Premises by or for Lessee or by anyone under Lessee's control. Lessee's
obligations under this Paragraph 6.2(c) shall include, but not be limited to,
the effects of any contamination or injury to person, property or the
environment created or suffered by Lessee, and the cost of investigation
(including consultants' and attorneys' fees and testing), removal, remediation,
restoration and/or abatement thereof, or of any contamination therein involved,
and shall survive the expiration or earlier termination of this Lease. No
termination, cancellation or release agreement entered into by Lessor and Lessee
shall release Lessee from its obligations under this Lease with respect to
Hazardous Substances, unless specifically so agreed by Lessor in writing at the
time of such agreement. Insert 6.2(c)
6.3 LESSEE'S COMPLIANCE WITH REQUIREMENTS. Lessee shall, at Lessee's sole
cost and expense, fully, diligently and in a timely manner, comply with all
"Applicable Requirements," which term is used in this Lease to mean all laws,
rules, regulations, ordinances, directives, covenants, easements and
restrictions of record, permits, the requirements of any applicable fire
insurance underwriter or rating bureau, relating in any manner to the Premises
(including but not limited to matters pertaining to (i) industrial hygiene, (ii)
environmental conditions on, in, under or about the Premises, including soil and
groundwater conditions, and (iii) the use, generation, manufacture, production,
installation, maintenance, removal, transportation, storage, spill, or release
of any Hazardous Substance), now in effect or which may hereafter come into
effect. Insert 6.3 Lessee shall, within five (5) days after receipt of
Lessor's written request, provide Lessor with copies of all documents and
information, including but not limited to permits, registrations, manifests,
applications, reports and certificates, evidencing Lessee's compliance with any
Applicable Requirements reasonably specified by Lessor, and shall immediately
upon receipt, notify Lessor in writing (with copies of any documents involved)
of any threatened or actual claim, notice, citation, warning, complaint or
report pertaining to or involving failure by Lessee or the Premises to comply
with any Applicable Requirements.
6.4 INSPECTION; COMPLIANCE WITH LAW. Lessor, Lessor's agents, employees,
contractors and designated representatives, and the holders of any mortgages,
deeds of trust or ground leases on the Premises ("LENDERS") shall have the right
to enter the Premises at any time in the case of an emergency, and otherwise
with at least 24 hours prior notice, for the purpose of inspecting the condition
of the Premises and for verifying compliance by Lessee with this Lease and all
Applicable Requirements (as defined in Paragraph 6.3), and Lessor shall be
entitled to employ experts and/or consultants in connection therewith to advise
Lessor with respect to Lessee's activities, including but not limited to
Lessee's installation, operation, use, monitoring, maintenance, or removal of
any Hazardous Substance on or from the Premises. The costs and expenses of any
such inspections shall be paid by the party requesting same, unless a Default or
Breach of this Lease by Lessee or a violation of Applicable Requirements or a
contamination, caused or materially contributed to by Lessee, is found to exist
or to be imminent, or unless the inspection is requested or ordered by a
governmental authority as the result of any such existing or imminent violation
or contamination. In such case, Lessee shall upon request reimburse Lessor or
Lessor's Lender, as the case may be, for the costs and expenses of such
inspections.
7. MAINTENANCE, REPAIRS, UTILITY INSTALLATIONS, TRADE FIXTURES AND ALTERATIONS.
7.1 LESSEE'S OBLIGATIONS.
(a) Subject to the provisions of Paragraphs 2.2 (Condition), 2.3
(Compliance with Covenants, Restrictions and Building Code), 7.2 (Lessor's
Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee shall, at
Lessee's sole cost and expense and at all times, keep the Premises and every
part thereof in good order, condition and repair (whether or not such portion of
the Premises requiring repair, or the means of repairing the same, are
reasonably or readily accessible to Lessee, and whether or not the need for such
repairs occurs as a result of Lessee's use, any prior use, the elements or the
age of such portion of the Premises), including, without limiting the generality
of the foregoing, all equipment or facilities specifically serving the Premises,
such as plumbing, heating, air conditioning, ventilating, electrical, lighting
facilities, boilers, fired or unfired pressure vessels, fire hose connections if
within the Premises, fixtures, interior walls, interior surfaces of exterior
walls, ceilings, floors, interior windows, doors, plate glass, but excluding any
items which are the responsibility of Lessor pursuant to Paragraph 7.2 below.
Lessee, in keeping the Premises in good order, condition and repair, shall
exercise and perform good maintenance practices. Lessee's obligations shall
include restorations, replacements or renewals when reasonably necessary to keep
the Premises and all improvements thereon or a part thereof in good order,
condition and state of repair.
(b) Lessee shall, at Lessee's sole cost and expense, procure and
maintain a contract, with copies to Lessor, in customary form and substance for
and with a contractor specializing and experienced in the inspection,
maintenance and service of the heating, air conditioning and ventilation system
for the Premises. However, Lessor reserves the right, upon notice to Lessee, to
procure and maintain the contract for the heating, air conditioning and
ventilating systems, and if Lessor so elects, Lessee shall reimburse Lessor,
upon demand, for the cost thereof.
(c) If Lessee fails to perform Lessee's obligations under this
Paragraph 7.1, Lessor may enter upon the Premises after ten (10) days' prior
written notice to Lessee (except in the case of an emergency, in which case no
notice shall be required), perform such obligations on Lessee's behalf, and put
the Premises in good order, condition and repair, in accordance with Paragraph
13.2 below.
7.2 LESSOR'S OBLIGATIONS. Subject to the provisions of Paragraphs 2.2
(Condition), 2.3 (Compliance with Covenants, Restrictions and Building Code),
4.2 (Operating Expenses), 6 (Use), 7.1 (Lessee's Obligations), 9 (Damage or
Destruction) and 14 (Condemnation), Lessor, subject to reimbursement pursuant to
Paragraph 4.2, shall keep in good order, condition and repair the foundations,
exterior walls, structural condition of interior bearing walls, roof, roof
membrane, skylights, smoke hatches, fire sprinkler and/or standpipes and hose
(if located in the Common Areas) or other automatic fire extinguishing system
including fire alarm and/or smoke detection systems and equipment, fire
hydrants, parking lots, walkways, parkways, driveways, irrigation systems,
exterior lighting, landscaping, fences, signs and utility systems serving the
Common Areas and all parts thereof, as well as providing the services for which
there is Operating Expense pursuant to Paragraph 4.2. Lessor shall not be
obligated to paint the interior surfaces of exterior walls nor shall Lessor be
obligated to maintain, repair or replace interior windows, doors or plate glass
of the Premises. Lessee expressly waives the benefit of any statute now or
hereafter in effect which would otherwise afford Lessee the right to make
repairs at Lessor's expense or to terminate this Lease because of Lessor's
failure to keep the Building, Industrial Center or Common Areas in good order,
condition and repair. Insert 7.2
7.3 UTILITY INSTALLATIONS, TRADE FIXTURES, ALTERATIONS.
(a) DEFINITIONS; CONSENT REQUIRED. The term "UTILITY INSTALLATIONS" is
used in this Lease to refer to all air lines, power panels, electrical
distribution, security and fire protection systems, communications systems,
lighting fixtures, heating, ventilating and air conditioning equipment,
plumbing, and fencing in, on or about the Premises. The term "TRADE FIXTURES"
shall mean Lessee's machinery and equipment which can be removed without doing
material damage to the Premises. The term "ALTERATIONS" shall mean any
modification of the improvements on the Premises which are provided by Lessor
under the terms of this Lease, other than Utility Installations or Trade
Fixtures. "LESSEE-OWNED ALTERATIONS AND/OR UTILITY INSTALLATIONS" are defined as
Alterations and/or Utility Installations made by Lessee that are not yet owned
by Lessor pursuant to Paragraph 7.4(a). Lessee shall not make nor cause to be
made any Alterations or Utility Installations in, on, under or about the
Premises without Lessor's prior written consent which shall not be unreasonably
withheld or delayed. Lessee may, however, make non-structural Utility
Installations to the interior of the Premises (excluding the roof) without
Lessor's consent but upon notice to Lessor, so long as they are not visible from
the outside of the Premises, do not involve puncturing, relocating or removing
the roof or any
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existing walls, or changing or interfering with the fire sprinkler or fire
detection systems and the cumulative cost thereof during the term of this Lease
as extended does not exceed $10,000.00 per year.
(b) CONSENT. Any Alterations or Utility Installations that Lessee shall
desire to make and which require the consent of the Lessor shall be presented to
Lessor in written form with detailed plans. All consents given by Lessor,
whether by virtue of Paragraph 7.3(a) or by subsequent specific consents, shall
be deemed conditioned upon: (i) Lessee's acquiring all applicable permits
required by governmental authorities; (ii) the furnishing of copies of such
permits together with a copy of the plans and specifications for the Alteration
or Utility Installation to Lessor prior to commencement of the work thereon; and
(iii) the compliance by Lessee with all conditions of said permits in a prompt
and expeditious manner. Any Alterations or Utility Installations by Lessee
during the term of this Lease shall be done in a good and workmanlike manner,
with good and sufficient materials, and be in compliance with all Applicable
Requirements. Lessee shall promptly upon completion thereof furnish Lessor with
as-built plans and specifications therefor.
(c) LIEN PROTECTION. Lessee shall pay when due all claims for labor or
materials furnished or alleged to have been furnished to or for Lessee at or for
use on the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises or any interest therein. Lessee shall
give Lessor not less than ten (10) days' notice prior to the commencement of any
work in, on, or about the Premises, and Lessor shall have the right to post
notices of non-responsibility in or on the Premises as provided by law. If
Lessee shall, in good faith, contest the validity of any such lien, claim or
demand, then Lessee shall, at its sole expense, defend and protect itself,
Lessor and the Premises against the same and shall pay and satisfy any such
adverse judgment that may be rendered thereon before the enforcement thereof
against the Lessor or the Premises. If Lessor shall require, Lessee shall
furnish to Lessor a surety bond satisfactory to Lessor in an amount equal to one
and one-half times the amount of such contested lien claim or demand,
indemnifying Lessor against liability for the same, as required by law for the
holding of the Premises free from the effect of such lien or claim. In
addition, Lessor may require Lessee to pay Lessor's reasonable attorneys' fees
and costs in participating in such action if Lessor shall reasonably decide it
is to its best interest to do so.
7.4 OWNERSHIP, REMOVAL, SURRENDER, AND RESTORATION.
(a) OWNERSHIP. Subject to Lessor's right to require their removal and
to cause Lessee to become the owner thereof as hereinafter provided in this
Paragraph 7.4, all Alterations and Utility Installations made to the Premises by
Lessee shall be the property of and owned by Lessee, but considered a part of
the Premises. Unless otherwise instructed per Subparagraph 7.4(b) hereof, all
Lessee-Owned Alterations and Utility Installations shall, at the expiration or
earlier termination of this Lease, become the property of Lessor and remain upon
the Premises and be surrendered with the Premises by Lessee.
(b) REMOVAL. Unless otherwise agreed in writing, Lessor may (at the
time Lessor gives its consent to the installation of such Lessee-owned
Alterations or Utility Installations) require that any or all Lessee-Owned
Alterations or Utility Installations be removed by the expiration or earlier
termination of this Lease, notwithstanding that their installation may have been
consented to by Lessor. Lessor may require the removal at any time of all or any
part of any Alterations or Utility Installations made without the required
consent of Lessor.
(c) SURRENDER/RESTORATION. Lessee shall surrender the Premises by the
end of the last day of the Lease term or any earlier termination date, clean and
free of debris and in good operating order, condition and state of repair,
ordinary wear and tear excepted and subject to Paragraph 9. Ordinary wear and
tear shall not include any damage or deterioration that would have been
prevented by good maintenance practice or by Lessee performing all of its
obligations under this Lease. Except as otherwise agreed or specified herein,
the Premises, as surrendered, shall include the Alterations and Utility
Installations. The obligation of Lessee shall include the repair of any damage
occasioned by the installation, maintenance or removal of Lessee's Trade
Fixtures, furnishings, equipment, and Lessee-Owned Alterations and Utility
Installations, as well as the removal of any storage tank installed by or for
Lessee, and the removal, replacement, or remediation of any soil, material or
ground water contaminated by Lessee, all as may then be required by Applicable
Requirements and/or good practice. Lessee's Trade Fixtures shall remain the
property of Lessee and shall be removed by Lessee subject to its obligation to
repair and restore the Premises per this Lease. Insert 7.4(c)
8. INSURANCE; INDEMNITY.
8.1 PAYMENT OF PREMIUMS. The cost of the premiums for the insurance policies
maintained by Lessor under this Paragraph 8 shall be an Operating Expense
pursuant to Paragraph 4.2 hereof. Premiums for policy periods commencing prior
to, or extending beyond, the term of this Lease shall be prorated to coincide
with the corresponding Commencement Date or Expiration Date.
8.2 LIABILITY INSURANCE.
(a) CARRIED BY LESSEE. Lessee shall obtain and keep in force during the
term of this Lease a Commercial General Liability policy of insurance protecting
Lessee, Lessor and any Lender(s) whose names have been provided to Lessee in
writing (as additional insureds) against claims for bodily injury, and property
damage based upon, involving or arising out of the ownership, use, occupancy or
maintenance of the Premises and all areas appurtenant thereto. Such insurance
shall be on an occurrence basis providing single limit coverage in an amount not
less than $1,000,000 per occurrence with an "Additional Insured-Managers or
Lessors of Premises" endorsement and contain the "Amendment of the Pollution
Exclusion" endorsement for damage caused by heat, smoke or fumes from a hostile
fire. The policy shall not contain any intra-insured exclusions as between
insured persons or organizations, but shall include coverage for liability
assumed under this Lease as an "INSURED CONTRACT" for the performance of
Lessee's indemnity obligations under this Lease. The limits of said insurance
required by this Lease or as carried by Lessee shall not, however, limit the
liability of Lessee nor relieve Lessee of any obligation hereunder. All
insurance to be carried by Lessee shall be primary to and not contributory with
any similar insurance carried by Lessor, whose insurance shall be considered
excess insurance only.
(b) CARRIED BY LESSOR. Lessor shall also maintain liability insurance
described in Paragraph 8.2(a) above, in addition to and not in lieu of, the
insurance required to be maintained by Lessee. Lessee shall not be named as an
additional insured therein.
8.3 PROPERTY INSURANCE-BUILDING, IMPROVEMENTS AND RENTAL VALUE.
(a) BUILDING AND IMPROVEMENTS. Lessor shall obtain and keep in force
during the term of this Lease a policy or policies in the name of Lessor, with
loss payable to Lessor and to any Lender(s), insuring against loss or damage to
the Premises. Such insurance shall be for full replacement cost, as the same
shall exist from time to time, or the amount required by any Lender(s), but in
no event more than the commercially reasonable and available insurable value
thereof if, by reason of the unique nature or age of the improvements involved,
such latter amount is less than full replacement cost. Lessee-Owned Alterations
and Utility Installations, Trade Fixtures and Lessee's personal property shall
be insured by Lessee pursuant to Paragraph 8.4. If the coverage is available and
commercially appropriate, Lessor's policy or policies shall insure against all
risks of direct physical loss or damage (except the perils of flood and/or
earthquake unless required by a Lender), including coverage for any additional
costs resulting from debris removal and reasonable amounts of coverage for the
enforcement of any ordinance or law regulating the reconstruction or replacement
of any undamaged sections of the Building required to be demolished or removed
by reason of the enforcement of any building, zoning, safety or land use laws as
the result of a covered loss but not including plate glass insurance. Said
policy or policies shall also contain an agreed valuation provision in lieu of
any co-insurance clause, waiver of subrogation, and inflation guard protection
causing an increase in the annual property insurance coverage amount by a factor
of not less than the adjusted U.S. Department of Labor Consumer Price Index for
All Urban Consumers for the city nearest to where the Premises are located.
(b) RENTAL VALUE. Lessor shall also obtain and keep in force during the term
of this Lease a policy or policies in the name of Lessor, with loss payable to
Lessor and any Lender(s), insuring the loss of the full rental and other charges
payable by all lessees of the Building to Lessor for one year (including all
Real Property Taxes, insurance costs, all Operating Expenses and any scheduled
rental increases). Said insurance may provide that in the event the Lease is
terminated by reason of an insured loss, the period of indemnity for such
coverage shall be extended beyond the date of the completion of repairs or
replacement of the Premises, to provide for one full year's loss of rental
revenues from the date of any such loss. Said insurance shall contain an agreed
valuation provision in lieu of any co-insurance clause, and the amount of
coverage shall be adjusted annually to reflect the projected rental income, Real
Property Taxes, insurance premium costs and other expenses, if any, otherwise
payable, for the next 12-month period. Operating Expenses shall include any
deductible amount in the event of such loss.
(c) ADJACENT PREMISES. Lessee shall pay for any increase in the premiums for
the property insurance of the Building and for the Common Areas or other
buildings in the Industrial Center if said increase is caused by Lessee's acts,
omissions, use or occupancy of the Premises.
(d) LESSEE'S IMPROVEMENTS. Since Lessor is the insuring Party, Lessor shall
not be required to insure Lessee-Owned Alterations and Utility Installations
unless the item in question has become the property of Lessor under the terms of
this Lease.
8.4 LESSEE'S PROPERTY INSURANCE. Subject to the requirements of Paragraph
8.5, Lessee at its cost shall either by separate policy or, at Lessor's option,
by endorsement to a policy already carried, maintain insurance coverage on all
of Lessee's personal property, Trade Fixtures and Lessee-Owned Alterations and
Utility Installations in, on, or about the Premises similar in coverage to that
carried by Lessor as the Insuring Party under Paragraph 8.3(a). Such insurance
shall be full replacement cost coverage with a deductible not to exceed
$10,000.00 per occurrence. The proceeds from any such insurance shall be used
by Lessee for the replacement of personal property and the restoration of Trade
Fixtures and Lessee-Owned Alterations and Utility Installations. Upon request
from Lessor, Lessee shall provide Lessor with written evidence that such
insurance is in force.
8.5 INSURANCE POLICIES. Insurance required hereunder shall be in companies
duly licensed to transact business in the state where the Premises are located,
and maintaining during the policy term a "General Policyholders Rating" of at
least B+, V, or such other rating as may be required by a Lender, as set forth
in the most current issue of "Best's Insurance Guide." Lessee shall not do or
permit to be done anything which shall invalidate the insurance policies
referred to in this Paragraph 8. Lessee shall cause to be delivered to Lessor,
within seven (7) days after the earlier of the Early Possession Date or the
Commencement Date, certified copies of, or certificates evidencing the existence
and amounts of, the insurance required under Paragraph 8.2(a) and 8.4. No such
policy shall be cancelable or subject to modification except after thirty (30)
days' prior written notice to Lessor. Lessee shall at least thirty (30) days
prior to the expiration of such policies, furnish Lessor with evidence of
renewals or "insurance binders" evidencing renewal thereof, or Lessor may order
such insurance and charge the reasonable cost thereof to Lessee, which amount
shall be payable by Lessee to Lessor upon demand.
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8.6 WAIVER OF SUBROGATION. Without affecting any other rights or remedies,
Lessor and Lessee each hereby release and relieve the other, and waive their
entire right to recover damages (whether in contract or in tort) against the
other, for loss or damage to their property arising out of or incident to the
perils required to be insured against under Paragraph 8. The effect of such
releases and waivers of the right to recover damages shall not be limited by the
amount of insurance carried or required, or by any deductibles applicable
thereto. Lessor and Lessee agree to have their respective insurance companies
issuing property damage insurance waive any right to subrogation that such
companies may have against Lessor or Lessee, as the case may be, so long as the
insurance is not invalidated thereby.
8.7 INDEMNITY. Except for Lessor's or Lessor's agents', employees', or
contractors' negligence, willful misconduct and/or breach of this Lease, Lessee
shall indemnify, protect, defend and hold harmless the Premises, Lessor and its
agents, Lessor's master or ground lessor, partners and Lenders, from and against
any and all claims, loss of rents and/or damages, costs, liens, judgments,
penalties, loss of permits, attorneys' and consultants' fees, expenses and/or
liabilities arising out of, involving, or in connection with, the occupancy of
the Premises by Lessee, the conduct of Lessee's business, any act, omission or
neglect of Lessee, its agents, contractors, employees or invitees, and out of
any Default or Breach by Lessee in the performance in a timely manner of any
obligation on Lessee's part to be performed under this Lease. The foregoing
shall include, but not be limited to, the defense or pursuit of any claim or any
action or proceeding involved therein, and whether or not (in the case of claims
made against Lessor) litigated and/or reduced to judgment. In case any action
or proceeding is brought against Lessor by reason of any of the foregoing
matters, Lessee upon notice from Lessor, shall defend the same at Lessee's
expense by counsel reasonably satisfactory to Lessor and Lessor shall cooperate
with Lessee in such defense. Lessor need not have first paid any such claim in
order to be so indemnified.
8.8 EXEMPTION OF LESSOR FROM LIABILITY. Except for Lessor's negligence, gross
negligence, willful misconduct and/or breach of this Lease Lessor shall not be
liable for injury or damage to the person or goods, wares, merchandise or other
property of Lessee, Lessee's employees, contractors, invitees, customers, or any
other person in or about the Premises, whether such damage or injury is caused
by or results from fire, steam, electricity, gas, water or rain, or from the
breakage, leakage, obstruction or other defects of pipes, fire sprinklers,
wires, appliances, plumbing, air conditioning or lighting fixtures, or from any
other cause, whether said injury or damage results from conditions arising upon
the Premises or upon other portions of the Building of which the Premises are a
part, from other sources or places, and regardless of whether the cause of such
damage or injury or the means of repairing the same is accessible or not. Lessor
shall not be liable for any damages arising from any act or neglect of any other
lessee of Lessor nor from the failure by Lessor to enforce the provisions of any
other lease in the Industrial Center.
9. DAMAGE OR DESTRUCTION.
9.1 DEFINITIONS.
(a) "PREMISES PARTIAL DAMAGE" shall mean damage or destruction to the
Premises, other than Lessee-Owned Alterations and Utility Installations, the
repair cost of which damage or destruction is less than fifty percent (50%) of
the then Replacement Cost (as defined in Paragraph 9.1(d)) of the Premises
(excluding Lessee-Owned Alterations and Utility Installations and Trade
Fixtures) immediately prior to such damage or destruction.
(b) "PREMISES TOTAL DESTRUCTION" shall mean damage or destruction to
the Premises, other than Lessee-Owned Alterations and Utility Installations, the
repair cost of which damage or destruction is fifty percent (50%) or more of the
then Replacement Cost of the Premises (excluding Lessee Owned Alterations and
Utility Installations and Trade Fixtures) immediately prior to such damage or
destruction. In addition, damage or destruction to the Building, other than
Lessee-Owned Alterations and Utility Installations and Trade Fixtures of any
lessees of the Building, the cost of which damage or destruction is fifty
percent (50%) or more of the then Replacement Cost (excluding Lessee-Owned
Alterations and Utility Installations and Trade Fixtures of any lessees of the
Building) of the Building shall, at the option of Lessor, be deemed to be
Premises Total Destruction.
(c) "INSURED LOSS" shall mean damage or destruction to the Premises,
other than Lessee-Owned Alterations and Utility Installations and Trade
Fixtures, which was caused by an event required to be covered by insurance
described in Paragraph 8.3(a) irrespective of any deductible amounts or coverage
limits involved.
(d) "REPLACEMENT COST" shall mean the cost to repair or rebuild the
improvements owned by Lessor at the time of the occurrence to their condition
existing immediately prior thereto, including demolition, debris removal and
upgrading required by the operation of applicable building codes, ordinances or
laws, and without deduction for depreciation.
(e) "HAZARDOUS SUBSTANCE CONDITION" shall mean the occurrence or
discovery of a condition involving the presence of, or a contamination by, a
Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the
Premises.
9.2 PREMISES PARTIAL DAMAGE - INSURED LOSS. If Premises Partial Damage that
is an Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such
damage (but not Lessee's Trade Fixtures or Lessee-Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect. In the event however, that there is a shortage of
insurance proceeds and such shortage is due to the fact that, by reason of the
unique nature of the improvements in the Premises, full replacement cost
insurance coverage was not commercially reasonable and available, Lessor shall
have no obligation to pay for the shortage in insurance proceeds or to fully
restore the unique aspects of the Premises unless Lessee provides Lessor with
the funds to cover same, or adequate assurance thereof, within ten (10) days
following receipt of written notice of such shortage and request therefor. If
Lessor receives said funds or adequate assurance thereof within said ten (10)
day period, Lessor shall complete them as soon as reasonably possible and this
Lease shall remain in full force and effect. If Lessor does not receive such
funds or assurance within said period, Lessor may nevertheless elect by written
notice to Lessee within ten (10) days thereafter to make such restoration and
repair as is commercially reasonable with Lessor paying any shortage in
proceeds, in which case this Lease shall remain in full force and effect. If
Lessor does not receive such funds or assurance within such ten (10) day period,
and if Lessor does not so elect to restore and repair, then this Lease shall
terminate sixty (60) following the occurrence of the damage or destruction.
Unless otherwise agreed, Lessee shall in no event have any right to
reimbursement from Lessor for any funds contributed by Lessee to repair any such
damage or destruction. Premises Partial Damage due to flood or earthquake shall
be subject to Paragraph 9.3 rather than Paragraph 9.2, notwithstanding that
there may be some insurance coverage, but the net proceeds of any such insurance
shall be made available for the repairs if made by either Party.
9.3 PARTIAL DAMAGE - UNINSURED LOSS. If Premises Partial Damage that is not
an Insured Loss occurs, unless caused by a negligent or willful act of Lessee
(in which event Lessee shall make the repairs at Lessee's expense and this Lease
shall continue in full force and effect), Lessor may at Lessor's option, either
(i) repair such damage as soon as reasonably possible at Lessor's expense, in
which event this Lease shall continue in full force and effect, or (ii) give
written notice to Lessee within thirty (30) days after receipt by Lessor of
knowledge of the occurrence of such damage of Lessor's desire to terminate this
Lease as of the date sixty (60) days following the date of such notice. In the
event Lessor acts to give such notice of Lessor's intention to terminate this
Lease, Lessee shall have the right within ten (10) days after the receipt of
such notice to give written notice to Lessor of Lessee's commitment to pay for
the repair of such damage totally at Lessee's expense and without reimbursement
from Lessor. Lessee shall provide Lessor with the required funds or
satisfactory assurance thereof within thirty (30) days following such commitment
from Lessee. In such event this Lease shall continue in full force and effect,
and Lessor shall proceed to make such repairs as soon as reasonably possible
after the required funds are available. If Lessee does not give such notice and
provide the funds or assurance thereof within the times specified above, this
Lease shall terminate as of the date of the occurrence of such damage.
9.4 TOTAL DESTRUCTION. Notwithstanding any other provision hereof, if
Premises Total Destruction occurs (including any destruction required by any
authorized public authority), this Lease shall terminate as of the date of such
Premises Total Destruction, whether or not the damage or destruction is an
insured Loss or was caused by a negligent or willful act of Lessee. In the
event, however, that the damage or destruction was caused by Lessee, Lessor
shall have the right to recover Lessor's damages from Lessee except as released
and waived in Paragraph 9.7.
9.5 DAMAGE NEAR END OF TERM. If at any time during the last twelve (12)
months of the term of this Lease there is damage for which the cost to repair
exceeds one month's Base Rent, whether or not an Insured Loss, either party may,
terminate this Lease effective sixty (60) days following the date of occurrence
of such damage by giving written notice to the other party of its election to do
so within thirty (30) days after the date of occurrence of such damage.
Provided, however, if Lessee at that time has an exercisable option to extend
this Lease or to purchase the Premises, then Lessee may preserve this Lease by
(a) exercising such option, and (b) providing Lessor with any shortage in
insurance proceeds (or adequate assurance thereof) needed to make the repairs on
or before the earlier of (i) the date which is ten (10) days after Lessee's
receipt of Lessor's written notice purporting to terminate this Lease, or (ii)
the day prior to the date upon which such option expires. If Lessee duly
exercises such option during such period and provides Lessor with funds (or
adequate assurance thereof) to cover any shortage in insurance proceeds, Lessor
shall, at Lessor's expense repair such damage as soon as reasonably possible and
this Lease shall continue in full force and effect. If Lessee fails to exercise
such option and provide such funds or assurance during such period, then this
Lease shall terminate as of the date set forth in the first sentence of this
Paragraph 9.5.
9.6 ABATEMENT OF RENT; LESSEE'S REMEDIES.
(a) In the event of (i) Premises Partial Damage or (ii) Hazardous
Substance Condition for which Lessee is not legally responsible, the Base Rent,
Operating Expenses and other charges, if any, payable by Lessee hereunder for
the period during which such damage or condition, its repair, remediation or
restoration continues, shall be abated in proportion to the degree to which
Lessee's use of the Premises is impaired. Except for abatement of Base Rent,
Operating Expenses and other charges, if any, as aforesaid, all other
obligations of Lessee hereunder shall be performed by Lessee, and Lessee shall
have no claim against Lessor for any damage suffered by reason of any such
damage, destruction, repair, remediation or restoration except for damages due
to Lessor's negligence, willful misconduct or breach of this Lease.
(b) If Lessor shall be obligated to repair or restore the Premises
under the provisions of this Paragraph 9 and shall not commence, in a
substantial and meaningful way, the repair or restoration of the Premises within
ninety (90) days after such obligation shall accrue, Lessee may, at any time
prior to the commencement of such repair or restoration, give written notice to
Lessor and to any Lenders of which Lessee has actual notice of Lessee's election
to terminate this Lease on a date not less than sixty (60) days following the
giving of such notice. If Lessee gives such notice to Lessor and such Lenders
and such repair or restoration is not commenced within thirty (30) days after
receipt of such notice, this Lease shall terminate as of the date specified in
said notice. If Lessor or a Lender commences the repair or restoration of the
Premises within thirty (30) days after the receipt of such notice, this Lease
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shall continue in full force and effect. "COMMENCE" as used in this Paragraph
9.6 shall mean either the unconditional authorization of the preparation of the
required plans, or the beginning of the actual work on the Premises, whichever
occurs first.
9.7 HAZARDOUS SUBSTANCE CONDITIONS. If a Hazardous Substance Condition
occurs, unless Lessee is legally responsible therefor (in which case Lessee
shall make the investigation and remediation thereof required by Applicable
Requirements and this Lease shall continue in full force and effect, but subject
to Lessor's rights under Paragraph 6.2(c) and Paragraph 13), Lessor may, at
Lessor's option either: (i) investigate and remediate such Hazardous Substance
Condition, if required, as soon as reasonably possible at Lessor's expense, in
which event this Lease shall continue in full force and effect, or (ii) if the
estimated cost to investigate and remediate such condition exceeds twenty (20)
times the then monthly Base Rent, give written notice to Lessee within thirty
(30) days after receipt by Lessor of knowledge of the occurrence of such
Hazardous Substance Condition of Lessor's desire to terminate this Lease as to
the date sixty (60) days following the date of such notice. In the event Lessor
elects to give such notice of Lessor's intention to terminate this Lease, Lessee
shall have the right within ten (10) days after the receipt of such notice to
give written notice to Lessor of Lessee's commitment to pay for the excess costs
of (a) investigation and remediation of such Hazardous Substance Condition to
the extent required by Applicable Requirements, over (b) an amount equal to
twenty (20) times the then monthly Base Rent. Lessee shall provide Lessor with
the funds required of Lessee or satisfactory assurance thereof within thirty
(30) days following said commitment by Lessee. In such event this Lease shall
continue in full force and effect, and Lessor shall proceed to make such
investigation and remediation as soon as reasonably possible after the requiring
funds are available. If Lessee does not give such notice and provide the
required funds or assurance thereof within the time period specified above, this
Lease shall terminate as of the date specified in Lessor's notice of
termination.
9.8 TERMINATION - ADVANCE PAYMENTS. Upon termination of this Lease pursuant
to this Paragraph 9, Lessor shall return to Lessee any advance payment made by
Lessee to Lessor and so much of Lessee's Security Deposit as has not been, or is
not then required to be, used by Lessor under the terms of this Lease.
9.9 WAIVER OF STATUTES. Lessor and Lessee agree that the terms of this Lease
shall govern the effect of any damage to or destruction of the Premises and the
Building with respect to the termination of this Lease and hereby waive the
provisions of any present or future statute to the extent it is inconsistent
herewith.
10. REAL PROPERTY TAXES.
10.1 PAYMENT OF TAXES. Lessor shall pay the Real Property Taxes, as defined
in Paragraph 10.2, applicable to the Industrial Center, and except as otherwise
provided in Paragraph 10.3, any such amounts shall be included in the
calculation of Operating Expenses in accordance with the provisions of Paragraph
4.2.
10.2 REAL PROPERTY TAX DEFINITION. As used herein, the term "REAL PROPERTY
TAXES" shall include any form of real estate tax or assessment, general,
special, ordinary or extraordinary, and any license fee, commercial rental tax,
improvement bond or bonds, levy or tax (other than inheritance, personal income
or estate taxes) imposed upon the Industrial Center by any authority having the
direct or indirect power to tax, including any city, state or federal
government, or any school, agricultural, sanitary, fire, street, drainage, or
other improvement district thereof, levied against any legal or equitable
interest of Lessor in the Industrial Center or any portion thereof, Lessor's
right to rent or other income therefrom, and/or Lessor's business of leasing the
Premises. The term "REAL PROPERTY TAXES" shall also include any tax, fee, levy,
assessment or charge, or any increase therein, imposed by reason of events
occurring, or changes in Applicable Law taking effect, during the term of this
Lease, including but not limited to a change in the ownership of the Industrial
Center or in the improvements thereon, the execution of this Lease, or any
modification, amendment or transfer thereof, and whether or not contemplated by
the Parties. In calculating Real Property Taxes for any calendar year, the Real
Property Taxes for any real estate tax year shall be included in the calculation
of Real Property Taxes for such calendar year based upon the number of days
which such calendar year and tax year have in common. Insert 10.2
10.3 ADDITIONAL IMPROVEMENTS. Operating Expenses shall not include Real
Property Taxes specified in the tax assessor's records and work sheets as being
caused by additional improvements placed upon the Industrial Center by Lessee or
by Lessor for the exclusive enjoyment of such other lessees. Notwithstanding
Paragraph 10.1 hereof, Lessee shall, however, pay to Lessor at the time
Operating Expenses are payable under Paragraph 4.2, the entirety of any increase
in Real Property Taxes if assessed solely by reason of Alterations, Trade
Fixtures or Utility Installations placed upon the Premises by Lessee or at
Lessee's request.
10.4 JOINT ASSESSMENT. If the Building is not separately assessed, Real
Property Taxes allocated to the Building shall be an equitable proportion of the
Real Property Taxes for all of the land and improvements included within the tax
parcel assessed, such proportion to be determined by Lessor from the respective
valuations assigned in the assessor's work sheets or such other information as
may be reasonably available. Lessor's reasonable determination thereof, in good
faith, shall be conclusive.
10.5 LESSEE'S PROPERTY TAXES. Subject to Lessee's right to contest the
amount or application of such taxes Lessee shall pay prior to delinquency all
taxes assessed against and levied upon Lessee-Owned Alterations and Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Lessee contained in the Premises or stored within the Industrial Center.
When possible, Lessee shall cause its Lessee-Owned Alterations and Utility
Installations, Trade Fixtures, furnishings, equipment and all other personal
property to be assessed and billed separately from the real property of Lessor.
If any of Lessee's said property shall be assessed with Lessor's real property,
Lessee shall pay Lessor the taxes attributable to Lessee's property within ten
(10) days after receipt of a written statement setting forth the taxes
applicable to Lessee's property.
11. UTILITIES. Lessee shall pay directly for all utilities and services
supplied to the Premises, including but not limited to electricity, telephone,
security, gas and cleaning of the Premises, together with any taxes thereon. If
any such utilities or services are not separately metered to the Premises or
separately billed to the Premises, Lessee shall pay to Lessor a reasonable
proportion to be determined by Lessor of all such charges jointly metered or
billed with other premises in the Building, in the manner and within the time
periods set forth in Paragraph 4.2(d).
12. ASSIGNMENT AND SUBLETTING.
12.1 LESSOR'S CONSENT REQUIRED.
(a) Lessee shall not voluntarily or by operation of law assign,
transfer, mortgage or otherwise transfer or encumber (collectively, "assign") or
sublet all or any part of Lessee's interest in this Lease or in the Premises
without Lessor's prior written consent given under and subject to the terms of
Paragraph 36.
(b) Insert 12.1(b)
(d) An assignment or subletting of Lessee's interest in this Lease
without Lessor's specific prior written consent shall, at Lessor's option, be a
Default curable after notice per Paragraph 13.1, or a non-curable Breach without
the necessity of any notice and grace period. If Lessor elects to treat such
unconsented to assignment or subletting as a non-curable Breach, Lessor shall
have the right to either: (i) terminate this Lease, or (ii) upon thirty (30)
days' written notice ("LESSOR'S NOTICE"), increase the monthly Base Rent for the
Premises to the greater of the then fair market rental value of the Premises, as
reasonably determined by Lessor, or one hundred ten percent (110%) of the Base
Rent then in effect. Pending determination of the new fair market rental value,
if disputed by Lessee, Lessee shall pay the amount set forth in Lessor's Notice,
with any overpayment credited against the next installment(s) of Base Rent
coming due, and any underpayment for the period retroactively to the effective
date of the adjustment being due and payable immediately upon the determination
thereof. Further, in the event of such Breach and rental adjustment, (i) the
purchase price of any option to purchase the Premises held by Lessee shall be
subject to similar adjustment to the then fair market value as reasonably
determined by Lessor (without the Lease being considered an encumbrance or any
deduction for depreciation or obsolescence, and considering the Premises at its
highest and best use and in good condition) or one hundred ten percent (110%) of
the price previously in effect, (ii) any index-oriented rental or price
adjustment formulas contained in this Lease shall be adjusted to require that
the base index be determined with reference to the index applicable to the time
of such adjustment, and (iii) any fixed rental adjustments scheduled during the
remainder of the Lease term shall be increased in the same ratio as the new
rental bears to the Base Rent in effect immediately prior to the adjustment
specified in Lessor's Notice.
(e) Lessee's remedy for any breach of this Paragraph 12.1 by Lessor
shall be limited to compensatory damages and/or injunctive relief.
12.2 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.
(a) Regardless of Lessor's consent, any assignment or subletting shall
not (i) be effective without the express written assumption by such assignee or
sublessee of the obligations of Lessee under this Lease, (ii) release Lessee of
any obligations hereunder, nor (iii) alter the primary liability of Lessee for
the payment of Base Rent and other sums due Lessor hereunder or for the
performance of any other obligations to be performed by Lessee under this Lease.
(b) Lessor may accept any rent or performance of Lessee's obligations
from any person other than Lessee pending approval or disapproval of an
assignment. Neither a delay in the approval or disapproval of such assignment
nor the acceptance of any rent for performance shall constitute a waiver or
estoppel of Lessor's right to exercise its remedies for the Default or Breach by
Lessee of any of the terms, covenants or conditions of this Lease.
(c) The consent of Lessor to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting by Lessee or to
any subsequent or successive assignment or subletting by the assignee or
sublessee. However, Lessor may consent to subsequent sublettings and assignments
of the sublease or any amendments or modifications thereto without notifying
Lessee or anyone else liable under this Lease or the sublease and without
obtaining their consent, and such action shall not relieve such persons from
liability under this Lease or the sublease.
(d) In the event of any Default or Breach of Lessee's obligation under
this Lease, Lessor may proceed directly against Lessee, any Guarantors or anyone
else responsible for the performance of the Lessee's obligations under this
Lease, including any sublessee, without first exhausting Lessor's remedies
against any other person or entity responsible therefor to Lessor, or any
security held by Lessor.
(e) Each request for consent to an assignment or subletting shall be in
writing, accompanied by information relevant to Lessor's determination as to the
financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, including but not limited to the
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intended use and/or required modification of the Premises, if any, together with
reimbursement of Lessor's legal fees and costs which shall not exceed $500.00.
Lessee agrees to provide Lessor with such other or additional information and/or
documentation as may be reasonably requested by Lessor.
(f) Any assignee of, or sublessee under, this Lease shall, by reason of
accepting such assignment or entering into such sublease, be deemed, for the
benefit of Lessor, to have assumed and agreed to conform and comply with each
and every term, covenant, condition and obligation herein to be observed or
performed by Lessee during the term of said assignment or sublease, other than
such obligations as are contrary to or inconsistent with provisions of an
assignment or sublease to which Lessor has specifically consented in writing.
12.3 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The following
terms and conditions shall apply to any subletting by Lessee of all or any part
of the Premises and shall be deemed included in all subleases under this Lease
whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all rentals and income arising from any sublease of all or a portion
of the Premises heretofore or hereafter made by Lessee, and Lessor may collect
such rent and income and apply same toward Lessee's obligations under this
Lease; provided, however, that until a Breach (as defined in Paragraph 13.1)
shall occur in the performance of Lessee's obligations under this Lease, Lessee
may, except as otherwise provided in this Lease, receive, collect and enjoy the
rents accruing under such sublease. Lessor shall not, by reason of the foregoing
provision or any other assignment of such sublease to Lessor, nor by reason of
the collection of the rents from a sublessee, be deemed liable to the sublessee
for any failure of Lessee to perform and comply with any of Lessee's obligations
to such sublessee under such Sublease. Lessee hereby irrevocably authorizes and
directs any such sublessee, upon receipt of a written notice from Lessor stating
that a Breach exists in the performance of Lessee's obligations under this
Lease, to pay to Lessor the rents and other charges due and to become due under
the sublease. Sublessee shall rely upon any such statement and request from
Lessor and shall pay such rents and other charges to Lessor without any
obligation or right to inquire as to whether such Breach exists and
notwithstanding any notice from or claim from Lessee to the contrary. Lessee
shall have no right or claim against such sublessee, or, until the Breach has
been cured, against Lessor, for any such rents and other charges so paid by said
sublessee to Lessor.
(b) In the event of a Breach by Lessee in the performance of its
obligations under this Lease, Lessor, at its option and without any obligation
to do so, may require any sublessee to attorn to Lessor, in which event Lessor
shall undertake the obligations of the sublessor under such sublease from the
time of the exercise of said option to the expiration of such sublease;
provided, however, Lessor shall not be liable for any prepaid rents or security
deposit paid by such sublessee to such sublessor or for any other prior defaults
or breaches of such sublessor under such sublease.
(c) Any matter or thing requiring the consent of the sublessor under a
sublease shall also require the consent of Lessor herein.
(d) No sublessee under a sublease approved by Lessor shall further
assign or sublet all or any part of the Premises without Lessor's and Lessee's
prior written consent.
(e) Lessor shall deliver a copy of any notice of Default or Breach by
Lessee to the sublessee, who shall have the right to cure the Default of Lessee
within the grace period, if any, specified in such notice. The sublessee shall
have a right of reimbursement and offset from and against Lessee for any such
Defaults cured by the sublessee.
Insert 12.3(f)
13. DEFAULT; BREACH; REMEDIES.
13.1 DEFAULT; BREACH. Lessor and Lessee agree that if an attorney is
consulted by Lessor in connection with a Lessee Default or Breach (as
hereinafter defined), Lessor may include the reasonable cost of such services
and costs in said notice as rent due and payable to cure said default. A
"DEFAULT" by Lessee is defined as a failure by Lessee to observe, comply with or
perform any of the terms, covenants, conditions or rules applicable to Lessee
under this Lease. A "BREACH" by Lessee is defined as the occurrence of any one
or more of the following Defaults, and, where a grace period for cure after
notice is specified herein, the failure by Lessee to cure such Default prior to
the expiration of the applicable grace period, and shall entitle Lessor to
pursue the remedies set forth in Paragraphs 13.2 and/or 13.3;
(a) The vacating of the Premises without a Lessor authorized assignee
or sublessee or without the intention to reoccupy same, or the abandonment of
the Premises.
(b) Except as expressly otherwise provided in this Lease, the failure
by Lessee to make any payment of Base Rent, Lessee's Share of Operating
Expenses, or any other monetary payment required to be made by Lessee hereunder
within five (5) days of when due, the failure by Lessee to provide Lessor with
reasonable evidence of insurance or surety bond required under this Lease, or
the failure of Lessee to fulfill any obligation under this Lease which endangers
or threatens life or property, where such failure continues for a period of
seven (7) business days following written notice thereof by or on behalf of
Lessor to Lessee.
(c) Except as expressly otherwise provided in this Lease, the failure
by Lessee to provide Lessor with reasonable written evidence (in duly executed
original form, if applicable) of (i) compliance with Applicable Requirements per
Paragraph 6.3, (ii) the inspection, maintenance and service contracts required
under Paragraph 7.1(b), (iii) the rescission of an unauthorized assignment or
subletting per Paragraph 12.1, (iv) a Tenancy Statement per Paragraphs 16 or 37,
(v) the subordination or non-subordination of this Lease per Paragraph 30, (vi)
the guaranty of the performance of Lessee's obligations under this Lease if
required under Paragraphs 1.11 and 37, (vii) the execution of any document
requested under Paragraph 42 (easements), or (viii) any other documentation or
information which Lessor may reasonably require of Lessee under the terms of
this lease, where any such failure continues for a period of ten (10) days
following written notice by or on behalf of Lessor to Lessee.
(d) A Default by Lessee as to the terms, covenants, conditions or
provisions of this Lease, or of the rules adopted under Paragraph 40 hereof that
are to be observed, complied with or performed by Lessee, other than those
described in Subparagraphs 13.1(a), (b) or (c), above, where such Default
continues for a period of thirty (30) days after written notice thereof by or on
behalf of Lessor to Lessee; provided, however, that if the nature of Lessee's
Default is such that more than thirty (30) days are reasonably required for its
cure, then it shall not be deemed to be a Breach of this Lease by Lessee if
Lessee commences such cure within said thirty (30) day period and thereafter
diligently prosecutes such cure to completion.
(e) The occurrence of any of the following events: (i) the making by
Lessee of any general arrangement or assignment for the benefit of creditors;
(ii) Lessee's becoming a "debtor" as defined in 11 U.S. Code Section 101 or any
successor statute thereto (unless, in the case of a petition filed against
Lessee, the same is dismissed within sixty (60) days); (iii) the appointment of
a trustee or receiver to take possession of substantially all of Lessee's assets
located at the Premises or of Lessee's interest in this Lease, where possession
is not restored to Lessee within thirty (30) days; or (iv) the attachment,
execution or other judicial seizure of substantially all of Lessee's assets
located at the Premises or of Lessee's interest in this Lease, where such
seizure is not discharged within thirty (30) days; provided, however, in the
event that any provision of this Subparagraph 13.1(e) is contrary to any
applicable law, such provision shall be of no force or effect, and shall not
affect the validity of the remaining provisions.
(f) The discovery by Lessor that any financial statement of Lessee or
of any Guarantor, given to Lessor by Lessee or any Guarantor, was materially
false without a reasonable explanation from Lessee for such error.
13.2 REMEDIES. If Lessee fails to perform any affirmative duty or obligation
of Lessee under this Lease, within ten (10) days after written notice to Lessee
(or in case of an emergency without notice), Lessor may at its option (but
without obligation to do so) perform such duty or obligation on Lessee's behalf,
including but not limited to the obtaining of reasonably required bonds,
insurance policies, or governmental licenses, permits or approvals. The costs
and expenses of any such performance by Lessor shall be due and payable by
Lessee to Lessor upon invoice therefor. If any check given to Lessor by Lessee
shall not be honored by the bank upon which it is drawn, Lessor, at its own
option, may require all future payments for a period of one (1) calendar year to
be made under this Lease by Lessee to be made only by cashier's check. In the
event of a Breach of this Lease by Lessee (as defined in Paragraph 13.1), with
or without further notice or demand, and without limiting Lessor in the exercise
of any right or remedy which Lessor may have by reason of such Breach, Lessor
may:
(a) Terminate Lessee's right to possession of the Premises by any
lawful means, in which case this Lease and the term hereof shall terminate and
Lessee shall immediately surrender possession of the Premises to Lessor. In such
event Lessor shall be entitled to recover from Lessee: (i) the worth at the time
of the award of the unpaid rent which had been earned at the time of
termination; (ii) the worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that the Lessee proves could have
been reasonably avoided; (iii) the worth at the time of award of the amount by
which the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss that the Lessee proves could be
reasonably avoided; and (iv) any other amount necessary to compensate Lessor for
all the detriment proximately caused by the Lessee's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including but not limited to the cost of recovering
possession of the Premises, expenses of reletting, including necessary
renovation and alteration of the Premises to the extent required by Paragraph
7.4(c), reasonable attorneys' fees, and that portion of any leasing commission
paid by Lessor in connection with this Lease applicable to the unexpired term of
this Lease. The worth at the time of award of the amount referred to in
provision (iii) of the immediately preceding sentence shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco or the Federal Reserve Bank District in which the Premises are located
at the time of award plus one percent (1%). Efforts by Lessor to mitigate
damages caused by Lessee's Default or Breach of this Lease shall not waive
Lessor's right to recover damages under this Paragraph 13.2. If termination of
this Lease is obtained through the provisional remedy of unlawful detainer,
Lessor shall have the right to recover in such proceeding the unpaid rent and
damages as are recoverable therein, or Lessor may reserve the right to recover
all or any part thereof in a separate suit for such rent and/or damages. If a
notice and grace period required under Subparagraph 13.1(b), (c) or (d) was not
previously given, a notice to pay rent or quit, or to perform or quit, as the
case may be, given to Lessee under any statute authorizing the forfeiture of
leases for unlawful detainer shall also constitute the applicable notice for
grace period purposes required by Subparagraph 13.1(b),(c) or (d). In such case,
the applicable grace period under the unlawful detainer statue shall run
concurrently after the one such
Initials: CM
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statutory notice, and the failure of Lessee to cure the Default within the
greater of the two (2) such grace periods shall constitute both an unlawful
detainer and a Breach of this Lease entitling Lessor to the remedies provided
for in this Lease and/or by said statute.
(b) Continue the Lease and Lessee's right to possession (under
California Civil Code Section 1951.4) after Lessee's Breach and recover the rent
as it becomes due, provided Lessee has the right to sublet or assign, subject
only to reasonable limitations. Lessor and Lessee agree that the limitations on
assignment and subletting in this Lease are reasonable. Acts of maintenance or
preservation, efforts to relet the Premises, or the appointment of a receiver to
protect the Lessor's interest under this Lease, shall not constitute a
termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available to Lessor under
the laws or judicial decisions of the state wherein the Premises are located.
(d) The expiration or termination of this Lease and/or the termination
of Lessee's right to possession shall not relieve Lessee from liability under
any indemnity provisions of this Lease as to matters occurring or accruing
during the term hereof or by reason of Lessee's occupancy of the Premises.
13.3
13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by Lessee to
Lessor of rent and other sums due hereunder will cause Lessor to incur costs not
contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges, and late charges which may be imposed upon Lessor by the
terms of any ground lease, mortgage or deed of trust covering the Premises.
Accordingly, if any installment of rent or other sum due from Lessee shall not
be received by Lessor or Lessor's designee within ten (10) days after such
amount shall be due, then, without any requirement for notice to Lessee, Lessee
shall pay to Lessor a late charge equal to six percent (6%) of such overdue
amount. The parties hereby agree that such late charge represents a fair and
reasonable estimate of the costs Lessor will incur by reason of late payment by
Lessee. Acceptance of such late charge by Lessor shall in no event constitute a
waiver of Lessee's Default or Breach with respect to such overdue amount, nor
prevent Lessor from exercising any of the other rights and remedies granted
hereunder.
13.5 BREACH BY LESSOR. Lessor shall not be deemed in breach of this Lease
unless Lessor fails within a reasonable time to perform an obligation required
to be performed by Lessor. For purposes of this Paragraph 13.5, a reasonable
time shall in no event be less than thirty (30) days after receipt by Lessor,
and by any Lender(s) whose name and address shall have been furnished to Lessee
in writing for such purpose, of written notice specifying wherein such
obligation of Lessor has not been performed; provided, however that if the
nature of Lessor's obligation is such that more than thirty (30) days after such
notice are reasonably required for its performance, then Lessor shall not be in
breach of this Lease if performance is commenced within such thirty (30) day
period and thereafter diligently pursued to completion.
14. CONDEMNATION. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said power
(all of which are herein called "condemnation"), this Lease shall terminate as
to the part so taken as of the date the condemning authority takes title or
possession, whichever first occurs. If Lessee's business is materially affected
or more than ten percent (10%) of the floor area of the Premises, or more than
twenty-five percent (25%) of the portion of the Common Areas designated for
Lessee's parking is taken by condemnation, or Lessee may elect to continue this
Lease with Base Rent abated in proportion to the adverse effect of the
condemnation on Lessee's business in the Premises, as reasonably determined by
Lessee and Lessor. Lessee may, at Lessee's option, to be exercised in writing
within ten (10) days after Lessor shall have given Lessee written notice of such
taking (or in the absence of such notice, within ten (10) days after the
condemning authority shall have taken possession) terminate this Lease as of the
date the condemning authority takes such possession. If Lessee does not
terminate this Lease in accordance with the foregoing, this Lease shall remain
in full force and effect as to the portion of the Premises remaining, except
that the Base Rent shall be reduced in the same proportion as the rentable floor
area of the Premises taken bears to the total rentable floor area of the
Premises. No reduction of Base Rent shall occur if the condemnation does not
apply to any portion of the Premises. Any award for the taking of all or any
part of the Premises under the power of eminent domain or any payment made under
threat of the exercise of such power shall be the property of Lessor, whether
such award shall be made as compensation for diminution of value of the
leasehold or for the taking of the fee, or as severance damages; provided,
however, that Lessee shall be entitled to any compensation, separately awarded
to Lessee for Lessee's relocation expenses and/or attributable to loss of
Lessee's Trade Fixtures and any Lessee owned Alterations and/or Utility
Installations which Lessee would be entitled to remove on expiration or earlier
termination of this Lease. In the event that this Lease is not terminated by
reason of such condemnation, Lessor shall to the extent of its net severance
damages received, over and above Lessee's Share of the legal and other expenses
incurred by Lessor in the condemnation matter, repair any damage to the Premises
caused by such condemnation authority. Lessee shall be responsible for the
payment of any amount in excess of such net severance damages required to
complete such repair.
15. BROKERS' FEES.
15.1
15.2
15.4 REPRESENTATIONS AND WARRANTIES. Lessee and Lessor each represent and
warrant to the other that it has had no dealings with any person, firm, broker
or finder other than as named in Paragraph 1.10(a) in connection with the
negotiation of this Lease and/or the consummation of the transaction
contemplated hereby, and that no broker or other person, firm or entity other
than said named Broker(s) is entitled to any commission or finder's fee in
connection with said transaction. Lessee and Lessor do each hereby agree to
indemnify, protect, defend and hold the other harmless from and against
liability for compensation or charges which may be claimed by any such unnamed
broker, finder or other similar party by reason of any dealings or actions of
the indemnifying Party, including any costs, expenses, and/or attorneys' fees
reasonably incurred with respect thereto.
16. TENANCY AND FINANCIAL STATEMENTS.
16.1 TENANCY STATEMENT. Each Party (as "RESPONDING PARTY") shall within ten
(10) days after written notice from the other Party (the "REQUESTING PARTY")
execute, acknowledge and deliver to the Requesting Party a statement in writing
in a form similar to the then most current "TENANCY STATEMENT" form published by
the American Industrial Real Estate Association, plus such additional
information, confirmation and/or statements as may be reasonably requested by
the Requesting Party.
16.2 FINANCIAL STATEMENT. If Lessor desires to finance, refinance, or sell
the Premises or the Building, or any part thereof, Lessee and all Guarantors
shall deliver to any potential lender or purchaser designated by Lessor such
financial statements of Lessee and such Guarantors as may be reasonably required
by such lender or purchaser, including but not limited to Lessee's financial
statements for the past three (3) years. All such financial statements shall be
received by Lessor and such lender or purchaser in confidence and shall be used
only for the purposes herein set forth.
17. LESSOR'S LIABILITY. The term "LESSOR" as used herein shall mean the owner or
owners at the time in question of the fee title to the Premises. In the event of
a transfer of Lessor's title or interest in the Premises or in this Lease,
Lessor shall deliver to the transferee or assignee (in cash or by credit) any
unused Security Deposit held by Lessor at the time of such transfer or
assignment. Except as provided in Paragraph 15.3, upon such transfer or
assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor
shall be relieved of all liability with respect to the obligations and/or
covenants under this Lease thereafter to be performed by the Lessor. Subject to
the foregoing, the obligations and/or covenants in this Lease to be performed by
the Lessor shall be binding only upon the Lessor as hereinabove defined. Insert
17
18. SEVERABILITY. The invalidity of any provision of this Lease, as determined
by a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.
19. INTEREST ON PAST-DUE OBLIGATIONS. Any monetary payment due Lessor hereunder,
other than late charges, not received by Lessor within ten (10) days following
the date on which it was due, shall bear interest from the date due at the prime
rate charged by the largest state chartered bank in the state in which the
Premises are located plus four percent (4%) per annum, but not exceeding the
maximum rate allowed by law, in addition to the potential late charge provided
for in Paragraph 13.4.
20. TIME OF ESSENCE. Time is of the essence with respect to the performance of
all obligations to be performed or observed by the Parties under this Lease.
21. RENT DEFINED. All monetary obligations of Lessee to Lessor under the terms
of this Lease are deemed to be rent with the exception of unused portion of the
Security Deposit.
22. NO PRIOR OR OTHER AGREEMENTS; BROKER DISCLAIMER. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each represents and warrants to the Brokers that it has made,
and is relying solely upon, its own investigation as to the nature, quality,
character and financial responsibility of the other Party to this Lease and as
to the nature, quality and character of the Premises. Brokers have no
responsibility with respect thereto or with respect to any default or breach
hereof by either Party. Each Broker shall be an intended third party
beneficiary of the provisions of this Paragraph 22.
23. NOTICES.
23.1 NOTICE REQUIREMENTS. All notices required or permitted by this Lease
shall be in writing and may be delivered in person (by hand or by messenger or
courier service) or may be sent by regular, certified or registered mail or U.S.
Postal Service Express Mail, with postage prepaid, or by facsimile transmission
during normal business hours, and shall be deemed sufficiently given if served
in a manner specified in this Paragraph 23. The addresses noted adjacent to a
Party's signature on this Lease shall be that Party's address for delivery or
mailing of notice purposes. Either Party may by written notice to the other
specify a different address for notice purposes, except that upon Lessee's
taking possession of the Premises, the Premises shall constitute Lessee's
address for the purpose of mailing or delivering notices to Lessee. A copy of
all notices required or permitted to be given to either hereunder shall be
concurrently transmitted to such party or parties at such addresses as such
party may from time to time hereafter designate by written notice to Lessee.
23.2 DATE OF NOTICE. Any notice sent by registered or certified mail, return
receipt requested, shall be deemed given on the date of delivery shown on the
receipt card, or if no delivery date is shown, the postmark thereon. If sent by
regular mail, the notice shall be deemed given seventy-two (72) hours after
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the same is addressed as required herein and mailed with postage prepaid.
Notices delivered by United States Express Mail or overnight courier that
guarantees next day delivery shall be deemed given twenty-four (24) hours after
delivery of the same to the United States Postal Service or courier. If any
notice is transmitted by facsimile transmission or similar means, the same shall
be deemed served or delivered upon telephone or facsimile confirmation of
receipt of the transmission thereof, provided a copy is also delivered via
delivery or mail. If notice is received on a Saturday or a Sunday or a legal
holiday, it shall be deemed received on the next business day.
24. WAIVERS. No waiver by Lessor of the Default or Breach of any term,
covenant or condition hereof by Lessee, shall be deemed a waiver of any other
term, covenant or condition hereof, or of any subsequent Default or Breach by
Lessee of the same or any other term, covenant or condition hereof. Lessor's
consent to, or approval of, any such act shall not be deemed to render
unnecessary the obtaining of Lessor's consent to, or approval of, any subsequent
or similar act by Lessee, or be construed as the basis of an estoppel to enforce
the provision or provisions of this Lease requiring such consent. Regardless of
Lessor's knowledge of a Default or Breach at the time of accepting rent, the
acceptance of rent by Lessor shall not be a waiver of any Default or Breach by
Lessee of any provision hereof. Any payment given Lessor by Lessee may be
accepted by Lessor on account of moneys or damages due Lessor, notwithstanding
any qualifying statements or conditions made by Lessee in connection therewith,
which such statements and/or conditions shall be of no force or effect
whatsoever unless specifically agreed to in writing by Lessor at or before the
time of deposit of such payment.
25. RECORDING. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a short form memorandum of this
Lease for recording purposes. The Party requesting recordation shall be
responsible for payment of any fees or taxes applicable thereto.
26. NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or earlier termination of
this Lease. In the event that Lessee holds over in violation of this Paragraph
26 then the Base Rent payable from and after the time of the expiration or
earlier termination of this Lease shall be increased to one hundred fifty
percent (150%) of the Base Rent applicable during the month immediately
preceding such expiration or earlier termination. Nothing contained herein
shall be construed as a consent by Lessor to any holding over by Lessee.
27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
28. COVENANTS AND CONDITIONS. All provisions of this Lease to be observed or
performed by Lessor or Lessee are both covenants and conditions.
29. BINDING EFFECT; CHOICE OF LAW. This Lease shall be binding upon the
Parties, their personal representatives, successors and assigns and be governed
by the laws of the State in which the Premises are located. Any litigation
between the Parties hereto concerning this Lease shall be initiated in the
county in which the Premises are located.
30. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.
30.1 SUBORDINATION. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "SECURITY DEVICE"), now or
hereafter placed by Lessor upon the real property of which the Premises are a
part, to any and all advances made on the security thereof, and to all renewals,
modifications, consolidations, replacements and extensions thereof. Lessee
agrees that the Lenders holding any such Security Device shall have no duty,
liability or obligation to perform any of the obligations of Lessor under this
Lease, but that in the event of Lessor's default with respect to any such
obligation, Lessee will give any Lender whose name and address have been
furnished Lessee in writing for such purpose notice of Lessor's default pursuant
to Paragraph 13.5. If any Lender shall elect to have this Lease and/or any
Option granted hereby superior to the lien of its Security Device and shall give
written notice thereof to Lessee, this Lease and such Options shall be deemed
prior to such Security Device, notwithstanding the relative dates of the
documentation or recordation thereof.
30.2 ATTORNMENT. Subject to the non-disturbance provisions of Paragraph
30.3, Lessee agrees to attorn to a Lender or any other party who acquires
ownership of the Premises by reason of a foreclosure of a Security Device, and
that in the event of such foreclosure, such new owner shall not: (i) be liable
for any act or omission of any prior lessor or with respect to events occurring
prior to acquisition of ownership, (ii) be subject to any offsets or defenses
which Lessee might have against any prior lessor, or (iii) be bound by
prepayment of more than one month's rent.
30.3 NON-DISTURBANCE. With respect to Security Devices entered into by
Lessor after the execution of this lease, Lessee's subordination of this Lease
shall be subject to receiving assurance (a "non-disturbance agreement") in a
form reasonably acceptable to Lessee from the Lender that Lessee's possession
and this Lease, including any options to extend the term hereof, will not be
disturbed so long as Lessee is not in Breach hereof and attorns to the record
owner of the Premises.
30.4 SELF-EXECUTING. The agreements contained in this Paragraph 30 shall be
effective without the execution of any further documents; provided, however,
that upon written request from Lessor or a Lender in connection with a sale,
financing or refinancing of Premises, Lessee and Lessor shall execute such
further writings as may be reasonably required to separately document any such
subordination or non subordination, attornment and/or non-disturbance agreement
as is provided for herein.
31. ATTORNEYS' FEES. If any Party or Broker brings an action or proceeding to
enforce the terms hereof or declare rights hereunder, the Prevailing Party (as
hereafter defined) in any such proceeding, action, or appeal thereon, shall be
entitled to reasonable attorneys' fees. Such fees may be awarded in the same
suit or recovered in a separate suit, whether or not such action or proceeding
is pursued to decision or judgment. The term "PREVAILING PARTY" shall include,
without limitation, a Party or Broker who substantially obtains or defeats the
relief sought, as the case may be, whether by compromise, settlement, judgment,
or the abandonment by the other Party or Broker of its claim or defense. The
attorneys' fee award shall not be computed in accordance with any court fee
schedule, but shall be such as to fully reimburse all reasonable attorneys' fees
incurred. Lessor shall be entitled to attorneys' fees, costs and expenses
incurred in preparation and service of notices of Default and consultations in
connection therewith, whether or not a legal action is subsequently commenced in
connection with such Default or resulting Breach, Broker(s) shall be intended
third party beneficiaries of this Paragraph 31.
32. LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Lessor's agents
shall have the right to enter the Premises at any time, in the case of an
emergency, and otherwise at reasonable times upon 24 hours' prior notice for the
purpose of showing the same to prospective purchasers, lenders, or lessees
during the last 8 months of the lease term, and making such alterations,
repairs, improvements or additions to the Premises or to the Building, as Lessor
may reasonably deem necessary. Lessor may at any time place on or about the
Premises or Building any ordinary "For Sale" signs and Lessor may at any time
during the last one hundred eighty (180) days of the term hereof place on or
about the Premises any ordinary "For Lease" signs. All such activities of
Lessor shall be without abatement of rent or liability to Lessee.
33. AUCTIONS. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises without first having
obtained Lessor's prior written consent. Notwithstanding anything to the
contrary in this Lease, Lessor shall not be obligated to exercise any standard
of reasonableness in determining whether to grant such consent.
34. SIGNS. Lessee shall not place any sign upon the exterior of the Premises
or the Building, except that Lessee may, with Lessor's prior written consent,
install (but not on the Building) such signs as are reasonably required to
advertise Lessee's own business so long as such signs are in a location
designated by Lessor and comply with Applicable Requirements and such signage
criteria established for the Industrial Center by Lessor. The installation of
any sign on the Premises by or for Lessee shall be subject to the provisions of
Paragraph 7 (Maintenance, Repairs, Utility Installations, Trade Fixtures and
Alterations). Unless otherwise expressly agreed herein, Lessor reserves air
rights to the use of the roof of the Building.
35. TERMINATION; MERGER. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate in the
Premises; provided, however, Lessor shall, in the event of any such surrender,
termination or cancellation, have the option to continue any one or all of any
existing subtenancies. Lessor's failure within ten (10) days following any such
event to make a written election to the contrary by written notice to the holder
of any such lesser interest, shall constitute Lessor's election to have such
event constitute the termination of such interest.
36. CONSENTS.
(a) Except for Paragraph 33 hereof (Auctions) or as otherwise provided
herein, wherever in this Lease the consent of a Party is required to an act by
or for the other Party, such consent shall not be unreasonably withheld or
delayed. Lessee's actual reasonable costs and expenses (including but not
limited to architects', attorneys', engineers' and other consultants' fees)
incurred in the consideration of, or response to, a request by Lessee for any
Lessor consent pertaining to this Lease or the Premises, including but not
limited to consents to an assignment a subletting or the presence or use of a
Hazardous Substance, shall be paid by Lessee to Lessor upon receipt of an
invoice and supporting documentation therefor. In addition to the deposit
described in Paragraph 12.2(e), Lessor may, as a condition to considering any
such request by Lessee, require that Lessee deposit with Lessor an amount of
money (in addition to the Security Deposit held under Paragraph 5) reasonably
calculated by Lessor to represent the cost Lessor will incur in considering and
responding to Lessee's request. Any unused portion of said deposit shall be
refunded to Lessee without interest. Lessor's consent to any act, assignment of
this Lease or subletting of the Premises by Lessee shall not constitute an
acknowledgment that no Default or Breach by Lessee of this Lease exists, nor
shall such consent be deemed a waiver of any then existing Default or Breach,
except as may be otherwise specifically stated in writing by Lessor at the time
of such consent.
(b) All conditions to Lessor's consent authorized by this Lease are
acknowledged by Lessee as being reasonable. The failure to specify herein any
particular condition to Lessor's consent shall not preclude the impositions by
Lessor at the time of consent of such further or other conditions as are then
reasonable with reference to the particular matter for which consent is being
given.
37. GUARANTOR.
37.1
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38. QUIET POSSESSION. Upon payment by Lessee of the rent for the Premises and
the performance of all of the covenants, conditions and provisions on Lessee's
part to be observed and performed under this Lease, Lessee shall have quiet
possession of the Premises for the entire term hereof subject to all of the
provisions of this Lease.
39. OPTIONS.
39.1 DEFINITION. As used in this Lease, the word "Option" has the following
meaning: (a) the right to extend the term of this Lease or to renew this Lease
or to extend or renew any lease that Lessee has on other property of Lessor; (b)
the right of first refusal to lease the Premises or the right of first offer to
lease the Premises or the right of first refusal to lease other property of
Lessor or the right of first offer to lease other property of Lessor; (c) the
right to purchase the Premises, or the right of first refusal to purchase the
Premises, or the right of first offer to purchase the Premises, or the right to
purchase other property of Lessor, or the right of first refusal to purchase
other property of Lessor, or the right of first offer to purchase other property
of Lessor.
39.2 OPTIONS PERSONAL TO ORIGINAL LESSEE. Each Option granted to Lessee in
this Lease is personal to the original Lessee named in Paragraph 1.1 hereof, and
cannot be voluntarily or involuntarily assigned or exercised by any person or
entity other than said original Lessee while the original Lessee is in full and
actual possession of the Premises and without the intention of thereafter
assigning or subletting. The Options, if any, herein granted to Lessee are not
assignable, either as a part of an assignment of this Lease or separately or
apart therefrom, and no Option may be separated from this Lease in any manner,
by reservation or otherwise.
39.3 MULTIPLE OPTIONS. In the event that Lessee has any multiple Options to
extend or renew this Lease, a later option cannot be exercised unless the prior
Options to extend or renew this Lease have been validly exercised.
39.4 EFFECT OF DEFAULT ON OPTIONS.
(a) Lessee shall have no right to exercise an Option, notwithstanding
any provision in the grant of Option to the contrary: (i) during the period
commencing with the giving of any notice of Default under Paragraph 13.1 and
continuing until the noticed Default is cured, or (ii) during the period of time
any monetary obligation due Lessor from Lessee is unpaid (without regard to
whether notice thereof is given Lessee), or (iii) during the time Lessee is in
Breach of this Lease, or (iv) in the event that Lessor has given three (3) or
more notices of separate Defaults under Paragraph 13.1 three (3) or more times
during the twelve (12) month period immediately preceding the exercise of the
Option, whether or not the Defaults are cured.
(b) The period of time within which an Option may be exercised shall
not be extended or enlarged by reason of Lessee's inability to exercise an
Option because of the provisions of Paragraph 39.4(a).
(c) All rights of Lessee under the provisions of an Option shall
terminate and be of no further force or effect, notwithstanding Lessee's due and
timely exercise of the Option if after such exercise and during the term of this
Lease, (i) Lessee fails to pay to Lessor a monetary obligation of Lessee for a
period of thirty (30) days after such obligation becomes due, or (ii) Lessor
gives to Lessee three (3) or more notices of separate Defaults under Paragraph
13.1 three (3) or more times during any twelve (12) month period, whether or not
the Defaults are cured, or (iii) if Lessee commits a Breach of this Lease.
40. RULES AND REGULATIONS. Lessee agrees that it will abide by, and keep and
observe all reasonable and non-discriminatory rules and regulations ("Rules and
Regulations") which Lessor may make from time to time for the management,
safety, care, and cleanliness of the grounds, the parking and unloading of
vehicles and the preservation of good order, as well as for the convenience of
other occupants or tenants of the Building and the Industrial Center and their
invitees. See attached Exhibit "C".
41. SECURITY MEASURES. Lessee hereby acknowledges that the rental payable to
Lessor hereunder does not include the cost of guard service or other security
measures, and that Lessor shall have no obligation whatsoever to provide same.
Lessee assumes all responsibility for the protection of the Premises, Lessee,
its agents and invitees and their property against the acts of third parties.
42. RESERVATIONS. Lessor reserves the right, from time to time, to grant,
without the consent or joinder of Lessee, such easements, rights of way, utility
raceways, and dedications that Lessor deems necessary, and to cause the
recordation of parcel maps and restrictions, so long as such easements, rights
of way, utility raceways, dedications, maps and restrictions do not reasonably
interfere with the use of the Premises by Lessee. Lessee agrees to sign any
documents reasonably requested by Lessor to effectuate any such easement rights,
dedication, map or restrictions.
43. PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one Party to the other under the provisions
hereof, the Party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment and there shall survive the right on the part of
said Party to institute suit for recovery of such sum. If it shall be adjudged
that there was no legal obligation on the part of said Party to pay such sum or
any part thereof, said Party shall be entitled to recover such sum or so much
thereof as it was not legally required to pay under the provisions of this Lease
together with reasonable fees incurred in the recovery of such costs.
44. AUTHORITY. If either Party hereto is a corporation, trust, or general or
limited partnership, each individual executing this Lease on behalf of such
entity represents and warrants that he or she is duly authorized to execute and
deliver this Lease on its behalf. If Lessee is a corporation, trust or
partnership, Lessee shall, within thirty (30) days after request by Lessor,
deliver to Lessor evidence satisfactory to Lessor of such authority.
45. CONFLICT. Any conflict between the printed provisions of this Lease and
the typewritten or handwritten provisions shall be controlled by the typewritten
or handwritten provisions.
46. OFFER. Preparation of this Lease by either Lessor or Lessee or Lessor's
agent or Lessee's agent and submission of same to Lessee or Lessor shall not be
deemed an offer to lease. This Lease is not intended to be binding until
executed and delivered by all Parties hereto.
47. AMENDMENTS. This Lease may be modified only in writing signed by the
parties in interest at the time of the modification. The Parties shall amend
this Lease from time to time to reflect any adjustments that are made to the
Base Rent or other rent payable under this Lease. As long as they do not
materially change Lessee's obligations hereunder, Lessee agrees to make such
reasonable non-monetary modifications to this Lease as may be reasonably
required by an institutional insurance company or pension plan Lender in
connection with the obtaining of normal financing or refinancing of the property
of which the Premises are a part.
48. MULTIPLE PARTIES. Except as otherwise expressly provided herein, if more
than one person or entity is named herein as either Lessor or Lessee, the
obligations of such multiple parties shall be the joint and several
responsibility of all persons or entities named herein as such Lessor or Lessee.
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LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR YOUR
ATTORNEY'S REVIEW AND APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED
TO EVALUATE THE CONDITION OF THE PROPERTY FOR THE POSSIBLE PRESENCE OF
ASBESTOS, UNDERGROUND STORAGE TANKS OR HAZARDOUS SUBSTANCES. NO
REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL
REAL ESTATE ASSOCIATION OR BY THE REAL ESTATE BROKERS OR THEIR
CONTRACTORS, AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL
EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH
IT RELATES; THE PARTIES SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN
COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. IF THE
SUBJECT PROPERTY IS IN A STATE OTHER THAN CALIFORNIA, AN ATTORNEY FROM
THE STATE WHERE THE PROPERTY IS LOCATED SHOULD BE CONSULTED.
The parties hereto have executed this Lease at the place and on the dates
specified above their respective signatures.
<TABLE>
<S> <C>
Executed at: San Diego, California Executed at: San Diego, California
----------------------------------------------- -----------------------------------------------
on: 1/31/99 on: 1/31/99
--------------------------------------------------------- --------------------------------------------------------
By LESSOR: By LESSEE:
COMPS Plaza Associates, L.P. COMPS.COM, INC., a Delaware corporation
- ------------------------------------------------------------ ------------------------------------------------------------
By: Alden Properties, Inc., a California corporation
- ------------------------------------------------------------ ------------------------------------------------------------
By: /s/ CHRISTOPHER S. McKELLAR By: /s/ KAREN GOODRUM
- ------------------------------------------------------------ ------------------------------------------------------------
Name Printed: Christopher S. McKellar Name Printed: Karen Goodrum
---------------------------------------------- ----------------------------------------------
Title: Vice President Title: Chief Financial Officer
----------------------------------------------------- -----------------------------------------------------
By: ________________________________________________________ By: ________________________________________________________
Name Printed: ______________________________________________ Name Printed: ______________________________________________
Title: _____________________________________________________ Title: _____________________________________________________
Address: 12526 High Bluff Dr., Suite 100 Address: 9888 Carroll Center Road, #100
--------------------------------------------------- ---------------------------------------------------
San Diego, CA 92130 San Diego, CA 92126
- ------------------------------------------------------------ ------------------------------------------------------------
Telephone: (619) 793-2622 Telephone: (619) 578-3000
------------------------------------------- -------------------------------------------
Facsimile: (619) 793-7616 Facsimile: (619) 684-3288
------------------------------------------- -------------------------------------------
</TABLE>
NOTE: These forms are often modified to meet changing requirements of law and
needs of the industry. Always write or call to make sure you are
utilizing the most current form: AMERICAN INDUSTRIAL REAL ESTATE
ASSOCIATION, 345 So. Figueroa St., M-1, Los Angeles, CA 90071,
(213) 687-8777.
(C) 1993 by American Industrial Real Estate Association All rights reserved. No
part of these words may be reproduced in any form without permission in writing.
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Exhibit A
Outline of Floor Plan of Premises
First Floor
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A-1
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Exhibit A
Outline of Floor Plan of Premises
Second Floor
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A-2
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EXHIBIT B
TENANT IMPROVEMENT AGREEMENT
----------------------------
1. TENANT IMPROVEMENTS. Lessee shall cause to be performed the
-------------------
improvements (the "Tenant Improvements") in the Premises in accordance with
-------------------
plans and specifications approved by Lessee and Lessor (the "Plans"), which
-----
approvals shall not be unreasonably withheld or delayed. The Tenant
Improvements shall be performed at the Lessee's cost, subject to the Lessor's
Contribution (hereinafter defined).
Lessee shall cause the Plans to be prepared by a registered
professional architect and engineer acceptable to Lessor and Lessee. Lessee
shall furnish the initial draft of the Plans to Lessor for Lessor's review and
approval. Lessor shall within two (2) weeks after receipt either provide
comments to such Plans or approve the same. Lessor shall be deemed to have
approved such Plans if it does not timely provide comments on such Plans. If
Lessor provides Lessee with comments to the initial draft of the Plans, Lessee
shall provide revised Plans to Lessor incorporating Lessor's comments within one
week after receipt of Lessor's comments. Lessor shall within one week after
receipt then either provide comments to such revised Plans or approve such
Plans. Lessor shall be deemed to have approved such revised Plans if Lessor
does not timely provide comments on such Plans. The process described above
shall be repeated, if necessary, until the Plans have been finally approved by
Lessor. Lessee hereby agrees that the Plans for the Tenant Improvements shall
comply with all Applicable Laws. Lessor's approval of any of the Plans (or any
modifications or changes thereto) shall not impose upon Lessor or its agents or
representatives any obligation with respect to the design of the Tenant
Improvements or the compliance of such Tenant Improvements or the Plans with
Applicable Laws. A contractor acceptable to Lessor and Lessee ("Contractor")
----------
shall perform the construction of the Tenant Improvements. Lessee shall enter
into a contract with Contractor for the construction of the Tenant Improvements.
2. CHANGE ORDERS. If, prior to the Commencement Date, Lessee shall
-------------
require improvements or changes (individually or collectively, "Change Orders")
-------------
to the Premises in addition to, revision of or substitution for the Tenant
Improvements, Lessee shall deliver to Lessor for its approval plans and
specifications for such Change Orders. If Lessor does not approve of the plans
for Change Orders, Lessor shall advise Lessee of the revisions required. Lessee
shall revise and redeliver the plans and specifications to Lessor within five
(5) business days of Lessor's advice or Lessee shall be deemed to have abandoned
its request for such Change Orders. Lessee shall pay for all preparations and
revisions of plans and specifications, and the construction of all Change
Orders, subject to Lessor's Contribution.
3. CONTRIBUTION. Lessor shall contribute an amount up to $2.00 per
------------
rentable square foot for previously improved space and $22.00 per rentable
square foot for Suite 236 (not previously improved) ("Lessor's Contribution")
---------------------
toward the costs incurred for the Tenant Improvements and Change Orders.
Lessor's contribution to be made upon Substantial Completion as defined in
Section 4 of this Agreement. Lessor has no obligation to pay for costs of the
Tenant Improvements or Change Orders in excess of Lessor's Contribution. For
the purposes of this Lease, the costs incurred for the Tenant Improvements and
Change Orders shall include, without limitation, the preparation of the Plans,
hard construction costs, architectural and engineering fees, all governmental
and other regulatory fees and costs associated with the Tenant Improvements and
Change Orders, costs of utility connection and permitting.
4. SUBSTANTIAL COMPLETION. The Tenant Improvements shall be deemed
----------------------
to be "Substantially Completed", and "Substantial Completion" shall be deemed to
occur when the Contractor certifies in writing to Lessor and Lessee that (a)
Contractor has substantially performed all of the Tenant Improvement work
required to be performed under this Plans, other than decoration and minor
"punch list" items and adjustments which do not materially interfere with
Lessee's access to or use of the Premises; and, if required, and (b) Contractor
or Lessee has obtained a temporary certificate of occupancy or other required
approval from the local governmental authority permitting occupancy of the
Premises. The Contractor shall guaranty all work and Improvements for one (1)
year from the earlier of Substantial Completion of the Tenant Improvements or
the commencement of the warranty for those items covered by manufacturer's or
vendor's warranties and, to the extent possible, shall assign all warranties to
Lessee.
5. ARBITRATION.
-----------
A. Dispute Resolution. If any dispute arises in connection with
------------------
this Tenant Improvement Agreement, such dispute shall be resolved in accordance
with this Article. Such dispute shall be determined by a panel consisting of
one representative of Lessor, one of Lessee's construction representatives (or
another party designated by Lessee), and a third party with extensive
development and construction experience in the construction of commercial office
space in the San Diego County area selected in accordance with paragraph 5C of
this Tenant Improvement Agreement ("Construction Panel").
B. Notice. All disputes to be determined in accordance with this
------
Section 5 shall be raised by notice to the other party, which notice shall state
with particularity the nature of the dispute and the demand for relief, making
specific reference by paragraph number and title to the provision of this Tenant
Improvement Agreement alleged to give rise to the dispute. Such notice shall
also refer to this Section 5.
C. Selection of Third Party/Costs. Lessor and Lessee shall mutually
------------------------------
and promptly select a third party who meets the qualifications set forth in
paragraph 5A of this Tenant Improvement Agreement. In the event a selection is
not made within two (2) days after demand for resolution is made, the third
party shall, upon the request of
<PAGE>
either party, be appointed by the then-president of the Association of General
Contractors of San Diego County. All proceedings contemplated by this Section 5
shall take place at the locations for all job-site meetings, unless the
Construction Panel mutually agrees to another location. The cost for the third
party's services shall be paid by the non-prevailing party, unless the
Construction Panel determines otherwise.
D. Interpretation and Resolution. In determining any dispute, the
-----------------------------
Construction Panel shall apply the pertinent provisions of this Tenant
Improvement Agreement (and the Lease, if applicable) without departure therefrom
in any respect. The Construction Panel shall not have the power to add to,
modify or change any of the provisions of this Tenant Improvement Agreement, but
this provision shall not prevent in any appropriate case the interpretation,
construction and determination by the Construction Panel of the applicable
provisions of this Tenant Improvement Agreement to the extent necessary in
applying the same to the matters to be determined by the Construction Panel.
E. Continued Performance. During any proceedings pursuant to this
---------------------
Section 5, Lessor and Lessee shall, to the extent possible, continue to perform
and discharge all of their respective obligations under this Tenant Improvement
Agreement and the Lease.
F. Binding Resolution. The Construction Panel shall meet within two
------------------
(2) days of the third party being selected as a member of the Construction Panel
and the Construction Panel shall thereafter resolve the issue in dispute within
two (2) business days, unless it is mutually agreed among the Construction Panel
members that additional times is necessary to resolve the dispute, but in no
event shall such additional time exceed five (5) business days. Lessor and
Lessee agree that time and strict punctual performance are of the essence with
respect to each provision of this Tenant Improvement Agreement and that any and
all decisions of the Construction Panel as to the matter in dispute shall be
binding upon both Lessor and Lessee.
6. MISCELLANEOUS. Terms used in this Exhibit B shall have the
------------- ---------
meanings assigned to them in the Lease. The terms of this Exhibit B are subject
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to the terms of the Lease.
LANDLORD: TENANT:
COMPS PLAZA ASSOCIATES, L.P. COMPS.COM, INC.,
A CALIFORNIA LIMITED PARTNERSHIP A DELAWARE CORPORATION
By: Alden Properties, Inc.
By: /s/ CHRIS McKELLAR By: /s/ KAREN GOODRUM
---------------------------------- ---------------------------------
Name: Chris McKellar Name: Karen Goodrum
-------------------------------- -------------------------------
Title: Vice President Title: Chief Financial Officer
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EXHIBIT C
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Rules and Regulations
1. Tenant must use window coverings approved by Landlord in all exterior or
atrium window offices. No awning shall be permitted on any part of the
Premises. Tenant shall not place anything against or near partitions, doors, or
windows which may appear unsightly from outside the Premises.
2. The halls, passages, exits, entrances, elevators, and stairways are not for
the use of the general public. Tenant shall not obstruct the hall, passages,
exits, entrances, elevators or stairways. Landlord shall in all cases retain
the right to control and prevent access thereto of all persons whose presence in
the reasonable judgment of Landlord would be prejudicial to the safety,
character, reputation, or interests of the Building and its tenants; provided
that nothing contained herein shall be construed to prevent access to persons
with whom any tenant normally deals in the ordinary course of its business,
unless such persons are engaged in illegal activities. No tenant and no
employee or invitee of any tenant shall go upon the roof of the Building or into
mechanical, electrical, or phone rooms without Landlord's consent. All common
areas and facilities forming a part of the Building shall be under the sole and
absolute control of Landlord with exclusive right to regulate and control these
areas.
3. Any directory of the Building will be provided, at Tenant's expense,
exclusively for the display of the name and location of tenants only and
Landlord reserves the right to limit the number of listings and exclude any
other names therefrom.
4. All cleaning and janitorial services for the Building and the Premises
shall be provided exclusively through Landlord, at Tenant's expense, and except
with the written consent of Landlord, no person or persons other than those
approved by Landlord may be employed by Tenant or permitted to enter the
Building for the purpose of cleaning the same. Tenant shall not cause any
unnecessary labor by carelessness or indifference to the orderliness and
cleanliness of the Premises. Landlord shall not in any way be responsible to any
Tenant for any loss of property on the Premises, however occurring, or for any
damage to any Tenant's property by the janitor or any other employee or any
other person.
5.
6. Any freight elevator shall be available for use by all tenants in the
Building, subject to such reasonable scheduling as Landlord, in its sole
discretion, shall deem appropriate.
7. Tenant shall not place a load upon any floor of the Premises which exceeds
the load per square foot which such floor was designed to carry. Landlord shall
have the right to prescribe the weight, size, and position of all equipment,
materials, furniture, or other property brought into the Building. If heavy
objects are deemed necessary by Tenant, and are pre-approved by Landlord, said
objects shall stand on platforms to properly distribute the weight, the size and
thickness of which shall be in Landlord's sole discretion. Any mechanical
equipment or business machines which cause noise or vibration to be transmitted
to the structure of the Building or other tenant's space and is objectionable to
Landlord shall be placed on vibration eliminators or other devices sufficient to
eliminate noise or vibration. Said eliminators shall be installed and
maintained at Tenant's sole expense. The persons employed to move such
equipment in or out of the Building must be reasonably acceptable to Landlord.
Landlord will not be responsible for loss of, or damage to, any such equipment
or other affected property or any damage done to the Building or other tenants
by maintaining or moving such equipment or other property. Any such loss or
damage shall be Tenant's responsibility and/or repaired at Tenant's sole
expense.
8. Tenant shall not use or keep in the Premises any kerosene, gasoline, or
flammable or combustible fluid or material.
9. Tenant shall not use, or permit to be used, in the Premises any foul or
noxious gas or substance.
10. Tenant shall not permit or allow the premises to be occupied or used in a
manner offensive or objectionable to Landlord or other occupants of the Building
by reason of noise, odors, or vibrations.
11. Tenant shall not bring or keep in or about the Premises any birds or
animals, except seeing-eye dogs when accompanied by their masters.
12. The building systems hours of operation shall be 7:00 a.m. to 6:00 p.m.
Monday through Friday, excluding legal holidays. Tenant shall not use any
method of heating or air conditioning other than that supplied or approved by
Landlord. Tenant shall not waste electricity, water, or air conditioning and
agrees to cooperate fully with Landlord to assure the most effective operation
of the Building's heating and air conditioning and to comply with any
governmental energy-saving rules, laws, or regulations for which Tenant has
actual notice and shall refrain from attempting to adjust controls other than
room thermostats installed for Tenant's use. Tenant shall keep corridor and/or
exterior doors closed, and shall close window coverings at the end of each
business day.
13. Landlord reserves the right to exclude from the Building between the hours
of 6:00 p.m. and 7:00 a.m. the following day, or such other hours as may be
established from time to time by Landlord, and on Sundays and legal holidays,
any persons unless that person is known to the person or employee in charge of
the Building and has a pass or is properly identified. Tenant shall be
responsible for all persons for whom its requests passes and shall be liable to
Landlord for all acts of such persons. Landlord shall not be liable for damage
or for any error with regard to the admission to or exclusion from the Building
of any person unless caused by the negligence or willful misconduct of Landlord
or Landlord's agents. Landlord reserves the right to prevent access to the
Building in case of invasion, mob, riot, public excitement, or other commotion
by closing the doors or by other reasonably appropriate action.
14. Tenant shall close and lock the doors of its Premises and entirely shut off
all water faucets or other water apparatus and, except with regard to Tenant's
computers and other equipment which must be run on a twenty-four hour basis, all
electricity, gas or air outlets before Tenant and its employees lease the
Premises. Tenant shall be
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responsible for any damage or injuries sustained by other tenants or occupants
of the Building or by Landlord resulting from noncompliance with this rule.
15.
16. The toilet rooms, toilet, urinals, wash bowls, and other apparatus shall
not be used for any purpose other than that for which they were constructed and
no foreign substance of any kind whatsoever shall be thrown therein. The
expense of any breakage, stoppage, or damage resulting from the violation of
this rule shall be borne by the tenant who, or whose employees or invitees,
shall have caused it.
17. Tenant shall not sell, or permit the sale at retail, of newspapers,
magazines, periodicals, theater tickets or any other goods or merchandise to the
general public in or on the Premises. Tenant shall not make any suite-to-suite
solicitation of business from other tenants in the Building. Tenant shall not
use the Premises for any business or activity other than that specifically
provided for in Tenant's Lease.
18. Tenant shall not mark, drive nails, screw, or drill into the partitions,
woodwork, or plaster or in any way deface the Premises or any part thereof,
except to install normal wall hangings. Landlord reserves the right to direct
electricians as to where and how telephones and telegraph wires are to be
introduced to the Premises. Tenant shall not cut or bore holes for wires.
19.
20. Canvassing, soliciting, or distribution of handbills or any other written
material and peddling in the Building or on the Site are prohibited and each
tenant shall cooperate to prevent same.
21. Landlord reserves the right to exclude or expel from the Building any
person who, in Landlord's judgment, is intoxicated or under the influence of
drugs or who is in violation of any of the Rules and Regulations of the
Building.
22. Tenant shall store all its trash and garbage within its Premises or deposit
in outside refuse containers intended for this purpose. Tenant shall not place
in any trash box or receptacle any material which cannot be disposed of in the
ordinary and customary manner of trash and garbage disposal. All garbage and
refuse disposal shall be made in accordance with directions issued from time to
time by Landlord. The outside areas immediately adjoining the Premises shall be
kept clean and free of rubbish by Tenant to the satisfaction of Landlord, and
Tenant shall not place or permit any obstruction or materials in such areas.
23. The Premises shall not be use for lodging nor shall the Premises be used
for any illegal purpose. No cooking shall be done or permitted by any tenant on
the Premises, except that use by Tenant of Underwriters' Laboratory-approved
equipment for brewing coffee, tea, hot chocolate and similar beverages shall be
permitted and the use of a microwave oven with all applicable federal, state,
county, and city laws, codes, ordinances, rules and regulations.
24. Tenant shall not use in any space or in the public halls of the Building
any mailcarts or hand trucks except those equipped with rubber tires and side
guards or such other material handling equipment as Landlord may approve.
Tenant shall not bring any vehicles of any kind into the Building. Carpet
stains caused by hand trucks shall be cleaned at Tenant's expense.
25. Tenant shall comply with all safety, fire protection, and evacuation
procedures and regulations established by Landlord or any governmental agency.
26. Tenant assumes any and all responsibility for protecting its Premises from
theft, robbery, or pilferage unless caused by Landlord's negligence or willful
misconduct.
27. Tenant shall address repair requests, concerns, etc., in writing to the
office of the Building. Employees of Landlord shall not perform on behalf of
Landlord or Tenant without express authority from Landlord.
28. Heat and air conditioning shall be furnished to the Premises by Landlord
(as part of the Operating Expenses to be reimbursed by Tenant) during normal
business hours of generally recognized business days, but not less than the
hours of 7:00 a.m. to 6:00 p.m. Monday through Friday (excluding in any event
Saturdays, Sundays and legal holidays).
29. Landlord may waive any one or more of these Rules and Regulations for the
benefit of Tenant or any other tenant, but no such waiver by Landlord shall be
construed as a waiver of such Rules and Regulations in favor of Tenant or any
other tenant, nor prevent Landlord from thereafter enforcing any such Rules and
Regulations against any or all of the tenants of the Building.
Parking Rules and Regulations
1. Tenant and authorized users shall not park vehicles in any parking areas
designated by Landlord as areas for parking by visitors to the Building.
2.
3. Tenant and authorized users shall not park any vehicle in the Building
parking areas other than automobiles, motorcycles, motor driven or non-motor
driven bicycles, or trucks. Landlord may, in its sole discretion, designate
separate areas for bicycles and motorcycles.
4. Cars must be parked entirely within the painted stall lines.
5. All directional signs and arrows must be observed.
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6. The speed limit shall be 5 miles per hour.
7. Parking is prohibited:
a. in areas not striped for parking;
b. in aisles;
c. where "No Parking" signs are posted;
d. on ramps;
e. in crosshatched areas; or
f. in such other areas as may be designated by Landlord, its agent,
lessee or licensee.
8. Parking stickers or any other device or form of identification that may be
supplied by Landlord shall remain the property of Landlord. Such parking
identification device must be displayed as requested and may not be mutilated in
any manner. The serial number of the parking identification device may not be
obliterated. Devices are not transferable, and any device in the possession of
an unauthorized holder will be void. There will be a reasonable replacement
charge to the Tenant or authorized user for any loss of any magnetic parking
card or other parking identification device.
9. Parking managers or attendants, if any, are not authorized to make or allow
any exception to these Parking Rules and Regulations.
10. Loss or theft of parking identification devices from automobiles must be
reported to the garage manager and/or Landlord immediately. Any parking
identification devices found on any unauthorized car will be confiscated. Lost
or stolen devices previously reported and then found must be reported to the
office of the garage and/or Landlord immediately.
11. Spaces are for the express purpose of one automobile per space. Washing,
waxing, cleaning, or servicing of any vehicle by the Tenant, authorized user
and/or its agents or representatives is prohibited.
12. The parking management, if any, and/or Landlord reserve the right to refuse
the issuance of monthly stickers or other parking identification devices to any
tenant, authorized user, or person and/or its agent or representative who
willfully refuse to comply with the above Parking Rules and Regulations or any
City, State, or Federal ordinance, law, or agreement.
13. Tenant, authorized users or its agents or representatives shall not load or
unload in areas other than those designated by Landlord for such activities.
14. Tenant, authorized users or agents or representatives therefor and
unauthorized users parked in prohibited areas, are subject to towing at tenant's
or owner's expense.
15. These Rules and Regulations are in addition to the terms, covenants,
agreements and conditions of any lease of premises in the Building. In the
event these Rules and Regulations conflict with any provision of the Lease, the
Lease shall govern.
16.
17. Tenant shall be responsible for the observance of all of the foregoing
rules by Tenant's employees, agents, clients, customers, invitees, and guests.
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INSERTS TO COMPS PLAZA ASSOCIATES, L.P./COMPS.COM, INC. LEASE
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INSERT 4.2(B):
- -------------
The amount of any charges for any services provided by affiliates, related or
designated parties of Lessor, which are included in the Operating Expenses,
shall be reasonable, customary and competitive with charges for similar services
of independent contractors in the area where the Industrial Center is located.
Notwithstanding the provisions of this Paragraph 4, the following shall not
be included within Operating Expenses: (i) any depreciation on the Building or
Industrial Center, (ii) costs incurred due to Lessor's violation of any terms or
conditions of this Lease or any other lease relating to the Industrial Center,
(iii) all principal interest, loan fees, and other financing costs related to
any mortgage or deed of trust and all rental and other payable due under any
ground or underlying lease of the Industrial Center, (iv) advertising,
promotional, legal limit to leasing and marketing costs, space planning costs,
Lessee allowances and concessions and other costs and expenses incurred in
connection with any lease, sublease and/or assignment negotiations and
transactions with present or prospective Lessees or other occupants of the
Industrial Center (except as otherwise provided herein), (v) costs, including
permit, license and inspection costs, incurred with respect to the installation
of other Lessees or occupants in the Industrial Center, improvements made for
the premises of other lessees or other occupants in the Industrial Center or
incurred in renovating or otherwise improving, decorating, painting or
redecorating vacant space for lessees or other occupants of the Industrial
Center, (vi) any costs fines or penalties incurred due to violations by Lessor
or other Tenants of the Industrial Center (other than Lessee) of any
governmental rule or authority, this Lease or any other lease in the Industrial
Center, or due to Lessor's gross negligence or willful misconduct, (vii)
expenses incurred by Lessor in connection with services or other benefits which
are exclusively provided to one or more Lessees of the Industrial Center, other
than Lessee, without reimbursement, (viii) wages salaries, or other compensation
paid to any executive employees of Lessor above the grade of project manager,
(ix) Lessor's general corporate overhead and administrative expenses, (xii)
reserves for any Expenses, (xiii) costs of correcting defects, including
allowances for same, in the construction of the Building (including latent
defects) or equipment used therein (or the replacement of defective equipment)
and any associated Common Areas or other improvements, (xiv) costs directly
resulting from the negligence or willful misconduct of Lessor, its employees,
agents or contractors, (xv) all costs of initial construction and landscaping
within the Industrial Center, (xvi) costs or fees related to the defense of
Lessor's title to the Building and/or Industrial Center and (xvii) contributions
to charitable or political organizations. Notwithstanding the specific
itemization elsewhere in this Lease as to certain components of Operating
Expenses, Lessor shall not be entitled to recover from all Lessees of the
Industrial Center more than its actual costs and expenses of the Industrial
Center.
INSERT 4.2(D):
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At any time within three (3) months of Lessee's receipt of any statement from
Lessor relating to Operating Expenses, Lessor shall furnish Lessee following
Lessee's written request therefor, invoices and other source documents relating
to Operating Expenses. If it is determined from
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Lessee's audit of such Operating Expenses that Lessee was overcharged by more
than three percent (3%), such overcharge shall entitle Lessee to credit against
its next payment of Operating Expenses the amount of the overcharge and the
costs associated with the audit (and, if such credit occurs following the
expiration of the Term, Lessor shall promptly pay the amount of such credit to
Lessee). If the audit determines that the Lessee was overcharged less than three
percent (3%), such overcharge shall entitle Lessee to credit against its next
payment(s) of Operating Expenses in the amount of the overcharge and Lessee
shall pay for all costs associated with the audit. If the audit shall determine
that Lessee was undercharged for the Operating Expenses, Lessee shall promptly
pay the amount of such undercharge to Lessor and Lessee shall pay for all costs
associated with the audit. Notwithstanding anything to the contrary herein, any
Operating Expenses attributable to a period which falls only partially within
the term of this Lease shall be prorated between Lessor and Lessee so that
Lessee shall pay only that portion thereof which the part of such period within
the Lease term bears to the entire period.
INSERT 6.2(C):
- -------------
Lessor shall indemnify, protect, defend and hold Lessee, its agents, employees
and shareholders harmless from and against any and all damages, liabilities,
judgments, costs, claims, liens, expenses, penalties, loss of permits and
attorneys' and consultants' fees arising out of or involving any Hazardous
Substance existing in, under or about the Premises prior to the Commencement
Date of that certain Lease dated March 8, 1994 (as identified with more
particularity in Paragraph 1 of Addendum #1) or brought onto the Premises by or
for Lessor or by anyone under Lessor's control. No termination, cancellation or
release agreement entered into by Lessor and Lessee shall release Lessor from
its obligations under this Lease with respect to such Hazardous Substances,
unless specifically so agreed by Lessor in writing at the time of such
agreement.
INSERT 6.3:
- ----------
Notwithstanding the foregoing, Lessee's obligations under this Paragraph 6.3
shall not require Lessee to comply with Applicable Requirements with respect to
any Hazardous Substances or environmental conditions on, in, under or about the
Premises, including soil and groundwater conditions, which existed prior to the
Commencement Date of that certain Lease dated March 8, 1994 (as identified with
more particularity in Paragraph 1 of Addendum #1) or which were caused by Lessor
or any other lessee of the Industrial Center or their respective agents,
employees or contractors.
INSERT 7.2:
- ----------
If Lessor fails to perform any of its repair and maintenance obligations under
this Paragraph 7.2 or otherwise as required in this Lease, and such failure
materially affects Lessee's ability to use and occupy the Premises for the
purposes permitted herein, Lessee shall have the right, but not the obligation,
to perform such repairs and/or maintenance if such failure continues for more
than fifteen (15) days after written notice from Lessee; provided, however, that
if the nature of the repairs and/or maintenance to be completed by Lessor is
such that more than fifteen (15) days are required to complete such repairs
and/or maintenance, Lessor shall have such additional time
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as is reasonably necessary to complete such repairs and/or maintenance so long
as Lessor takes appropriate action to commence such repairs and/or maintenance
within such fifteen (15) day period and thereafter diligently pursues such
repairs and/or maintenance to completion. In such event, Lessor shall reimburse
Lessee for the reasonable costs incurred by Lessee to complete such repairs
and/or maintenance within thirty (30) days after receipt of Lessee's written
demand therefore, together with copies of the paid invoices evidencing the costs
incurred by Lessee. Any repairs and/or maintenance permitted herein shall be
performed in a good workmanlike manner by licensed contractors. If Lessor
objects to the repairs and/or maintenance performed or the expenses incurred by
Lessee in performing such work, Lessor shall deliver a written notice of
Lessor's objection to Lessee within thirty (30) days after Lessor's receipt of
Lessee's invoice evidencing the expenses incurred by Lessee. Lessor's notice
shall set forth in reasonable detail Lessor's reasons for its claim that such
repairs and/or maintenance were not required or were not Lessor's obligation in
the terms of this lease and/or the reasons for Lessor's dispute of the expenses
incurred by Lessee in performing such work.
INSERT 7.4(C):
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Any Trade Fixtures and Equipment purchased by Lessee and installed in the
Premises, which Lessee intends to remove from the Premises upon the expiration
or earlier termination of this Lease, shall be separately identified on a list
("Equipment List") to be compiled by Lessee for approval of Lessor, which
approval shall not be unreasonably withheld. The Lease shall be amended to
incorporate the Equipment List upon its completion. The Trade Fixtures and
Equipment on the Equipment List shall be and remain the sole property of Lessee.
Said Fixtures and Equipment may be removed form the Premises by Lessee at any
time during the term of this Lease.
INSERT 10.2:
- -----------
Notwithstanding the foregoing provisions of this Paragraph 10.2 to the contrary,
"real property taxes" shall not include (a) Lessor's federal or state income,
franchise, inheritance or estate taxes or (b) any taxes on Lessor's personal
property not located in or on the Industrial Center or (c) any taxes on the
personal property of other tenants in the Building. In the case of any
assessment which may be evidenced by improvement or other bonds or which may be
paid in annual or other periodic installments, Lessor shall elect to cause such
assessment to be paid in installments over the maximum period permitted by law.
INSERT 12.1(B):
- --------------
(b) Any provision in this Lease to the contrary notwithstanding, Lessor's
consent shall not be required for an assignment or subletting to: (i) any entity
who controls, is controlled by or is under common control with Lessee, (ii) any
successor corporation resulting from a merger, acquisition, consolidation or
reorganization or (iii) to any person or legal entity having a consolidated net
worth of at least $5 million which acquires all the assets of Lessee as a going
concern of the business being conducted on the Premises (each of the foregoing
is hereinafter referred to as a "PERMITTED TRANSFEREE"), provided that before
such assignment shall be
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<PAGE>
effective (i) said Permitted Transferee shall assume, in full, the obligations
of Lessee under this Lease, (ii) Lessor shall be given written notice of such
assignment and assumption and (iii) the use of -the Premises by the Permitted
Transferee shall be for the Permitted Use only. For purposes of this paragraph,
the term "control" means possession, directly or indirectly, of the power to
direct or cause the direction of the management, affairs and policies of anyone,
whether through the ownership of voting securities, by contract or otherwise.
For purposes of this Lease, the sale or transfer of Lessee's capital stock,
including without limitation a private or public offering or a transfer in
connection with a merger, consolidation or reorganization of Lessee, shall not
be deemed an assignment, subletting or other transfer or encumbrance of the
Lease or the Premises. An assignment or subletting to a Permitted Transferee
shall not release the assigning Lessee from any of its duties and obligations
hereunder.
INSERT 12.3(F):
- --------------
(f) The parties agree that fifty percent (50%) of any amounts paid by an
assignee or subtenant in excess of (i) the Basic Rent payable by Lessee
hereunder or, in the case of a sublease of a portion of the Premises, in excess
of the Basic Rent reasonably allocated to such portion plus (ii) Lessee's out-
of-pocket costs for such assignment or subletting including, without limitation,
broker's commissions, attorney's fees, tenant improvements and any payment under
Paragraph 12.2(e), shall be the property of Lessor and such amounts shall, at
Lessee's option, be payable by Lessee or directly to Lessor by the assignee or
subtenant. At Lessor's request, a written agreement shall be entered into by
and between Lessor, Lessee and the proposed assignee or subtenant in a form
reasonably acceptable to each confirming the requirements of this subparagraph.
INSERT 17:
- ---------
Notwithstanding the foregoing, a Lessor whose interest in this Lease or the
Premises is foreclosed by a foreclosure or execution sale shall not be relieved
of liability unless the party who acquires the Lessor's interest agrees to
recognize Lessee's interest and rights in and under this Lease and not to
disturb Lessee's possession hereunder so long as Lessee is not in default beyond
any applicable cure period hereunder.
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ADDENDUM #1
COMPS PLAZA ASSOCIATES, L.P./COMPS.COM, INC.
LEASE DATED JANUARY 31, 1999
1. CANCELLATION OF PRIOR LEASE
That certain Lease dated March 8, 1994 by and between COMPS Plaza Associates,
L.P., (successor in interest to Plaza Associates, a joint venture partnership),
as Landlord and Business Real Estate Information Corp., a California
corporation, as Tenant, as amended by Amendment #One dated May 5, 1994;
Amendment of Lease dated September 15, 1994; Third Amendment to Lease dated
January 3, 1997; Fourth Amendment to Lease dated October 22, 1997; Fifth
Amendment to Lease dated July 29, 1998; Sixth Amendment to Lease dated September
1, 1998 and Seventh Amendment to Lease dated October 5, 1998 shall be canceled
upon the Commencement Date of this Agreement ( March 1, 1999) and neither Tenant
nor Landlord shall have any obligations under the prior lease beyond its
cancellation date.
2. PREMISES
The Premises consist of approximately 33,217 rentable square feet as specified
below and shown on the attached Exhibit "A".
SUITE RENTABLE SQUARE FEET
----- --------------------
100 8,813
101 2,747
111 1,383
116 1,518
120 1,279
200 6,432
212 2,387
222 2,105
225 3,510
235 905
236 2,138
3. EXPANSION SPACE
Lessee shall take possession of each suite specified below immediately upon the
vacating of each individual suite by its respective current tenant. The Base
Rent for each said expansion suite, which Lessee will be obligated to pay
starting on the date Lessee takes possession of each expansion suite, shall be
calculated by using the per square foot rental rate which is in effect at the
time Lessee takes possession of each expansion suite. The Base Rent for the
expansion suites shall be adjusted in accordance with Paragraph 4 of this
Addendum. Lessee shall be entitled to the tenant improvement allowance set
forth in this Paragraph 6 of this Addendum with respect to each expansion suite.
RENTABLE CURRENT TENANT
SUITE SQUARE FEET LEASE EXPIRATION
------ ----------- ----------------
115 2,042 Month to Month (14 day notice)
122 2,105 Month to Month (60 day notice)
214 852 5/31/99
216 769 5/31/99
218 871 3/31/99
220 1,159 3/31/99
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<PAGE>
4. BASE RENT ADJUSTMENT
The monthly Base Rent shall be adjusted upward by three and one half percent (3
1/2%) on each anniversary of the Commencement Date during the five (5) years of
the Original Term.
Upon the Substantial Completion ( as defined in attached Exhibit "B", Tenant
Improvement Agreement) of Tenant Improvements in Suite 236, the then current
monthly Base Rent shall be increased $622.00 per month.
Upon the Commencement Date of each extension of the Term, monthly Base Rent
shall be adjusted to reflect the fair market rental value of such space as
determined according to Paragraph 5 below. Annual adjustments will thereafter
continue at three and one half percent (3 1/2%).
5. DETERMINATION OF FAIR MARKET VALUE
The fair market rental value of the Premises for purposes of the adjustment set
forth above shall be determined in accordance with the following procedure:
No later than sixty (60) days prior to the Adjustment Date, Lessor and Lessee
will attempt to agree on a fair market rental for the Premises. If Lessor and
Lessee fail to agree on the fair market rental value of the Premises by thirty
(30) days before the Adjustment Date, Lessor and Lessee shall each select,
within ten (10) days after such failure, an appraiser who is a member of a
nationally recognized society of appraisers (MAI) to render an opinion on the
fair market rental value of the Premises and each party shall notify the other,
in writing, of the name and qualifications of the appraiser selected. If either
party fails to designate an appraiser within the time required, the
determination of the fair market rental value made by the appraiser selected in
a timely manner shall be conclusively the fair market rental value for the
Premises and the rental for the period in question, subject to the ten percent
(10%) adjustment limitation set forth above.
The appraisers selected by the parties shall submit their opinions of the fair
market rental value of the Premises to both parties, in writing, within fifteen
(15) days after their selection. If the difference between the opinions of the
two (2) appraisers is ten percent (10%), the two appraisers shall, within ten
(10) days after the date that the later opinion of value is rendered to the
parties, designate a third similarly qualified appraiser. The sole
responsibility of the third appraiser shall be to determine which of the
opinions presented by the first two appraisers is most accurate. The third
appraiser shall have no right to propose a middle ground or any modification of
either of the opinions of the first two appraisers. The third appraiser's
choice shall be submitted to the parties within ten (10) days after his or her
designation. Such determination shall bind both the parties and shall establish
the fair market rental value of the Premises. Each party shall pay the fees and
expenses of the appraisers selected by it, and they shall pay equal shares of
the fees and expenses of the third appraiser.
If the rent for a particular period has not yet been established as herein above
provided at the commencement date of that period, Lessee shall continue to pay
the rent paid during the year immediately preceding the period until the rent
for the period in question has been established. Lessee shall (i) pay any
additional amount of Rent that may be due within fifteen (15) days after the
Rent for the period in question has been determined or (ii) receive a credit for
any over-payment to its next Rent payment.
"Fair market rental value" for the purpose of this Agreement shall mean the then
prevailing rent for properties (a.) in the general geographic vicinity as; (b.)
comparable in size and use to; (c.) improved to similar standards as; and (d.)
leased similarly to the Premises.
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<PAGE>
6. TENANT IMPROVEMENTS
At the inception of this Lease, Lessor shall at its sole cost and expense paint
and clean the carpet in the Premises where needed as reasonably agreed by Lessee
and Lessor.
Lessor shall grant Lessee an allowance of $2.00 per rentable square foot for
tenant improvements made to previously improved expansion space and $22.00 per
rentable square foot for tenant improvements made to Suite 236 (which has not
previously been improved) as it is expended by Lessee. The allowance may not be
accumulated to be spent disproportionately amongst the suites.
All tenant improvements shall be made pursuant to the terms of the Tenant
Improvement Agreement attached hereto as Exhibit "B" (the "T.I. Agreement");
provided, however, that the parties may amend such T.I. Agreement to the extent
the anticipated improvements are to be made to space currently occupied by
Lessee. Lessor and Lessee agree to work together in good faith to ensure that
any tenant improvements to be made by Lessor do not unreasonably disturb
Lessee's business operations in the premises or access thereto.
7. RIGHT OF FIRST REFUSAL
Provided Lessee is not in default under all or any of the terms and conditions
of the Lease beyond any applicable cure period, Lessor agrees that it will not
enter into a new lease for any space in the building not occupied by Lessee
without first notifying Lessee in writing. If Lessee, within ten (10) business
days after receipt of Lessor's written notice, indicates and delivers in writing
to Lessor its agreement to lease such space, said space shall be leased to
Lessee for the same rate as that then payable by Lessee per square foot in
accordance with the Base Rent schedule of this Lease.
8. OPERATING EXPENSES
Notwithstanding anything to contrary in this Lease Operating Expenses for the
1999 calendar year will be billed at $.365 per rentable square foot per month
(based on 1998 actual Operating Expenses) and shall be due and payable on the
first day of each month commencing upon the Commencement Date of the Lease.
Operating Expenses will be increased no more than three and one half percent
(31/2 %) per year on a cumulative basis effective February 1 of each year of
the Term and any extension(s) thereof.
Lessee's Share of electricity for all suites within the Building is 70.6% (Suite
228 is separately metered and the current tenant pays SDG&E directly for its
suite electrical usage), Lessee's Share for all other Operating Expenses is
63.4%. Lessee's Share will ultimately be adjusted to 87.2% for suite electricity
and 78.2% for all other Operating Expenses when Lessee has taken possession of
all expansion space specified in Paragraph 3 of this Addendum.
9. RELOCATION OF TENANT IN SUITE 228
Lessor acknowledges that Lessee desires to occupy Suite 228 which is currently
occupied by Nowak-Meulmester. Lessor agrees to cooperate with Lessee to
relocate or buy Nowak-Meulmester out of its remaining lease term and will
diligently negotiate with Nowak-Meulmester in an effort to have them vacate
their premises so that Lessee may occupy Suite 228. Lessee shall cooperate with
Lessor in connection with such negotiations, participating in them where
reasonably necessary. Lessor's contribution toward actual costs of such
relocation or buy out shall not exceed $34,000.00.
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<PAGE>
10. AFTER HOURS AIR CONDITIONING/HEATING/VENTILATION
Lessor shall furnish to the Premises ( as part of the Operating Expenses to be
reimbursed by Lessee to Lessor) heating, ventilation and air conditioning
("HVAC") during normal business hours which shall mean between the hours of 7:00
a.m. to 6:00 p.m., Monday through Friday, excluding Federal holidays. Should
Lessee request HVAC services outside normal business hours, Lessor shall use
reasonable efforts to provide such services and Lessee shall pay, as additional
rent, $15.00 per hour for each hour of service requested.
11. PARKING
Lessee shall be entitled to the use, on a nonexclusive and unreserved basis, of
one hundred twelve (112) parking spaces in the Building parking lot. In
addition, one space shall be designated for Lessee's "Employee of the Month" in
a location to be determined by Lessor in its sole discretion. Lessee shall pay
all costs incurred with respect to any sign or pavement stenciling to identify
the "Employee of the Month" parking space.
12. OPTION TO EXTEND
Lessee may extend the Term of the Lease for five (5) terms of two (2) years
each. The Term shall automatically extend for two (2) years upon the expiration
of the preceding Term unless Lessee provides to Lessor a six (6) month prior
written notice that states that Lessee will not extend the Term. Provided,
however, if Lessee is in default beyond any applicable cure period on the date
the extended term is to commence, at Lessor's option, the Lease shall expire at
the end of the then current Term. The options granted to Lessee in the Lease
are personal to Lessee and may not be exercised or be assigned, voluntarily or
involuntarily, by or to any person or entity other than Lessee or Permitted
Transferee. Lessee's Base Rent during said extended Terms shall be the then
"market rent" for the Premises as determined pursuant to Paragraph 5 of this
Addendum. Lessor and Lessee shall promptly execute an addendum to the Lease
memorializing the extension of the Terms and the Base Rent. Lessee's occupancy
during such extended Term shall be governed by all of the other terms,
conditions, covenants and provisions of the Lease, and all references to the
Term shall mean the Term as extended.
LESSOR: LESSEE:
COMPS Plaza Associates, L.P. COMPS.COM, Inc.,
By: Alden Properties, Inc., a Delaware corporation
a California corporation
Signature: /s/ CHRISTOPHER S. McKELLAR Signature /s/ KAREN GOODRUM
---------------------------- -----------------------
Christopher S. McKellar Karen Goodrum
Vice President Chief Financial Officer
Date: 1/31/99 Date: 1/31/99
-------------------------------- ---------------------------
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<PAGE>
EXHIBIT 10.15
FORM OF EMPLOYMENT AND
INCENTIVE COMPENSATION AGREEMENT
This EMPLOYMENT AND INCENTIVE COMPENSATION AGREEMENT ("Agreement") is made
effective as of this _____ day of ________ 1994 (the "Effective Date"), between
COMPS, InfoSystems, Inc., a Delaware corporation, hereinafter referred to as
"COMPS," and _________________, hereinafter referred to as "Employee."
IN CONSIDERATION of the promises and of the mutual covenants contained
herein, and for other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto do hereby agree as follows:
1. Employment. COMPS hereby affirms its employment of Employee, and
----------
Employee hereby affirms such employment, upon the terms and conditions set forth
herein.
2. Duties. Employee is engaged in the position of
------
_________________________________ of COMPS. Employee shall faithfully and
diligently perform the duties customarily performed by persons in the position
for which Employee is engaged, together with such other duties as ________
and/or the Board of Directors of COMPS shall designate from time to time.
Specifically, but not by way of limitation, Employee shall perform those duties
set forth on Exhibit A, attached hereto and incorporated herein by reference. As
part of Employee's duties, Employee acknowledges and understands that: (a)
Employee will devote utmost knowledge and best skill to the performance of
his/her duties; (b) Employee shall devote his/her full business time to the
rendition of such services, subject to absences for customary vacations and for
temporary illness; and (c) Employee will not engage in any other gainful
occupation which requires his/her personal attention without prior consent of
_______, with the exception that Employee may personally trade in stock, bonds,
securities, commodities or real estate investments for his/her own benefit.
Employee agrees to submit to periodic physical examinations for any valid COMPS
purpose as determined in the sole discretion of the Board of Directors of COMPS.
3. Compensation.
------------
3.1 Base Salary. As compensation for the proper and satisfactory
-----------
performance of all duties to be performed by
<PAGE>
employee hereunder, COMPS shall pay to Employee a salary of ____________
per month, for each whole month during the employment term (as defined in
Section 4 below) of this Agreement, payable in arrears in equal, semi-
monthly installments ("Base Salary"). The Base Salary may be increased or
decreased from time to time, at the sole discretion of COMPS. In the event
of such increase, COMPS shall notify Employee of the amount by a letter to
Employee signed by the Chief Executive Officer of COMPS. Any increase in
the Base Salary shall be effective for the remainder of the Term of this
Agreement.
3.2 Customary Fringe Benefits. Employee shall be entitled to such
-------------------------
fringe benefits as COMPS customarily makes available to executive employees
of COMPS ("Fringe Benefits"). Such Fringe Benefits may include vacation
leave, sick leave, and health insurance coverage. COMPS reserves the right
to change the Fringe Benefits on a prospective basis, at any time,
effective upon delivery of written notice to Employee, and in all events
the Fringe Benefits shall terminate upon termination of employment.
3.3 Incentive Compensation and Stock Option Plan. Employee shall
--------------------------------------------
receive such rights to which Employee may become entitled under the terms
of the COMPS Stock Option Plan. Employee shall also receive the Incentive
Compensation outlined in Section 7 hereof.
3.4 Withholding. All payments of compensation under this Agreement,
-----------
in whatever form, are subject to any required deductions for state and
federal withholding tax, Social Security and all other employee taxes and
payroll deductions ("Base Salary").
4. Term. The employment term pursuant to this Agreement shall commence on
----
the Effective Date set forth above, and shall remain in effect until
__________________ (the "Expiration Date"), unless Employee's employment is
terminated sooner in accordance with the provisions of Section 5 below. If the
Agreement is not terminated pursuant to Section 5, the Agreement shall continue
from year to year after ________________, unless either party to the Agreement
shall give written notice to the other of a desire to change, amend, modify or
terminate the Agreement, at least 30 days prior to ______________ or each
succeeding ____________.
2
<PAGE>
5. Termination. This Agreement and the employment of Employee shall
-----------
terminate prior to its expiration date under the following conditions:
5.1 Death. The death of Employee;
-----
5.2 Disability. The permanent disability of Employee (permanent
----------
disability shall exist when Employee suffers from a condition of mind or
body that indefinitely prevents Employee from satisfactory further
performance of his/her duties, even with reasonable accommodation);
5.3 Termination for Good Cause. Upon receipt by Employee of written
--------------------------
notice from Employer that Employee's employment is being terminated for
"good cause." The Employer has "good cause" to terminate Employee's
employment if Employee engages in the following:
5.3.1 Any wilful misappropriation, destruction, or damage to
property or funds belonging to COMPS, or its employees, clients or
visitors.
5.3.2 Sexual, verbal, or physical harassment or discrimination
towards any employee, client, or visitor of COMPS.
5.3.3 Internal or external dishonesty, or any other act of
deceit, in connection with COMPS' business.
5.3.4 Consuming or being under the influence of alcohol or
illegal drugs while at work.
5.3.5 Commission of a felony which results in conviction.
5.3.6 Breach of the provisions of Sections 9, 10 or 11 hereof.
5.3.7 Competition with COMPS (as defined in Section 12) by
Employee.
5.3.8 Employee fails or refuses to faithfully and diligently
perform any of his/her customary or assigned duties which failure or
refusal is not cured within 30 days after written notice thereof is
given to Employee.
3
<PAGE>
5.3.9 Employee fails or refuses to comply with the policies,
standards and regulations of the Employer which from time to time may be
established, which failure or refusal is not cured within 15 days after
written notice thereof is given to Employee.
5.4 Termination at Will. Although COMPS and Employee anticipate an
-------------------
employment relationship through the end of the effective date, COMPS may
terminate the employment of Employee at any time, with or without cause, upon
written notice delivered to Employee that Employee's employment is being
terminated for "other than good cause."
5.5 Employee Resignation. Employee may resign at any time during the
--------------------
term of this Agreement by providing 60 days' advance notice of that
resignation. Employee will continue to receive his/her Base Salary through
that notice period.
6. Compensation Upon Termination.
-----------------------------
6.1 Payment of Compensation Upon Termination for Cause. In the event
--------------------------------------------------
Employee is terminated for good cause, as set forth in Section 5.3, he/she
shall receive notice of termination that day and shall be entitled only to
the compensation set forth as Base Salary herein, prorated through the date
of said notice. When Employee is terminated for good cause as defined in
Section 5.3, Employee is entitled to no other severance compensation arising
out of this Agreement and out of his/her employment relationship with COMPS,
and Employee shall permanently and absolutely forfeit all rights to all other
benefits otherwise accruing by reason of Employee's employment by COMPS.
Without limiting the generality of the foregoing, Employee shall, upon
termination for good cause, permanently and absolutely forfeit all rights to
incentive compensation, as described in Section 7 hereof, and all rights
under the Stock Option Plans, as set forth in Exhibit B.
6.2 Payment of Compensation Upon Termination Other Than for Good Cause.
------------------------------------------------------------------
In the event Employee's employment is terminated for other than good cause,
Employee shall receive Base Salary continuation in an amount described below,
and certain partial incentive bonus, but, only if Employee executes a general
release of claims in a form satisfactory to COMPS, releasing any and all
claims Employee has against COMPS arising out of his/her
4
<PAGE>
employment or the termination of said employment. Employee is not entitled to
any Base Salary continuation pursuant to this Section unless he/she signs the
general release described above. The Base Salary continuation described in
this Section amounts to four months' Base Salary continuation if Employee's
employment terminates other than for good cause prior to November 1, 1995,
five months' Base Salary continuation if Employee's employment is terminated
other than for good cause between November 1, 1995 and October 31, 1996, and
six months' Base Salary continuation if Employee's employment terminates
other than for good cause after October 31, 1996. The maximum Base Salary
continuation Employee may receive under this Section is six months' salary.
Employee shall also be entitled to the partial Incentive Bonus under Section
7.3 (treating, for purposes of Section 7.3, Employee as "actively employed"
for the Base Salary continuation period). Employee is entitled to no other
Base Salary continuation when his/her employment is terminated for other than
good cause, pursuant to Section 5.4.
7. Incentive Compensation. In addition to the Base Salary, within thirty (30)
----------------------
days after issuance of quarterly accrual basis financial statements, COMPS shall
pay to Employee an incentive bonus (the "Incentive Bonus") for each fiscal
quarter the last day of which falls within the employment term pursuant to this
Agreement. Notwithstanding anything herein to the contrary, however, such
Incentive Bonus shall only be paid when COMPS' cash flow permits such payment.
The Incentive Bonus shall be computed in accordance with any bonus plan
established by the Compensation Committee for each quarter. The Compensation
Committee may modify or terminate any Incentive Bonus Program in which Employee
is a participant at any time upon written notice to Employee.
7.1 Termination. Employee shall not be entitled to any Incentive Bonus if
-----------
Employee's active employment is for less than the full fiscal quarter in
question, and Employee shall receive no Incentive Bonus for any partial
fiscal quarter of employment unless Employee's employment hereunder is
terminated by reason of Employee's death or disability, or pursuant to
Section 5.4. In any such instance, COMPS shall pay Employee or Employee's
estate an Incentive Bonus for the portion of the fiscal quarter during which
Employee was actively employed by COMPS. Employee's partial Incentive Bonus
shall be determined by multiplying the Incentive Bonus which would have been
paid
5
<PAGE>
to Employee pursuant to this Section 5 if Employee had remained employed by
COMPS at the end of the fiscal quarter by a fraction, the numerator of which
is the number of complete months of the fiscal year during which Employee was
actively employed by COMPS and the denominator of which is twelve (12).
8. Arbitration/Sole Remedy for Breach of Agreement. Except as provided in
-----------------------------------------------
Section 9, in the event of any dispute between Employer and Employee concerning
any aspect of the employment relationship, including any disputes upon
termination, all such disputes shall be resolved by binding arbitration before a
single neutral arbitrator. The arbitrator shall be selected from the American
Arbitration Association through its procedures. All rules governing the
arbitration shall be the rules as set forth by the American Arbitration
Association. The arbitrator is bound to rule only on whether or not there has
been a violation of the terms of this Agreement and to render an award, if any,
that is consistent with the terms of this Agreement. Neither party to this
Agreement is entitled to any legal recourse or rights or remedies other than
those provided within this Agreement. The Employee's sole remedies for claims
arising out of his employment, with the exception of Workers' Compensation
remedies, are those set forth in this Agreement. In the event of a termination
of employment, the arbitrator is limited to a determination of whether or not
the discharge was for good cause or for other than good cause. If an
arbitration is brought for something other than a termination of employment, the
arbitrator is limited to award contract damages. The arbitrator may apportion
the costs of the arbitration, including arbitrator's fees, among the parties,
but shall have no power to award attorneys' fees. Each party shall be
responsible for its own attorneys' fees.
9. Trade Secrets. Employee agrees that he/she has also signed and will abide
-------------
by the terms of COMPS' Employee Agreement Concerning Confidentiality, Trade
Secrets, Outside Employment and Solicitation of BREIC Employees as a condition
of Employee's employment.
10. No Adverse Use. Employee will not at any time use COMPS' Trade Secrets or
--------------
Inventions in any manner which may directly or indirectly have an adverse effect
upon COMPS' business, nor will Employee perform any acts which would tend to
reduce COMPS' proprietary value in Trade Secrets or Inventions.
11. Return of Materials at Termination. In the event of any termination of
----------------------------------
Employee's employment or upon the request of
6
<PAGE>
COMPS at any time, Employee or Employee's representative will promptly deliver
to COMPS all materials, property, documents, data, and other information
belonging to COMPS or pertaining to Trade Secrets or Inventions. Employee shall
not take any materials, property, documents or other information, or any
reproduction or excerpt thereof, belonging to COMPS or containing or pertaining
to any Trade Secrets or Inventions.
12. Covenant Not to Compete. Employee agrees that, during Employee's
-----------------------
employment, and during any period prior to which payments to Employee under
Sections 5 and 6 and Exhibit B are completed, Employee will not directly or
indirectly compete with COMPS in any way, or prepare to compete or assist any
other person or entity to compete with COMPS in any way, and that Employee will
not act as an officer, director, employee, consultant, more than three percent
(3%) shareholder, significant lender, or agent of any other entity which is
engaged in any business in California, Arizona or Nevada of the same nature as,
or in competition with, the business in which COMPS is now engaged or in which
COMPS becomes engaged during the term of Employee's employment.
13. General Provisions.
------------------
13.1 Payments. All payments due pursuant to the terms of this Agreement
--------
shall be delivered in person, or by first class mail, postage prepaid to the
last known address of the other party. Payments may be in lawful money of the
United States, or may be made by check, draft or warrant of the paying
entity.
13.2 Notices. Any notices to be given hereunder by either party to the
-------
other may be effected by either personal delivery in writing, or by mail,
registered or certified, postage prepaid with a return receipt requested.
Mailed notices shall be addressed to the other party to the address appearing
beneath the party's signature on this Agreement, but each party may change
its address by written notice in accordance with this paragraph. Notices
delivered personally shall be deemed communicated as of the date of delivery.
13.3 Complete Agreement. Employee acknowledges receipt of this
------------------
Agreement and agrees that this Agreement and COMPS' Employee Agreement
Concerning Confidentiality, Trade Secrets, Outside Employment and
Solicitation of BREIC Employees represent the entire Agreement with Employer
concerning the subject matter hereof. These Agreements
7
<PAGE>
supersede any and all other Agreements, either oral or in writing, between
the parties hereto with respect to the matters discussed herein of Employee
and contain all of the covenants and agreements between the parties with
respect to the terms and conditions of Employee's employment. Employee hereby
waives any rights previously award to Employee under any previous employment
agreements, if any, including, without limitation, any rights under any: a)
Phantom Stock Option Award Program; b) Incentive Compensation/Target Bonus
Program; and/or c) Stock Option Plan. Each party to these Agreements
acknowledges that no representations, inducements, promises or agreements,
orally or otherwise, have been made by any party or anyone acting on behalf
of any party which are not embodied herein.
13.4 Severability. If any provision of this Agreement is held by a
------------
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way.
13.5 Other Benefits. Any amounts payable under this Agreement, other
--------------
than Base Salary, shall not be deemed salary or other compensation for the
purpose of computing benefits under any pension plan or other arrangement of
COMPS for the benefit of its employees.
13.6 No Waiver. Either party's failure to enforce any provision of this
---------
Agreement shall not in any way be construed as a waiver of any such provision,
or prevent that party from thereafter enforcing each and every other provision
of this Agreement.
13.7 Successors and Assigns. The rights and obligations of COMPS under
----------------------
this agreement shall enure to the benefit of and shall be binding upon the
successors and assigns of COMPS. Employee shall not be entitled to assign any of
his/her rights or obligations under this agreement.
13.8 Applicable Law. This agreement shall be interpreted, construed,
--------------
governed and enforced in accordance with the laws of the State of California.
13.9 Amendments. No amendment or modification of the terms or
----------
conditions of this agreement shall be valid unless in writing and signed by the
parties thereto.
8
<PAGE>
IN WITNESS THEREOF, the parties hereto execute this Agreement, effective as
of the date first above written.
EMPLOYEE: COMPS InfoSystems, Inc., a
California corporation
____________________________ By:___________________________
Print Name and Address Its:__________________________
____________________________
____________________________
9
<PAGE>
Exhibit 10.16
EXECUTIVE EMPLOYMENT AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is made effective as of
this 14th day of October, 1994 (the "Effective Date"), between COMPS,
InfoSystems, Inc., a Delaware corporation, hereinafter referred to as "COMPS,"
and Chris Crane, hereinafter referred to as "Employee."
IN CONSIDERATION of the promises and of the mutual covenants contained
herein, and for other good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto do hereby agree as follows:
1. Employment. COMPS hereby affirms its employment of Employee, and
----------
Employee hereby affirms such employment, upon the terms and conditions set forth
herein.
2. Duties. Employee is engaged in the position of President and Chief
------
Executive Officer of COMPS. Employee shall faithfully and diligently perform
the duties customarily performed by persons in the position for which Employee
is engaged, together with such other duties the Board of Directors of COMPS
shall designate from time to time. As part of Employee's duties, Employee
acknowledges and understands that: (a) Employee will devote utmost knowledge and
best skill to the performance of his duties; (b) Employee shall devote his full
business time to the rendition of such services, subject to absences for
customary vacations and for temporary illness; and (c) Employee will not engage
in any other gainful occupation which requires his personal attention without
prior consent of the Board of Directors with the exceptions that Employee may
personally trade in stocks, bonds, securities, commodities or real estate
investments for his own benefit, Employee may continue in his capacity as
President of the corporate general partnership that owns the building that COMPS
leases, and Employee may continue in his capacity as a Director on the Board of
Directors for Beeba's Creations, Inc. Employee agrees to submit to periodic
physical examinations for any valid COMPS purpose as determined in the sole
discretion of the Board of Directors of COMPS.
3. Compensation.
------------
3.1 Base Salary. As compensation for the proper and satisfactory
-----------
performance of all duties to be performed by employee hereunder, COMPS
shall pay to Employee a salary of $12,500.00 per month, for each whole
month during the employment term (as defined in Section 4 below) of this
Agreement, payable in arrears in equal, semi-monthly installments ("Base
Salary"). The compensation Committee of the Board of Directors will review
Employee's Base Salary each year to determine if a change in Employee's
Base Salary will occur.
3.2 Bonus. Before the commencement of each fiscal year, the Board of
-----
Directors and Employee shall agree upon objectives for Employee to meet
that year. Those objectives are for the purpose of determining bonus
compensation to Employee. The mutually agreed to objectives, if met, will
result in a target bonus to Employee of $50,000.00 for fiscal year 1995.
The Compensation Committee of the Board of Directors will review Employee's
Bonus each year to determine if a change in Employee's Bonus will occur.
CAC
<PAGE>
3.3 Customary Fringe Benefits. Employee shall be entitled to such
-------------------------
fringe benefits as COMPS customarily makes available to executive employees
of COMPS ("Fringe Benefits"). Such Fringe Benefits may include vacation
leave, sick leave, and health insurance coverage. COMPS reserves the right
to change the Fringe Benefits on a prospective basis, at any time,
effective upon delivery of written notice to Employee, and in all events
the Fringe Benefits shall terminate upon termination of employment.
4. Term. The employment term pursuant to this Agreement shall commence on
----
the Effective Date set forth above, and shall remain in effect until October 15,
1997 (the "Expiration Date") , unless Employee's employment is terminated sooner
in accordance with the provisions of Section 5 below. If the Agreement is not
terminated pursuant to Section 5, the Agreement shall continue from year to year
after October 15, 1997, unless either party to the Agreement shall give written
notice to the other of a desire to change, amend, modify or terminate the
Agreement, at least 30 days prior to October 15, 1997, or each succeeding
October 15.
5. Termination. This Agreement and the employment of Employee shall
-----------
terminate prior to its expiration date under the following conditions:
5.1 Death. The death of Employee.
-----
5.2 Disability. The permanent disability of Employee (permanent
----------
disability shall exist when Employee suffers from a condition of mind or
body that indefinitely prevents Employee from satisfactory further
performance of his duties, even with reasonable accommodation, for a
cumulative period of 120 business days in any consecutive twelve month
period following the commence of employment.
5.3 Termination for Good Cause. Upon receipt by Employee of written
--------------------------
notice from Employer that Employee's employment is being terminated for
"good cause." The Employer has "good cause" to terminate Employee's
employment if Employee engages in the following:
5.3.1 Any willful misappropriation of property or funds
belonging to COMPS, or its employees, clients, or visitors.
5.3.2 Sexual harassment or discrimination towards any employee,
client, or visitor of COMPS.
5.3.3 Consuming or being under the influence of alcohol or
illegal drugs while at work.
5.3.4 Commission of a felony which results in conviction.
5.3.5 Breach of any of the provisions of Sections 8 or 9 hereof.
5.3.6 Competition with COMPS (as defined in Section 11) by
Employee.
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CAC
<PAGE>
5.3.7 Employee fails or refuses to faithfully and diligently
perform the usual and customary duties of his employment which failure
or refusal is not cured within 30 days after written notice thereof is
given to Employee.
5.3.8 Employee fails or refuses to comply with the policies,
standards and regulations of the Employer which from time to time may
be established, which failure or refusal is not cured within 15 days
after written notice thereof is given to Employee.
5.4 Resignation. At any time during the term of this Agreement,
-----------
Employee may provide notice of his intent to resign.
5.5 Termination For Other Than Good Cause. COMPS may terminate
-------------------------------------
Employee's employment at any time without good cause, upon written notice
delivered to Employee that Employee's employment is being terminated for
"other than good cause." It shall be deemed a termination by COMPS without
good cause under this Paragraph 5.5 if Employee resigns within 30 days of
having been removed from the position described in Paragraph 2 without his
consent.
6. Compensation Upon Termination.
-----------------------------
6.1 Payment of Compensation Upon Termination For Good Cause. In the
-------------------------------------------------------
event Employee is terminated for good cause, as set forth in Section 5.3,
he/she shall receive two weeks' notice that his employment is terminated
and Employee shall be entitled only to the compensation set forth as base
salary herein, prorated through the date of said notice. When Employee is
terminated for good cause as defined in Section 5.3, Employee is entitled
to no other severance compensation arising out of this Agreement and out of
his employment relationship with COMPS, and Employee shall permanently and
absolutely forfeit all rights to all other benefits otherwise accruing by
reason of Employee's employment by COMPS.
6.2 Payment of Compensation Upon Termination Other Than For Good
------------------------------------------------------------
Cause. In the event Employee's employment is terminated for other than
-----
good cause, Employee shall receive Base Salary continuation in an amount
described below, only if Employee executes a general release of claims in a
form acceptable to COMPS, releasing any and all claims Employee has against
COMPS arising out of his employment or the termination of said employment.
Employee is not entitled to any Base Salary continuation pursuant to this
Section unless he/she signs the general release described above. The Base
Salary continuation described in this Section amounts to six months' base
salary continuation at his then current Base Salary level if Employee's
employment terminates for other than for good cause prior to November 1,
1995, seven months' Base Salary continuation if Employee's employment is
terminated for other than good cause between November 1, 1995 and October
31, 1996, and eight months' Base Salary continuation at his then current
Base Salary level if Employee's employment is terminated other than for
good cause after October 31, 1996. Employee shall also be entitled to
receive a pro rata share of his target bonus for that year if he is
terminated for other than good cause. For instance, if the target bonus
that year was $50,000.00, and
3
CAC
<PAGE>
Employee was terminated for other than good cause after three months, he
would receive a $12,500.00 bonus upon termination. Employee is entitled to
no other compensation when his employment is terminated for other than good
cause.
7. Arbitration/Sole Remedy for Breach of Agreement. Except as provided in
-----------------------------------------------
Section 8, in the event of any dispute between Employer and Employee concerning
any aspect of the employment relationship, including any disputes upon
termination, all such disputes shall be resolved by binding arbitration before a
single neutral arbitrator. The arbitrator shall be selected from the American
Arbitration Association through its procedures. All rules governing the
arbitration shall be the rules as set forth by the American Arbitration
Association. The arbitrator is bound to rule only on whether or not there has
been a violation of the terms of this Agreement and to render an award, if any,
that is consistent with the terms of this Agreement. Neither party to this
Agreement is entitled to any legal recourse or rights or remedies other than
those provided within this Agreement. The Employee's sole remedies for claims
arising out of his employment, with the exception of Workers' Compensation
remedies, are those set forth in this Agreement. In the event of a termination
of employment, the arbitrator is limited to a determination of whether or not
the discharge was for good cause or for other than good cause. If an
arbitration is brought for something other than a termination of employment, the
arbitrator is limited to award contract damages. The arbitrator may apportion
the costs of the arbitration, including arbitrator's fees, among the parties,
but shall have no power `to award attorneys' fees. Each party shall be
responsible for its own attorneys' fees.
8. Trade Secrets. As used in this Section 8, "Trade Secrets" shall mean,
-------------
without limitation, any document or information relating to COMPS' products,
processes or services, including documents and information relating to
Inventions, and to the research, development, engineering or manufacture of
Inventions, and to COMPS, purchasing, customer or supplier lists, which
documents or information have been disclosed to Employee or become known to
Employee as a consequence (in whole or in part) of or through Employee's
employment by COMPS (including documents, information or Inventions conceived,
originated, discovered or developed by Employee), which is not generally known
in the relevant trade or industry. "Inventions" shall mean discoveries,
concepts, and ideas, whether patentable or copyrightable or not, including but
not limited to processes, methods, formulas, techniques, devices, designs,
programs (including computer programs), computer graphics, apparatus, products,
as well as improvements thereof or know-how related thereto, relating to any
present or anticipated business or activities of COMPS.
8.1 Acknowledgement of Proprietary Interest. Employee recognizes the
---------------------------------------
proprietary interest of COMPS in all Trade Secrets. Employee acknowledges
and agrees that any and all Trade Secrets, whether developed by Employee
alone or in conjunction with others or otherwise, shall be and are the
property of COMPS.
8.2 Covenant Not to Divulge Trade Secrets. Employee acknowledges and
-------------------------------------
agrees that COMPS is entitled to prevent the disclosure of Trade Secrets.
As a portion of the consideration for the employment of Employee and for
the compensation being paid to Employee by COMPS, Employee agrees at all
times during the term of the employment by COMPS and thereafter to hold in
strictest confidence, and not to use, disclose or allow to be disclosed to
any person, firm, or corporation, Trade Secrets,
4
CAC
<PAGE>
including Trade Secrets developed by Employee, other than disclosures to
persons engaged by COMPS for the purpose of furthering the business of
COMPS, or other than use in the pursuit of the business of COMPS.
Specifically, Employee may disclose trade secrets to prospective alliance
partners or prospective clients of COMPS. Employee shall obtain
confidentiality, trade secret and/or proprietary information agreements
from those prospective alliance partners or clients, before he discloses
any trade secrets.
8.3 Confidential Information of Others. Employee represents and
----------------------------------
warrants that if Employee has any confidential information belonging to
others, Employee will not use or disclose to COMPS any such information or
documents. Employee represents that his employment with COMPS will not
require him to violate any obligation to or confidence with any other
party.
8.4 Injunctive Relief. Employee agrees that the breach of any
-----------------
provision of Sections 8, 9 and/or 11 of this Agreement will cause COMPS
irreparable injury and damage. Consequently, Employee agrees that because
remedies at law may be inadequate to protect COMPS against breach of these
provisions or this Agreement, COMPS shall be entitled, in addition to all
other remedies available to it, to the granting of an injunction, including
ex parte temporary relief, restraining Employee from violating Sections 8,
9 and/or 11 of this Agreement. The parties agree that a breach of Sections
8, 9 and/or 11 of this Agreement by Employee, which is alleged in a
verified complaint or affidavit filed by COMPS with a proper court, shall
entitle COMPS to the immediate issuance, without notice or hearing, of a
temporary restraining order precluding the continuance of the conduct in
question until a hearing on a preliminary injunction. A preliminary
injunction may be issued by the court, without bond, upon a proper showing
of: a) the breach; b) the confidential nature of the information, which may
be shown by affidavit and in-camera to the court; c) ownership of the
information by COMPS; and d) that the confidential or proprietary
information was furnished to Employee or that Employee became aware of that
information during his employment with COMPS.
9. No Adverse Use. Employee will not at any time use COMPS' Trade Secrets
--------------
or Inventions in any manner which may directly or indirectly have an adverse
effect upon COMPS' business, nor will Employee perform any acts which would tend
to reduce COMPS' proprietary value in Trade Secrets or Inventions.
10. Return of Materials at Termination. In the event of any termination
----------------------------------
of Employee's employment, Employee or Employee's representative will promptly
deliver to COMPS all materials, property, documents, data, and other information
belonging to COMPS or pertaining to Trade Secrets or Inventions. Employee shall
not take any materials, property, documents or other information, or any
reproduction or excerpt thereof, belonging to COMPS or containing or pertaining
to any Trade Secrets or Inventions.
11. Covenant Not to Compete. Employee agrees that, during Employee's
-----------------------
employment, and during any period prior to which payments to Employee under
Sections 5 and 6 and Exhibit B are completed, Employee will not directly or
indirectly compete with COMPS in any way, or prepare to compete or assist any
other person or entity to compete with COMPS in any way, and that Employee will
not act as an officer, director, employee, consultant, more than
5
CAC
<PAGE>
three percent (3%) shareholder, significant lender, or agent of any other entity
which is engaged in any business in California, Arizona, or Nevada of the same
nature as, or in competition with, the business in which COMPS is now engaged or
in which COMPS becomes engaged during the term of Employee's employment.
12. General Provisions.
------------------
12.1 Payments. All payments due pursuant to the terms of this
--------
Agreement shall be delivered in person, or by first class mail, postage
prepaid to the last known address of the other party. Payments may be in
lawful money of the United States, or may be made by check, draft or
warrant of the paying entity.
12.2 Notices. Any notices to be given hereunder by either party to
-------
the other may be effected by either personal delivery in writing, or by
mail, registered or certified, postage prepaid with a return receipt
requested. Mailed notices shall be addressed to the other party to the
address appearing beneath the party's signature on this Agreement, but each
party may change its address by written notice in accordance with this
paragraph. Notices delivered personally shall be deemed communicated as of
the date of delivery.
12.3 Complete Agreement. Employee acknowledges receipt of this
------------------
Agreement and COMPS' Employee Agreement Concerning Confidentiality, Trade
Secrets, Outside Employment and Solicitation of BREIC Employees and agrees
that these Agreements represent the entire Agreement with Employer
concerning the subject matter hereof. These Agreements supersede any and
all other Agreements, either oral or in writing, between the parties hereto
with respect to the matters discussed herein of Employee and contain all of
the covenants and agreements between the parties with respect to the terms
and conditions of Employee's employment. Each party to these Agreements
acknowledges that no representations, inducements, promises or agreements,
orally or otherwise, have been made by any party or anyone acting on behalf
of any party which are not embodied herein.
12.4 Severability. If any provision of this agreement is held by a
------------
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall nevertheless continue in full force without
being impaired or invalidated in any way.
12.5 Other Benefits. Any amounts payable under this Agreement, other
--------------
than Base Salary, shall not be deemed salary or other compensation for the
purpose of computing benefits under any pension plan or other arrangement
of COMPS for the benefit of its employees.
12.6 No Waiver. Either party's failure to enforce any provision of
---------
this Agreement shall not in any way be construed as a waiver of any such
provision, or prevent that party from thereafter enforcing each and every
other provision of this Agreement.
6
CAC
<PAGE>
12.7 Successors and Assigns. The rights and obligations of COMPS
----------------------
under this agreement shall inure to the benefit of and shall be binding
upon the successors and assigns of COMPS. Employee shall not be entitled
to assign any of his rights or obligations under this agreement.
12.8 Applicable Law. This agreement shall be interpreted, construed,
--------------
governed and enforced in accordance with the laws of the state of
California.
12.9 Amendments. No amendment or modification of the terms or
----------
conditions of this agreement shall be valid unless in writing and signed by
the parties thereto.
IN WITNESS WHEREOF, the parties hereto execute this Agreement, effective as
of the date first above written
EMPLOYEE: COMPS InfoSystems, INC., a California
corporation
/s/ Christopher A. Crane
- -------------------------------- By: /s/ Christopher A. Crane
Print Name and Address ------------------------
Its: Pres & CEO
------------------------
Christopher A. Crane
- --------------------------------
1880 Cam Monrovia
- --------------------------------
La Jolla, CA 92037
- --------------------------------
7
CAC
<PAGE>
Exhibit 10.17
FORM OF EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made and entered into
as of November 6, 1998, by and between COMPS INFOSYSTEMS, INC., a Delaware
corporation (the "Company"), and ____________________, an individual (the
"Executive").
RECITALS
--------
WHEREAS, the execution and delivery of this Agreement by the Company
and the Executive is a condition to the closing of that certain Asset Purchase
Agreement (the "Purchase Agreement") of even date herewith, by and among the
Company, the Executive, REALBID LLC, a California limited liability company, and
[Robert Potter] [Emmett DeMoss], an individual; and
WHEREAS, the Company and the Executive have determined that it is in
their respective best interests to enter into this Agreement on the terms and
conditions as set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and promises contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows (capitalized terms used herein and not
expressly defined herein shall have the meanings assigned such terms in the
Purchase Agreement):
1. EMPLOYMENT TERMS AND DUTIES
---------------------------
1.1 Employment. The Company hereby employs the Executive, and the
----------
Executive hereby accepts employment by the Company, upon the terms and
conditions set forth in this Agreement.
1.2 Duties. The Company shall start a REALBID Division within the
------
Company and shall locate the executive office of the REALBID Division in Marin
County and San Francisco County. The Executive shall serve as the Chairman of
the REALBID Division and as the Vice President of the Company, with such powers
and duties appropriate to those positions as may be provided in the Bylaws of
the Company, and as determined by the Board of Directors of the Company (the
"Board") from time to time. Such duties will include, without limitation,
planning, management, operations, sales and marketing, product development and
enhancement and overall supervision of the REALBID Division. During the term of
his employment hereunder, the Executive shall devote his full working time and
efforts to the performance of his duties to the Company and shall not be or
occupied with non-Company activities during his working time or otherwise
employed at any time during the term of this Agreement. The Executive shall use
his best efforts in the performance of his duties and the furtherance of the
interests of the Company. The Executive shall at all times discharge his duties
under the supervision and direction of the Chief Executive Officer of the
Company or his designee. The Executive will annually present a business plan,
and quarterly present revised two year projections of the same, to the Chief
Executive Officer.
<PAGE>
1.3 Term. Subject to the provisions Section 1.5 below, the term of
---- -----------
employment of the Executive under this Agreement shall commence on the date
hereof and terminate on January 1, 2003 (the "Employment Term"). Upon
termination of the Employment Term, the Executive's employment with the Company
and the Company's obligation to employ the Executive in any capacity shall cease
in any and all manner.
1.4 Compensation and Benefits.
-------------------------
1.4.1 Base Salary. In consideration of the services rendered to the
-----------
Company hereunder by the Executive and the Executive's covenants hereunder,
including but not limited to, his covenants under Sections 2 and 3 below, the
---------- -
Company shall, during the Employment Term, pay the Executive a salary at the
annual rate of Two Hundred Twenty-Five Thousand Dollars ($225,000) (the "Base
Salary"). The Base Salary shall be payable in accordance with the normal
payroll practices of the Company then in effect. The Base Salary and all other
forms of compensation paid to the Executive hereunder shall be subject to all
applicable taxes required to be withheld by the Company pursuant to federal,
state or local law. The Company, in its sole discretion, may (i) increase the
Base Salary from time to time and (ii) pay the Executive a cash bonus in such
amount (which amount may be zero or up to fifty thousand dollars ($50,000)) as
may be determined by the Board or a committee of the Board. The Executive shall
be solely responsible for income taxes imposed on the Executive by reasons of
any cash or non-cash compensation and benefits provided by this Agreement.
1.4.2 Stock Options. Executive shall be granted (i) incentive stock
-------------
options (the "Options") to purchase 416,666.5 shares of the Company's Class B
Common Stock (the "Incentive Option Shares") and (ii) non-statutory stock
options to purchase 6,920.5 shares of the Company's Class B Common Stock (the
"Non-Statutory Option Shares," and together with the Incentive Option Shares,
the "Option Shares"), as set forth in detail in such Executive's Notice of
Grant of Stock Option attached hereto as Exhibit A (the "Notice of Grant").
Executive shall acquire a vested interest in (i) 20% of the Incentive Option
Shares on the date of this Agreement (the "Vesting Commencement Date"), (ii)
100% of the Non-Statutory Options Shares on the Vesting Commencement Date and
(iii) the remaining 80% of the Incentive Option Shares shall vest in successive
equal monthly installments over a forty-eight (48) month period commencing on
January 1, 1999.
1.4.3 Benefits Package. In addition to the Base Salary, during the
----------------
Employment Term, the Executive shall be entitled to receive such pension, profit
sharing, bonus, life insurance, hospitalization, major medical, and other
benefit plans of the Company as may be in effect from time to time as are
afforded to other comparable executives of the Company.
1.4.4 Vacation. The Executive shall be entitled to vacation each
--------
fiscal year accruing at 1.25 days per month for an annual accrual of fifteen
(15) days. The maximum number of unused vacation days which may be accrued at
any one time shall be one hundred eighty (180) days.
1.4.5 Expenses. The Company shall, upon receipt from the Executive
--------
of signed and itemized lists of expenditures with supporting receipts to the
extent required by applicable income tax regulations and the Company's
reimbursement policies, reimburse the
2
<PAGE>
Executive for all out-of-pocket business expenses reasonably incurred by the
Executive in connection with his employment hereunder.
1.5 Termination. The Executive's employment and this Agreement
-----------
(except as otherwise provided hereunder) shall terminate upon the occurrence of
any of the following, at the time set forth therefor (the "Termination Date"):
1.5.1 Voluntary Termination. Thirty (30) days following the
---------------------
Employee's written notice to the Company of termination of employment; provided,
--------
however, that the Company may waive all or a portion of the thirty (30) days'
- -------
notice and accelerate the effective date of such termination (and the
Termination Date) (termination pursuant to this Section 1.5.1 being referred to
-------------
herein as "Voluntary Termination");
1.5.2 Termination For Cause. Immediately following written notice of
---------------------
termination for "Cause" (as defined below), specifying such Cause (as determined
in good faith by the Board), given by the Company (termination pursuant to this
Section 1.5.2 being referred to herein as termination for "Cause"). As used
- --------------
herein, "Cause" means termination based on (i) the Executive's material breach
of this Agreement or any significant material written policy or procedure of the
Company, including but not limited to, policies concerning equal employment
opportunity and harassment in the workplace, (ii) conviction of the Executive
for (x) any crime constituting a felony in the jurisdiction in which committed,
(y) any crime involving moral turpitude (whether or not a felony), or (z) any
other violation of criminal law involving dishonesty or willful misconduct which
injures the Company (whether or not a felony), (iii) substance abuse by the
Executive which in any material manner interferes with the performance of his
duties under this Agreement, (iv) the failure or refusal of the Executive to
follow the lawful and proper directives of the Board which are within the scope
of the Executive's duties set forth in Section 1.2 above and which is not
-----------
corrected within seven (7) days after written notice to the Executive
identifying such failure or refusal, (v) willful malfeasance or gross misconduct
by the Executive which discredits or damages the Company, including, without
limitation, any breach of his obligations under Section 2 or Section 3 below,
--------- ---------
(vi) indictment of the Executive by a grand jury for a felony violation of the
federal securities laws, (vii) the Executive's willful breach or habitual
neglect of duties as an employee of the Company (including, but not limited to
chronic absence from work for reasons other than illness), (viii) conduct by the
Executive for which the Company incurs civil liability in excess of fifty
thousand dollars ($50,000) in the aggregate to any other employee or third party
or be assessed any fine or penalty by a governmental agency or (ix) the death or
Disability of the Executive. For the purposes of this Agreement, "Disability"
means the Board's good faith determination that the Executive has been unable to
perform any material portion of his duties under this Agreement for a period of
thirty (30) consecutive days, or sixty (60) days in the aggregate during the
Employment Term, with or without reasonable accommodation, due to physical or
mental illness or incapacity.
1.5.3 Termination Without Cause. Only after the completion of the
-------------------------
first twelve months of this Agreement, five days following written notice of
termination without Cause given by the Company; provided, however, that the
Executive shall be retained by the Company as a consultant and shall receive
payment of Base Salary and Option Shares as provided in Section 1.6.2 below
-------------
(termination pursuant to this Section 1.5.3 being referred to herein as
-------------
termination "Without Cause"). Notwithstanding anything to the contrary
contained
3
<PAGE>
herein, including without limitation Section 1.5.2(iv) hereof, the Executive
-----------------
shall not be required to relocate from Marin County or San Francisco County to
any other area and any such required relocation shall constitute a termination
Without Cause as set forth in this Section 1.5.3.
-------------
1.5.4 Other Remedies. Termination pursuant to Section 1.5.2
-------------- -------------
above shall be in addition to and without prejudice to any other right or remedy
to which the Company may be entitled at law, in equity, or under the Agreement.
1.6 Severance and Termination.
-------------------------
1.6.1 Termination for Cause or Voluntary Termination. In the
----------------------------------------------
case of a Voluntary Termination or a termination of the Executive's employment
hereunder for Cause in accordance with Section 1.5.2 above at any time (i) the
-------------
Executive shall not be entitled to receive payment of, and the Company shall
have no obligation to pay any severance or similar compensation attributable to
such termination other than Base Salary earned but unpaid as of the Termination
Date or otherwise as required by law, (ii) the vesting of the Option Shares
shall terminate as of the date of the termination of the Executive's employment
hereunder and (iii) the Company's obligations under this Agreement shall
immediately cease.
1.6.2 Termination Without Cause.
-------------------------
(a) In the case of a termination of the Executive's employment
hereunder Without Cause in accordance with Section 1.5.3 above within the two
-------------
year period following the date of this Agreement:
(1) The Company shall pay the Executive an amount equal to his
then applicable Base Salary for a period of one (1) year commencing on the
Termination Date (the "Post-Termination Period"), payable at the times and
subject to the tax withholding specified in Section 1.4.1 above; provided,
------------- --------
however, that the payment of such salary shall be paid only if the Executive
- -------
executes and delivers to the Company the Confidential Separation Agreement and
General Release substantially in the form of Exhibit B attached hereto (the
---------
"Separation and Release Agreement") and does not revoke the Separation and
Release Agreement pursuant to the terms of the same.
(2) The Company will retain the Executive as a full-time
consultant for the first six months of the Post-Employment Period and as a part-
time consultant for the remaining six months of the Post-Employment Period (i.e.
on call for a specified number of hours per week). Except for the continuation
of his salary payments pursuant to Section 1.6.2.(a)(1) above, the Executive
--------------------
shall not receive any kind of consideration, payment or benefits for his
consulting services rendered pursuant to this Agreement.
(b) In the case of a termination of the Executive's employment
hereunder Without Cause in accordance with Section 1.5.3 above after the two
-------------
year period following the date of this Agreement:
(1) The Company shall pay the Executive an amount equal to his
then applicable Base Salary for a period equal to the shorter of (x) six (6)
months commencing on the Termination Date and (y) the remaining term of his
employment (the
4
<PAGE>
"Shortened Post-Termination Period"), payable at the times and subject to
the tax withholding specified in Section 1.4.1 above; provided, however, that
------------- -------- -------
the payment of such salary shall be paid only if the Executive executes and
delivers to the Company the Separation and Release Agreement and does not revoke
the Separation and Release Agreement pursuant to the terms of the same.
(2) The Company will retain the Executive as a part-time
consultant during the Shortened Post-Termination Period. Except for the
continuation of his salary pursuant to Section 1.6.2(b)(1) above, the Executive
-------------------
shall not receive any kind of consideration, payment or benefit for his
consulting services rendered pursuant to this Agreement.
(c) Notwithstanding any provision to the contrary set forth herein,
in Executive's Notice of Grant of Stock Option, the Incentive Stock Option
Agreement or the Non-Statutory Option Agreement referenced in such Notice of
Grant:
(1) If the Executive is terminated Without Cause in accordance
with Section 1.5.3 within the two year period following the date of this
-------------
Agreement, the Executive's Option Shares shall continue to vest pursuant to the
Notice of Grant during the Post-Termination Period; provided, however, that if
-------- -------
the aggregate number of Options Shares in which the Executive will acquire a
vested interest at the end of the Post-Termination Period would not equal at
least seventy-five percent (75%) of Option Shares, then the vesting schedule
described in the Notice of Grant will be adjusted to provide for the vesting of
an aggregate of seventy-five percent (75%) of the Option Shares at the end of
the Post-Termination Period; provided further, that such adjusted vesting
----------------
schedule shall continue to provide for vesting in successive equal monthly
installments during the Post-Termination Period.
(2) If the Executive is terminated Without Cause in accordance
with Section 1.5.3 after the two year period following the date of the
-------------
Agreement, the Executive's Option Shares shall continue to vest pursuant to the
Notice of Grant during the Shortened Post-Termination Period only if the
Executive will not have acquired a vested interest in at least seventy-five
percent (75%) of the Option Shares as of the Termination Date, in which case the
vesting schedule described in the Notice of Grant will be adjusted to provide
for the vesting of an aggregate of seventy-five percent (75%) of the Option
Shares at the end of the Shortened Post-Termination Period; provided further,
----------------
that such adjusted vesting schedule shall continue to provide for vesting in
successive equal monthly installments during the Shortened Post-Termination
Period.
(d) Notwithstanding anything to the contrary herein:
(1) The Company's obligation to (i) pay the Executive the salary
under Section 1.6.2(a)(1) above or Section 1.6.2(b)(1) above and (ii) retain the
------------------- -------------------
Executive as a consultant under Section 1.6.2(a)(2) above or Section 1.6.2(b)(2)
------------------- -------------------
above shall cease immediately in the event of the Executive's breach of his
obligations under Section 2 above or Section 3 above or, if applicable, the
--------- ---------
Executive's breach of his obligations under the Non-Competition Agreement of
even date herewith by and between the Company and the Executive (the "Non-
Competition Agreement").
5
<PAGE>
(2) The vesting of the Executive's Option Shares under Sections
1.6.2(c)(1) and (2) above shall cease immediately in the event of the
- ----------- ---
Executive's breach of his obligations under Section 2 above or Section 3 above
--------- ---------
or, if applicable, the Executive's breach of his obligations under the Non-
Competition Agreement.
1.6.3 Termination Complete. It is expressly acknowledged by the
--------------------
Executive that, except as provided in Sections 1.6.2(a)(1) and 1.6.2(b)(1)
-------------------- -----------
above, the provisions of this Section 1.6 shall have the effect of eliminating
-----------
all compensation (salary, stock options, bonuses, and benefits) which would have
been paid or available had such employment relationship not been terminated.
2. CONFIDENTIAL INFORMATION - NON-DISCLOSURE
-----------------------------------------
2.1 Definition of Confidential Information. The Executive hereby
--------------------------------------
acknowledges that during the Executive's employment hereunder, the Executive may
have access to, make use of, acquire, create, develop or add to certain
confidential and proprietary information regarding the Company or any company
owned by or affiliated with the Company (collectively, the "COMPS Group")
(whether in existence prior to, as of or after the date hereof, including
without limitation any confidential and proprietary information that the Company
purchased from REALBID LLC under the Purchased Agreement) (collectively,
"Confidential Information"), which Confidential Information shall include,
without limitation, all of the following materials and information (whether or
not reduced to writing and whether or not patentable or protected by copyright):
(i) any and all trade secrets concerning the business and affairs of any member
of the COMPS, product specifications, data, procedures, know-how, formulae,
compositions, processes, designs, sketches, photographs, graphs, drawings,
samples, inventions, models, documentation, techniques, diagrams, flowcharts,
new products and new technology information, product prototypes, product copies,
manufacturing, development or marketing techniques, material development or
marketing timetables, strategies and development plans, and ideas, past, current
and planned research and development, current and planned manufacturing and
distribution methods and processes, customer lists, current and anticipated
customer requirements, price lists, market studies, business plans, computer
software and programs (including object code and source code), computer software
and database technologies and information (including without limitation
confirmed sales transactions, buyer and seller information, listings, space
availability and tenant and lease comparables), systems, structures and
architectures (and related processes, formulae, compositions, improvements,
devices, know-how, inventions, discoveries, concepts, ideas, designs, methods
and information) of any member of the COMPS Group including but not limited to
information related to the customers, suppliers or personnel of such members of
the COMPS Group, and any other information, however, documented, of any member
of the COMPS Group that is a trade secret within the meaning of any and all
applicable state and federal trade secret laws; (ii) any and all information
concerning the business and affairs of any member of the COMPS Group (which
includes historical financial statements, financial projections and budgets,
historical and projected sales, capital spending budgets and plans, the names
and backgrounds of key personnel and personnel training and techniques and
materials), however documented; and (iii) any and all notes, analysis,
compilations, studies, summaries, and other material prepared by or for any
member of the COMPS Group containing or based, in whole or in part, on any
information included in the foregoing. The parties hereto agree that the
failure of any Confidential Information to be marked
6
<PAGE>
or otherwise labeled as confidential or proprietary information shall not affect
its status as Confidential Information. Notwithstanding the foregoing,
Confidential Information shall not include any information (i) which is
generally known to the public or to companies in businesses similar to the
Company's business (except for the companies which license such Confidential
Information from any member of the COMPS Group), (ii) which later, through no
act of any of the Executive, REALBID, or the other parties to the Asset Purchase
Agreement, becomes generally known or (iii) information required to be disclosed
by the Executive pursuant to a subpoena or court order, or pursuant to a
requirement of a governmental agency or law of the United States of America or a
state thereof or any governmental or political subdivision thereof, provided
that (a) the Executive will provide the Company with prior written notice of
such disclosure in order that the Company may attempt to obtain a protective
order or the assurance of confidential treatment and (b) the Executive will
cooperate with the Company in attempting to obtain such order or assurance.
2.2 The Executive Covenant. In consideration of the Company's
----------------------
entering into this Agreement and providing the Base Salary, the Option Shares
and other benefits to the Executive, and further in consideration of the
Executive's continued exposure to the Confidential Information and the
Executive's continued receipt of specialized training from members of the COMPS
Group, the receipt of which are hereby acknowledged by the Executive, the
Executive covenants as follows:
2.2.1 Non-Use and Non-Disclosure. Commencing on the date hereof and
--------------------------
at all times thereafter, the Executive shall hold in the strictest confidence
(except as previously approved by the Company in writing), and shall not,
directly or indirectly, disclose, divulge, reveal, report, publish, transfer or
otherwise communicate, or use for his own benefit or the benefit of any other
person, partnership, firm, corporation or other entity, or use to the detriment
of any member of the COMPS Group, or misuse in any way, any Confidential
Information. The Executive acknowledges that he will in no way infringe upon
any COMPS copyrights and will in no way use, copy, appropriate or redistribute
any part of the Confidential Information, whether obtained directly or
indirectly from COMPS, without a specific written license agreement with COMPS.
It is agreed that any derivative, modification or elaboration of any
Confidential Information by any third party remains the proprietary property of
COMPS for purposes of this Agreement. The Executive and the Company each hereby
stipulates that, as between them, all Confidential Information constitutes
important material and confidential and/or proprietary information of the
Company's, constitutes unique and valuable information, and affects the
successful conduct of the Company's business and the goodwill of the COMPS
Group, and that members of the COMPS Group shall be entitled to recover their
respective damages, in addition to any injunctive remedy that may be available,
for any breach of this Section 2.
---------
2.2.2 Trade Secrets. All trade secrets of the COMPS Group will be
-------------
entitled to all of the protection and benefits under all applicable federal and
state trade secrets law. If any information that any member of the COMPS Group
deems to be a trade secret is found by a court of competent jurisdiction not to
be a trade secret for purposes of this Agreement, such information will,
nevertheless, be considered Confidential Information for purposes of this
Agreement. The Executive hereby waives any requirement that the members of the
COMPS Group submit proof of the economic value of any trade secret or post a
bond or
7
<PAGE>
other security. The Executive hereby acknowledges that the database technologies
and information (including without limitation confirmed sales transactions,
buyer and seller information, listings, space availability and tenant and lease
comparables) shall be considered a trade secret of the COMPS Group.
2.2.3 Ownership. The Executive hereby acknowledges and agrees that
---------
all right, title and interest in and to any Confidential Information shall be
and shall remain the exclusive property of the COMPS Group, and that any
Confidential Information which the Executive acquires from any member of the
COMPS Group was received in confidence and as a fiduciary of such member of the
COMPS Group. Without limiting the foregoing, the Executive shall assign to the
COMPS Group, any and all right, title or interest which the Executive may have
in all Confidential Information made, developed or conceived of in whole or in
part by the Executive during his employment hereunder. The Executive further
agrees to execute and deliver any and all instruments, and to do all other
things reasonably requested by any member of the COMPS Group (both during and
after the his employment hereunder) in order to vest more fully in such member
of the COMPS Group all ownership rights in such Confidential Information. All
equipment, notebooks, documents, memoranda, reports, files, samples, books,
correspondence, lists, other written and graphic records, and the like, in any
way relating to any Confidential Information, the business of the Company or its
activities, which the Executive shall prepare, use, construct, observe, process,
or control (collectively, "Materials") shall be and shall remain the COMPS
Group's exclusive property, and the Executive hereby agrees to deliver all
Materials, together with any and all copies thereof, promptly to the Company on
behalf of the COMPS Group upon the termination of this Agreement for any reason.
The Executive further agrees that any property situated on the Company's
premises and owned by the Company, including disks and other storage media,
filing cabinets or other work areas, is subject to inspection by Company
personnel at any time with or without notice.
2.2.4 Other Obligations. The Executive acknowledges that the COMPS
-----------------
Group, from time to time, may have agreements with other persons, entities or
with the U.S. Government or agencies thereof, which imposes obligations or
restrictions on the COMPS Group regarding inventions made during the course of
work thereunder, or regarding the confidential nature of such work. The
Executive hereby agrees to be bound by all such obligations or restrictions and
to take all action necessary to discharge the obligations of the COMPS Group
thereunder.
3. NON-COMPETITION AND NON-INTERFERENCE
------------------------------------
3.1 Covenant of the Executive. In consideration of the Company's
-------------------------
entering into this Agreement and providing the Base Salary, Option Shares and
other benefits to the Executive, and further in consideration of the Executive's
continued exposure to the Confidential Information and the Executive's continued
receipt of specialized training from the members of the COMPS Group, the receipt
of which are hereby acknowledged by the Executive, the Executive covenants as
follows:
3.1.1 Non-Competition. During the Executive's employment
---------------
hereunder and the Severance Period, the Executive shall not, directly or
indirectly, own, manage, engage in, operate or conduct, prepare to or plan to
conduct or assists any person or entity to conduct any
8
<PAGE>
business, or have any interest in any business, person, firm, corporation or
other entity (as a principal, owner, agent, employee, shareholder, officer,
director, joint venturer, partner, security holder) (except for the ownership of
publicly-traded securities constituting not more than five percent (5%) of the
outstanding securities of the issuer thereof), creditor (except for trade credit
extended in the ordinary course of business), consultant or in any other
capacity that engages in any business which is the same as, similar to or
competitive with the business of any member of the COMPS Group including without
limitation the commercial real estate information business, which shall include
among other things, buyer/seller matching, transaction facilitation, listing
services, sales comparables, lease comparables, space availability, tenant
information, property inventory, property characteristics, automated valuation
models and city and regional market overviews (collectively, the "Business"),
anywhere in the United States. The covenants set forth in this Section 3.1.1
-------------
shall be construed as a series of separate covenants covering their subject
matter in each of the separate states where the Company conducts the Business,
and except for geographic coverage, each such separate covenant shall be deemed
identical in terms to the covenant set forth above in this Section 3.1.1 To the
-------------
extent that any such covenant shall be judicially unenforceable in any one or
more of such states, such covenant shall not be affected with respect to each of
the other states. Each covenant with respect to such states shall be construed
as severable and independent.
3.1.2 No Diversion of Others. During the Executive's employment
----------------------
hereunder and the Severance Period, the Executive shall not, either for himself
or for any other person, firm, corporation or other entity, directly or
indirectly, or by action in concert with others:
(a) induce or influence, or seek to induce or influence, any Person
who is engaged by any member of the COMPS Group (as an agent, employee,
consultant, or in any other capacity) or any successor thereto with the purpose
of obtaining such person as an employee or customer for a business competitive
with any member of the COMPS Group's business; or
(b) divert or take away or attempt to divert or take away, or solicit
or attempt to solicit, any existing or potential customer of any member of the
COMPS Group (whether or not such customer is actually a customer of any member
of the COMPS Group as of the date hereof, including without limitation any
customer solicited by the Executive or which became known by the Executive prior
to the date hereof) with the purpose of obtaining such person as an employee or
customer for a business competitive with any member of the COMPS Group's
Business.
3.1.3 Organizing Competitive Business. Without limiting any of the
-------------------------------
other provisions contained in this Section 3, during the Executive's employment
---------
hereunder and the Severance Period, the Executive shall not undertake planning
for or organization of any business activity competitive with the Business of
any member of the COMPS Group, or conspire with agents, employees, consultants
or other representatives of any member of the COMPS Group for the purpose of
organizing any such competitive business activity.
9
<PAGE>
4. INJUNCTIVE RELIEF AND ADDITIONAL REMEDY
---------------------------------------
4.1 In General. The Executive acknowledges and agrees that members
----------
of the COMPS Group shall suffer irreparable harm in the event that the Executive
breaches any of his obligations under Sections 2 or 3 hereof, and that monetary
---------- -
damages shall be inadequate to compensate the damaged members of the COMPS Group
for any such breach. Accordingly, the Executive agrees that in the event of any
breach or threatened breach by the Executive of any of the provisions of
Sections 2 or 3 hereof, the damaged members of the COMPS Group shall be entitled
- ---------- -
to a temporary restraining order, preliminary injunction and permanent
injunction in order to prevent or restrain any such breach or threatened breach
by the Executive, or by any or all of the Executive's agents, representatives or
other persons directly or indirectly acting for, on behalf of or with the
Executive, without having to prove damages.
4.2 No Limitation of Remedies. Notwithstanding the provisions set
-------------------------
forth in Section 4.1 above, or any other provision contained in this Agreement,
-----------
the parties hereby agree that no remedy conferred by any of the specific
provisions of this Agreement, including, without limitation, this Section 4, is
---------
intended to be exclusive of any other remedy, and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute or otherwise.
5. REASONABLENESS OF RESTRICTIONS.
------------------------------
THE EXECUTIVE HAS CAREFULLY READ AND CONSIDERED THE PROVISIONS OF
SECTIONS 2 AND 3 HEREOF AND, HAVING DONE SO, HEREBY AGREES THAT THE RESTRICTIONS
- ----------- -
SET FORTH IN SUCH SECTIONS ARE FAIR AND REASONABLE AND ARE REASONABLY REQUIRED
FOR THE PROTECTION OF THE INTERESTS OF THE COMPANY.
6. REPRESENTATIONS AND WARRANTIES
-------------------------------
6.1 By the Executive. The Executive represents and warrants to the
----------------
Company that (i) this Agreement is valid and binding upon and enforceable
against him in accordance with its terms, (ii) the Executive is not bound by or
subject to any contractual or other obligation that would be violated by his
execution or performance of this Agreement, including, but not limited to, any
non-competition agreement presently in effect, and (iii) the Executive is not
subject to any pending or, to the Executive's knowledge, threatened claim,
action, judgment, order or investigation that could adversely affect his ability
to perform his obligations under this Agreement or the business reputations of
the Company.
6.2 By the Company. The Company represents and warrants to the
--------------
Executive that (i) this Agreement is valid and binding upon and enforceable
against the Company in accordance with its terms, (ii) the Company is not bound
by or subject to any contractual or other obligation that would be violated by
its execution or performance of this Agreement, including, but not limited to,
any non-competition agreement presently in effect, and (iii) the Company is not
subject to any pending, or to the Company's knowledge, threatened claim, action,
judgement, order or investigation that could adversely affect its ability to
perform its obligations under this Agreement.
10
<PAGE>
7. SURVIVAL OF CERTAIN RIGHTS AND OBLIGATIONS
------------------------------------------
Sections 2, 3 and 6 above shall survive any termination of this
---------- - -
Agreement and continue in full force and effect as is necessary or appropriate
to enforce the covenants and agreements of the Executive in Sections 2, 3 and 6.
---------- - -
The existence of any claim or cause of action by the Executive against the
Company, whether predicated on this Agreement or otherwise, shall not constitute
a defense to the enforcement by the Company of the covenants and agreements of
Sections 2, 3 and 6 above.
- ---------- - -
8. MISCELLANEOUS
-------------
8.1 Notices. All notices, requests and other communications
-------
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally against written receipt or by facsimile transmission with
answer back confirmation or mailed (postage prepaid by certified or registered
mail, return receipt requested) or by overnight courier to the parties at the
following addresses or facsimile numbers:
If to the Executive, to:
__________________________________
__________________________________
__________________________________
__________________________________
If to the Company, to:
COMPS InfoSystems, Inc.
9888 Carroll Centre Road, Suite 100
San Diego, CA 92126
Facsimile No.: (619) 684-3292
Attention: Mr. Christopher A. Crane
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section 8.1, be deemed given upon
-----------
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section 8.1, be deemed given upon receipt, and (iii) if
-----------
delivered by mail in the manner described above to the address as provided in
this Section 8.1, be deemed given upon receipt (in each case regardless of
-----------
whether such notice, request or other communication is received by any other
Person to whom a copy of such notice, request or other communication is to be
delivered pursuant to this Section). Any party from time to time may change its
address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other parties hereto.
8.2 Obligations Contingent on Performance. The obligations of the
-------------------------------------
Company hereunder, including its obligation to pay the compensation provided for
herein, are contingent upon the Executive's performance of his obligations
hereunder.
11
<PAGE>
8.3 Entire Agreement. This Agreement, the Purchase Agreement and the
----------------
documents executed in connection with the Purchase Agreement, including, without
limitation, the Non-Competition Agreement, supersede all prior discussions and
agreements among the parties with respect to the subject matter hereof and
contain the sole and entire agreement between the parties hereto with respect
thereto.
8.4 Waiver. Any term or condition of this Agreement may be waived at
------
any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party waiving such term or condition. No waiver by any
party hereto of any term or condition of this Agreement, in any one or more
instances, shall be deemed to be or construed as a waiver of the same or any
other term or condition of this Agreement on any future occasion. All remedies,
either under this Agreement or by law or otherwise afforded, will be cumulative
and not alternative.
8.5 Amendment. This Agreement may be amended, supplemented or
---------
modified only by a written instrument duly executed by or on behalf of each
party hereto.
8.6 No Third Party Beneficiary. The terms and provisions of this
--------------------------
Agreement are intended solely for the benefit of each party hereto and the
Company's successors or assigns, and it is not the intention of the parties to
confer third-party beneficiary rights upon any other Person.
8.7 No Assignment; Binding Effect. This Agreement is binding upon,
-----------------------------
inures to the benefit of and is enforceable by the parties hereto and any
successors or assigns of the Company. The Executive shall not be entitled to
assign his right, interest or obligations under this Agreement without the prior
written consent of the Company.
8.8 Headings. The headings used in this Agreement have been inserted
--------
for convenience of reference only and do not define or limit the provisions
hereof.
8.9 Severability. The Company and Executive intend all provisions of
------------
this Agreement to be enforced to the fullest extent permitted by law.
Accordingly, if a court of competent jurisdiction determines that the scope
and/or operation of any provision of this Agreement is too broad to be enforced
as written, the Company and Executive intend that the court should reform such
provision to such narrower scope and/or operation as it determines to be
enforceable. If, however, any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future law, and not subject
to reformation, then (i) such provision shall be fully severable, (ii) this
Agreement shall be construed and enforced as if such provision was never a part
of this Agreement, and (iii) the remaining provisions of this Agreement shall
remain in full force and effect and shall not be affected by illegal, invalid,
or unenforceable provisions or by their severance.
8.10 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of California applicable to
contracts executed and performed in such State, without giving effect to
conflicts of laws principles.
8.11 Arbitration. Except as otherwise provided in Section 4 above,
----------- ---------
the Executive agrees that any and all disputes that the Executive has with the
Company or any of its
12
<PAGE>
employees, which arise out of the Executive's employment, the termination of
employment, or under the terms of this Agreement, shall be resolved through
final and binding arbitration. This shall include, without limitation, disputes
relating to this Agreement, any disputes regarding the Executive's employment by
the Company or the termination thereof, claims for breach of contract or breach
of the covenant of good faith and fair dealing, and any claims of discrimination
or other claims under any federal, state or local law or regulation now in
existence or hereinafter enacted and as amended from time to time concerning in
any way the subject of the Executive's employment with the Company or its
termination. The only claims not covered by this Section 8.11 are claims for
------------
benefits under the workers' compensation laws or unemployment insurance laws and
any claims arising from the Executive's breach of Sections 2 or 3 of this
---------- -
Agreement. Binding arbitration will be conducted in San Diego, California, in
accordance with the rules and regulations of the American Arbitration
Association. Each party will bear one half of the cost of the arbitration filing
and hearing fees, and the cost of the arbitrator. Each party will bear its own
attorneys' fees, unless otherwise decided by the arbitrator. The Executive
understands and agrees that the arbitration shall be instead of any civil
litigation and that the arbitrator's decision shall be final and binding to the
fullest extent permitted by law and enforceable by any court having jurisdiction
thereof. Each party shall be entitled to pre-hearing discovery as provided in
California Code of Civil Procedure Section 1283.05.
8.12 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by facsimile, each of which will be deemed an original, but all
of which together will constitute one and the same instrument.
[SIGNATURE PAGE TO FOLLOW]
13
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the date first written above.
"COMPANY"
COMPS INFOSYSTEMS, INC.
a Delaware corporation
By:
----------------------
Name:
----------------------
Title:
----------------------
"EXECUTIVE"
-----------------------------
<PAGE>
EXHIBIT A
NOTICE OF GRANT
See Exhibit 10.34 to Registration Statement on Form S-1
<PAGE>
EXHIBIT B
CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE
(Employee) and COMPS InfoSystems, Inc. (COMPS - Employer) agree to
terminate their employment relationship on the following basis:
1. (Employee) and COMPS agree that (Employee) shall separate his/her employment
with COMPS effective (Date). (Employee) will return all of COMPS' keys, records,
and files (electronic or other) on (Date) and will cooperate fully with COMPS'
managers and employees in a professional manner to assure a smooth transition.
2. In consideration for (Employee)'s agreement and commitments herein, COMPS
will provide (Employee) with the following additional consideration to which
he/she is not otherwise entitled:
a) Additional compensation and stock options, if any, as described in
the Employment Agreement between Employee and COMPS, dated
________, so long as (Employee) has not revoked this Separation
Agreement during the preceding seven (7) days.
b) Outplacement services to be provided by Drake, Beam, Morin, Inc.
3. (Employee) agrees that he/she is not entitled to receive, and will not
claim, any right, benefit or compensation other than what is expressly set forth
in Paragraph 2 above, and hereby expressly waives any claim to any compensation,
benefit or payment whatsoever except as expressly referenced in Paragraph 2
hereof.
4. (Employee) and COMPS promise not to disparage each other in any manner and
Employee promises not to use or disclose any confidential information he learned
while employed by COMPS. (Employee) further agrees that he/she will not
solicit, participate in or assist in any way the solicitation of any employees
of COMPS to cease employment or doing present or future business with COMPS.
(Employee) and COMPS further agree to keep this agreement and its contents in
complete confidence and not to disclose the fact or amount of these additional
payments to any past, present or prospective employee of COMPS. The terms of
this Agreement are confidential and shall not be divulged to any party without
the prior written consent of the non-disclosing party, which shall not be
unreasonably withheld; provided, however, that COMPS and (Employee) can disclose
-------- -------
the details of this Agreement to their respective counsel.
5. In consideration of the compensation set forth in Paragraph 2, (Employee)
does hereby unconditionally, irrevocably and absolutely release and discharge
COMPS, its owners, directors, officers, employees, agents, attorneys,
stockholders, insurers, divisions, successors and/or assigns and any related
holding, parent or subsidiary corporations, from any and all loss, liability,
claims, demands, causes of action, or suits of any type, whether in law and/or
in equity, related directly or indirectly of in any way connected with any
transaction, affairs or occurrences
B-1
<PAGE>
between them to date, including, but not limited to, (Employee)'s employment
with COMPS, and the termination of said employment.
In further consideration thereof, (Employee) irrevocably and absolutely agrees
that she will not prosecute nor allow to be prosecuted on her behalf in any
administrative agency, whether federal or state, or in any court, whether
federal or state, any claim or demand of any type related to the matter released
above, it being an intention of the parties that with the execution by
(Employee) of this Release, COMPS, its owners, officers, directors, employees,
agents, attorneys, successors and/or assigns and all related holding, parent and
subsidiary corporations will be absolutely, unconditionally and forever
discharged of and from all obligations to or on behalf of (Employee) related in
any way to the matter discharged herein.
6. This Separation Agreement is intended by the parties to release and
discharge any and all claims of (Employee) against COMPS InfoSystems, Inc.
including, but not limited to, any claims arising under the Age Discrimination
in Employment Act, 29 U.S.C. 621 et seq. It is the intent of the parties that
------
this Separation Agreement satisfy the requirements of the Older Workers Benefit
Protection Act, Public Law 101-433, codified at 29 U.S.C. 626(f). The following
general provisions, along with the other provisions of the Separation Agreement,
are agreed to for this purpose:
a. (Employee) acknowledges and agrees that he has read and he understands
the terms of this Separation Agreement.
b. (Employee) acknowledges that he has been given a full opportunity to
consult with his lawyer with respect to the matters referenced in this
Separation Agreement, and that (Employee) has obtained and considered
such legal counsel as he deems necessary, such that (Employee) is
entering into this Separation Agreement freely, knowingly, and
voluntarily;
c. (Employee) acknowledges that he has been given at least 21 days in
which to consider whether or not to enter into this Separation
Agreement;
d. (Employee) may revoke Separation Agreement during the seven (7) day
period following the execution of this Separation Agreement. If not
revoked, this Separation Agreement shall become effective eight (8)
days after (Employee) signs this Separation Agreement.
7. It is further understood and agreed that as a condition of this settlement,
all rights under Section 1542 of the Civil Code of the State of California are
expressly waived by (Employee). Such Section reads as follows:
"A General Release does not extend to claims which the creditor
does not know or suspect to exist in her favor at the time of
executing the release, which if known by her must have materially
affected her settlement with the debtor."
A-2
<PAGE>
(Employee) does certify that he has read all of this Release, the quoted Civil
Code section and that he fully understands all of the same. (Employee) hereby
expressly agrees that this Release shall extend and apply to all unknown,
unsuspected and unanticipated injuries and damages, as well as to any that are
now alleged.
8. This Agreement contains all of the terms, promises, representations and
understandings made between the parties. (Employee) agrees that no promises,
coercion, representations or inducements have been made which caused him to sign
this Agreement other than those which are expressly set forth above and that the
terms of this Agreement are contractual and not a mere recital.
9. (Employee) agrees that any and all disputes that (Employee) has with COMPS
or any of its employees, which arise under the terms of this Agreement, shall be
resolved through final and binding arbitration. This shall include, without
limitation, disputes relating to this Agreement. Binding arbitration will be
conducted in San Diego, California, in accordance with the rules and regulations
of the American Arbitration Association. Each party will bear one half of the
cost of the arbitration filing and hearing fees, and the cost of the arbitrator.
Each party will bear its own attorneys' fees, unless otherwise decided by the
arbitrator. (Employee) understands and agrees that the arbitration shall be
instead of any civil litigation and that the arbitrator's decision shall be
final and binding to the fullest extent permitted by law and enforceable by any
court having jurisdiction thereof.
10. If any provision of this Agreement, or part thereof, is held invalid, void
or voidable as against the public policy or otherwise, the invalidity shall not
affect other provisions, or parts thereof.
11. This Release may be pleaded as a full and complete defense and may be used
as the basis for an injunction against any action, suit or proceeding which may
be prosecuted, instituted or attempted by either party in breach thereof.
12. This agreement has been presented to COMPS InfoSystems, Inc. and (Employee)
for consideration on (Date) by Rebecca Seagle, Manager of Human Resources, for
Christopher A. Crane, President and Chief Executive Officer of COMPS
InfoSystems, Inc.
A-3
<PAGE>
13. The parties hereto warrant and represent to each other that it/he has read
and understands the meaning of each provision of this Agreement and it/his
signature below constitutes it/his acceptance of each term of the Agreement.
WE AGREE TO ALL OF THE FOREGOING TERMS. THIS AGREEMENT HAS BEEN
EXECUTED ON THE DATE SHOWN BELOW AT SAN DIEGO, CALIFORNIA
COMPS InfoSystems, Inc. (COMPS)
By:
------------------------------------- --------------------------
Christopher A. Crane Date
President and Chief Executive Officer
------------------------------------- --------------------------
(Employee) Date
- ---------------------------------------- --------------------------
Rebecca Seagle Date
Manager of Human Resources
A-4
<PAGE>
Schedule to Exhibit 10.17
Executive Title
- --------- -----
Emmett DeMoss Chairman of REALBID Division and
Vice President of COMPS.COM, INC.
Robert Potter President of REALBID Division and
Vice President of COMPS.COM, INC.
<PAGE>
Exhibit 10.18
COVENANT NOT TO COMPETE
-----------------------
This Covenant Not to Compete ("Agreement"), dated as of October 14,
1994, is executed and delivered by ROBERT C. BEASLEY, an individual ("Beasley")
to COMPS InfoSystems, Inc., a Delaware corporation (the "Company"), and is made
contemporaneously with the repurchase by the Company of certain shares of the
Company's stock held by Beasley (the "Repurchased Shares").
RECITALS
--------
A. The Company is engaged in the business of providing business
information relating to real estate (the "Business").
B. Concurrently with the execution and delivery hereof, the Company
is acquiring the Repurchased Shares pursuant to a Repurchase Agreement between
the Company and Beasley dated on even date herewith (the "Repurchase
Agreement").
C. Beasley acknowledges and agrees that he has technical expertise
associated with the Business and is well known in the real estate information
industry. In addition, Beasley has valuable business contacts with clients and
potential clients of the Business and with professionals in the real estate
information industry. Furthermore, Beasley's reputation and goodwill are an
integral part of the Company's business success throughout the areas where it
conducts the Business. Since Beasley has the ability to compete with the
Company in the operation of the Business, the Company therefore desires that
Beasley enter into this Agreement. But for Beasley's entry into this Agreement,
the Company would not have entered into the Repurchase Agreement with Beasley.
Beasley, in exchange for the consideration to be paid under the Repurchase
Agreement and the consideration described herein, is willing to enter into this
Agreement.
AGREEMENT
---------
NOW THEREFORE, as a material inducement to the Company to acquire the
Repurchased Shares, and for other good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, the parties hereby agree as
follows:
1. Term and Consideration. The term of this Agreement shall commence
----------------------
on the dated hereof (the "Closing Date") and shall expire on the seventh
anniversary of the Closing Date (the "Term"). As consideration, Beasley shall
be paid $4,336 on a monthly basis beginning with November, 1994 and ending in
May, 1996.
2. Covenant Not to Compete. Unless acting in accordance with the
-----------------------
Company's prior written consent, Beasley shall not, directly or indirectly, own,
manage, join, operate or control, or participate in the ownership, management,
operation or control of, or be connected as a director, officer, employee,
partner, consultant or otherwise with, or permit his name to be used by or in
connection with, any profit or non-profit business or organization that engages
in the business of providing real estate information in the States of California
or Arizona, it being understood that the foregoing shall not limit Beasley from
(a) making passive
<PAGE>
investments of less than 5% of the outstanding equity securities in any entity
listed for trading on a national stock exchange or quoted on any recognized
automatic quotation system, or (b) acting as an officer of the Company.
3. No Solicitation of Customers or Employees. Beasley agrees that:
-----------------------------------------
(a) during the Term, Beasley shall not, directly or indirectly,
call on or solicit or divert or take away from the Company (including without
limitation by divulging to any competitor or potential competitor of the
Company) any person, firm, corporation or other entity who is or which at the
Closing Date was a customer of the Company or whose identity is known to Beasley
at the Closing Date as one whom the Company intends to solicit; and
(b) during the Term, Beasley shall not, directly or indirectly,
solicit or seek to hire or offer employment to any employee of the Company or
any employee of any successor or affiliate of the Company which is engaged in
the real estate information business, unless the employment of such employee is
terminated or the Company gives written consent to such employment or offer of
employment.
4. Severability of Provisions. In the event that the provisions of
--------------------------
Section 2 and Section 3 ever be adjudicated by a court of competent jurisdiction
to exceed the time or geographic or other limitations permitted by applicable
law, then such provisions shall be deemed reformed to the maximum time or
geographic or other limitations permitted by applicable law, as determined by
such court in such action. Without limiting the foregoing, the covenants
contained herein shall be construed as separate covenants, covering their
respective subject matters, with respect to (a) each of the separate cities,
counties and states of the United States, in which the Company or its successors
now transacts any business, (b) each business now conducted by any of the
Company or its successors, and (c) the Company and its successors separately.
6. Injunctive Relief. Beasley acknowledges that (a) the provisions
-----------------
of Section 2 and Section 3 are reasonable and necessary to protect the
legitimate interests of the Company, and (b) any violation of Section 2 or
Section 3 will result in irreparable injury to the Company, the exact amount of
which will be difficult to ascertain, and that the remedies at law for any such
violation would not be reasonable or adequate compensation to the Company for
such a violation. Accordingly, Beasley agrees that if Beasley violates the
provisions of Section 2 or Section 3, in addition to any other remedy which may
be available at law or in equity, the Company shall be entitled to specific
performance and injunctive relief, without posting bond or other security, and
without the necessity of proving actual damages.
7. Notices. All notices, requests, demands and other communications
-------
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given if given in the manner and to the
address(es) set forth below:
If to Beasley:
Robert C. Beasley
3411-A Reynard Way
San Diego, CA 92103
<PAGE>
If to the Company:
COMPS InfoSystems, Inc.
9888 Carrol Centre Road
San Diego, CA 92126
Attn: President
8. Entire Agreement; Amendments and Waivers. This Agreement and the
----------------------------------------
Repurchase Agreement constitute the entire agreement among the parties
pertaining to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties. No amendment, supplement, modification or waiver of this Agreement
shall be binding unless executed in writing by the parties. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a
continuing waiver unless otherwise expressly provided. The parties expressly
acknowledge that they have not relied upon any prior agreements, understandings,
negotiations and discussions, whether oral or written.
9. Assignment. Neither this Agreement nor any of the rights or
----------
obligations hereunder may be assigned by any party without the prior written
consent of the other parties except that the Company may, without such consent,
assign all such rights and obligations to a wholly-owned subsidiary (or a
partnership controlled by the Company) or subsidiaries of the Company or to a
successor in interest to the Company which shall assume all obligations and
liabilities hereunder.
10. Attorneys' Fees and Arbitration. The parties acknowledge and
-------------------------------
agree that time is of the essence in resolving any dispute that may arise in
connection with this Agreement. Except as set forth herein, any controversy or
claim arising out of or relating to this Agreement, or the breach thereof, that
cannot be resolved between the parties in a timely manner shall be settled by
binding arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association ("AAA"). The expenses of the arbitration,
including the arbitrators' fees, expert witness fees, and attorneys' fees, may
be awarded to the prevailing party, in the discretion of the arbitrator, or may
be apportioned among the parties in any manner deemed appropriate by the
arbitrator. Unless and until the arbitrator decides that one party is to pay
for all (or a share) of such expenses, each party to the dispute shall bear its
own fees and costs arising in connection with the enforcement of the Agreement.
Not withstanding the foregoing, the Company, in accordance with the provisions
of Section 5 of this Agreement, may seek equitable enforcement of the terms of
this Agreement in any court of competent jurisdiction.
11. Choice of Law. This Agreement shall be construed, interpreted
-------------
and the rights of the parties determined in accordance with the laws of the
State of California.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed on their respective behalf, by their respective officers
thereunto duly authorized, all as of the day and year first above written.
"COMPANY"
/s/ Christopher A. Crane
- -------------------------
COMPS InfoSystems, Inc.
a Delaware corporation
By: Christopher A. Crane
Its: President
"BEASLEY"
/s/ Robert C. Beasley
- ------------------------
Robert C. Beasley
<PAGE>
Exhibit 10.19
FORM OF NON-COMPETITION AND NON-DISCLOSURE AGREEMENT
This NON-COMPETITION AND NON-DISCLOSURE AGREEMENT (this "Agreement")
is made as of November 6, 1998 by and between COMPS INFOSYSTEMS, INC., a
Delaware corporation (the "Company"), and __________________ ("Seller").
RECITALS
--------
WHEREAS, the Company, Seller, Emmett DeMoss, an individual, and Robert
Potter, an individual, have entered into that certain Asset Purchase Agreement
of even date herewith (the "Purchase Agreement") pursuant to which the Company
is purchasing substantially all of the assets of REALBID (the "Purchased
Assets");
WHEREAS, the going concern value of the Purchased Assets and the
business being sold by REALBID to the Company would be diminished substantially
if Seller were to compete with the Company in such business or in the Company's
business within the United States (the "Territory");
WHEREAS, the Purchase Agreement requires that Seller enter into this
Agreement as a condition to the obligation of the Company to purchase the
Purchased Assets and to consummate the transactions contemplated by the Purchase
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants set forth in
this Agreement, and in connection with the Closing under the Purchase Agreement
and the sale of the Purchased Assets in connection therewith, the parties hereto
agree as follows (capitalized terms used herein and not otherwise defined herein
shall have the meanings given such terms in the Purchase Agreement):
1. Non-Competition. As an inducement for the Company to enter into
---------------
the Purchase Agreement and to pay the Purchase Price, Seller hereby covenants as
follows:
a. In General. Commencing on the date hereof (the "Effective
----------
Date") and for a period equal to the earlier of
(i) (x) one year after the date of the termination of Seller's
employment with COMPS (1) if Seller's employment with COMPS is terminated for
cause, (2) if Seller's employment with COMPS is terminated without cause during
the first two years of Seller's employment with COMPS or (3) if Seller
voluntarily terminated his employment with COMPS, or (y) if Seller's employment
with COMPS is terminated without cause after Seller's first two years of
employment with COMPS, the shorter of (1) six months after the date of the
termination of Seller's employment with COMPS and (2) the remaining term of
Seller's employment under his employment agreement with COMPS; or
(ii) four (4) years after the Effective Date (the "Term"),
Seller shall not, directly or indirectly, own, manage, engage in, operate or
conduct, prepare to or plan to conduct or assists any person or entity to
conduct any business, or have any interest in
<PAGE>
any business, person, firm, corporation or other entity (as a principal, owner,
agent, employee, shareholder, officer, director, joint venturer, partner,
security holder (except for the ownership of publicly-traded securities
constituting not more than five percent (5%) of the outstanding securities of
the issuer thereof), creditor (except for trade credit extended in the ordinary
course of business), consultant or in any other capacity that engages in any
business which is the same as, similar to or competitive with the Company in the
commercial real estate information business, which commercial real estate
information business shall include without limitation, buyer/seller matching,
transaction facilitation, listing services, sales comparables, lease
comparables, space availability, tenant information, property inventory,
property characteristics, automated valuation models and city and regional
market overviews (collectively the "Business"), within the Territory. The
covenants set forth in this Section 1(a) shall be construed as a series of
-----------
separate covenants covering their subject matter in each of the separate states
where the Company conducts the Business, and except for geographic coverage,
each such separate covenant shall be deemed identical in terms to the covenant
set forth above in this Section 1(a). To the extent that any such covenant shall
------------
be judicially unenforceable in any one or more of such state, such covenant
shall not be affected with respect to each of the other states in the Territory.
Each covenant with respect to such state in the Territory shall be construed as
severable and independent.
b. No Diversion of Others. During the Term, Seller shall not, either
----------------------
for itself or for any other person, firm, corporation or other entity, directly
or indirectly, or by action in concert with others:
(i) induce or influence, or seek to induce or influence, any
person who is engaged by the Company (as an agent, employee, consultant, or in
any other capacity) or any successor thereto with the purpose of obtaining such
person as an employee or customer for a business competitive with the Business;
or
(ii) divert or take away or attempt to divert or take away, or
solicit or attempt to solicit, any existing or potential customer of the Company
(whether or not such customer is actually a customer of the Company as of the
Effective Date, including without limitation any customer solicited by Seller or
which became known by Seller prior to the Effective Date) with the purpose of
obtaining such person as an employee or customer for a business competitive with
the Business.
c. Organizing Competitive Business. Without limiting any of the
-------------------------------
other provisions contained in this Section 1, during the Term, Seller shall not
---------
plan to compete, prepare to compete or discuss with the Business with any third
party, planning or preparing to compete with the Business, or conspire with
agents, employees, consultants, other representatives of the Company or any
other third party for the purpose of organizing any business activity
competitive with the Business.
2. Confidential Information and Non-Disclosure.
-------------------------------------------
a. Definition of Confidential Information. Seller hereby
--------------------------------------
acknowledges that the Purchased Assets include the confidential and proprietary
<PAGE>
information regarding Seller in existence prior to the date hereof and other
confidential and proprietary information of the Company (collectively,
"Confidential Information"), which Confidential Information shall include,
without limitation, all of the following materials and information (whether or
not reduced to writing and whether or not patentable or protected by copyright):
(i) any and all trade secrets concerning the business and affairs of the
Business, product specifications, data, procedures, know-how, formulae,
compositions, processes, designs, sketches, photographs, graphs, drawings,
samples, inventions, models, documentation, techniques, diagrams, flowcharts,
new products and new technology information, product prototypes, product copies,
manufacturing, development or marketing techniques, material, development or
marketing timetables, strategies and development plans, and ideas, past, current
and planned research and development, current and planned manufacturing and
distribution methods and processes, customer lists, current and anticipated
customer requirements, price lists, market studies, business plans, computer
software and programs (including object code and source code), computer software
and database technologies and information (including without limitation
confirmed sales transactions, buyer and seller information, listings, space
availability and tenant and lease comparables), systems, structures and
architectures (and related processes, formulae, compositions, improvements,
devices, know-how, inventions, discoveries, concepts, ideas, designs, methods
and information) of the Business including but not limited to information
related to the customers, suppliers or personnel of the Business, and any other
information, however, documented, of the Business that is a trade secret within
the meaning of any and all applicable state and federal trade secret laws; (ii)
any and all information concerning the business and affairs of the Business
(which includes historical financial statements, financial projections and
budgets, historical and projected sales, capital spending budgets and plans, the
names and backgrounds of key personnel and personnel training and techniques and
materials), however documented; and (iii) any and all notes, analysis,
compilations, studies, summaries, and other material prepared by or for the
Business containing or based, in whole or in part, on any information included
in the foregoing. The parties hereto agree that the failure of any Confidential
Information to be marked or otherwise labeled as confidential or proprietary
information shall not affect its status as Confidential Information.
Notwithstanding the foregoing, Confidential Information shall not include any
information (i) which is generally known to the public or to companies in
businesses similar to the Business (except for companies which license such
Confidential Information from the Company), (ii) which later, through no act of
Seller or any other party to the Purchase Agreement (except the Company),
becomes generally known or (iii) which is required to be disclosed by Seller
pursuant to a subpoena or court order, or pursuant to a requirement of a
governmental agency or law of the United States of America or a state thereof or
any governmental or political subdivision thereof, provided that (a) Seller will
provide the Company with prior written notice of such disclosure in order that
the Company may attempt to obtain a protective order or other assurance of
confidential treatment and (b) Seller will cooperate with the Company in
attempting to obtain such order or assurance.
b. Non-Use and Non-Disclosure. Commencing on the date hereof, Seller
--------------------------
shall hold in the strictest confidence (except as previously approved by the
Company in writing), and shall not, directly or indirectly, disclose, divulge,
reveal, report, publish, transfer or otherwise communicate, or use for its own
benefit or the benefit of any other person, partnership, firm, corporation or
other entity, or use to the detriment of the Company, or misuse in any way, any
Confidential Information. Seller acknowledges that it will in no way infringe
upon any COMPS' copyrights and will in no way use, copy, appropriate or
redistribute any part of the Confidential Information, whether obtained directly
or indirectly from COMPS, without a
<PAGE>
specific written license agreement with COMPS. It is agreed that derivative,
modification or elaboration of any Confidential Information by any third party
remains the proprietary property of COMPS for purposes of this Agreement. Seller
and the Company each hereby stipulates that, as between them, all Confidential
Information acquired by the Company constitutes important, material and
confidential and/or proprietary information of the Company and the Business,
constitutes unique and valuable information, and affects the successful conduct
of the Business and the Company's goodwill, and that the Company shall be
entitled to recover its damages, in addition to any injunctive remedy that may
be available, for any breach of this Section 2.
---------
c. Trade Secrets. All trade secrets of the Business will be entitled
-------------
to all of the protection and benefits under all applicable federal and state
trade secrets law. If any information that the Company deems to be a trade
secret is found by a court of competent jurisdiction not to be a trade secret
for purposes of this Agreement, such information will, nevertheless, be
considered Confidential Information for purposes of this Agreement. Seller
hereby waives any requirement that the Company submit proof of the economic
value of any trade secret or post a bond or other security.
d. Ownership. Seller hereby acknowledges and agrees that all right,
---------
title and interest in and to any Confidential Information shall be the exclusive
property of the Company, and that any Confidential Information which the Seller
acquired from REALBID was received in confidence and as a fiduciary of REALBID.
Without limiting the foregoing, Seller shall assign to the Company any and all
right, title or interest which Seller may have in all Confidential Information
made, developed or conceived of in whole or in part by Seller during his term as
an officer of REALBID. Seller further agrees to execute and deliver any and all
instruments, and to do all other things reasonably requested by the Company in
order to vest more fully in the Company all ownership rights in such
Confidential Information. All equipment, notebooks, documents, memoranda,
reports, files, samples, books, correspondence, lists, other written and graphic
records, and the like, in any way relating to any Confidential Information or
the Business, which Seller prepared, used, constructed, observed, processed, or
controlled (collectively, "Materials") shall be the Company's exclusive
property, and Seller hereby agrees to deliver all Materials, together with any
and all copies thereof, promptly to the Company at the Company's request.
3. Reasonableness of Restrictions. SELLER HAS CAREFULLY READ AND
------------------------------
CONSIDERED THE PROVISIONS OF SECTIONS 1 AND 2 HEREOF AND, HAVING DONE SO, HEREBY
---------- -
AGREES THAT THE RESTRICTIONS SET FORTH IN SUCH SECTIONS ARE FAIR AND REASONABLE
AND ARE REASONABLY REQUIRED FOR THE PROTECTION OF THE INTERESTS OF THE COMPANY
AND THE BUSINESS.
4. Injunctive Relief.
-----------------
a. In General. Seller acknowledges and agrees that the Company shall
----------
suffer irreparable harm in the event that Seller breaches any of its obligations
under Section 1 or 2 hereof, and that monetary damages shall be inadequate to
--------- -
compensate the Company for any such breach. Accordingly, Seller agrees that in
the event of any breach or threatened breach by Seller of any of the provisions
of Section 1 or 2 hereof, the Company shall be entitled to a temporary
--------- -
restraining order, preliminary injunction and permanent injunction in order to
prevent
<PAGE>
or restrain any such breach or threatened breach by Seller, or by any or all of
Seller's agents, representatives or other persons directly or indirectly acting
for, on behalf of or with Seller.
b. No Limitation of Remedies. Notwithstanding the provisions set
-------------------------
forth in Section 4(a), above, or any other provision contained in this
Agreement, the parties hereby agree that no remedy conferred by any of the
specific provisions of this Agreement, including, without limitation, this
Section 4, is intended to be exclusive of any other remedy, and each and every
- ---------
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise.
5. MISCELLANEOUS
-------------
a. Notices. All notices, requests and other communications hereunder
-------
must be in writing and will be deemed to have been duly given only if delivered
personally against written receipt or by facsimile transmission with answer back
confirmation or mailed (postage prepaid by certified or registered mail, return
receipt requested) or by overnight courier to the parties at the following
addresses or facsimile numbers:
If to Seller, to:
REALBID LLC
700 Larkspur Landing Circle, Suite 199
Larkspur, CA 94939
Facsimile No.: (415) 464-4196
Attention: Emmett DeMoss
If to the Company, to:
COMPS InfoSystems, Inc.
9888 Carroll Centre Road
Suite 100
San Diego, CA 92126
Facsimile No.: (619) 684-3292
Attention: Christopher A. Crane
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section 5(a), be deemed given upon
------------
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section 5(a), be deemed given upon receipt, and (iii) if
------------
delivered by mail in the manner described above to the address as provided in
this Section 5(a), be deemed given upon receipt (in each case regardless of
------------
whether such notice, request or other communication is received by any other
Person to whom a copy of such notice, request or other communication is to be
delivered pursuant to this Section). Any party from time to time may change its
address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other parties hereto.
b. Entire Agreement. This Agreement, all exhibits attached hereto,
----------------
the Purchase Agreement and the documents executed in connection with the
Purchase Agreement supersede all prior discussions and agreements among the
parties with respect to the
<PAGE>
subject matter hereof and contains the sole and entire agreement among the
parties hereto with respect thereto.
c. Waiver. Any term or condition of this Agreement may be waived at
------
any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party waiving such term or condition. No waiver by any
party hereto of any term or condition of this Agreement, in any one or more
instances, shall be deemed to be or construed as a waiver of the same or any
other term or condition of this Agreement on any future occasion. All remedies,
either under this Agreement or by law or otherwise afforded, will be cumulative
and not alternative.
d. Amendment. This Agreement may be amended, supplemented or
---------
modified only by a written instrument duly executed by or on behalf of each
party hereto.
e. No Third Party Beneficiary. The terms and provisions of this
--------------------------
Agreement are intended solely for the benefit of each party hereto and the
Company's successors or assigns, and it is not the intention of the parties to
confer third-party beneficiary rights upon any other Person.
f. No Assignment; Binding Effect. This Agreement shall inure to the
-----------------------------
benefit of any successors or assigns of the Company. Seller shall not be
entitled to assign its obligations under this Agreement.
g. Headings. The headings used in this Agreement have been inserted
--------
for convenience of reference only and do not define or limit the provisions
hereof.
h. Severability. If any provision of this Agreement is held to be
------------
illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, (c) the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible and mutually acceptable to
the parties herein.
i. Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of California applicable to contracts
executed and performed in such State, without giving effect to conflicts of laws
principles.
j. Attorneys Fees. In the event suit or action is brought by any
--------------
party under this Agreement to enforce or construe any of its terms, the
prevailing party shall be entitled to recover, in addition to all other amounts
and relief, its reasonable costs and attorneys fees incurred at and in
preparation for arbitration, trial, appeal and review, such sum to be set by the
arbitrator or court before which the matter is heard.
<PAGE>
k. Counterparts. This Agreement may be executed in any number of
------------
counterparts and by facsimile, each of which will be deemed an original, but all
of which together will constitute one and the same instrument.
[SIGNATURE PAGE TO FOLLOW]
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has duly executed this
Agreement as of the date first above written.
COMPS INFOSYSTEMS, INC.,
a Delaware corporation
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
SELLER
By:
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[SIGNATURE PAGE TO THE REALBID NON-COMPETITION
AND NON-DISCLOSURE AGREEMENT]
<PAGE>
Schedule 1 to Exhibit 10.19
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Parties
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REALBID LLC, a California limited liability company
Emmett DeMoss, an individual
Robert Potter, an individual
<PAGE>
Exhibit 10.20
FORM OF
NON-COMPETITION AND NON-DISCLOSURE AGREEMENT
This NON-COMPETITION AND NON-DISCLOSURE AGREEMENT (this "Agreement")
is made as of _________, 199_ by and between COMPS INFOSYSTEMS, INC., a Delaware
corporation (the "Company"), and __________________ ("Principal").
RECITALS
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WHEREAS, the Company, [AOBR, Inc., a Texas corporation ("AOBR")],
[Linda Hoffman, an individual ("Hoffman"),] [Guy Goodwin, an individual,] and
[Don Guy, an individual,] have entered into that certain Asset Purchase
Agreement, dated as of December __, 1998 (the "Purchase Agreement") pursuant to
which the Company is purchasing all of the assets related to Hoffman Valuation
Data Services (the "Purchased Assets");
WHEREAS, the going concern value of the Purchased Assets and the
business being sold by AOBR and Hoffman to the Company would be diminished
substantially if the Principal were to compete with the Company in such business
or in the Company's business within the United States (the "Territory");
WHEREAS, the Purchase Agreement requires that Principal enter into
this Agreement as a condition to the obligation of the Company to purchase the
Purchased Assets and to consummate the transactions contemplated by the Purchase
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants set forth in
this Agreement, and in connection with the Closing under the Purchase Agreement
and the sale of the Purchased Assets in connection therewith, the parties hereto
agree as follows (capitalized terms used herein and not otherwise defined herein
shall have the meanings given such terms in the Purchase Agreement):
1. Non-Competition. As an inducement for the Company to enter into
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the Purchase Agreement and to pay the Purchase Price, Principal hereby covenants
as follows:
a. In General. Commencing on the date hereof (the "Effective Date")
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and for a period of two (2) years after the Effective Date (the "Term"),
Principal shall not, directly or indirectly, own, manage, engage in, operate or
conduct, prepare to or plan to conduct or assist any person or entity to conduct
any business, or have any interest in any business, person, firm, corporation or
other entity (as a principal, owner, agent, employee, shareholder, officer,
director, joint venturer, partner, security holder (except for the ownership of
publicly-traded securities constituting not more than five percent (5%) of the
outstanding securities of the issuer thereof), creditor (except for trade credit
extended in the ordinary course of business), consultant or in any other
capacity) that engages, directly or indirectly, in any business which is the
same as, similar to or competitive with the Company in the Business, which
Business shall include without limitation, the collection and distribution of
sales comparable information or publication of materials similar to the Report
(whether in electronic form or hard copy form), within the Territory.
Notwithstanding the foregoing, the Business will not include sales
<PAGE>
comparable information required to produce the Austin Office Building Report
which information will be licensed to AOBR for the sole purpose of preparing the
Austin Office Building Report. The covenants set forth in this Section 1(a)
shall be construed as a series of separate covenants covering their subject
matter in each of the separate states where the Company conducts the Business,
and except for geographic coverage, each such separate covenant shall be deemed
identical in terms to the covenant set forth above in this Section 1(a). To the
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extent that any such covenant shall be judicially unenforceable in any one or
more of such state, such covenant shall not be affected with respect to each of
the other states in the Territory. Each covenant with respect to such state in
the Territory shall be construed as severable and independent.
b. No Diversion of Others. During the Term, Principal shall not,
----------------------
either for itself or for any other person, firm, corporation or other entity,
directly or indirectly, or by action in concert with others:
(i) induce or influence, or seek to induce or influence, any person
who is engaged by the Company (as an agent, employee, consultant, or in any
other capacity) or any successor thereto with the purpose of obtaining such
person as an employee or customer for a business competitive with the Business;
or
(ii) divert or take away or attempt to divert or take away, or solicit
or attempt to solicit, any existing or potential customer of the Company
(whether or not such customer is actually a customer of the Company as of the
Effective Date, including without limitation any customer solicited by Principal
or which became known by Principal prior to the Effective Date) with the purpose
of obtaining such person as an employee or customer for a business competitive
with the Business.
c. Organizing Competitive Business. Without limiting any of the
-------------------------------
other provisions contained in this Section 1, during the Term, Principal shall
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not plan to compete, prepare to compete or discuss the Business with any third
party, planning or preparing to compete with the Business, or conspire with
agents, employees, consultants, other representatives of the Company or any
other third party for the purpose of organizing any business activity
competitive with the Business.
2. Confidential Information and Non-Disclosure.
-------------------------------------------
a. Definition of Confidential Information. Principal hereby
--------------------------------------
acknowledges that the Purchased Assets include the confidential and proprietary
information regarding Principal in existence prior to the date hereof and other
confidential and proprietary information of the Company (collectively,
"Confidential Information"), which Confidential Information shall include,
without limitation, all of the following materials and information (whether or
not reduced to writing and whether or not patentable or protected by copyright):
(i) any and all trade secrets concerning the business and affairs of the
Business, product specifications, data, know-how, formulae, compositions,
processes, designs, sketches, photographs, graphs, drawings, samples, inventions
and ideas, customer lists, current and anticipated customer requirements, price
lists, market studies, business plans of the Business and any other information,
however, documented, of the Business that is a trade secret within the
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<PAGE>
meaning of any and all applicable state and federal trade secret laws; (ii) any
and all information concerning the business and affairs of the Business (which
includes historical financial statements, financial projections and budgets and
historical and projected sales), however documented; and (iii) any and all
notes, analysis, compilations, studies, summaries, and other material prepared
by or for the Business containing or based, in whole or in part, on any
information included in the foregoing. The parties hereto agree that the failure
of any Confidential Information to be marked or otherwise labeled as
confidential or proprietary information shall not affect its status as
Confidential Information. Notwithstanding the foregoing, Confidential
Information shall not include any information which is generally known to the
public or to companies in businesses similar to the Business, or which later,
through no act of Principal or any other party to the Purchase Agreement (except
the Company), becomes generally known.
b. Non-Use and Non-Disclosure. Commencing on the date hereof,
--------------------------
Principal shall hold in the strictest confidence (except as previously approved
by the Company in writing), and shall not, directly or indirectly, disclose,
divulge, reveal, report, publish, transfer or otherwise communicate, or use for
its own benefit or the benefit of any other person, partnership, firm,
corporation or other entity, or use to the detriment of the Company, or misuse
in any way, any Confidential Information. Principal and the Company each hereby
stipulates that, as between them, all Confidential Information acquired by the
Company constitutes important, material and confidential and/or proprietary
information of the Company and the Business, constitutes unique and valuable
information, and affects the successful conduct of the Business and the
Company's goodwill, and that the Company shall be entitled to recover its
damages, in addition to any injunctive remedy that may be available, for any
breach of this Section 2.
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c. Trade Secrets. All trade secrets of the Business will be entitled
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to all of the protection and benefits under all applicable federal and state
trade secrets law. If any information that the Company deems to be a trade
secret is found by a court of competent jurisdiction not to be a trade secret
for purposes of this Agreement, such information will, nevertheless, be
considered Confidential Information for purposes of this Agreement. Principal
hereby waives any requirement that the Company submit proof of the economic
value of any trade secret or post a bond or other security.
d. Ownership. Principal hereby acknowledges and agrees that all
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right, title and interest in and to any Confidential Information shall be the
exclusive property of the Company, and that any Confidential Information which
the Principal acquired from AOBR or Hoffman was received in confidence and as a
fiduciary of AOBR. Without limiting the foregoing, Principal shall assign to
the Company any and all right, title or interest which Principal may have in all
Confidential Information made, developed or conceived of in whole or in part by
Principal during his/her term as company principal or affiliate of AOBR.
Principal further agrees to execute and deliver any and all instruments, and to
do all other things reasonably requested by the Company in order to vest more
fully in the Company all ownership rights in such Confidential Information. All
notebooks, documents, memoranda, reports, files, samples, books, correspondence,
lists, other written and graphic records, and the like, in any way relating to
any Confidential Information or the Business, which Principal prepared, used,
constructed, observed, processed, or controlled (collectively, "Materials")
shall be the Company's
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<PAGE>
exclusive property, and Principal hereby agrees to deliver all Materials,
together with any and all copies thereof, promptly to the Company at the
Company's request.
3. Reasonableness of Restrictions. PRINCIPAL HAS CAREFULLY READ AND
------------------------------
CONSIDERED THE PROVISIONS OF SECTIONS 1 AND 2 HEREOF AND, HAVING DONE SO, HEREBY
AGREES THAT THE RESTRICTIONS SET FORTH IN SUCH SECTIONS ARE FAIR AND REASONABLE
AND ARE REASONABLY REQUIRED FOR THE PROTECTION OF THE INTERESTS OF THE COMPANY
AND THE BUSINESS.
4. Injunctive Relief.
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a. In General. Principal acknowledges and agrees that the
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Company shall suffer irreparable harm in the event that Principal breaches any
of its obligations under Section 1 or 2 hereof, and that monetary damages shall
be inadequate to compensate the Company for any such breach. Notwithstanding the
arbitration provision of the Purchase Agreement, Principal agrees that in the
event of any breach or threatened breach by Principal of any of the provisions
of Section 1 or 2 hereof, the Company shall be entitled to a temporary
restraining order, preliminary injunction and permanent injunction in order to
prevent or restrain any such breach or threatened breach by Principal, or by any
or all of Principal's agents, representatives or other persons directly or
indirectly acting for, on behalf of or with Principal.
b. No Limitation of Remedies. Notwithstanding the provisions set
-------------------------
forth in Section 4(a), above, or any other provision contained in this
Agreement, the parties hereby agree that no remedy conferred by any of the
specific provisions of this Agreement, including, without limitation, this
Section 4, is intended to be exclusive of any other remedy, and each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise.
5. MISCELLANEOUS
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a. Notices. All notices, requests and other communications
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hereunder must be in writing and will be deemed to have been duly given only if
delivered personally against written receipt or by facsimile transmission with
answer back confirmation or mailed (postage prepaid by certified or registered
mail, return receipt requested) or by overnight courier to the parties at the
following addresses or facsimile numbers:
If to Principal, to:
AOBR, Inc.
8303 North Mopac, Suite B-325
Austin, TX 78759
Facsimile No: (512) 346-4873
Attention: Linda Hoffman and Guy Goodwin
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<PAGE>
If to the Company, to:
COMPS InfoSystems, Inc.
9888 Carroll Centre Road, Suite 100
San Diego, CA 92126
Facsimile No.: (619) 684-3292
Attention: Christopher Crane
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section 5(a), be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section 5(a), be deemed given upon receipt, and (iii) if
delivered by mail in the manner described above to the address as provided in
this Section 5(a), be deemed given upon receipt (in each case regardless of
whether such notice, request or other communication is received by any other
Person to whom a copy of such notice, request or other communication is to be
delivered pursuant to this Section). Any party from time to time may change its
address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other parties hereto.
b. Entire Agreement. This Agreement (and all exhibits attached
----------------
hereto) the Purchase Agreement (and all exhibits and schedules attached thereto)
and all other documents delivered in connection herewith supersede all prior
discussions and agreements among the parties with respect to the subject matter
hereof and thereof and contains the sole and entire agreement among the parties
hereto with respect thereto.
c. Waiver. Any term or condition of this Agreement may be waived at
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any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party waiving such term or condition. No waiver by any
party hereto of any term or condition of this Agreement, in any one or more
instances, shall be deemed to be or construed as a waiver of the same or any
other term or condition of this Agreement on any future occasion. All remedies,
either under this Agreement or by law or otherwise afforded, will be cumulative
and not alternative.
d. Amendment. This Agreement may be amended, supplemented or
---------
modified only by a written instrument duly executed by or on behalf of each
party hereto.
e. No Third Party Beneficiary. The terms and provisions of this
--------------------------
Agreement are intended solely for the benefit of each party hereto and the
Company's successors or assigns, and it is not the intention of the parties to
confer third-party beneficiary rights upon any other Person.
f. No Assignment; Binding Effect. This Agreement shall inure to the
-----------------------------
benefit of any successors or assigns of the Company. Principal shall not be
entitled to assign its obligations under this Agreement.
g. Headings. The headings used in this Agreement have been inserted
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for convenience of reference only and do not define or limit the provisions
hereof.
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<PAGE>
h. Severability. If any provision of this Agreement is held to be
------------
illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, (c) the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible and mutually acceptable to
the parties herein.
i. Governing Law. This Agreement shall be governed by and construed
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in accordance with the laws of the State of California applicable to contracts
executed and performed in such State, without giving effect to conflicts of laws
principles.
j. Attorneys Fees. In the event suit or action is brought by any
--------------
party under this Agreement to enforce or construe any of its terms, the
prevailing party shall be entitled to recover, in addition to all other amounts
and relief, its reasonable costs and attorneys fees incurred at and in
preparation for arbitration, trial, appeal and review, such sum to be set by the
arbitrator or court before which the matter is heard.
k. Construction. No provision of this Agreement shall be construed
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in favor of or against any party on the ground that such party or its counsel
drafted the provision. Any remedies provided for herein are not exclusive of
any other lawful remedies which may be available to either party. This
Agreement shall at all times be construed so as to carry out the purposes stated
herein.
l. Counterparts. This Agreement may be executed in any number of
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counterparts and by facsimile, each of which will be deemed an original, but all
of which together will constitute one and the same instrument.
[SIGNATURE PAGE TO FOLLOW]
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has duly executed this
Agreement as of the date first above written.
COMPS INFOSYSTEMS, INC.,
a Delaware corporation
By:
------------------------
Name:
------------------------
Title:
------------------------
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[Principal]
[SIGNATURE PAGE TO THE FORM OF
NON-COMPETITION AND NON-DISCLOSURE AGREEMENT]
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<PAGE>
Schedule 1 to Exhibit 10.20
---------------------------
Principals
- ----------
AOBR, Inc., a Texas corporation
Linda Hoffman, an individual
Guy Goodwin, an individual
Don Guy, an individual
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<PAGE>
Exhibit 10.21
FORM OF EMPLOYEE CONFIDENTIALITY
AND INVENTIONS AGREEMENT
(Date)
(Name/address)
The following confirms an agreement between me and COMPS InfoSystems, Inc.,
a Delaware corporation (the "Company"), which is a material part of the
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consideration for my employment by the Company:
1. (a) I understand that the Company possesses and will possess
Proprietary Information which is important to its business. For purposes of this
Agreement, "Proprietary Information" is information that was or will be
developed, created, or discovered by or on behalf of the Company, or which
became or will become known by, or was or is conveyed to the Company, which has
commercial value in the Company's business. "Proprietary Information" includes,
----------- -----------
but is not limited to, information about real estate sales comparables, real
estate listings, real estate leases, real estate inventory, real estate space
availability, tenants, algorithms, trade secrets, licenses, computer programs,
designs, technology, ideas, know-how, processes, formulas, compositions, data,
techniques, improvements, inventions (whether patentable or not), works of
authorship, business and product development plans, skills or salaries or terms
of compensation of other employees, information about customers, budgets,
prices, costs, and other information concerning the Company's actual or
anticipated business, research or development, or which is received in
confidence by or for the Company from any other person. I understand that my
employment creates a relationship of confidence and trust between me and the
Company with respect to Proprietary Information. I have been informed and
acknowledge that the unauthorized taking of the Company's Proprietary
Information (i) could result in a civil liability under California Civil Code
Section 3426, and that, if willful, could result in an award for double the
amount of the Company's damages and attorneys' fees; and (ii) is a crime under
California Penal Code Section 499(c), punishable by imprisonment for a time not
exceeding one (1) year, or by a fine not exceeding five thousand dollars
($5,000), or by both.
(b) I acknowledge and agree that COMPS' software and databases
including, but not limited to, real estate sales transactions, listings, lease
comparables, inventories, tenants, and space availability are proprietary to
COMPS and the sole property of COMPS. I acknowledge that COMPS' information and
software is copyrighted and that I will in no way win infringe upon such
copyrights. I will in no way use, copy, appropriate, or redistribute this
information, whether obtained directly or indirectly from COMPS, without a
specific written license agreement with COMPS. I agree that any derivative,
modification or elaboration of COMPS' software or databases by a third party is
still the proprietary property of COMPS for purposes of this Agreement.
2. I understand that the Company possesses or will possess "Company
Materials" which are important to its business. For purposes of this Agreement,
"Company Materials" are documents or other media or tangible items that contain
- ------------------
or embody Proprietary
-1-
________
Initials
<PAGE>
Information or any other information concerning the business, operations or
plans of the Company, whether such documents have been prepared by me or by
others. "Company Materials" include, but are not limited to, blueprints,
drawings, photographs, charts, graphs, software, functional and technical
specifications, software concepts, methodologies, notebooks, customer lists,
computer disks, tapes or printouts, sound recordings and other printed,
typewritten or handwritten documents, as well as samples, prototypes, models,
products and the like.
3. In consideration of my employment by the Company and the compensation
received by me from the Company from time to time, I hereby agree as follows:
a. All Proprietary Information and all title, patents, patent rights,
copyrights, mask work rights, trade secret rights, and other intellectual
property and rights (collectively "Rights") in connection therewith will be the
------
sole property of the Company. I hereby assign to the Company any Rights I may
have or acquire in such Proprietary Information. At all times, both during my
employment by the Company and after its termination, I will keep in confidence
and trust and will not use or disclose any Proprietary Information or anything
relating to it without the prior written consent of the President or Chairman of
the Company except as may be necessary and appropriate in the ordinary course of
performing my duties to the Company. Nothing contained herein will prohibit an
employee from disclosing to anyone the amount of his or her wages.
b. All Company Materials will be the sole property of the Company.
I further agree that any property situated on the Company's premises and owned
by the Company, including disks and other storage media, filing cabinets or
other work areas, are subject to inspection by Company personnel at any time
with or without notice. I agree that during my employment by the Company, I will
not remove any Company Materials from the business premises of the Company or
deliver any Company Materials to any person or entity outside the Company,
except as I am required to do in connection with performing the duties of my
employment. I further agree that, immediately upon the termination of my
employment by me or by the Company for any reason, or during my employment if so
requested by the Company, I will return all Company Materials, apparatus,
equipment and other physical property, or any reproduction of such property,
excepting only (i) my personal copies of records relating to my compensation;
(ii) my personal copies of any materials previously distributed generally to
stockholders of the Company; and (iii) my copy of this Agreement.
c. I will promptly disclose in writing to my immediate supervisor,
with a copy to the President of the Company, or to any persons designated by the
Company, all "Inventions," which includes all improvements, inventions, designs,
----------
formulas, works of authorship, trade secrets, technology, computer programs,
layouts, algorithms, computer programs, formulas, compositions, ideas, designs,
processes, techniques, know-how and data, whether or not patentable, made or
conceived or reduced to practice or developed by me, either alone or jointly
with others, during the term of my employment. I will also disclose to the
-2-
________
Initials
<PAGE>
President of the Company all things that would be Inventions if made during the
term of my employment, conceived, reduced to practice, or developed by me within
six months after the termination of my employment with the Company. Such
disclosures will be received by the Company in confidence (to the extent they
are not assigned in Section (d) below) and do not extend the assignment made in
-----------
Section 3(d) below. I will not disclose Inventions to any person outside the
- ------------
Company unless I am requested to do so by management personnel of the Company.
d. I agree that all Inventions which I make, conceive, reduce to
practice or develop (in whole or in part, either alone or jointly with others)
during my employment will be the sole property of the Company to the maximum
extent permitted by Section 2870 of the California Labor Code, a copy of which
is attached, and I hereby assign such Inventions and all Rights therein to the
Company. No assignment in this Agreement will extend to inventions, the
assignment of which is prohibited by Labor Code Section 2870 (attached
Attachment A). At the time of each such disclosure, I will advise the Company
- ------------
in writing of any inventions that I believe fully qualify for protection under
Section 2870; and I will at that time provide to the Company in writing all
evidence necessary to substantiate that belief I understand that the Company
will keep in confidence and will not disclose to third parties without my
consent any proprietary information disclosed in writing to the Company pursuant
to this Agreement relating to inventions that qualify fully for protection under
the provisions of Section 2870. 1 will preserve the confidentiality of any
invention that does not qualify fully for protection under Section 2870. 1 agree
to keep and maintain adequate and current records (in the form of notes,
sketches, drawings and in any other form that may be required by the Company) of
all Proprietary Information developed by me and all Inventions made by me during
the period of my employment at the Company, which records shall be available to
and remain the sole property of the Company at all times. I hereby waive and
quitclaim to the Company any and all claims of any nature whatsoever which I now
or may hereafter have for infringement of any proprietary rights assigned to the
Company.
e. I agree to perform, during and after my employment, all acts
deemed necessary or desirable by the Company to permit and assist it, at the
Company's expense, in obtaining, maintaining, defending and enforcing Rights
with respect to such Inventions and improvements in any and all countries. Such
acts may include, but are not limited to, execution of documents and assistance
or cooperation in legal proceedings, including appearing as a party or witness.
I hereby irrevocably designate and appoint the Company and its duly authorized
officers and agents, as my agents and attorneys-in-fact to act for and in my
behalf and instead of me, to execute and file any documents and to do all other
lawfully permitted acts to further the above purposes with the same legal force
and effect as if executed by me. My obligation to assist the Company with
respect to proprietary fights in any and all countries shall continue beyond the
termination of my employment, but the Company shall compensate me at a
reasonable rate after my termination for the time actually spent by me at the
Company's request on such assistance.
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Initials
<PAGE>
f. Any assignment of copyright pursuant to this Agreement includes
all rights of paternity, integrity, disclosure and withdrawal and any other
rights that may be known as or referred to as "moral rights" (collectively
"Moral Rights"). To the extent such Moral Rights cannot be assigned under
------------
applicable law and to the extent the following is allowed by the laws in the
various countries where Moral Rights exist, I hereby waive such Moral Rights and
consent to any action of the Company that would violate such Moral Rights in the
absence of such consent. I will confirm any such waivers and consents from time
to time as requested by the Company.
g. I have attached as Attachment B to this Agreement a complete
------------
list of all existing Inventions or improvements to which I claim ownership as of
the date of this Agreement and that I desire to specifically clarify are not
subject to this Agreement, and I acknowledge and agree that such list is
complete. If disclosure of an item on Attachment B would cause me to violate any
------------
prior confidentiality agreement, I understand that I am not to list such in
Attachment B but am to inform the Company that all items have not been
- ------------
listed for that reason. A space is provided on Attachment B for such purpose. If
------------
no such list is attached to this Agreement, I represent that I have no such
Inventions and improvements at the time of signing this Agreement.
___________[INITIAL HERE]
h. During the term of my employment and for one year thereafter, I
will not encourage or solicit any employee or consultant of the Company to leave
the Company for any reason. However, this obligation will not affect any
responsibility I may have as an employee of the Company with respect to the bona
fide hiring and firing of Company personnel.
i. I agree that during my employment with the Company I will not
engage in any employment, business, or activity that is in any way competitive
with the business or proposed business of the Company, and I will not prepare to
compete, nor will I assist any other person or organization in competing with
the Company or in preparing to engage in competition with the business or
proposed business of the Company. The provisions of this paragraph will apply
both during normal working hours and at all other times including, but not
limited to, nights, weekends and vacation time, while I am employed by the
Company.
j. I represent that my performance of all the terms of this
Agreement will not breach any agreement to keep in confidence proprietary
information acquired by me in confidence or in trust prior to my employment by
the Company. I have not entered into, and I agree I will not enter into, any
agreement either written or oral in conflict herewith or in conflict with my
employment with the Company. I agree that I will not, during my employment with
the Company, improperly use or disclose any proprietary information or trade
secrets of my former or concurrent employers, if any, and that I will not bring
onto the premises of the Company any unpublished documents or any property
belonging to my former or concurrent employers unless consented to in writing by
such employers.
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________
Initials
<PAGE>
k. I recognize that the Company has received and in the future will
receive from third parties their confidential or proprietary information subject
to a duty on the Company's part to maintain the confidentiality of such
information and, in some cases, to use it only for certain limited purposes. I
agree that I owe the Company and such third parties, both during the term of my
employment and thereafter, a duty to hold all such confidential or proprietary
information in the strictest confidence and not to disclose it to any person,
firm or corporation (except in a manner that is consistent with the Company's
agreement with the third party) or use it for the benefit of anyone other than
the Company or such third party (consistent with the Company's agreement with
the third party).
4. I agree that this Agreement is not an employment contract and that I
have the right to resign and the Company has the right to terminate my
employment at any time, for any reason, with or without cause.
5. I agree that this Agreement does not purport to set forth all of the
terms and conditions of my employment, and that as an employee of the Company I
have obligations to the Company which are not set forth in this Agreement.
6. I agree that
(a) my obligations under Sections 1(a) through Sections 1(b) and
------------- -------------
Sections 3(a) through 3(f) and Sections 3(h) and 3(k) of this Agreement will
- ------------- ---- ------------- ----
continue in effect after termination of my employment, regardless of the reason
or reasons for termination, and whether such termination is voluntary or
involuntary on my part, and that I will notify any future client, employer or
potential employer or client of my obligations under this Agreement;
(b) the Company is entitled to communicate my obligations under this
Agreement to any future employer or potential employer of mine;
(c) upon termination of my employment for any reason I will execute,
a bide by and deliver to the Company a termination certificate substantially in
the form attached to this Agreement as Attachment C; and
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(d) the Company has expended substantial efforts to maintain the
confidentiality of the Proprietary Information and would be materially and
irreparably injured by an unauthorized disclosure of any of that information
during my employment with the Company or thereafter, and that any breach of this
Agreement will result in irreparable and continuing damage to the Company for
which there can be no adequate remedy at law, and in the event of any such
breach, the Company will be entitled to immediate injunctive relief and other
equitable remedies (without any need to post any bond or other security) in
addition to such other and further relief as may be proper.
7. I agree that any dispute in the meaning, effect or validity of this
Agreement will be resolved in accordance with the laws of the State of
California without regard
-5-
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<PAGE>
to the conflict of laws provisions thereof to this Agreement. I further agree
that if one or more provisions of this Agreement are held to be illegal or
unenforceable under applicable California law, such illegal or unenforceable
portion(s) will be limited or excluded from this Agreement to the minimum extent
required so that this Agreement will otherwise remain in full force and effect
and enforceable in accordance with its terms. Venue for any action relating to
this Agreement shall be in San Diego County, California.
8. This Agreement will be effective as of the date I execute this
Agreement and will be binding upon me, my heirs, executors, assigns, and
administrators and will inure to the benefit of the Company, its subsidiaries,
successors and assigns.
9. This Agreement constitutes the entire agreement pertaining to the
subject matter hereof and supersedes all prior and contemporaneous oral, written
or implied agreements, representations, and understanding of the subject matter
hereof. This Agreement can only be modified by a subsequent written agreement
executed by the President or Chairman of the Company.
10. This Agreement is supplementary to, and shall not be considered a
waiver of, any rights of the Company that may exist independently of this
Agreement.
-6-
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<PAGE>
I HAVE READ THIS AGREEMENT CAREFULLY AND I UNDERSTAND AND ACCEPT THE
OBLIGATIONS WHICH IT IMPOSES UPON ME WITHOUT RESERVATION. NO PROMISES OR
REPRESENTATIONS HAVE BEEN MADE TO ME TO INDUCE ME TO SIGN THIS AGREEMENT. I
SIGN THIS AGREEMENT VOLUNTARILY AND FREELY, IN DUPLICATE, WITH THE UNDERSTANDING
THAT ONE ORIGINAL COUNTERPART WILL BE RETAINED BY THE COMPANY AND THE OTHER
ORIGINAL COUNTERPART WILL BE RETAINED BY ME.
Dated:__________, 19____ _____________________________________________
(Name)
Accepted and Agreed to:
By____________________________
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<PAGE>
ATTACHMENT A
------------
TO EMPLOYEE CONFIDENTIALITY AND INVENTIONS AGREEMENT
----------------------------------------------------
Section 2870. Application of provision providing that employee will assign
or offer to assign rights in invention to employer.
(a) Any provision in an employment agreement which provides that an
employee will assign, or offer to assign, any of his or her rights in an
invention to his or her employer will not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for these
inventions that either:
(1) Relate at the time of conception or reduction to practice of
the invention to the employer's business, or actual or demonstrably anticipated
research or development of the employer, or
(2) Result from any work performed by the employee for the
employer.
(b) To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is against the
public policy of this state and is unenforceable.
-8-
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<PAGE>
ATTACHMENT B
------------
TO EMPLOYEE CONFIDENTIALITY AND INVENTIONS AGREEMENT
----------------------------------------------------
(Name/address)
1. The following is a [complete] list of inventions or improvements
relevant to the subject matter of my employment by COMPS InfoSystems, Inc. (the
"Company") that have been made or conceived or first reduced to practice by me
alone or jointly with others prior to my employment by the Company that I desire
to clarify are not subject to the Company's Confidentiality and Inventions
Agreement.
No inventions or improvements
See below:
Due to confidentiality agreements with a prior employer, I cannot
disclose certain inventions that would otherwise be included on the above list.
Additional sheets attached
2. I propose to bring to my employment the following materials and
documents of a former employer, which employer has expressly consulted to my
continued possession and use.
No materials or documents
See below:
________________________________
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<PAGE>
ATTACHMENT C
------------
TO EMPLOYEE CONFIDENTIALITY AND INVENTIONS AGREEMENT
----------------------------------------------------
I hereby certify that I do not have in my possession, nor have I failed to
return, any devices, records, data, notes, reports, proposals, lists,
correspondence, specifications, drawings, blueprints, blue/redlines, sketches,
materials equipment, other documents or property, or reproductions of any
aforementioned items belonging to COMPS InfoSystems, Inc., its subsidiaries,
affiliates, successors or assigns (together, the "Company").
I further certify that I have complied with all the terms of the Company's
Employee Confidentiality and Inventions Agreement signed by me, including the
reporting of any Inventions (as defined therein) and original works of
authorship, conceived or made by me (solely or jointly with others) covered by
that agreement,
I further agree that, in compliance with the Employee Confidentiality and
Inventions Agreement, I will continue to preserve as confidential all
Proprietary Information (as defined therein).
- ---------------------------------- ------------------------------------------
Employee's Signature Date
- ----------------------------------
Employee's Name Printed
-10-
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<PAGE>
Exhibit 10.22
FORM OF INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made and entered into this ____ day of ___________, 1999
between COMPS.COM, INC., a Delaware corporation ("Corporation"), whose address
is 9888 Carroll Centre Drive, Suite 100, San Diego, California 92126 and
__________________ ("Director"), whose address is
__________________________________.
RECITALS:
--------
A. WHEREAS, Director, a member of the Board of Directors of Corporation
(the "Board"), performs a valuable service in such capacity for Corporation; and
B. WHEREAS, the stockholders of Corporation have adopted Bylaws (the
"Bylaws") providing for the indemnification of the officers, directors, agents
and employees of Corporation to the maximum extent authorized by Section 145 of
the Delaware General Corporation Law, as amended (the "Law"); and
C. WHEREAS, the Bylaws and the Law, as amended and in effect from time to
time or any successor or other statutes of Delaware having similar import and
effect, currently purport to be the controlling law governing Corporation with
respect to certain aspects of corporate law, including indemnification of
directors and officers; and
D. WHEREAS, in accordance with the authorization provided by the Law,
Corporation may from time to time purchase and maintain a policy or policies of
Directors and Officers Liability Insurance ("D & O Insurance"), covering certain
liabilities which may be incurred by its directors and officers in the
performance of services as directors and officers of Corporation; and
E. WHEREAS, as a result of developments affecting the terms, scope and
availability of D & O Insurance there exists general uncertainty as to the
extent and overall desirability of protection afforded members of the Board of
Directors by such D & O Insurance, if any, and by statutory and bylaw
indemnification provisions; and
F. WHEREAS, in order to induce Director to continue to serve as a member
of the Board, Corporation has determined and agreed to enter into this contract
with Director.
NOW, THEREFORE, in consideration of Director's continued service as a
director after the date hereof, the parties hereto agree as follows:
1. Certain Definitions. The following terms used in this Agreement shall
-------------------
have the meanings set forth below. Other terms are defined where appropriate in
this Agreement.
(a) "Disinterested Director" shall mean a director of Corporation who
----------------------
is not or was not a party to the Proceeding in respect of which indemnification
is being sought by Director.
(b) "Expenses" shall include all direct and indirect costs (including,
--------
without limitation, attorneys' fees, retainers, court costs, transcripts, fees
of experts, witness fees, travel
<PAGE>
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, all other disbursements or out-of-pocket
expenses and reasonable compensation for time spent by Director for which he or
she is otherwise not compensated by Corporation) actually and reasonably
incurred in connection with a Proceeding or establishing or enforcing a right to
indemnification under this Agreement, applicable law or otherwise; provided,
however, that "Expenses" shall not include any Liabilities.
(c) "Final Adverse Determination" shall mean that a determination that
---------------------------
Director is not entitled to indemnification shall have been made pursuant to
Section 5 hereof and either (i) a final adjudication in a Delaware court or
decision of an arbitrator pursuant to Section 13(a) hereof shall have denied
Director's right to indemnification hereunder, or (ii) Director shall have
failed to file a complaint in a Delaware court or seek an arbitrator's award
pursuant to Section 13(a) for a period of one hundred twenty (120) days after
the determination made pursuant to Section 5 hereof.
(d) "Independent Legal Counsel" shall mean a law firm or member of a
-------------------------
law firm selected by Corporation and approved by Director (which approval shall
not be unreasonably withheld) and that neither is presently nor in the past five
years has been retained to represent: (i) Corporation, in any material matter,
or (ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term "Independent
Legal Counsel" shall not include any person who, under the applicable standards
of professional conduct then prevailing, would have a conflict of interest in
representing either Corporation or Director in a Proceeding to determine
Director's right to indemnification under this Agreement.
(e) "Liabilities" shall mean liabilities of any type whatsoever
-----------
including, but not limited to, any judgments, fines, ERISA excise taxes and
penalties, and penalties and amounts paid in settlement (including all interest
assessments and other charges paid or payable in connection with or in respect
of such judgments, fines, penalties or amounts paid in settlement) of any
proceeding.
(f) "Proceeding" shall mean any threatened, pending or completed
----------
action, claim, suit, arbitration, alternative dispute resolution mechanism,
investigation, administrative hearing or any other proceeding whether civil,
criminal, administrative or investigative, including any appeal therefrom.
(g) "Change of Control" shall mean the occurrence of any of the
-----------------
following events after the date of this Agreement:
(i) A change in the composition of the Board, as a result of which
fewer than two-thirds (2/3) of the incumbent directors are directors who either
(1) had been directors of Corporation twenty-four (24) months prior to such
change or (2) were elected, or nominated for election, to the Board with the
affirmative votes of at least a majority of the directors who had been directors
of Corporation 24 months prior to such change and who were still in office at
the time of the election or nomination; or
2
<PAGE>
(ii) Any "person" (as such term is used in section 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended) through the acquisition or
aggregation of securities is or becomes the beneficial owner, directly or
indirectly, of securities of Corporation representing twenty percent (20%) or
more of the combined voting power of Corporation's then outstanding securities
ordinarily (and apart from rights accruing under special circumstances) having
the right to vote at elections of directors (the "Capital Stock"), except that
any change in ownership of Corporation's securities by any person resulting
solely from a reduction in the aggregate number of outstanding shares of Capital
Stock, and any decrease thereafter in such person's ownership of securities,
shall be disregarded until such person increases in any manner, directly or
indirectly, such person's beneficial ownership of any securities of Corporation.
2. Indemnity of Director. Corporation hereby agrees to hold harmless and
---------------------
indemnify Director to the fullest extent authorized or permitted by the
provisions of the Law, as may be amended from time to time.
3. Additional Indemnity. Subject only to the exclusions set forth in
--------------------
Section 4 hereof, Corporation hereby further agrees to hold harmless and
indemnify Director:
(a) against any and all Expenses in connection with any Proceeding
(including an action by or in the right of Corporation) to which Director is,
was or at any time becomes a party, or is threatened to be made a party, by
reason of the fact that Director is, was or at any time becomes a director,
officer, employee or agent of Corporation, or is or was serving or at any time
serves at the request of Corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise; and
(b) otherwise to the fullest extent as may be provided to Director by
Corporation under the non-exclusivity provisions of the Bylaws of Corporation
and the Law.
4. Limitations on Additional Indemnity. No indemnity pursuant to Section
-----------------------------------
3 hereof shall be paid by Corporation:
(a) except to the extent the aggregate of losses to be indemnified
thereunder exceeds the sum of such losses for which the Director is indemnified
pursuant to Section 2 hereof or reimbursed pursuant to any D & O Insurance
purchased and maintained by Corporation;
(b) in respect of remuneration paid to Director if it shall be
determined by a final judgment or other final adjudication that such
remuneration was in violation of law;
(c) on account of any Proceeding in which judgment is rendered against
Director for an accounting of profits made from the purchase or sale by Director
of securities of Corporation pursuant to the provisions of Section 16(b) of the
Securities Exchange Act of 1934 and amendments thereto or similar provisions of
any federal, state or local statutory law;
(d) on account of a Final Adverse Determination that Director's
conduct was knowingly fraudulent or deliberately dishonest or constituted
willful misconduct;
3
<PAGE>
(e) provided there has been no Change of Control, on account of or
arising in response to any Proceeding (other than a Proceeding referred to in
Section 10(b) hereof) initiated by Director or any of Director's affiliates
against Corporation or any officer, director or stockholder of Corporation
unless such Proceeding was authorized in the specific case by action of the
Board of Directors of Corporation;
(f) if a final decision by a Court having jurisdiction in the matter
shall determine that such indemnification is not lawful; or
(g) on account of any Proceeding to the extent that Director is a
plaintiff, a counter-complainant or a cross-complainant therein (other than a
Proceeding permitted by Section 4(e) hereof).
5. Procedure for Determination of Entitlement to Indemnification.
-------------------------------------------------------------
(a) Whenever Director believes that he or she is entitled to
indemnification pursuant to this Agreement, Director shall submit a written
request for indemnification to Corporation. Any request for indemnification
shall include sufficient documentation or information reasonably available to
Director to support his or her claim for indemnification. Director shall submit
his or her claim for indemnification within a reasonable time not to exceed five
years after any judgment, order, settlement, dismissal, arbitration award,
conviction, acceptance of a plea of nolo contendere or its equivalent, final
termination or other disposition or partial disposition of any Proceeding,
whichever is the later date for which Director requests indemnification. The
President, Secretary or other appropriate officer shall, promptly upon receipt
of Director's request for indemnification, advise the Board in writing that
Director has made such a request. Determination of Director's entitlement to
indemnification shall be made not later than ninety (90) days after
Corporation's receipt of his or her written request for such indemnification.
(b) The Director shall be entitled to select the forum in which
Director's request for indemnification will be heard, which selection shall be
included in the written request for indemnification required in Section 5(a).
This forum shall be any one of the following:
(i) The stockholders of Corporation;
(ii) A quorum of the Board consisting of Disinterested
Directors;
(iii) Independent Legal Counsel, who shall make the
determination in a written opinion; or
(iv) A panel of three arbitrators, one selected by Corporation,
another by Director and the third by the first two arbitrators selected. If for
any reason three arbitrators are not selected within thirty (30) days after the
appointment of the first arbitrator, then selection of additional arbitrators
shall be made by the American Arbitration Association. If any arbitrator
resigns or is unable to serve in such capacity for any reason, the American
Arbitration Association shall select his or her replacement. The arbitration
shall be conducted pursuant to the commercial arbitration rules of the American
Arbitration Association now in effect.
4
<PAGE>
If Director fails to make such designation, his or her claim shall be
determined by the forum selected by Corporation.
6. Presumption and Effect of Certain Proceedings. Upon making a request
---------------------------------------------
for indemnification, Director shall be presumed to be entitled to
indemnification under this Agreement and Corporation shall have the burden of
proof to overcome that presumption in reaching any contrary determination. The
termination of any Proceeding by judgment, order, settlement, arbitration award
or conviction, or upon a plea of nolo contendere or its equivalent shall not
affect this presumption or, except as may be provided in Section 4 hereof,
establish a presumption with regard to any factual matter relevant to
determining Director's rights to indemnification hereunder. If the person or
persons so empowered to make a determination pursuant to Section 5(b) hereof
shall have failed to make the requested determination within thirty (30) days
after any judgment, order, settlement, dismissal, arbitration award, conviction,
acceptance of a plea of nolo contendere or its equivalent, or other disposition
or partial disposition of any Proceeding or any other event which could enable
Corporation to determine Director's entitlement to indemnification, the
requisite determination that Director is entitled to indemnification shall be
deemed to have been made.
7. Contribution. If the indemnification provided in Sections 2 and 3 is
------------
unavailable and may not be paid to Director for any reason other than those set
forth in Section 4, then in respect of any Proceeding in which Corporation is or
is alleged to be jointly liable with Director (or would be if joined in such
Proceeding), Corporation shall contribute to the amount of Expenses and
Liabilities paid or payable by Director in such proportion as is appropriate to
reflect (i) the relative benefits received by Corporation on the one hand and
Director on the other hand from the transaction from which such Proceeding
arose, and (ii) the relative fault of Corporation on the one hand and of
Director on the other hand in connection with the events which resulted in such
Expenses and Liabilities, as well as any other relevant equitable
considerations. The relative fault of Corporation on the one hand and of
Director on the other shall be determined by reference to, among other things,
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent the circumstances resulting in such Expenses and
Liabilities. Corporation agrees that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
or any other method of allocation which does not take account of the foregoing
equitable considerations.
8. Insurance and Funding. Corporation hereby represents and warrants that
---------------------
it shall purchase and maintain insurance to protect itself and/or Director
against any Expenses and Liabilities in connection with any Proceeding to the
fullest extent permitted by the Law.
9. Continuation of Obligations. All agreements and obligations of
---------------------------
Corporation contained herein shall continue during the period Director is a
director, officer, employee or agent of Corporation (or is or was serving at the
request of Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise) and shall continue thereafter so long as Director shall be subject
to any possible Proceeding, by reason of the fact that Director was serving
Corporation or such other entity in any capacity referred to herein.
5
<PAGE>
10. Notification and Defense of Claim. Promptly after receipt by Director
---------------------------------
of notice of the commencement of any Proceeding, Director will, if a claim in
respect thereof is to be made against Corporation under this Agreement, notify
Corporation of the commencement thereof; but the omission so to notify
Corporation will not relieve it from any liability which it may have to Director
otherwise than under this Agreement. With respect to any Proceeding as to which
Director notifies Corporation of the commencement thereof:
(a) Corporation will be entitled to participate therein at its own
expense;
(b) Except as otherwise provided below, to the extent that it may
wish, Corporation jointly with any other indemnifying party similarly notified
will be entitled to assume the defense thereof, with counsel reasonably
satisfactory to Director. After notice from Corporation to Director of its
election to assume the defense thereof, Corporation will not be liable to
Director under this Agreement for any Expenses subsequently incurred by Director
in connection with the defense thereof other than reasonable costs of
investigation or as otherwise provided below. Director shall have the right to
employ his or her own counsel in such Proceeding but the Expenses associated
with the employment of such counsel incurred after notice from Corporation of
its assumption of the defense thereof shall be at the expense of Director unless
(i) the employment of counsel by Director has been authorized by Corporation,
(ii) Director shall have reasonably concluded that there may be a conflict of
interest between Corporation and Director in the conduct of the defense of such
Proceeding or (iii) Corporation shall not in fact have employed counsel to
assume the defense of such Proceeding, in each of which cases the Expenses of
Director's separate counsel shall be at the expense of Corporation. Corporation
shall not be entitled to assume the defense of any Proceeding brought by or on
behalf of Corporation or as to which Director shall have made the conclusion
provided for in (ii) above; and
(c) Provided there has been no Change of Control, Corporation shall
not be liable to indemnify Director under this Agreement for any amounts paid in
settlement of any Proceeding effected without its written consent, which consent
shall not be unreasonably withheld. Corporation shall be permitted to settle
any Proceeding except that it shall not settle any Proceeding in any manner
which would impose any penalty, out-of-pocket liability, or limitation on
Director without Director's written consent.
11. Advancement and Repayment of Expenses.
-------------------------------------
(a) In the event that Director employs his or her own counsel pursuant
to Section 10(b)(i) through (iii) above, Corporation shall advance to Director,
prior to any final disposition of any Proceeding any and all Expenses incurred
in investigating or defending any such Proceeding within ten (10) days after
receiving copies of invoices presented to Director for such Expenses.
(b) Director agrees that Director will reimburse Corporation for all
Expenses paid by Corporation in defending any Proceeding against Director in the
event and only to the extent that there has been a Final Adverse Determination
that Director is not entitled, under the provisions of the Law, the Bylaws, this
Agreement or otherwise, to be indemnified by Corporation for such Expenses.
6
<PAGE>
12. Remedies of Director.
--------------------
(a) In the event that (i) a determination pursuant to Section 5 hereof
is made that Director is not entitled to indemnification, (ii) advances of
Expenses are not made pursuant to this Agreement, (iii) payment has not been
timely made following a determination of entitlement to indemnification pursuant
to this Agreement, or (iv) Director otherwise seeks enforcement of this
Agreement, Director shall be entitled to a final adjudication in an appropriate
court of his or her rights. Alternatively, Director at his or her option may
seek an award in arbitration to be conducted by a single arbitrator pursuant to
the commercial arbitration rules of the American Arbitration Association now in
effect, whose decision is to be made within ninety (90) days following the
filing of the demand for arbitration. The Corporation shall not oppose
Director's right to seek any such adjudication or arbitration award.
(b) In the event that a determination that Director is not entitled to
indemnification, in whole or in part, has been made pursuant to Section 5
hereof, the decision in the judicial proceeding or arbitration provided in
paragraph (a) of this Section 12 shall be made de novo and Director shall not be
prejudiced by reason of a determination that he or she is not entitled to
indemnification.
(c) If a determination that Director is entitled to indemnification
has been made pursuant to Section 5 hereof or otherwise pursuant to the terms of
this Agreement, Corporation shall be bound by such determination in the absence
of (i) a misrepresentation of a material fact by Director or (ii) a specific
finding (which has become final) by an appropriate court that all or any part of
such indemnification is expressly prohibited by law.
(d) In any court proceeding pursuant to this Section 12, Corporation
shall be precluded from asserting that the procedures and presumptions of this
Agreement are not valid, binding and enforceable. The Corporation shall
stipulate in any such court or before any such arbitrator that Corporation is
bound by all the provisions of this Agreement and is precluded from making any
assertion to the contrary.
(e) Expenses reasonably incurred by Director in connection with his or
her request for indemnification under this Agreement, meeting enforcement of
this Agreement or to recover damages for breach of this Agreement shall be borne
by Corporation.
(f) Corporation and Director agree herein that a monetary remedy for
breach of this Agreement, at some later date, will be inadequate, impracticable
and difficult to prove, and further agree that such breach would cause Director
irreparable harm. Accordingly, Corporation and Director agree that Director
shall be entitled to temporary and permanent injunctive relief to enforce this
Agreement without the necessity of proving actual damages or irreparable harm.
The Corporation and Director further agree that Director shall be entitled to
such injunctive relief, including temporary restraining orders, preliminary
injunctions and permanent injunctions, without the necessity of posting bond or
other undertaking in connection therewith. Any such requirement of bond or
undertaking is hereby waived by Corporation, and Corporation acknowledges that
in the absence of such a waiver, a bond or undertaking may be required by the
court.
7
<PAGE>
13. Enforcement. Corporation expressly confirms and agrees that it has
-----------
entered into this Agreement and assumed the obligations imposed on Corporation
hereby in order to induce Director to continue as a director of Corporation, and
acknowledges that Director is relying upon this Agreement in continuing in such
capacity.
14. Separability. Each of the provisions of this Agreement is a separate
------------
and distinct agreement and independent of the others, so that if any or all of
the provisions hereof shall be held to be invalid or unenforceable to any extent
for any reason, such invalidity or unenforceability shall not affect the
validity or enforceability of the other provisions hereof, or the obligation of
the Corporation to indemnify the Director to the full extent provided by the
Bylaws or the Law, and the affected provision shall be construed and enforced so
as to effectuate the parties' intent to the maximum extent possible.
15. Governing Law. This Agreement shall be governed by and interpreted
-------------
and enforced in accordance with the internal laws of the State of Delaware.
16. Consent to Jurisdiction. The Corporation and Director each
-----------------------
irrevocably consent to jurisdiction of the courts of the State of Delaware for
all purposes in connection with any Proceeding which arises out of or relates to
this Agreement and agree that any Proceeding instituted under this Agreement
shall be brought only in the state courts of the State of Delaware.
17. Binding Effect. This Agreement shall be binding upon Director and
--------------
upon Corporation, its successors and assigns, and shall inure to the benefit of
Director, his or her heirs, executors, administrators, personal representatives
and assigns and to the benefit of Corporation, its successors and assigns.
18. Entire Agreement. This Agreement represents the entire agreement
----------------
between the parties hereto and there are no other agreements, contracts or
understandings between the parties hereto with respect to the subject matter of
this Agreement, except as specifically referred to herein. This Agreement
supersedes any and all agreements regarding indemnification heretofore entered
into by the parties.
19. Amendment and Termination. No amendment, modification, waiver,
-------------------------
termination or cancellation of this Agreement shall be effective for any purpose
unless set forth in writing signed by both parties hereto.
20. Subrogation. In the event of payment under this agreement,
-----------
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Director, who shall execute all documents required and
shall do all acts that may be necessary to secure such rights and to enable
Corporation effectively to bring suit to enforce such rights.
21. Non-Exclusivity of Rights. The rights conferred on Director by this
-------------------------
Agreement shall not be exclusive of any other right which Director may have or
hereafter acquire under any statute, provision of Corporation's Certificate of
Incorporation or Bylaws, agreement, vote of stockholders or directors, or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding office.
8
<PAGE>
22. Survival of Rights. The rights conferred on Director by this
------------------
Agreement shall continue after Director has ceased to be a director, officer,
employee or other agent of Corporation or such other entity.
23. Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing and shall be addressed to Director or to
Corporation, as the case may be, at the address shown on page 1 of this
Agreement, or to such other address as may have been furnished by either party
to the other, and shall be deemed to have been duly given if (a) delivered by
hand and receipted for by the party to whom said notice or other communication
shall have been directed, or (b) mailed by certified or registered mail with
postage prepaid, on the third business day after the date on which it is so
mailed.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.
DIRECTOR: COMPS.COM, INC., a Delaware corporation
______________________________ By: _______________________________
Its: _______________________________
10
<PAGE>
Exhibit 10.23
FORM OF INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made and entered into this ____ day of ___________, 1998
between COMPS.COM, INC., a Delaware corporation ("Corporation"), whose address
is 9888 Carroll Centre Drive, Suite 100, San Diego, California 92126 and
__________________ ("Officer"), whose address is
__________________________________.
RECITALS:
--------
A. WHEREAS, Officer, an officer of Corporation (but not currently a
member of the Board of Directors of Corporation (the "Board")), performs a
valuable service in such capacity for Corporation; and
B. WHEREAS, the stockholders of Corporation have adopted Bylaws (the
"Bylaws") providing for the indemnification of the officers, directors, agents
and employees of Corporation to the maximum extent authorized by Section 145 of
the Delaware General Corporation Law, as amended (the "Law"); and
C. WHEREAS, the Bylaws and the Law, as amended and in effect from time to
time or any successor or other statutes of Delaware having similar import and
effect, currently purport to be the controlling law governing Corporation with
respect to certain aspects of corporate law, including indemnification of
directors and officers; and
D. WHEREAS, in accordance with the authorization provided by the Law,
Corporation may from time to time purchase and maintain a policy or policies of
Directors and Officers Liability Insurance ("D & O Insurance"), covering certain
liabilities which may be incurred by its directors and officers in the
performance of services as directors and officers of Corporation; and
E. WHEREAS, as a result of developments affecting the terms, scope and
availability of D & O Insurance there exists general uncertainty as to the
extent and overall desirability of protection afforded officers by such D & O
Insurance, if any, and by statutory and bylaw indemnification provisions; and
F. WHEREAS, in order to induce Officer to continue to serve as an officer
of Corporation, Corporation has determined and agreed to enter into this
contract with Officer.
NOW, THEREFORE, in consideration of Officer's continued service as an
officer after the date hereof, the parties hereto agree as follows:
1. Certain Definitions. The following terms used in this Agreement shall
-------------------
have the meanings set forth below. Other terms are defined where appropriate in
this Agreement.
(a) "Disinterested Director" shall mean a director of Corporation who
----------------------
is not or was not a party to the Proceeding in respect of which indemnification
is being sought by Officer.
(b) "Expenses" shall include all direct and indirect costs (including,
--------
without limitation, attorneys' fees, retainers, court costs, transcripts, fees
of experts, witness fees, travel
1
<PAGE>
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, all other disbursements or out-of-pocket
expenses and reasonable compensation for time spent by Officer for which he or
she is otherwise not compensated by Corporation) actually and reasonably
incurred in connection with a Proceeding or establishing or enforcing a right to
indemnification under this Agreement, applicable law or otherwise; provided,
however, that "Expenses" shall not include any Liabilities.
(c) "Final Adverse Determination" shall mean that a determination that
---------------------------
Officer is not entitled to indemnification shall have been made pursuant to
Section 5 hereof and either (i) a final adjudication in a Delaware court or
decision of an arbitrator pursuant to Section 13(a) hereof shall have denied
Officer's right to indemnification hereunder, or (ii) Officer shall have failed
to file a complaint in a Delaware court or seek an arbitrator's award pursuant
to Section 13(a) for a period of one hundred twenty (120) days after the
determination made pursuant to Section 5 hereof.
(d) "Independent Legal Counsel" shall mean a law firm or member of a
-------------------------
law firm selected by Corporation and approved by Officer (which approval shall
not be unreasonably withheld) and that neither is presently nor in the past five
years has been retained to represent: (i) Corporation, in any material matter,
or (ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term "Independent
Legal Counsel" shall not include any person who, under the applicable standards
of professional conduct then prevailing, would have a conflict of interest in
representing either Corporation or Officer in a Proceeding to determine
Officer's right to indemnification under this Agreement.
(e) "Liabilities" shall mean liabilities of any type whatsoever
-----------
including, but not limited to, any judgments, fines, ERISA excise taxes and
penalties, and penalties and amounts paid in settlement (including all interest
assessments and other charges paid or payable in connection with or in respect
of such judgments, fines, penalties or amounts paid in settlement) of any
proceeding.
(f) "Proceeding" shall mean any threatened, pending or completed
----------
action, claim, suit, arbitration, alternative dispute resolution mechanism,
investigation, administrative hearing or any other proceeding whether civil,
criminal, administrative or investigative, including any appeal therefrom.
(g) "Change of Control" shall mean the occurrence of any of the
-----------------
following events after the date of this Agreement:
(i) A change in the composition of the Board, as a result of which
fewer than two-thirds (2/3) of the incumbent directors are directors who either
(1) had been directors of Corporation twenty-four (24) months prior to such
change or (2) were elected, or nominated for election, to the Board with the
affirmative votes of at least a majority of the directors who had been directors
of Corporation 24 months prior to such change and who were still in office at
the time of the election or nomination; or
(ii) Any "person" (as such term is used in section 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended) through the acquisition or
aggregation of
2
<PAGE>
securities is or becomes the beneficial owner, directly or indirectly, of
securities of Corporation representing twenty percent (20%) or more of the
combined voting power of Corporation's then outstanding securities ordinarily
(and apart from rights accruing under special circumstances) having the right to
vote at elections of directors (the "Capital Stock"), except that any change in
ownership of Corporation's securities by any person resulting solely from a
reduction in the aggregate number of outstanding shares of Capital Stock, and
any decrease thereafter in such person's ownership of securities, shall be
disregarded until such person increases in any manner, directly or indirectly,
such person's beneficial ownership of any securities of Corporation.
2. Indemnity of Officer. Corporation hereby agrees to hold harmless and
--------------------
indemnify Officer to the fullest extent authorized or permitted by the
provisions of the Law, as may be amended from time to time.
3. Additional Indemnity. Subject only to the exclusions set forth in
--------------------
Section 4 hereof, Corporation hereby further agrees to hold harmless and
indemnify Officer:
(a) against any and all Expenses in connection with any Proceeding
(including an action by or in the right of Corporation) to which Officer is, was
or at any time becomes a party, or is threatened to be made a party, by reason
of the fact that Officer is, was or at any time becomes a director, officer,
employee or agent of Corporation, or is or was serving or at any time serves at
the request of Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise; and
(b) otherwise to the fullest extent as may be provided to Officer by
Corporation under the non-exclusivity provisions of the Bylaws of Corporation
and the Law.
4. Limitations on Additional Indemnity. No indemnity pursuant to Section
-----------------------------------
3 hereof shall be paid by Corporation:
(a) except to the extent the aggregate of losses to be indemnified
thereunder exceeds the sum of such losses for which the Officer is indemnified
pursuant to Section 2 hereof or reimbursed pursuant to any D & O Insurance
purchased and maintained by Corporation;
(b) in respect of remuneration paid to Officer if it shall be
determined by a final judgment or other final adjudication that such
remuneration was in violation of law;
(c) on account of any Proceeding in which judgment is rendered against
Officer for an accounting of profits made from the purchase or sale by Officer
of securities of Corporation pursuant to the provisions of Section 16(b) of the
Securities Exchange Act of 1934 and amendments thereto or similar provisions of
any federal, state or local statutory law;
(d) on account of a Final Adverse Determination that Officer's conduct
was knowingly fraudulent or deliberately dishonest or constituted willful
misconduct;
(e) provided there has been no Change of Control, on account of or
arising in response to any Proceeding (other than a Proceeding referred to in
Section 10(b) hereof) initiated by Officer or any of Officer's affiliates
against Corporation or any officer, director or stockholder
3
<PAGE>
of Corporation unless such Proceeding was authorized in the specific case by
action of the Board;
(f) if a final decision by a Court having jurisdiction in the matter
shall determine that such indemnification is not lawful; or
(g) on account of any Proceeding to the extent that Officer is a
plaintiff, a counter-complainant or a cross-complainant therein (other than a
Proceeding permitted by Section 4(e) hereof).
5. Procedure for Determination of Entitlement to Indemnification.
-------------------------------------------------------------
(a) Whenever Officer believes that he or she is entitled to
indemnification pursuant to this Agreement, Officer shall submit a written
request for indemnification to Corporation. Any request for indemnification
shall include sufficient documentation or information reasonably available to
Officer to support his or her claim for indemnification. Officer shall submit
his or her claim for indemnification within a reasonable time not to exceed five
years after any judgment, order, settlement, dismissal, arbitration award,
conviction, acceptance of a plea of nolo contendere or its equivalent, final
termination or other disposition or partial disposition of any Proceeding,
whichever is the later date for which Officer requests indemnification. The
President, Secretary or other appropriate officer shall, promptly upon receipt
of Officer's request for indemnification, advise the Board in writing that
Officer has made such a request. Determination of Officer's entitlement to
indemnification shall be made not later than ninety (90) days after
Corporation's receipt of his or her written request for such indemnification.
(b) The Officer shall be entitled to select the forum in which
Officer's request for indemnification will be heard, which selection shall be
included in the written request for indemnification required in Section 5(a).
This forum shall be any one of the following:
(i) The stockholders of Corporation;
(ii) A quorum of the Board consisting of Disinterested
Directors;
(iii) Independent Legal Counsel, who shall make the determination
in a written opinion; or
(iv) A panel of three arbitrators, one selected by Corporation,
another by Officer and the third by the first two arbitrators selected. If for
any reason three arbitrators are not selected within thirty (30) days after the
appointment of the first arbitrator, then selection of additional arbitrators
shall be made by the American Arbitration Association. If any arbitrator
resigns or is unable to serve in such capacity for any reason, the American
Arbitration Association shall select his or her replacement. The arbitration
shall be conducted pursuant to the commercial arbitration rules of the American
Arbitration Association now in effect.
If Officer fails to make such designation, his or her claim shall be
determined by the forum selected by Corporation.
4
<PAGE>
6. Presumption and Effect of Certain Proceedings. Upon making a request
---------------------------------------------
for indemnification, Officer shall be presumed to be entitled to indemnification
under this Agreement and Corporation shall have the burden of proof to overcome
that presumption in reaching any contrary determination. The termination of any
Proceeding by judgment, order, settlement, arbitration award or conviction, or
upon a plea of nolo contendere or its equivalent shall not affect this
presumption or, except as may be provided in Section 4 hereof, establish a
presumption with regard to any factual matter relevant to determining Officer's
rights to indemnification hereunder. If the person or persons so empowered to
make a determination pursuant to Section 5(b) hereof shall have failed to make
the requested determination within thirty (30) days after any judgment, order,
settlement, dismissal, arbitration award, conviction, acceptance of a plea of
nolo contendere or its equivalent, or other disposition or partial disposition
of any Proceeding or any other event which could enable Corporation to determine
Officer's entitlement to indemnification, the requisite determination that
Officer is entitled to indemnification shall be deemed to have been made.
7. Contribution. If the indemnification provided in Sections 2 and 3 is
------------
unavailable and may not be paid to Officer for any reason other than those set
forth in Section 4, then in respect of any Proceeding in which Corporation is or
is alleged to be jointly liable with Officer (or would be if joined in such
Proceeding), Corporation shall contribute to the amount of Expenses and
Liabilities paid or payable by Officer in such proportion as is appropriate to
reflect (i) the relative benefits received by Corporation on the one hand and
Officer on the other hand from the transaction from which such Proceeding arose,
and (ii) the relative fault of Corporation on the one hand and of Officer on the
other hand in connection with the events which resulted in such Expenses and
Liabilities, as well as any other relevant equitable considerations. The
relative fault of Corporation on the one hand and of Officer on the other shall
be determined by reference to, among other things, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent the
circumstances resulting in such Expenses and Liabilities. Corporation agrees
that it would not be just and equitable if contribution pursuant to this Section
7 were determined by pro rata allocation or any other method of allocation which
does not take account of the foregoing equitable considerations.
8. Insurance and Funding. Corporation hereby represents and warrants that
---------------------
it shall purchase and maintain insurance to protect itself and/or Officer
against any Expenses and Liabilities in connection with any Proceeding to the
fullest extent permitted by the Law.
9. Continuation of Obligations. All agreements and obligations of
---------------------------
Corporation contained herein shall continue during the period Officer is a
director, officer, employee or agent of Corporation (or is or was serving at the
request of Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise) and shall continue thereafter so long as Officer shall be subject to
any possible Proceeding, by reason of the fact that Officer was serving
Corporation or such other entity in any capacity referred to herein.
10. Notification and Defense of Claim. Promptly after receipt by Officer
---------------------------------
of notice of the commencement of any Proceeding, Officer will, if a claim in
respect thereof is to be made against Corporation under this Agreement, notify
Corporation of the commencement thereof; but the omission so to notify
Corporation will not relieve it from any liability which it may have to
5
<PAGE>
Officer otherwise than under this Agreement. With respect to any Proceeding as
to which Officer notifies Corporation of the commencement thereof:
(a) Corporation will be entitled to participate therein at its own
expense;
(b) Except as otherwise provided below, to the extent that it may
wish, Corporation jointly with any other indemnifying party similarly notified
will be entitled to assume the defense thereof, with counsel reasonably
satisfactory to Officer. After notice from Corporation to Officer of its
election to assume the defense thereof, Corporation will not be liable to
Officer under this Agreement for any Expenses subsequently incurred by Officer
in connection with the defense thereof other than reasonable costs of
investigation or as otherwise provided below. Officer shall have the right to
employ his or her own counsel in such Proceeding but the Expenses associated
with the employment of such counsel incurred after notice from Corporation of
its assumption of the defense thereof shall be at the expense of Officer unless
(i) the employment of counsel by Officer has been authorized by Corporation,
(ii) Officer shall have reasonably concluded that there may be a conflict of
interest between Corporation and Officer in the conduct of the defense of such
Proceeding or (iii) Corporation shall not in fact have employed counsel to
assume the defense of such Proceeding, in each of which cases the Expenses of
Officer's separate counsel shall be at the expense of Corporation. Corporation
shall not be entitled to assume the defense of any Proceeding brought by or on
behalf of Corporation or as to which Officer shall have made the conclusion
provided for in (ii) above; and
(c) Provided there has been no Change of Control, Corporation shall
not be liable to indemnify Officer under this Agreement for any amounts paid in
settlement of any Proceeding effected without its written consent, which consent
shall not be unreasonably withheld. Corporation shall be permitted to settle
any Proceeding except that it shall not settle any Proceeding in any manner
which would impose any penalty, out-of-pocket liability, or limitation on
Officer without Officer's written consent.
11. Advancement and Repayment of Expenses.
-------------------------------------
(a) In the event that Officer employs his or her own counsel pursuant
to Section 10(b)(i) through (iii) above, Corporation shall advance to Officer,
prior to any final disposition of any Proceeding any and all Expenses incurred
in investigating or defending any such Proceeding within ten (10) days after
receiving copies of invoices presented to Officer for such Expenses.
(b) Officer agrees that Officer will reimburse Corporation for all
Expenses paid by Corporation in defending any Proceeding against Officer in the
event and only to the extent that there has been a Final Adverse Determination
that Officer is not entitled, under the provisions of the Law, the Bylaws, this
Agreement or otherwise, to be indemnified by Corporation for such Expenses.
12. Remedies of Officer.
-------------------
(a) In the event that (i) a determination pursuant to Section 5 hereof
is made that Officer is not entitled to indemnification, (ii) advances of
Expenses are not made pursuant to
6
<PAGE>
this Agreement, (iii) payment has not been timely made following a determination
of entitlement to indemnification pursuant to this Agreement, or (iv) Officer
otherwise seeks enforcement of this Agreement, Officer shall be entitled to a
final adjudication in an appropriate court of his or her rights. Alternatively,
Officer at his or her option may seek an award in arbitration to be conducted by
a single arbitrator pursuant to the commercial arbitration rules of the American
Arbitration Association now in effect, whose decision is to be made within
ninety (90) days following the filing of the demand for arbitration. The
Corporation shall not oppose Officer's right to seek any such adjudication or
arbitration award.
(b) In the event that a determination that Officer is not entitled to
indemnification, in whole or in part, has been made pursuant to Section 5
hereof, the decision in the judicial proceeding or arbitration provided in
paragraph (a) of this Section 12 shall be made de novo and Officer shall not be
prejudiced by reason of a determination that he or she is not entitled to
indemnification.
(c) If a determination that Officer is entitled to indemnification has
been made pursuant to Section 5 hereof or otherwise pursuant to the terms of
this Agreement, Corporation shall be bound by such determination in the absence
of (i) a misrepresentation of a material fact by Officer or (ii) a specific
finding (which has become final) by an appropriate court that all or any part of
such indemnification is expressly prohibited by law.
(d) In any court proceeding pursuant to this Section 12, Corporation
shall be precluded from asserting that the procedures and presumptions of this
Agreement are not valid, binding and enforceable. The Corporation shall
stipulate in any such court or before any such arbitrator that Corporation is
bound by all the provisions of this Agreement and is precluded from making any
assertion to the contrary.
(e) Expenses reasonably incurred by Officer in connection with his or
her request for indemnification under this Agreement, meeting enforcement of
this Agreement or to recover damages for breach of this Agreement shall be borne
by Corporation.
(f) Corporation and Officer agree herein that a monetary remedy for
breach of this Agreement, at some later date, will be inadequate, impracticable
and difficult to prove, and further agree that such breach would cause Officer
irreparable harm. Accordingly, Corporation and Officer agree that Officer shall
be entitled to temporary and permanent injunctive relief to enforce this
Agreement without the necessity of proving actual damages or irreparable harm.
The Corporation and Officer further agree that Officer shall be entitled to such
injunctive relief, including temporary restraining orders, preliminary
injunctions and permanent injunctions, without the necessity of posting bond or
other undertaking in connection therewith. Any such requirement of bond or
undertaking is hereby waived by Corporation, and Corporation acknowledges that
in the absence of such a waiver, a bond or undertaking may be required by the
court.
13. Enforcement. Corporation expressly confirms and agrees that it has
-----------
entered into this Agreement and assumed the obligations imposed on Corporation
hereby in order to induce Officer to continue as an officer of Corporation, and
acknowledges that Officer is relying upon this Agreement in continuing in such
capacity.
7
<PAGE>
14. Separability. Each of the provisions of this Agreement is a separate
------------
and distinct agreement and independent of the others, so that if any or all of
the provisions hereof shall be held to be invalid or unenforceable to any extent
for any reason, such invalidity or unenforceability shall not affect the
validity or enforceability of the other provisions hereof, or the obligation of
the Corporation to indemnify the Officer to the full extent provided by the
Bylaws or the Law, and the affected provision shall be construed and enforced so
as to effectuate the parties' intent to the maximum extent possible.
15. Governing Law. This Agreement shall be governed by and interpreted
-------------
and enforced in accordance with the internal laws of the State of Delaware.
16. Consent to Jurisdiction. The Corporation and Officer each irrevocably
-----------------------
consent to jurisdiction of the courts of the State of Delaware for all purposes
in connection with any Proceeding which arises out of or relates to this
Agreement and agree that any Proceeding instituted under this Agreement shall be
brought only in the state courts of the State of Delaware.
17. Binding Effect. This Agreement shall be binding upon Officer and upon
--------------
Corporation, its successors and assigns, and shall inure to the benefit of
Officer, his or her heirs, executors, administrators, personal representatives
and assigns and to the benefit of Corporation, its successors and assigns.
18. Entire Agreement. This Agreement represents the entire agreement
----------------
between the parties hereto and there are no other agreements, contracts or
understandings between the parties hereto with respect to the subject matter of
this Agreement, except as specifically referred to herein. This Agreement
supersedes any and all agreements regarding indemnification heretofore entered
into by the parties.
19. Amendment and Termination. No amendment, modification, waiver,
-------------------------
termination or cancellation of this Agreement shall be effective for any purpose
unless set forth in writing signed by both parties hereto.
20. Subrogation. In the event of payment under this agreement,
-----------
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Officer, who shall execute all documents required and
shall do all acts that may be necessary to secure such rights and to enable
Corporation effectively to bring suit to enforce such rights.
21. Non-Exclusivity of Rights. The rights conferred on Officer by this
-------------------------
Agreement shall not be exclusive of any other right which Officer may have or
hereafter acquire under any statute, provision of Corporation's Certificate of
Incorporation or Bylaws, agreement, vote of stockholders or directors, or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding office.
22. Survival of Rights. The rights conferred on Officer by this Agreement
------------------
shall continue after Officer has ceased to be a director, officer, employee or
other agent of Corporation or such other entity.
23. Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing and shall be addressed to Officer or to
Corporation, as the case may be, at the
8
<PAGE>
address shown on page 1 of this Agreement, or to such other address as may have
been furnished by either party to the other, and shall be deemed to have been
duly given if (a) delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed, or (b) mailed by
certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.
OFFICER: COMPS.COM, INC., a Delaware corporation
______________________________ By: _______________________________
Its: _______________________________
10
<PAGE>
Exhibit 10.24
SOFTWARE LICENSE AGREEMENT
--------------------------
THIS SOFTWARE LICENSE AGREEMENT (the "Agreement") is made and entered into
as of this 27th day of February, 1997 (the "Effective Date"), by and between
QUALITATIVE MARKETING SOFTWARE, INC. ("Licensor"), a Delaware corporation with
its principal offices located at 28051 U.S. Highway 19 North, Suite E,
Clearwater, Florida 34621-2647, and COMPS INFOSYSTEMS, INC. ("Licensee"), a
Delaware corporation with its principal offices located at 9888 Carroll Centre
Road, Suite 100, San Diego, California 92126-4580.
R E C I T A L S:
WHEREAS, Licensor, as the result of the expenditure of time, skill, effort
and money, has designed, developed, and produced, and is the owner of the entire
right, title and interest in and to, certain software and databases and the
documentation associated therewith as more particularly described on Schedule A
----------
attached hereto (defined below, collectively, as the "Licensed Products"); and
WHEREAS, Licensee desires to obtain from Licensor, and Licensor desires to
grant to Licensee, a non-exclusive, non-transferable, non-assignable license to
use the Licensed Products solely for the Licensed Use, in accordance with the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises, which shall be deemed an
integral part of this Agreement and not as mere recitals hereto, and in
consideration of the mutual covenants, representations, agreements and
conditions herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound thereby, agree as follows:
1. DEFINITIONS.
-----------
1.1 Definitions. As used in this Agreement, the following terms (which
appear herein as capitalized terms) shall have the meaning set forth below:
"Affiliate," when used with respect to any Person. shall mean any
----------
Person controlling, controlled by or under common control with such Person.
"Agreement" shall mean this Software License Agreement, as originally
---------
executed and as amended, modified or supplemented thereafter in accordance with
its terms.
CSF PW
- --- --
Licensee Licensor
1
<PAGE>
"Business Day" shall mean a day which is not a Saturday or a Sunday or
------------
a bank holiday under the laws of the United States.
"CASS" shall mean Coding Accuracy Support System as defined by the
----
USPS.
"CPU" shall mean a single computer central processing unit, including
---
its associated equipment.
"Communications" shall have the meaning specified in Section 22.l.
--------------
"Confidential Information" shall have the meaning specified in Section
------------------------
16. 1.
"Database Update" shall mean a change, modification or other update of
---------------
any Database.
"Databases" shall mean the directories and other files more
---------
particularly described on Schedule A attached hereto under the caption
----------
"Databases," as they exist on the Effective Date and any Database Updates
thereto.
"Designated CPU" shall mean a single computer central processing unit,
--------------
including its associated equipment, owned or leased by Licensee, the
manufacturer, operating system and location of which are specified on Schedule B
----------
attached hereto.
"Disputes" shall have the meaning specified in Section 23.5.
--------
"Documentation" shall mean the standard user manual or other
-------------
documentation or explanatory material related to the Licensed Software and the
Databases more particularly described on Schedule A attached hereto under the
caption "Documentation," developed by Licensor and supplied by Licensor to
Licensee for use in connection with the Licensed Software and the Databases, and
any subsequent versions thereof which Licensee may receive from Licensor.
"Effective Date" shall have the meaning specified in the first
--------------
sentence of this Agreement, which shall be deemed to be the date of execution of
this Agreement by Licensor and Licensee.
"Equipment" shall mean the hardware and other equipment comprising the
---------
system in which the Licensed Software and Databases are installed, including the
Designated CPU.
CSF PW
- --- --
Licensee Licensor
2
<PAGE>
"Initial License Fee" shall have the meaning specified in Section 3.1.
-------------------
"Initial Term" shall have the meaning specified in Section 4. 1.
------------
"License" shall mean the license granted to Licensee by Licensor
-------
pursuant to Section 2. 1.
"Licensed Products" shall mean the Licensed Software, the Databases
-----------------
arid the Documentation.
"Licensed Software" shall mean the object code (machine readable)
-----------------
version of Licensor's computer software program more particularly described on
Schedule A attached hereto under the caption "Licensed Software," as it exists
on the Effective Date and any Updates and Upgrades thereto. "Licensed Software"
shall not include the source code version.
"Licensed Use" shall mean and be restricted to the reading into and
------------
out of memory of the Licensed Software and the Databases and the execution of
the Licensed Software and the Databases, in whole or in part, by the Designated
CPU solely for the internal purposes of Licensee in connection with the
operation of the Licensee Services, and the utilization of the Documentation in
connection therewith. "Licensed Use" shall not include the transmission of any
of the Licensed Software or the Databases via any on-line service or
telecommunication network or on the Internet.
"Licensee" shall mean the entity specified in the first sentence of
--------
this Agreement as Licensee.
"Licensee Services" shall mean standardizing addresses and appending
-----------------
geographic coordinates to Licensee's data during data entry. Licensee will be
permitted to license its data to third parties, provided that Licensee is not in
violation of any other agreement, including the BLR Agreement for the BLR
Geocoding database.
"Licensor" shall mean the entity specified in the first sentence of
--------
this Agreement as Licensor.
"Losses" shall mean any and all claims, demands, costs, losses,
------
damages, liabilities, fines, penalties and expenses (including, without
limitation, reasonable attorneys' fees) of any kind or nature whatsoever,
whether imposed, incurred or asserted.
CSF PW
- --- --
Licensee Licensor
3
<PAGE>
"MSP" shall mean the Maintenance Support Program to be provided by
---
Licensor to Licensee hereunder in connection with the Licensed Products, as more
particularly described in Section 8.
"Person" shall mean any corporation, association, partnership, joint
------
venture, trust, organization, business, individual, government, governmental
agency or political subdivision thereof, or any other entity or institution of
any type whatsoever.
"Renewal Date" shall mean the first day of any Renewal Term.
------------
"Renewal License Fee" shall have the meaning specified in Section 3.2.
-------------------
"Renewal Term" shall have the meaning specified in Section 4.2.
------------
"Restrictions on Use" shall have the meaning specified in Section 2.l.
-------------------
"USPS" shall mean the United States Postal Service.
----
"Update" shall mean a change, modification or other update of the
------
Licensed Software made to correct an error (i.e., bug fix), defect or other
problem and/or to maintain the operational quality of the Licensed Software,
which is not an Upgrade.
"Upgrade" shall mean a new release of the Licensed Software, or any
-------
part thereof, which adds major new functionality or features to the last version
of the Licensed Software.
"Warranty Period" shall have the meaning specified in Section 12. 1.
---------------
2. GRANT OF LICENSE.
----------------
2.1 Grant of License. Subject to the terms and conditions set forth in
this Agreement (including the full payment of all license fees), Licensor hereby
grants to Licensee during the term of this Agreement, and Licensee hereby
accepts, a non-exclusive, non-transferable, non-assignable license (the
"License") (i) to use the Licensed Software and the Databases only on the
Designated CPU for the Licensed Use and (ii) to use the Documentation in support
of the Licensed Use, provided that, the License granted hereunder shall be
subject to the restrictions set forth on Schedule A attached hereto
----------
(collectively, the "Restrictions on Use").
CSF PW
- --- --
Licensee Licensor
4
<PAGE>
2.2 Licensed Use. The Licensed Software and the Databases may be used
only on the Designated CPU and the Licensed Products may be used solely to
process Licensee's own data in connection with the Licensee Services; it being
expressly understood and agreed by Licensee that "Licensed Use" shall not
include using the Licensed Products at the request of or for the benefit of any
third parties or otherwise transmitting data via any telecommunication source,
device or medium.
2.3 Additional Licenses. Licensee understands that the Licensed Software
and the Databases cannot be transferred to, or used in connection with, any CPU
that is not licensed by Licensor to operate the Licensed Software and the
Databases. In the event Licensee desires to use the Licensed Software and the
Databases on additional CPU(s), Licensee shall first obtain an additional
license from Licensor for the Licensed Software and Databases for each such
additional CPU(s). Licensee acknowledges that such additional licenses shall be
made available to Licensee at Licensor's then-prevailing license fees.
2.4 Upgrades. Some of the Upgrades produced by Licensor during the term
of this Agreement may include additional functionality or features which go
beyond the scope of the capabilities of the Licensed Software delivered by
Licensor pursuant to this Agreement and which require additional databases. If
Licensee requests any such Upgrade (including any additional databases),
Licensee acknowledges that this will require an additional license from Licensor
and that Licensee will be charged an additional license fee in connection
therewith.
2.5 Transfer of License. Licensee may not, directly or indirectly, sell,
assign, sublicense, lease, rent, distribute, or otherwise transfer the License,
the Licensed Products, or any rights therein to any other Person, or to any
other computer other than the Designated CPU, unless Licensee first obtains the
written consent of Licensor.
2.6 Non-Exclusive Nature. Licensee acknowledges and agrees that the
License granted hereunder and the relationship between the parties is non-
exclusive. Licensee further acknowledges and agrees that Licensor retains the
right to grant similar licenses to use the Licensed Products to other Persons.
2.7 No Sale and Purchase or Lease. Notwithstanding anything to the
contrary contained herein, the parties agree that this transaction is not a sale
and purchase nor a lease of the Licensed Products.
3. LICENSE FEES; OTHER CHARGES; TAXES.
----------------------------------
3.1 Initial License Fee. In consideration of the License and other rights
granted by Licensor to Licensee hereunder, Licensee shall pay to Licensor the
initial license fee set forth on Schedule C attached hereto (the "Initial
----------
License Fee") for the Initial Term, in accordance with
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the payment schedule set forth therein. Licensee acknowledges and agrees that
the Initial License Fee shall be deemed nonrefundable and fully earned by
Licensor upon payment thereof by Licensee in consideration of the administrative
and other expenses incurred by Licensor in granting the License to Licensee.
3.2 Renewal License Fee. In the event this Agreement and the License
granted hereunder are renewed pursuant to Section 4.2, Licensee shall pay to
Licensor the renewal license fee set forth on Schedule D attached hereto (the
----------
"Renewal License Fee") for each Renewal Term, in accordance with the payment
schedule set forth therein. Licensee acknowledges and agrees that the Renewal
License Fee shall be deemed non-refundable and fully earned by Licensor upon
payment therefor by Licensee.
3.3 Maintenance Support Program Fees. Except as otherwise set forth
herein, the fee for any Updates, Database Updates, Upgrades. or consulting or
other services relating to the Licensed Products which Licensor performs in
connection with the MSP shall be as set forth on Schedules C and D attached
----------- -
hereto, and shall be payable in accordance with the payment schedule set forth
therein. Licensee acknowledges and agrees that the MSP fees shall be deemed
nonrefundable and fully earned by Licensor upon payment therefor by Licensee.
3.4 Out-of-Pocket Expenses. All reasonable, pre-approved out-of-pocket
expenses incurred by Licensor in performing its obligations under this
Agreement, including but not limited to travel, meals, and lodging, shall be
paid by Licensee within thirty (30) days after Licensee's receipt of the invoice
therefor.
3.5 Payment; Interest Charges. Except as otherwise set forth herein, all
fees, charges and expenses to be paid by Licensee pursuant to this Agreement are
due and payable upon Licensee's receipt of Licensor's invoice therefor. All
amounts not paid when due shall bear interest at the rate of one and one-half
percent (1.5%) per month or at the highest contract rate allowed by law,
whichever is less, from the date due until paid, which interest shall be added
to the unpaid amount due and owing by Licensee to Licensor. Subject to the
right to cure set forth in Section 17.3.1, the failure of Licensee to pay any
amounts when due shall constitute sufficient cause for Licensor to suspend or
terminate this Agreement, including Licensor's obligation to provide the MSP
(including any Updates, Database Updates and Upgrades) and all express
warranties of Licensor under Section 12.l. In addition, Licensee agrees to pay
all costs involved in collecting overdue amounts, including reasonable
attorneys' fees.
3.6 Applicable Taxes. In addition to the fees and charges due hereunder,
Licensee shall be liable for all local, state and federal sales, use,
withholding, excise, personal property, value-added, or other similar taxes,
assessments or duties which may now or hereafter be imposed upon this Agreement
or which are based on or in any way relating to this Agreement, the Licensed
Products, or any services related thereto, excluding, however, taxes measured on
Licensor's income. Licensee shall pay or reimburse Licensor for any such taxes
and Licensor
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may add such taxes to the invoices submitted to Licensee by Licensor as provided
herein. Licensee agrees to indemnify Licensor as to all such taxes.
3.7 No Right of Setoff. Licensee shall have no right of setoff against
any payments due Licensor pursuant to this Agreement, whether on account of any
claims or alleged claims against Licensor under this Agreement or otherwise.
4. TERM; RENEWAL.
-------------
4.1 Term. The term of this Agreement shall commence on the Effective Date
and shall continue and remain in full force and effect for a period of one (1)
year from the Effective Date (the "Initial Term"), unless otherwise earlier
terminated in accordance with the provisions of Section 17.
4.2 Renewal. Except as otherwise provided herein, upon the expiration of
the Initial Term or any Renewal Term, as the case may be, this Agreement shall
be automatically renewed for an additional one (1) year period (each such year a
"Renewal Term") without notice unless no less than sixty (60) days prior to the
expiration of the Initial Term or any Renewal Term, as the case may be, either
party notifies the other party in writing of its intent not to renew this
Agreement. If no such notice is received within said time frame, Licensee shall
be deemed to have renewed this Agreement and shall pay for all charges and fees
in connection therewith in accordance with Section 3.2. Notwithstanding anything
to the contrary contained herein, this Agreement shall not be renewed if, at the
Renewal Date, any of the following conditions have not been satisfied (unless
waived by Licensor in writing):
4.2.1 Licensee shall not be in default in any payments due to
Licensor under this Agreement or any other agreement and shall have timely
met all such obligations;
4.2.2 Licensee shall not be in breach or violation of any of the
other terms, conditions or provisions of this Agreement or any other
agreement between Licensee and Licensor; and
4.2.3 Licensee shall have paid to Licensor the Renewal License Fee.
The determination as to the satisfaction of any of the above conditions by
Licensee is in the sole discretion of Licensor. Licensor may determine to
refuse to renew this Agreement, where any of the above conditions are not met,
at any time at or prior to the Renewal Date.
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5. PROPERTY RIGHTS.
---------------
5.1 Property Rights in Licensor. Licensee acknowledges that: (i) Licensor
owns the full right, title and interest in and to the Licensed Products and all
copies thereof, including all associated patents, copyrights, trademarks, trade
names, trade secrets and other intellectual property rights; (ii) all right,
title and interest in and to the Licensed Products and all copies thereof,
including all associated patents, copyrights, trademarks, trade names, trade
secrets and other intellectual property rights, are, and shall at all times
remain, the exclusive property of Licensor; and (iii) Licensee shall have no
right or interest as to the Licensed Products or any copies thereof, including
all associated patents, copyrights, trademarks, trade names, trade secrets and
other intellectual property rights, except as a licensee as expressly set forth
in this Agreement.
5.2 Third Party Data Files. Notwithstanding anything to the contrary
contained Herein, Licensor does not own, and Licensee shall have no right or
interest in, any third party data files used to prepare the Databases, including
any USPS data files. Licensor shall be responsible for paying all fees due to
third parties for the license of such data files.
5.3 BLR Geocoding File. Licensee acknowledges that the geocoding data is
being licensed directly from Business Location Research (BLR) and all license
fees due for such license shall be paid directly to BLR. Licensee further
acknowledges that Licensor will require written notice from BLR of such license.
In the event Licensee fails to maintain the license with BLR, or if said license
is canceled or terminated, the same shall not terminate this Agreement or
Licensee's obligations hereunder, including payment of the Initial License Fee
or Renewal License Fee, as the case may be. In the event the license for use of
the BLR Geocoding database between Licensee and BLR is terminated, Licensee will
pay Licensor the license fee for the QMS Geocoding database as set forth in
Schedule D attached hereto.
- ----------
6. DELIVERY OF LICENSED PRODUCTS; RISK OF LOSS.
-------------------------------------------
6.1 Delivery of Licensed Products. Within a reasonable time after the
Effective Date, Licensor shall furnish Licensee one (1) master copy of the
Licensed Products. Licensor shall not be liable to Licensee for any delay in
the delivery of the Licensed Products.
6.2 Risk of Loss. Upon delivery of the Licensed Products, Licensee
assumes all risk of loss with respect to the Licensed Products.
7. INSTALLATION; TRAINING.
----------------------
7.1 Installation. Licensee shall be solely responsible for installing the
Licensed Software and the Databases on the Designated CPU. Licensee may request
assistance from
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Licensor in the installation of the Licensed Software and the Databases, which
services shall be charged to Licensee at Licensor's then-current hourly rates.
7.2 Data Entry. Data entry and verification of the data input to and
output from the Licensed Software and the Databases shall be the sole
responsibility of Licensee. Licensee shall be responsible for the conversion of
its current data to the format required by the Licensed Software and the
Databases.
7.3 Training. No training in the use of the Licensed Products will be
provided by Licensor. Licensee may request training assistance from Licensor,
which training shall be charged to Licensee at Licensor's then-current hourly
rates.
8. MAINTENANCE SUPPORT PROGRAM.
---------------------------
8.1 Maintenance Support Program. During the Initial Term and each Renewal
Term of this Agreement, Licensor agrees to provide and Licensee agrees to accept
the maintenance and support services with respect to the most current version of
the Licensed Software and Databases as set forth in this Section 8. The fees for
such maintenance and support services are set forth on Schedules C and D
----------- -
attached hereto.
8.2 Updates. Licensor will make reasonable efforts to correct any
material errors in the most current version of the Licensed Software and
Databases from time to time and shall provide Licensee with copies of all
Updates and Database Updates as they are released and made generally available
by Licensor to its customers from time to time; provided that Licensor shall use
its best efforts to provide the Database Updates to Licensee every two (2)
months. All Updates and Database Updates shall be owned by Licensor and shall
be subject to the terms and conditions of this Agreement.
8.3 Upgrades. Subject to the provisions of Section 2.4, Licensor agrees
to provide Licensee with copies of all Upgrades as they are released and made
generally available by Licensor to its customers from time to time. All
Upgrades shall be owned by Licensor and shall be subject to the terms and
conditions of this Agreement.
8.4 Negation of MSP and Express Warranties. Licensee understands and
acknowledges that the Licensed Software and the Databases will become dated and
will be automatically rendered inoperable if Licensee fails to install any
Licensed Software or Database within thirty (30) days of its receipt of same
from Licensor. If Licensee so fails to install any Licensed Software or
Database, all obligations of Licensor as to the MSP and all warranties of
Licensor under Section 12.1 shall terminate and be null and void and of no
further force and effect.
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8.5 Telephone Support. Licensor shall provide telephone support to
Licensee out of its service office in Boulder, Colorado on Monday through Friday
(holidays excluded) between the Hours of 8:00 a.m. and 5:00 p.m., Mountain
Standard Time, with respect to questions regarding the use of the most current
version of the Licensed Products. Hours of service are subject to change at any
time by Licensor without notice. This telephone support shall be available to
Licensee at no cost beyond the fees set forth on Schedules C and D attached
----------- -
hereto, provided the frequency and length of calls are reasonable.
8.6 Costs of Excluded Items. If it is determined by Licensor that any
apparent problem with the Licensed Products that is reported to Licensor by
Licensee is due to the acts or omissions of Licensee or its employees, hardware
problems, use of unqualified personnel, user error, alteration of the Licensed
Products by Licensee or any third party, the use of an out-of-date version of
the Licensed Products, or failure to comply with the terms and conditions of
this Agreement, Licensor shall notify Licensee and such time and expenses
associated with such support effort shall be billed by Licensor at its then-
current hourly rates and paid by Licensee within thirty (30) days of its receipt
of the invoice therefor.
8.7 On-Site Services. Licensor shall have no obligation to provide any
services at Licensee's site.
8.8 Hardware Maintenance. Licensor shall have no obligation to provide
maintenance or repair for any hardware or associated operated system. Hardware
maintenance shall be the sole responsibility of Licensee.
8.9 No Additional Services. Licensor is under no obligation to provide
any additional services and any agreements for same will be separate from and in
addition to this Agreement at Licensor's then-current hourly rates plus
expenses.
9. REPRODUCTION OF LICENSED PRODUCTS.
---------------------------------
9.1 Licensed Software and Databases. The Licensed Software and the
Databases may not be copied or duplicated by Licensee, in whole or in part,
except that Licensee may copy the Licensed Software and the Databases solely for
use on the Designated CPU or for necessary security back-up purposes. The
original and all copies of the Licensed Software and the Databases, in whole or
in part, which are made or used by or in the possession of Licensee shall be and
shall remain the property of Licensor and shall be kept by Licensee at the
location of the Equipment in which they are first installed as set forth on
Schedule B attached hereto.
- ----------
9.2 Documentation. In no event may Licensee copy or duplicate, or
transmit via any medium, in whole or in part, the Documentation, but additional
copies of the Documentation will
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be made available to Licensee upon request at a nominal fee for copying and
shipping and Handling.
10. MODIFICATION OF LICENSED SOFTWARE AND DATABASES.
-----------------------------------------------
10.1 No Modification by Licensee. Licensee shall not alter, modify,
change, decompile, disassemble or reverse engineer the Licensed Software or any
Database.
10.2 Merger of Licensed Software. Licensee may, at its expense, merge the
Licensed Software into other software programs to form an updated work for the
Licensed Use, provided such resulting merged software shall be subject to all of
the terms and conditions of this Agreement.
11. PROTECTION OF TRADE SECRETS.
---------------------------
11.1 Licensed Products. Licensee agrees that the Licensed Products and
all associated patents, copyrights, trademarks, trade names, trade secrets and
other intellectual property rights are the exclusive property, and constitute a
valuable trade secret, of Licensor. Licensee agrees not to seek to discover or
to disclose any of Licensor's trade secrets by disassembling, decompiling or
otherwise reverse engineering the Licensed Software or Databases. Licensee
shall not disclose, disseminate, transmit via any medium whatsoever, or make
available the Licensed Products, or any portion thereof, to third parties
without Licensor's prior written consent.
11.2 Source Code. The source code for the Licensed Software shall not be
disclosed or made available to Licensee. Licensee shall not create, derive or
discover, or attempt to create, derive or discover, by reverse compiling,
reverse engineering, reverse assembling or otherwise, the source code for the
Licensed Software or any part thereof from the object code format or from other
information made available to Licensee under this Agreement or otherwise.
12. LIMITED WARRANTY AND DISCLAIMER.
-------------------------------
12.1 Limited Warranty. Licensor warrants that, for a period of ninety
(90) days from the date of shipment of any Licensed Software or Database to
Licensee (the "Warranty Period"), such Licensed Software or Database, as the
case may be, will perform substantially according to its product description as
specified in the Documentation under normal use and that the diskettes and/or CD
ROMs on which the Licensed Software and Databases furnished to Licensee are
recorded will be free from defects in materials and workmanship. The foregoing
warranty shall be null and void and of no force and effect if the Licensed
Software or Database fails to perform as a result of accident, neglect or
misuse, user error, electrical power damage, or in the event that all or any
part of the Licensed Software or Database is installed improperly or on any
computer
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equipment other than the Designated CPU or used with any operating system for
which the Licensed Software or Database is not designed, or if the Licensed
Software or Database is altered or modified or is incorrectly merged with other
software by Licensee or any third party.
12.2 Sole and Exclusive Remedy. Licensee acknowledges that Licensor's
sole obligation and liability and Licensee's sole and exclusive remedy for a
breach of the express warranty under Section 12.1 shall be the replacement or
repair of any Licensed Software or Database and/or diskette(s) and/or CD ROM(S)
not meeting Licensor's limited warranty, provided that Licensor receives, during
the applicable Warranty Period, written notice of a defect or other problem and
Licensee thereafter promptly returns the Licensed Products to Licensor for
replacement or repair. If Licensor is unable to deliver such a replacement or
make such repair within a reasonable period of time thereafter (which in no
event shall be less than sixty (60) days after its receipt of the Licensed
Products), Licensee may terminate this Agreement by returning the Licensed
Products to Licensor, and Licensor shall thereafter refund to Licensee that
portion of the Initial License Fee or the Renewal License Fee, as the case may
be, paid by Licensee which is attributable to the remaining portion of the
Initial Term or the Renewal Term, as the case may be (commencing with the date
of Licensor's receipt of the Licensed Products as described in the preceding
sentence) as full payment of all obligations of Licensor pursuant to this
Agreement.
12.3 Warranty Disclaimer. THE FOREGOING LIMITED WARRANTY IS IN LIEU OF
ALL OTHER WARRANTIES AND CONDITIONS, EXPRESS OR IMPLIED, AND CONSTITUTES THE
SOLE AND EXCLUSIVE WARRANTY OF LICENSOR WITH RESPECT TO THE LICENSED PRODUCTS.
EXCEPT FOR THE EXPRESS LIMITED WARRANTY SET FORTH IN SECTION 12.1, LICENSOR
SPECIFICALLY DISCLAIMS, AND LICENSEE RELEASES AND WAIVES, ALL WARRANTIES OF ANY
KIND, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES
OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR USE AND PURPOSE OR ANY WARRANTY
ARISING UNDER STATUTE OR OTHERWISE IN LAW OR FROM A COURSE OF DEALING, COURSE OF
PERFORMANCE OR USAGE OF TRADE. Without limiting the generality of the
foregoing, Licensor does not warrant that the Licensed Software or any Database
is accurate or will meet Licensee's requirements, will operate in any
combination that may be selected for use by Licensee or in combination with
other software, or will operate uninterrupted or error free. Furthermore,
Licensor does not warrant that all software errors, defects or inefficiencies
will be corrected, nor does Licensor assume any liability for failure to correct
any such error, defect or inefficiency. Licensor makes no warranty, and
Licensee assumes the entire risk, as to the integrity of any data and the
results, capabilities, suitability, use or performance of the Licensed Products.
IN NO EVENT SHALL LICENSOR BE LIABLE TO LICENSEE FOR ANY DAMAGES RESULTING FROM
OR RELATED TO THE USE OR PERFORMANCE OF THE LICENSED PRODUCTS.
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13. LIMITATION OF LIABILITY.
-----------------------
IT IS UNDERSTOOD AND AGREED THAT LICENSOR'S TOTAL LIABILITY UNDER THIS
AGREEMENT, IF ANY, FOR ANY DAMAGES SUFFERED BY LICENSEE, ANY PARTY CLAIMING ON
BEHALF OF OR THROUGH LICENSEE, OR ANY OTHER THIRD PARTY, WHETHER IN CONTRACT, IN
TORT, UNDER ANY WARRANTY THEORY, IN NEGLIGENCE, OR OTHERWISE, SHALL BE LIMITED
TO DIRECT DAMAGES AND SHALL NOT EXCEED THE AMOUNT OF FEES PAID TO LICENSOR BY
LICENSEE PURSUANT TO THIS AGREEMENT FOR THE LICENSED PRODUCTS FOR THE SIX (6)
MONTHS IMMEDIATELY PRECEDING THE OCCURRENCE GIVING RISE TO ANY SUCH CLAIM. THE
LICENSE FEE CHARGED HEREIN IS A CONSIDERATION IN LIMITING LICENSOR'S LIABILITY
HEREUNDER. LICENSEE UNDERSTANDS THAT UNDER NO CIRCUMSTANCES SHALL LICENSOR BE
LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES SUFFERED BY LICENSEE, ANY PARTY CLAIMING ON BEHALF OF OR
THROUGH LICENSEE, OR ANY OTHER THIRD PARTY RESULTING FROM OR ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR THE PERFORMANCE OR BREACH THEREOF, INCLUDING LOSS
OF BUSINESS OR PROFITS, BUSINESS INTERRUPTION, OR DAMAGE OR DESTRUCTION OF DATA,
EVEN IF LICENSOR HAS BEEN PREVIOUSLY ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
NO ACTION, REGARDLESS OF FORM OR BASIS, ARISING OUT OF THE TRANSACTIONS UNDER
THIS AGREEMENT MAY BE BROUGHT BY LICENSEE MORE THAN ONE (1) YEAR AFTER LICENSEE
KNEW OR SHOULD HAVE KNOWN OF THE OCCURRENCE OF THE EVENT(S) WHICH GAVE RISE TO
SUCH ACTION.
14. PATENT, COPYRIGHT AND TRADE SECRET INDEMNITY.
--------------------------------------------
14.1 Right to License. Licensor represents and warrants that it is the
owner of the Licensed Products (except as disclosed in Section 5.2 as to any
third party data files) and that it has the right and authority to grant the
License hereunder with respect to the Licensed Products.
14.2 Notification to Licensor. In the event Licensee has any knowledge of
any infringement of, litigation instituted with respect to, or challenge to, the
Licensed Products by any Person, Licensee shall immediately notify Licensor.
Additionally, in such event, Licensee shall immediately furnish to Licensor
copies of all correspondence, notices, advertising, complaints, legal documents,
and other written materials relating to any such infringement, litigation or
challenge which it may have in its possession.
14.3 Investigation, Defense and Indemnification. Licensor agrees to
investigate promptly and defend Licensee against any claim, demand, suit or
action brought against Licensee based on any claim that the use by Licensee of
the then-current version of the Licensed Products delivered by Licensor to
Licensee infringes any existing United States patent, copyright or trade secret
of any third party, provided Licensee (i) provides timely notice of any such
claim,
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demand, suit or action to Licensor, (ii) is not using the Licensed Products in
an unauthorized manner, and (iii) agrees to cooperate fully with Licensor and to
execute any and all documents and take any and all action deemed necessary or
advisable by Licensor to protect the Licensed Products and Licensor's interests
therein. If all of the conditions in (i)-(iii) are met, Licensor agrees to
assume the defense of such claim, demand, suit or action, with counsel of
Licensor's choice, and indemnify and hold harmless Licensee from and against any
and all damages and costs (including reasonable attorneys' fees) finally awarded
by a court against Licensee as a result of any such claim, demand, suit or
action; provided that Licensor's obligation to pay damages and costs shall not
exceed the total sum specifically set forth in Section 13, and provided further
that Licensor will not be responsible for any damages or costs under any
compromise made by Licensee without Licensor's written consent. In the event
Licensor decides to assume the defense of any such claim, demand, suit or action
and so indemnify Licensee, Licensee shall be bound by the terms of any
settlement agreement entered into by Licensor.
14.4 Non-infringing Use. If, in Licensor's opinion, any of the Licensed
Products are likely to become the subject of a claim for infringement or if, as
a result of any such claim, demand, suit or action, Licensee is enjoined from
using any of the Licensed Products, Licensor may, at its own expense and at its
option, (i) procure for Licensee the right to continue using such Licensed
Product, (ii) replace the same with non-infringing software of equivalent
function or performance, or (iii) modify such Licensed Product so that it
becomes non-infringing. If none of these options is reasonably practical,
Licensor may terminate this Agreement, whereupon Licensor shall refund to
Licensee that portion of the Initial License Fee or Renewal License Fee, as the
case may be, paid by Licensee which is attributable to the remaining portion of
the Initial Term or the Renewal Term, as the case may be, as full payment of all
obligations of Licensor pursuant to this Agreement.
14.5 No Further Indemnity. Licensor shall have no obligation with respect
to any such infringement claim based upon Licensee's modification of the
Licensed Products or their combination, merger, operation or use with equipment,
data, software or other items not furnished by Licensor, provided such
infringement would have been avoided but for such combination or merger. EXCEPT
AS SPECIFICALLY PROVIDED IN THIS SECTION 14, LICENSOR SHALL HAVE NO LIABILITY TO
LICENSEE FOR THE INFRINGEMENT OF ANY PATENTS, COPYRIGHTS, TRADE SECRETS OR OTHER
PROPRIETARY RIGHTS BY THE LICENSED PRODUCTS OR ANY PORTION THEREOF.
15. LICENSEE INDEMNIFICATION.
------------------------
Licensee hereby agrees to indemnify and hold harmless Licensor, its
officers, directors, shareholders, employees, agents, insurers, attorneys,
successors, and assigns from and against any and all Losses resulting directly
or indirectly from (i) any and all acts and omissions of Licensee, its
employees, or agents with respect to the Licensed Products, including, without
limitation, Licensee's negligent or intentional misrepresentation of Licensor or
the Licensed Products, the use, operation or possession of the Licensed Products
by Licensee, or any breach of any term or provision of this Agreement by
Licensee, and (ii) any claim, demand, suit or action
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brought against Licensor that Licensee's use of its software programs infringes
the intellectual property of a third party.
16. CONFIDENTIAL INFORMATION; NON-SOLICITATION.
------------------------------------------
16.1 Confidential Information. Licensee acknowledges and agrees that the
Licensed Products are protected by the law of copyright, are very valuable,
special and unique assets of Licensor, and contain trade secrets and proprietary
information, and that Licensor has a proprietary interest in such Licensed
Products and all ideas, trade secrets, procedures, processes, methods, systems,
techniques, algorithms and concepts contained therein or related thereto,
whether disclosed orally or in writing or by any other media (collectively, the
"Confidential Information"), and such Confidential Information shall remain the
sole and exclusive property of Licensor. In performance of its duties
hereunder, Licensor will also be receiving information deemed confidential by
Licensee (also, "Confidential Information"). The party receiving any such
Confidential Information (the "Receiving Party") shall hold such Confidential
Information in strictest confidence, for the exclusive use of the Receiving
Party, and the Receiving Party will not take any action in derogation of such
confidentiality and agrees that its use and disclosure of the Confidential
Information must be continuously controlled. The Receiving Party shall take all
reasonable steps to insure that the Confidential Information is not used by or
made available or furnished or disclosed to any Person (other than the Receiving
Party's employees directly concerned with the Licensed Use and who need such
disclosure for the conduct of their ordinary responsibilities), including, but
not limited to, taking all steps it takes to protect information, data or other
tangible and intangible property of its own that it regards as proprietary or
confidential. The Receiving Party shall instruct its employees and agents
having access to the Confidential Information regarding the terms and
limitations contained in this Section 16.
16.2 Non-Confidential Information. Information shall not be deemed
"Confidential Information" which:
16.2.1 is or has become publicly known as of the date of receipt by
the Receiving Party other than through disclosure by the Receiving Party;
or
16.2.2 is already in the possession of, or actually and demonstrably
is known to, the Receiving Party at the time of disclosure; or
16.2.3 is approved for public release by written authorization from
the party disclosing any Confidential Information.
16.3 Non-Solicitation; Non-Competition. In consideration of Licensor's
transmittal of the Confidential Information to Licensee, Licensee agrees that,
during the term of this Agreement and for a period of two (2) years thereafter,
neither it nor any of its Affiliates:
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16.3.1 shall, directly or indirectly, solicit, hire or otherwise
retain as an employee or independent contractor any present or former
employee of or consultant to Licensor who was assigned to the development,
marketing or maintenance of any part of the Licensed Products, nor solicit,
encourage or request any such employee to leave the employ of Licensor; or
16.3.2 shall compete, directly or indirectly, with Licensor in the
creation, manufacture, sale, licensing, marketing or distribution of
software programs and materials which are similar to or which compete with
the Licensed Products within the geographic areas in which the Licensed
Products are then offered for sale or license; provided, however, that this
provision shall not prohibit Licensee from developing a software program
for internal business purposes only.
16.4 Specific Performance. Each party specifically agrees that any breach
of this Section 16 will result in irreparable injury to the other party and the
other party shall be entitled (without the necessity of posting any bond or
establishing the inadequacy of damages as a remedy) to specific performance and
injunctive relief to correct and/or enjoin any such breach or threatened breach
in addition to all other remedies which might be available. In the event any
such action is brought by Licensor, the parties hereby agree that the United
States District Court for the Middle District of Florida, Tampa Division shall
have exclusive Jurisdiction to hear and determine any such action. In the event
any such action is brought by Licensee. the parties hereby agree that the United
States District Court for the County of San Diego shall not have exclusive
jurisdiction to hear and determine any such action. Each party hereby expressly
submits and consents in advance to such jurisdiction and venue in any such
action and agrees that service of any summons and complaint, or other process or
papers, may be made by registered or certified mail, return receipt requested,
addressed to such party at the address to which notices are to be sent pursuant
to Section 22.1 hereof.
16.5 Independent Covenants The covenants and agreements of the parties
set forth in this Section 16 shall be construed as agreements independent of any
other provision of any agreement, and the existence of any claim or cause of
action, whether predicated on this Agreement or otherwise, shall not constitute
a defense to the enforcement of the covenants and agreements contained herein.
17. TERMINATION OF AGREEMENT.
------------------------
17.1 By Licensor or Licensee. This Agreement and the License and other
rights granted hereunder may be terminated by Licensor or Licensee:
17.1.1 at the end of the Initial Term or any Renewal Term by giving
the other party written notice of its intent not to renew no less than
sixty (60) days prior to the expiration of the Initial Term or any Renewal
Term, as the case may be; or
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<PAGE>
17.1.2 immediately where the other party (the "breaching party")
breaches any term or provision of this Agreement (excluding any failure to
make any payment hereunder, which shall be governed by Section 17.3. 1) and
fails to cure such breach within thirty (30) days after written notice of
such breach from the non-breaching party.
17.2 By Licensee Only. This Agreement and the License and other rights
granted hereunder may be terminated by Licensee as set forth in the last
sentence of Section 12.2.
17.3 By Licensor Only. This Agreement and the License and other rights
granted hereunder may be terminated immediately by Licensor by written notice to
Licensee:
17.3.1 where Licensee fails to make any payment hereunder when due,
and fails to cure such breach within ten (10) days after the due date of
payment; or
17.3.2 in the event (i) of an assignment by Licensee for the benefit
of creditors; (ii) Licensee shall become insolvent, or shall be unable to
pay its debts as they mature, or shall admit in writing its inability to
pay its debts as they mature; (iii) of Licensee's dissolution or loss of
charter by forfeiture; (iv) Licensee is adjudged bankrupt or insolvent by a
United States court of competent jurisdiction; (v) a trustee or receiver is
appointed for Licensee or its assets or any substantial part thereof, (vi)
Licensee files a voluntary petition under any bankruptcy or other similar
law providing for its reorganization, dissolution or liquidation, or any
involuntary petition under any bankruptcy or other similar law is filed
against Licensee; (vii) Licensee shall consent to the appointment of a
receiver or a trustee for itself or its assets or of any substantial part
thereof, or (viii) any substantial part of Licensee's property becomes
subject to any levy, seizure, assignment, application, or sale for or by a
creditor or government agency; or
17.3.3 in the event Licensee breaches any of the provisions of
Sections 2.5, 10.1, 11 or 16; or
17.3.4 as set forth in Section 14.4.
18. EFFECT OF TERMINATION.
---------------------
18.1 Effect of Termination. Immediately upon any termination,
cancellation or expiration of this Agreement or of any License granted hereunder
for any reason:
18.1.1 all rights and Licenses granted to Licensee under this
Agreement shall cease and terminate and Licensee shall have no right
thereafter to use, and shall cease the use of, the Licensed Products or any
portion thereof,
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18.1.2 Licensee shall return the originals of the Licensed Products
and all copies thereof, in whole or in part, to Licensor;
18.1.3 Licensee shall remove the Licensed Software and Databases and
all portions thereof from any merged software, including as permitted
pursuant to Section 10.2;
18.1.4 Licensee shall pay to Licensor any and all outstanding fees,
charges, payments and expenses due pursuant to this Agreement;
18.1.5 Licensor shall have the right, at any time, to take possession
of the Licensed Products and all copies thereof wherever located, without
demand or notice; and
18.1.6 Licensor may cease performance of all of Licensor's
obligations hereunder without liability to Licensee, including the MSP
(which will cause the Licensed Software and the Databases to become dated
and automatically rendered inoperable) and all express warranties contained
under Section 12. 1.
18.2 Certification by Licensee. Within ten (10) days following the date
of termination, cancellation or expiration of this Agreement, Licensee shall
certify in writing to Licensor its compliance with the provisions of Section 18.
1.
18.3 Survival. The provisions of Sections 3.6, 5.1, 12, 13, 15, 16, 18.1,
18.2, 23.4 and 23.5 shall survive the termination, cancellation or expiration of
this Agreement for any reason.
19. FORCE MAJEURE.
-------------
Licensor shall not be liable to Licensee for any delay or failure by
Licensor in the performance of its obligations under this Agreement or otherwise
if such delay or failure arises from any cause or causes beyond the control of
Licensor including, without limitation, labor shortages or disputes, strikes,
other labor or industrial disturbances, delays in transportation, acts of God,
floods, lightning, fire, epidemic, shortages of materials, rationing, utility or
communication failures, earthquakes, casualty, war, acts of the public enemy, an
act of civil or military authority, sabotage, explosives, riots, insurrections,
embargoes, blockades, actions, restrictions, regulations or orders of any
government, agency or subdivision thereof, or failure of suppliers.
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20. EXPORT REGULATIONS; U.S. GOVERNMENT RESTRICTIONS.
------------------------------------------------
20.1 Export Regulations. Licensee acknowledges that the Licensed Products
and any direct products thereof may be subject to United States export laws,
statutes and regulations, and that Licensee will at all times comply with the
provisions of such laws, statutes and regulations including obtaining any
necessary or required licenses. Licensee shall not export or re-export or
otherwise transmit, directly or indirectly, the Licensed Products or any direct
products thereof into, or use the Licensed Products or any direct products
thereof in, any country prohibited or restricted under United States export
laws, statutes or regulations or any other applicable laws.
20.2 U.S. Government Restrictions. The Licensed Products are provided
with Restricted Rights. Use, duplication or disclosure by the United States
Government is subject to restrictions as set for in subparagraph (c)(1)(ii) of
The Rights in Technical Data and Computer Software clause at DFARS 252.227-7013
or subparagraphs (c)(1) and (2) of the Commercial Computer Software - Restricted
Rights at 48 CFR 52.227, as applicable.
21. INDEPENDENT CONTRACTOR RELATIONSHIP.
-----------------------------------
21.1 Independent Contractors Only. The relationship of Licensor and
Licensee is that of independent contractors, and nothing contained in this
Agreement shall be construed to (i) give either party the power to direct and
control the day-to-day activities of the other, (ii) constitute the parties as
partners, joint venturers, co-owners or otherwise as participants in a joint or
common undertaking, (iii) allow either party to act on behalf of or bind the
other party or create or assume any obligation on behalf of the other party for
any purpose whatsoever, or (iv) create any ownership interest in Licensee or any
other Person as to the Licensed Products. All financial obligations associated
with Licensee's business are the sole responsibility of Licensee.
22. COMMUNICATIONS.
--------------
22.1 Communications. Whether expressly so stated or not, all notices,
demands, requests and other communications required or permitted by or provided
for in this Agreement (collectively, "Communications") shall be given in writing
to the parties at their respective addresses set forth above in the first
sentence of this Agreement, or at such other address as a party shall designate
for itself in writing in accordance with this Section 22. Communications may be
transmitted (i) by personal delivery, (ii) by delivery by messenger, express or
air courier, or similar courier, or (iii) by delivery by United States first
class certified or registered mail, postage prepaid. Except as otherwise
provided in this Agreement, delivery or service of any Communication shall be
deemed effective only upon receipt; provided, any Communication received after
5:00 p.m. local time of place of receipt, or on a day other than a Business Day,
shall be deemed received on the next succeeding Business Day.
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22.2 Change of Address. Each party agrees to provide the other party at
least ten (10) days advance notice of any change in its principal business
location. In addition, Licensee agrees to provide Licensor at least ten (10)
days advance notice of any change in the location of Designated CPU.
3. MISCELLANEOUS PROVISIONS.
------------------------
23.1 Entire Agreement. This Agreement, including all of the Schedules
referenced herein and attached hereto, constitutes the entire agreement between
the parties hereto pertaining to the subject matter hereof, and supersedes,
supplants, and renders null and void any and all prior and contemporaneous
negotiations, discussions, proposals, agreements, understandings,
representations or communications, oral or written, of the parties hereto with
respect to the subject matter hereof
23.2 Binding Effect. This Agreement shall be binding upon, inure to the
benefit of, and be enforceable by the parties hereto and their respective
successors and permitted assigns.
23.3 Amendment. This Agreement may be amended only by a writing duly
executed by the authorized representatives of the parties hereto which makes
specific reference to this Agreement.
3.4 Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Florida, without regard to
the choice of law provisions of that State.
3.5 Arbitration of Disputes. Except as otherwise expressly provided
herein, all claims, disputes and other matters in question arising out of or
relating to this Agreement, including the breach or interpretation hereof
(collectively, "Disputes"), shall be resolved by arbitration in Tampa, Florida
(if initiated by Licensor) or San Diego, California (if initiated by Licensee)
by a panel of three (3) arbitrators. Either party may initiate arbitration by
giving the other party written notice containing a brief description of the
Dispute(s) to be arbitrated and the monetary amount involved. If the parties
are unable to agree as to the settlement of the Dispute within ten (10) days of
such written notice, then, within twenty (20) days of such written notice, each
party shall select an arbitrator and the two arbitrators selected by the parties
shall select a third arbitrator. Any arbitrator selected hereunder shall be a
commercial person knowledgeable in data processing and the licensing of computer
software. No person shall serve as an arbitrator who has, or has had, any
expectation of acquiring any business or financial relationship with either of
the parties hereto or who has acquired from either party or any other source
detailed prior knowledge of the matter in dispute. A decision by a majority of
the panel of arbitrators, when reduced to writing and signed by the arbitrators,
shall be final and binding upon the parties and judgment thereon may be entered
by any court of competent jurisdiction. Any award of the panel of arbitrators
shall include an award of reasonable attorneys' fees and costs and interest for
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20
<PAGE>
such period as shall fully compensate the party in whose favor the award is
entered for the loss of use of the funds in question. The parties shall use
their best efforts to assure that all arbitration proceedings shall be held and
conducted so that the panel's award shall be rendered in writing within sixty
(60) days after the arbitration has been initiated. Any arbitration under this
Agreement shall be subject to and conducted in accordance with the rules and
procedures of the American Arbitration Association for commercial arbitration in
effect at the time arbitration is initiated.
23.6 Assignment. Neither party may assign or transfer its rights or
obligations under this Agreement except with the express written consent of the
other party; provided, however, that a successor in interest by merger, by
operation of law, purchase or otherwise of the entire business of either party
shall acquire all rights and obligations of such party hereunder without the
necessity of obtaining prior written consent. Any assignment without such
consent shall be null and void and of no force and effect.
23.7 Waiver. No party to this Agreement shall be deemed to have waived
any of its rights, powers or remedies under this Agreement unless such waiver is
expressly set forth in a writing signed by the waiving party. No written waiver
of any provision of this Agreement shall be deemed to be, or shall constitute,
(i) a waiver of any other provision of this Agreement, whether or not similar,
or (ii) a continuing or subsequent waiver of the same or another provision of
this Agreement. The failure of either party to enforce at any time any of the
provisions of this Agreement, or the failure to require at any time performance
by the other party of any of the provisions of this Agreement, will in no way be
construed to be a present or future waiver of any such provisions, or in any way
affect the validity of either party to enforce each and every such provision
thereafter.
23.8 Captions. The captions and headings of Sections and subsections
contained in this Agreement are provided for convenience of reference only and
shall not be considered a part hereof for purposes of interpreting this
Agreement, and, therefore, such captions and headings do not define, modify,
limit, describe or affect in any way the meaning or intent of this Agreement or
any of its terms or provisions.
23.9 Gender, Etc. Whenever the context shall require, the use of the
masculine gender herein shall be deemed to include the feminine gender and the
neuter gender, and the use of the singular or the plural herein shall be deemed
to include the plural or the singular, as the case may be.
23.10 Severability. If any Section or other provision of this Agreement,
or the application of such Section or provision, is held invalid, then the
remainder of this Agreement, and the application of such Section or provision to
persons or circumstances other than those with respect to which it is held
invalid, shall not in any way be affected or impaired thereby. In the event
that any provision of this Agreement becomes or is declared by a court of
competent jurisdiction or panel of arbitrators to be illegal, unenforceable or
void, this Agreement shall
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21
<PAGE>
continue in full force and effect without said provision. The parties agree to
negotiate in good faith a substitute valid and enforceable provision that most
nearly effects the parties' intent and to be bound by the mutually agreed
substitute provision. Notwithstanding anything to the contrary contained herein,
if any of the provisions of Section 16 are found to be invalid, then the parties
hereto agree to enter into such other agreement as will validly afford, to the
greatest extent possible, the protection intended by that Section.
23.11 Parties in Interest. Nothing in this Agreement, express or implied,
is intended to confer any rights, benefits or remedies under or by reason of
this Agreement on any Person other than the parties to it and their respective
successors and permitted assigns, nor is anything in this Agreement intended to
relieve or discharge any obligation of any third Person to any party hereto or
give any third Person any right to subrogation or action over or against any
party to this Agreement.
23.12 No Presumption. In the event of any uncertainty in the terms of
this Agreement, there shall exist no presumption against either party that such
uncertainty arose from the preparation of this Agreement by such party.
23.13 Any Inconsistencies. To the extent there is any inconsistency
between this Agreement, on the one hand, and any purchase order or other
document issued in connection with this Agreement, on the other hand, this
Agreement shall control over any inconsistency appearing in any purchase order
or other document issued in connection with this Agreement.
23.14 Counterparts. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original and
all of which together shall constitute one and the same instrument, and in
making proof hereof it shall not be necessary to produce or account for more
than one such counterpart.
23.15 Attorneys' Fees and Costs of Enforcement. The parties hereto agree
that should it become necessary for any party hereto to employ an attorney to
enforce any of its rights hereunder against any other party hereto, the
prevailing party shall be entitled, in addition to any other rights and remedies
it may have, to reimbursement from the non-prevailing party of all costs and
expenses, including reasonable attorneys' fees, costs of arbitration and court
costs.
23.16 Computation of Time. Except as is otherwise expressly provided in
this Agreement, all periods of time shall be computed by including Saturdays,
Sundays and holidays.
23.17 Approval of Licensor. Whenever this Agreement requires or provides
for any approval, acceptance, waiver or consent by Licensor, such approval,
acceptance, waiver or consent must in every case be in writing.
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23.18 Further Assurances. Each party agrees to execute and deliver any
and all papers, documents and instruments or take such further actions as the
other party may reasonably require to carry out the terms of this Agreement.
23.19 Remedies. All remedies shall be cumulative and not alternative and
in addition to all other rights and remedies available in law and in equity.
23.20 Recitals. The parties hereby agree that each and all of the
Recitals set forth herein are true and correct and are incorporated by this
reference and made a part of this Agreement for all purposes.
23.21 Other Rules of Construction. For purposes of this Agreement, the
following rules of construction shall also apply, whether expressly so stated or
not:
23.21.l All of the Schedules referred to in this Agreement shall be
deemed incorporated into this Agreement by this reference and made a part
of this Agreement for all purposes as if fully set forth in this Agreement.
23.21.2 References in this Agreement to Sections and Schedules are
references to Sections of and Schedules attached to this Agreement, except
as expressly otherwise indicated.
23.21.3 Any phrase containing the term "include" or "including"
shall mean including without limitation.
23.21.4 Unless the context requires otherwise, the words "herein,"
"hereof," "hereunder," and other words of similar import refer to this
Agreement as a whole and not to any particular section, subsection or
clause.
23.21.5 Unless the context requires otherwise, any reference to a
statute shall include and shall be deemed to be a reference to such
statute, or any successor statute to such statute, and to the regulations
promulgated thereunder, with all amendments made thereto and in force from
time to time.
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<PAGE>
IN WITNESS WHEREOF, Licensor and Licensee have executed this Agreement as
of the Effective Date.
COMPS INFOSYSTEMS, INC. QUALITATIVE MARKETING SOFTWARE, INC.
By: /s/ Craig Farrington By: /s/ Paul Wray
------------------------------ ----------------------------
Print Name: Craig Farrington Print Name: Paul Wray
----------------------
Title: V.P. Marketing Title: President
---------------------------
"Licensee" "Licensor"
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<PAGE>
SCHEDULE A
----------
Licensed Software, Documentation, Databases, and
------------------------------------------------
Restrictions on Use
-------------------
A. Licensed Software GeoStan(TM) [Library]* -- Non-CASS
StarData(TM) -- Non-CASS
CENTRUS(TM) ACM demo -- 100 record limit
*Licensee may replace the GeoStan [Library] with the GeoStan [OCX] when the OCX
is available.
B. Documentation GeoStan(TM) Reference Manual
StarData(TM) User Guide
CENTRUS User Guide
C. Databases a. Qualitative Marketing Software's GeoStan(TM)
Address Standardization and Business Location
Research (BLR) Geocoding database files
(called GSDS) and required support files for
the United States.
-------------
b. Qualitative Marketing Software's BLR ZIP+4
Centroid File(s) (called Z9s), or its
suitable replacement, which Licensor has
license to resell and distribute, for the
United States.
-------------
D. Restrictions on Use
Licensee agrees that the Licensed Products:
(1) shall not be CASS certified for address standardization;
(2) shall not be transmitted on the Internet; and
(3) shall only process a maximum of 500,000 records annually.
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<PAGE>
SCHEDULE B
----------
Designated CPS and Users
------------------------
The Licensed Software and Databases are licensed to Licensee for the following
Designated CPS and users:
GeoStan(TM), StarData(TM), and CENTRUS(TM) ACM (demo)
- -----------------------------------------------------
Designated CPU Manufacturer: PC
Operating System: Windows(R) NT
Location: 9888 Carroll Centre Rd.
Suite 100
San Diego, CA 92126-4580
Sites 1
Users 10
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<PAGE>
SCHEDULE C
----------
Initial License Fee
-------------------
Software
GeoStan [Library] $10,000.00
StarData No charge
CENTRUS No Charge
Geocoding Database licensed directly from BLR
USPS Database $ 3,000.00
MSP $ 1,500.00
Total Initial License Fee for
Licensed Products and MSP $14,500.00*
Terms $4,853.00 plus applicable sales tax and
shipping ($60.00) due at offices of Licensor
on the Effective Date;
$4,853.00 plus applicable sales tax due at
offices of Licensor on or before march 20,
1997; and
$4,794.00 plus applicable sales tax due at
offices of Licensor on or before April 21,
1997.
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<PAGE>
SCHEDULE D
----------
Renewal License Fee
-------------------
Geocoding Database licensed directly from BLR
USPS Database $3,000.00
MSP $1,500.00
Total Renewal License Fee for $4,500.00*
Licensed Products and MSP
Terms Payment due at offices of Licensor on the
Renewal Date
(optional - QMS Geocoding $2,000.00
database**)
*Does not include shipping or applicable sales tax.
**In the event Licensee elects to License the QMS Geocoding database,
payment of $6,500.00* shall be due at offices of Licensor as set forth above
under "Terms".
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<PAGE>
TRANSAMERICA INFORMATION MANAGEMENT SERVICES EXHIBIT 10.25
METROSCAN
1860 Howe Avenue, #455
Sacramento, CA 95825
(916) 921-6629
(800) 866-2783
(916) 921-6781 (FAX) PAGE 1 of 4
----- -----
LICENSE AND SUBSCRIPTION AGREEMENT
----------------------------------
Subject to the terms and conditions on the reverse side, Transamerica
Information Management Services ("TIMS") hereby grants a limited non-exclusive,
non-transferable license to use the METROSCAN(TM) CD-ROM databases for the
localities identified below, together with the METROSCAN(TM) Software and
associated manuals and other printed material ("documentation") provided with
this package (hereinafter referred to collectively as "METROSCAN(TM)") to the
following person (hereinafter referred to as the "Licensee"):
LICENSE
(SOLD TO) (BILL TO)
Name COMPS Name S A M E
-------------------------------- -------------------------------
Company COMPS Company____________________________
-----------------------------
Address 5414 Oberlin Drive #300 Address____________________________
-----------------------------
City San Diego State CA Zip 92121 City______ State ____ Zip ________
----------- ---- -----
Phone 457-2274 FAX: 597-4886 Phone __________ FAX: ________
---------- ---------
BUSINESS TYPE: Com. R.E. Info
----------------------
Subject to the terms and conditions on the reverse side, TIMS agrees to
provide the licensee with METROSCAN(TM) for the following localities, and to
update those databases on a monthly basis.: MidMonth Updates Where Avail.
<TABLE>
<S> <C> <C>
----
San Diego COUNTY DATA/MAPS/BOTH _____ X _____ = 1295.00
- --------------------------- ---- -------
---- ----
Los Angeles (A-B-C) COUNTY DATA/MAPS/BOTH _____ X _____ = 2250.00
- --------------------------- ---- ---- -------
----
Orange COUNTY DATA/MAPS/BOTH _____ X _____ = 500.00
- --------------------------- ---- -------
----
Riverside COUNTY DATA/MAPS/BOTH _____ X _____ = 500.00
- --------------------------- ---- -------
----
San Bernadino COUNTY DATA/MAPS/BOTH _____ X _____ = 500.00
- --------------------------- ---- -------
___________________________ NETWORKING FEES (IF APPLICABLE) = _______
CD-ROM DRIVE REQUIREMENT: = _______
HARDWARE/SOFTWARE: = _______
</TABLE>
Diskette Type: [ ] 5 1/4" [ X ] 3 1/2
- -----------------------------------------
SPECIAL INSTRUCTIONS
- -----------------------------------------
Invoice for full amt on page #4
- ----------------------------------
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
- -----------------------------------------
PAYMENT TERMS: All invoices are due and payable upon receipt. Unpaid invoices
are subject to late charges. MetroScan(TM) shipments will be suspended on past-
due accounts.
Term of the agreement shall be for 12 months commencing 12/1 1992 to 12/1 1993
-- ---- ---- ---- ----
and is non-cancelable for that period; except that TIMS may terminate this
Agreement at any time for non payment of the license fee or if Licensee fails to
comply with any provision of this Agreement. This Agreement shall automatically
renew annually unless written notice of cancellation is given by either party 60
days prior to the expiration date of each term.
_______ My check the amount of $_________________ is enclosed.
_______ Please charge my _____ VISA _____ MASTERCARD
Card Number: ____________ Expiration Date: __________
<PAGE>
EQUIPMENT REQUIREMENTS:
<TABLE>
<S> <C>
IBM-PC/XT/AT, 386, PS/2 or compatible with 640K of RAM Computer Model:_____________________
Microsoft DOS___________ Amount of Memory:___________________
Hard Disk (must have 2 mb of free space per county) DOS Version:________________________
Available expansion slot Amount of Free Space on Hard Disk___
Maps require VGA or EGA monitor & card Monitor/Graphics Card:______________
</TABLE>
WARNING! I HAVE BEEN INFORMED THAT I SHOULD BACK UP MY HARD DISK PRIOR TO THE
INSTALLATION OF THE METROSCAN(TM) CD-ROM DRIVE INTERFACE CARD. I HOLD TIMS
HARMLESS FOR THE INSTALLATION.
Licensee's Initials: _______________
TERMS AND CONDITIONS
--------------------
CAREFULLY READ THE FOLLOWING TERMS AND CONDITIONS BEFORE YOU
ENTER THIS LICENSE AGREEMENT. YOUR SIGNATURE BELOW
CONSTITUTES YOUR ACCEPTANCE OF THESE TERMS AND CONDITIONS.
OWNERSHIP OF METROSCAN(TM)
MetroScan(TM) shall remain the property of Transamerica Information Management
Services (TIMS) at all times and shall be surrendered to TIMS at the licensee's
expense at such time as the License and Subscription Agreement shall be
terminated. TIMS reserve the right to request that Licensee return all CD-ROM's,
monthly updates, and documentation within 10 days of receipt of each new month's
updates.
PROHIBITED USES/YOU MAY:
. Use MetroScan(TM) on any compatible computer, provided you use it only
one computer at a time.
. Use MetroScan(TM) on a network, file server or virtual disk, provided
that access is limited to one user at a time and that you have the original copy
of the documentation and the program disks. If MetroScan is used by multiple-
users on a network, then each network node will bear a surcharge for MetroScan's
network pricing schedule. TIMS is not responsible for the functionality or
performance of the network operating system or software.
PROHIBITED USES/YOU MAY NOT
---
. Make copies of the documentation or program disks, except as described
in the documentation.
. Loan, rent, sub-license, or otherwise transfer the software or the
documentation, except as provided above.
. Alter, modify or adapt the software or documentation, including, but
not limited to, translating, decompiling, disassembling or creating derivative
works.
Licensee if not permitted to download more than 5,000 data records without
explicit written permission from licensor.
THIS LICENSE AND YOUR RIGHT TO USE THE SOFTWARE AUTOMATICALLY TERMINATE IF YOU
FAIL TO COMPLY WITH ANY PROVISION OF THIS LICENSE AGREEMENT. UPON TERMINATION,
YOU WILL IMMEDIATELY RETURN ALL DOCUMENTATION AND DISKS. LIMITED WARRANTY
LIMITED WARRANTY
TIMS warrants that MetroScan(TM) will substantially conform to published
specifications and to the documentation, provided that it is used on the
computer hardware and with the operating system for which it was designed.
TIMS also warrants that the magnetic media on which the software is distributed
and the documentation are free from defects in materials and workmanship. TIMS
will replace defective media or documentation or correct substantial software
errors at no charge, provided Licensee returns the item with dated proof of
payment to TIMS within ten (10) days of the date of delivery. If TIMS is unable
to replace defective media or documentation or to correct substantial software
errors, TIMS will refund the license fee. These are the Licensee's sole remedies
for any breach of warranty.
DISCLAIMER
(1) EXCEPT AS SPECIFICALLY PROVIDED ABOVE, TIMS MAKES NO WARRANTY OR
REPRESENTATION, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THIS SOFTWARE OR
DOCUMENTATION, INCLUDING THEIR QUALITY, PERFORMANCE, MERCHANTABILITY, OR FITNESS
FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL TIMS BE LIABLE FOR DIRECT, INDIRECT,
SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES ARISING OUT OF THE USE OF OR
INABILITY TO USE METROSCAN(TM) (AND/OR ASSOCIATED SOFTWARE OR DOCUMENTATION),
EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. In particular, TIMS is not
responsible for any costs, including, but not limited to, those incurred as a
result of lost profits or revenue, loss of MetroScan(TM), loss of data, the cost
of recovering such software or data, the cost of substitute software, or claims
by third parties. In no case shall TIMS' liability exceed the amount of the
license fee.
(2) The information contained in MetroScan(TM) has been compiled from
public records. However, it does not represent the official records of the
County Assessor. These records are for information purposes only. No liability
is assumed by the County Assessor or TIMS for the accuracy or completeness of
this information. The user is directed to the office of the County Assessor for
official assessment records.
(3) THE WARRANTY AND LIMITATIONS SET FORTH ABOVE ARE EXCLUSIVE AND IN LIEU
OF ALL OTHERS, ORAL OR WRITTEN, EXPRESS OR IMPLIED. No TIMS dealer,
distributor, agent, or employee is authorized to make any modification or
addition to the Limited Warranty set forth above.
(4) Some states do not allow the exclusion or limitation of implied
warranties or limitations of liability for incidental or consequential damages,
so the above limitations or exclusions may not apply to this License.
NOTE: All orders are subject to approval by TIMS.
SUBSCRIBER SEE PAGE 4 TRANSAMERICA INFORMATION MANAGEMENT
---------------------- REPRESENTATIVE ______________________
AUTHORIZED SIGNATURE
DATE: ___________________________ DATE: ___________________________
/s/ Christopher A. Crane 12/17/92 APPROVED BY: /s/ James E. Gregg
DATE: 12/17/92
------------------------------
<PAGE>
TRANSAMERICA INFORMATION MANAGEMENT SERVICES Supercedes all previous agreements
METROSCAN
1860 Howe Avenue, #455
Sacramento, CA 95825
(916) 921-6629
(800) 866-2783
(916) 921-6781 (FAX) PAGE 2 of 4
----- -----
LICENSE AND SUBSCRIPTION AGREEMENT
----------------------------------
Subject to the terms and conditions on the reverse side, Transamerica
Information Management Services ("TIMS") hereby grants a limited non-exclusive,
non-transferable license to use the METROSCAN(TM) CD-ROM databases for the
localities identified below, together with the METROSCAN(TM) Software and
associated manuals and other printed material ("documentation") provided with
this package (hereinafter referred to collectively as "METROSCAN(TM)") to the
following person (hereinafter referred to as the "Licensee"):
LICENSE
(SOLD TO) (BILL TO)
Name________________________________ Name_______________________________
Company COMPS Company____________________________
-----------------------------
Address_____________________________ Address____________________________
City___________ State ____ Zip _____ City_______ State ____ Zip ________
Phone__________ FAX:_________ Phone __________ FAX: ________
BUSINESS TYPE:
----------------------
Subject to the terms and conditions on the reverse side, TIMS agrees to
provide the licensee with METROSCAN(TM) for the following localities, and to
update those databases on a monthly basis.: (MidMonth Updates Where Avail.)
<TABLE>
<S> <C> <C>
----
VENTURA COUNTY DATA/MAPS/BOTH _____ X _____ = 500.00
- --------------------------- ---- -------
----
CLARK, NV COUNTY DATA/MAPS/BOTH _____ X _____ = 500.00
- --------------------------- ---- -------
----
KING COUNTY DATA/MAPS/BOTH _____ X _____ = 500.00
- --------------------------- ---- -------
----
SNOHOMISH COUNTY DATA/MAPS/BOTH _____ X _____ = 500.00
- --------------------------- ---- -------
----
PIERCE COUNTY DATA/MAPS/BOTH _____ X _____ = 500.00
- --------------------------- ---- -------
___________________________ NETWORKING FEES (IF APPLICABLE) = _______
CD-ROM DRIVE REQUIREMENT: = _______
HARDWARE/SOFTWARE: = _______
</TABLE>
Diskette Type: [ ] 5 1/4" [ X ] 3 1/2
- ------------------------------------
SPECIAL INSTRUCTIONS
- ------------------------------------
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
- ------------------------------------
PAYMENT TERMS: All invoices are due and payable upon receipt. Unpaid invoices
are subject to late charges. MetroScan(TM) shipments will be suspended on past-
due accounts.
Term of the agreement shall be for 12 months commencing 12/1 1992 to 12/1 1993
-- ---- ---- ---- ----
and is non-cancelable for that period; except that TIMS may terminate this
Agreement at any time for non payment of the license fee or if Licensee fails to
comply with any provision of this Agreement. This Agreement shall automatically
renew annually unless written notice of cancellation is given by either party 60
days prior to the expiration date of each term.
_______ My check the amount of $_________________ is enclosed.
_______ Please charge my _____ VISA _____ MASTERCARD
Card Number: ____________ Expiration Date: __________
<PAGE>
EQUIPMENT REQUIREMENTS:
<TABLE>
<S> <C>
IBM-PC/XT/AT, 386, PS/2 or compatible with 640K of RAM Computer Model:_____________________
Microsoft DOS___________ Amount of Memory:___________________
Hard Disk (must have 2 mb of free space per county) DOS Version:________________________
Available expansion slot Amount of Free Space on Hard Disk___
Maps require VGA or EGA monitor & card Monitor/Graphics Card:______________
</TABLE>
WARNING! I HAVE BEEN INFORMED THAT I SHOULD BACK UP MY HARD DISK PRIOR TO THE
INSTALLATION OF THE METROSCAN(TM) CD-ROM DRIVE INTERFACE CARD. I HOLD TIMS
HARMLESS FOR THE INSTALLATION.
Licensee's Initials: _______________
TERMS AND CONDITIONS
--------------------
CAREFULLY READ THE FOLLOWING TERMS AND CONDITIONS BEFORE YOU ENTER THIS LICENSE
AGREEMENT.
YOUR SIGNATURE BELOW CONSTITUTES YOUR ACCEPTANCE OF THESE TERMS AND CONDITIONS.
OWNERSHIP OF METROSCAN(TM)
MetroScan(TM) shall remain the property of Transamerica Information Management
Services (TIMS) at all times and shall be surrendered to TIMS at the licensee's
expense at such time as the License and Subscription Agreement shall be
terminated. TIMS reserve the right to request that Licensee return all CD-ROM's,
monthly updates, and documentation within 10 days of receipt of each new month's
updates.
PROHIBITED USES/YOU MAY:
. Use MetroScan(TM) on any compatible computer, provided you use it only
one computer at a time.
. Use MetroScan(TM) on a network, file server or virtual disk, provided
that access is limited to one user at a time and that you have the original copy
of the documentation and the program disks. If MetroScan is used by multiple-
users on a network, then each network node will bear a surcharge for MetroScan's
network pricing schedule. TIMS is not responsible for the functionality or
performance of the network operating system or software.
PROHIBITED USES/YOU MAY NOT
---
. Make copies of the documentation or program disks, except as described
in the documentation.
. Loan, rent, sub-license, or otherwise transfer the software or the
documentation, except as provided above.
. Alter, modify or adapt the software or documentation, including, but
not limited to, translating, decompiling, disassembling or creating derivative
works.
Licensee if not permitted to download more than 5,000 data records without
explicit written permission from licensor.
THIS LICENSE AND YOUR RIGHT TO USE THE SOFTWARE AUTOMATICALLY TERMINATE IF YOU
FAIL TO COMPLY WITH ANY PROVISION OF THIS LICENSE AGREEMENT. UPON TERMINATION,
YOU WILL IMMEDIATELY RETURN ALL DOCUMENTATION AND DISKS. LIMITED WARRANTY
LIMITED WARRANTY
TIMS warrants that MetroScan(TM) will substantially conform to published
specifications and to the documentation, provided that it is used on the
computer hardware and with the operating system for which it was designed.
TIMS also warrants that the magnetic media on which the software is distributed
and the documentation are free from defects in materials and workmanship. TIMS
will replace defective media or documentation or correct substantial software
errors at no charge, provided Licensee returns the item with dated proof of
payment to TIMS within ten (10) days of the date of delivery. If TIMS is unable
to replace defective media or documentation or to correct substantial software
errors, TIMS will refund the license fee. These are the Licensee's sole remedies
for any breach of warranty.
DISCLAIMER
(1) EXCEPT AS SPECIFICALLY PROVIDED ABOVE, TIMS MAKES NO WARRANTY OR
REPRESENTATION, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THIS SOFTWARE OR
DOCUMENTATION, INCLUDING THEIR QUALITY, PERFORMANCE, MERCHANTABILITY, OR FITNESS
FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL TIMS BE LIABLE FOR DIRECT, INDIRECT,
SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES ARISING OUT OF THE USE OF OR
INABILITY TO USE METROSCAN(TM) (AND/OR ASSOCIATED SOFTWARE OR DOCUMENTATION),
EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. In particular, TIMS is not
responsible for any costs, including, but not limited to, those incurred as a
result of lost profits or revenue, loss of MetroScan(TM), loss of data, the cost
of recovering such software or data, the cost of substitute software, or claims
by third parties. In no case shall TIMS' liability exceed the amount of the
license fee.
(2) The information contained in MetroScan(TM) has been compiled from
public records. However, it does not represent the official records of the
County Assessor. These records are for information purposes only. No liability
is assumed by the County Assessor or TIMS for the accuracy or completeness of
this information. The user is directed to the office of the County Assessor for
official assessment records.
(3) THE WARRANTY AND LIMITATIONS SET FORTH ABOVE ARE EXCLUSIVE AND IN LIEU
OF ALL OTHERS, ORAL OR WRITTEN, EXPRESS OR IMPLIED. No TIMS dealer,
distributor, agent, or employee is authorized to make any modification or
addition to the Limited Warranty set forth above.
(4) Some states do not allow the exclusion or limitation of implied
warranties or limitations of liability for incidental or consequential damages,
so the above limitations or exclusions may not apply to this License.
NOTE: All orders are subject to approval by TIMS.
SUBSCRIBER SEE PAGE 4 TRANSAMERICA INFORMATION MANAGEMENT
----------------------- REPRESENTATIVE ______________________
AUTHORIZED SIGNATURE
DATE:----------------------------- DATE: _______________________________
/s/ Christopher A. Crane 12/17/92 APPROVED BY: /s/ James E. Gregg
-------------------------
DATE: 12/17/92
--------------------------------
<PAGE>
TRANSAMERICA INFORMATION MANAGEMENT SERVICES Supercedes all previous agreement
METROSCAN
1860 Howe Avenue, #455
Sacramento, CA 95825
(916) 921-6629
(800) 866-2783
(916) 921-6781 (FAX) PAGE 3 of 4
----- -----
LICENSE AND SUBSCRIPTION AGREEMENT
----------------------------------
Subject to the terms and conditions on the reverse side, Transamerica
Information Management Services ("TIMS") hereby grants a limited non-exclusive,
non-transferable license to use the METROSCAN(TM) CD-ROM databases for the
localities identified below, together with the METROSCAN(TM) Software and
associated manuals and other printed material ("documentation") provided with
this package (hereinafter referred to collectively as "METROSCAN(TM)") to the
following person (hereinafter referred to as the "Licensee"):
LICENSE
(SOLD TO) (BILL TO)
Name________________________________ Name_______________________________
Company COMPS Company____________________________
-----------------------------
Address_____________________________ Address____________________________
City___________ State ____ Zip _____ City ______ State _____ Zip ______
Phone _________ FAX: _________ Phone __________ FAX: ________
BUSINESS TYPE:______________________
Subject to the terms and conditions on the reverse side, TIMS agrees to
provide the licensee with METROSCAN(TM) for the following localities, and to
update those databases on a monthly basis.: (MidMonth Updates Where Avail.)
<TABLE>
<S> <C> <C>
----
ALAMEDA COUNTY DATA/MAPS/BOTH _____ X _____ = 500.00
- --------------------------- ---- -------
----
SAN FRANCISCO COUNTY DATA/MAPS/BOTH _____ X _____ = 500.00
- --------------------------- ---- -------
----
MARIN COUNTY DATA/MAPS/BOTH _____ X _____ = 500.00
- --------------------------- ---- -------
----
SANTA CLARA COUNTY DATA/MAPS/BOTH _____ X _____ = 500.00
- --------------------------- ---- -------
----
CONTRA COSTA COUNTY DATA/MAPS/BOTH _____ X _____ = 500.00
- --------------------------- ---- -------
___________________________ NETWORKING FEES (IF APPLICABLE) = _______
CD-ROM DRIVE REQUIREMENT: = _______
HARDWARE/SOFTWARE: = _______
</TABLE>
Diskette Type: [ ] 5 1/4" [ X ] 3 1/2
- ---------------------------------------
SPECIAL INSTRUCTIONS
- ---------------------------------------
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
__________________________________
- ---------------------------------------
PAYMENT TERMS: All invoices are due and payable upon receipt. Unpaid invoices
are subject to late charges. MetroScan(TM) shipments will be suspended on past-
due accounts.
Term of the agreement shall be for 12 months commencing 12/1 1992 to 12/1 1993
-- ---- ---- ---- ----
and is non-cancelable for that period; except that TIMS may terminate this
Agreement at any time for non payment of the license fee or if Licensee fails to
comply with any provision of this Agreement. This Agreement shall automatically
renew annually unless written notice of cancellation is given by either party 60
days prior to the expiration date of each term.
_______ My check the amount of $_________________ is enclosed.
_______ Please charge my _____ VISA _____ MASTERCARD
Card Number: ____________ Expiration Date: __________
<PAGE>
EQUIPMENT REQUIREMENTS:
<TABLE>
<S> <C>
IBM-PC/XT/AT, 386, PS/2 or compatible with 640K of RAM Computer Model:_____________________
Microsoft DOS___________ Amount of Memory:___________________
Hard Disk (must have 2 mb of free space per county) DOS Version:________________________
Available expansion slot Amount of Free Space on Hard Disk___
Maps require VGA or EGA monitor & card Monitor/Graphics Card:______________
</TABLE>
WARNING! I HAVE BEEN INFORMED THAT I SHOULD BACK UP MY HARD DISK PRIOR TO THE
INSTALLATION OF THE METROSCAN(TM) CD-ROM DRIVE INTERFACE CARD. I HOLD TIMS
HARMLESS FOR THE INSTALLATION.
Licensee's Initials: _______________
TERMS AND CONDITIONS
--------------------
CAREFULLY READ THE FOLLOWING TERMS AND CONDITIONS BEFORE YOU ENTER THIS LICENSE
AGREEMENT.
YOUR SIGNATURE BELOW CONSTITUTES YOUR ACCEPTANCE OF THESE TERMS AND CONDITIONS.
OWNERSHIP OF METROSCAN(TM)
MetroScan(TM) shall remain the property of Transamerica Information Management
Services (TIMS) at all times and shall be surrendered to TIMS at the licensee's
expense at such time as the License and Subscription Agreement shall be
terminated. TIMS reserve the right to request that Licensee return all CD-ROM's,
monthly updates, and documentation within 10 days of receipt of each new month's
updates.
PROHIBITED USES/YOU MAY:
. Use MetroScan(TM) on any compatible computer, provided you use it only
one computer at a time.
. Use MetroScan(TM) on a network, file server or virtual disk, provided
that access is limited to one user at a time and that you have the original copy
of the documentation and the program disks. If MetroScan is used by multiple-
users on a network, then each network node will bear a surcharge for MetroScan's
network pricing schedule. TIMS is not responsible for the functionality or
performance of the network operating system or software.
PROHIBITED USES/YOU MAY NOT
---
. Make copies of the documentation or program disks, except as described
in the documentation.
. Loan, rent, sub-license, or otherwise transfer the software or the
documentation, except as provided above.
. Alter, modify or adapt the software or documentation, including, but
not limited to, translating, decompiling, disassembling or creating derivative
works.
Licensee if not permitted to download more than 5,000 data records without
explicit written permission from licensor.
THIS LICENSE AND YOUR RIGHT TO USE THE SOFTWARE AUTOMATICALLY TERMINATE IF YOU
FAIL TO COMPLY WITH ANY PROVISION OF THIS LICENSE AGREEMENT. UPON TERMINATION,
YOU WILL IMMEDIATELY RETURN ALL DOCUMENTATION AND DISKS. LIMITED WARRANTY
LIMITED WARRANTY
TIMS warrants that MetroScan(TM) will substantially conform to published
specifications and to the documentation, provided that it is used on the
computer hardware and with the operating system for which it was designed.
TIMS also warrants that the magnetic media on which the software is distributed
and the documentation are free from defects in materials and workmanship. TIMS
will replace defective media or documentation or correct substantial software
errors at no charge, provided Licensee returns the item with dated proof of
payment to TIMS within ten (10) days of the date of delivery. If TIMS is unable
to replace defective media or documentation or to correct substantial software
errors, TIMS will refund the license fee. These are the Licensee's sole remedies
for any breach of warranty.
DISCLAIMER
(1) EXCEPT AS SPECIFICALLY PROVIDED ABOVE, TIMS MAKES NO WARRANTY OR
REPRESENTATION, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THIS SOFTWARE OR
DOCUMENTATION, INCLUDING THEIR QUALITY, PERFORMANCE, MERCHANTABILITY, OR FITNESS
FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL TIMS BE LIABLE FOR DIRECT, INDIRECT,
SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES ARISING OUT OF THE USE OF OR
INABILITY TO USE METROSCAN(TM) (AND/OR ASSOCIATED SOFTWARE OR DOCUMENTATION),
EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. In particular, TIMS is not
responsible for any costs, including, but not limited to, those incurred as a
result of lost profits or revenue, loss of MetroScan(TM), loss of data, the cost
of recovering such software or data, the cost of substitute software, or claims
by third parties. In no case shall TIMS' liability exceed the amount of the
license fee.
(2) The information contained in MetroScan(TM) has been compiled from
public records. However, it does not represent the official records of the
County Assessor. These records are for information purposes only. No liability
is assumed by the County Assessor or TIMS for the accuracy or completeness of
this information. The user is directed to the office of the County Assessor for
official assessment records.
(3) THE WARRANTY AND LIMITATIONS SET FORTH ABOVE ARE EXCLUSIVE AND IN LIEU
OF ALL OTHERS, ORAL OR WRITTEN, EXPRESS OR IMPLIED. No TIMS dealer,
distributor, agent, or employee is authorized to make any modification or
addition to the Limited Warranty set forth above.
(4) Some states do not allow the exclusion or limitation of implied
warranties or limitations of liability for incidental or consequential damages,
so the above limitations or exclusions may not apply to this License.
NOTE: All orders are subject to approval by TIMS.
TRANSAMERICA INFORMATION MANAGEMENT
REPRESENTATIVE ____________________
DATE: _____________________________
APPROVED BY: /s/ James E. Gregg
----------------------
DATE: 12/17/92
------------------------------
SUBSCRIBER SEE PAGE 4
------------------------
AUTHORIZED SIGNATURE
DATE: _______________________________
/s/ Christopher A. Crane 12/17/98
<PAGE>
TRANSAMERICA INFORMATION MANAGEMENT SERVICES Supercedes all previous agreements
METROSCAN
1860 Howe Avenue, #455
Sacramento, CA 95825
(916) 921-6629
(800) 866-2783
(916) 921-6781 (FAX) PAGE 4 of 4
----- -----
LICENSE AND SUBSCRIPTION AGREEMENT
----------------------------------
Subject to the terms and conditions on the reverse side, Transamerica
Information Management Services ("TIMS") hereby grants a limited non-exclusive,
non-transferable license to use the METROSCAN(TM) CD-ROM databases for the
localities identified below, together with the METROSCAN(TM) Software and
associated manuals and other printed material ("documentation") provided with
this package (hereinafter referred to collectively as "METROSCAN(TM)") to the
following person (hereinafter referred to as the "Licensee"):
LICENSE
(SOLD TO) (BILL TO)
Name________________________________ Name ______________________________
Company COMPS Company____________________________
-----------------------------
Address_____________________________ Address____________________________
City _________ State ____ Zip _____ City ______ State ____ Zip ________
Phone _________ FAX: _________ Phone __________ FAX:_________
BUSINESS TYPE:______________________
Subject to the terms and conditions on the reverse side, TIMS agrees to
provide the licensee with METROSCAN(TM) for the following localities, and to
update those databases on a monthly basis.: (MidMonth Updates Where Avail.)
<TABLE>
<S> <C> <C>
----
SAN JOAQUIN COUNTY DATA/MAPS/BOTH _____ X _____ = 500.00
- --------------------------- ---- --------
----
STANISLAUS COUNTY DATA/MAPS/BOTH _____ X _____ = 500.00
- --------------------------- ---- --------
----
SACRAMENTO COUNTY DATA/MAPS/BOTH _____ X _____ = 500.00
- --------------------------- ---- --------
----
SONOMA COUNTY DATA/MAPS/BOTH _____ X _____ = 500.00
- --------------------------- ---- --------
----
SAN MATEO COUNTY DATA/MAPS/BOTH _____ X _____ = 500.00
- --------------------------- ---- --------
___________________________ Subtotal = 12545.00
--------
Less 25% = *3136.25
--------
* means less than
</TABLE>
Diskette Type: [ ] 5 1/4" [ X ] 3 1/2
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
SPECIAL INSTRUCTIONS SUBTOTAL: $ 9408.75
---------------
State Sales Tax $_______________
- -------------------------------------------------------------------------------------
<S> <C>
__________________________________ Account Initiation Fee $_____________
TAX-EXEMPT-CA RESALE # (Training, Software
- ---------------------------------- Support, Customer Hotline and Freight)
SEE ATTACHED CARD Installation Fee $ 9408.75
- ---------------------------------- -------------
__________________________________ TOTAL PRICE $_____________
__________________________________ LESS DEPOSIT $_____________
__________________________________ BALANCE DUE $_____________
- -------------------------------------------------------------------------------------
</TABLE>
PAYMENT TERMS: All invoices are due and payable upon receipt. Unpaid invoices
are subject to late charges. MetroScan(TM) shipments will be suspended on past-
due accounts.
Term of the agreement shall be for 12 months commencing 12/1 1992 to 12/1 1993
-- ---- ---- ---- ----
and is non-cancelable for that period; except that TIMS may terminate this
Agreement at any time for non payment of the license fee or if Licensee fails to
comply with any provision of this Agreement. This Agreement shall automatically
renew annually unless written notice of cancellation is given by either party 60
days prior to the expiration date of each term.
_______ My check the amount of $_________________ is enclosed.
_______ Please charge my _____ VISA _____ MASTERCARD
Card Number: ____________ Expiration Date: __________
<PAGE>
EQUIPMENT REQUIREMENTS:
<TABLE>
<S> <C>
IBM-PC/XT/AT, 386, PS/2 or compatible with 640K of RAM Computer Model:_____________________
Microsoft DOS___________ Amount of Memory:___________________
Hard Disk (must have 2 mb of free space per county) DOS Version:________________________
Available expansion slot Amount of Free Space on Hard Disk___
Maps require VGA or EGA monitor & card Monitor/Graphics Card:______________
</TABLE>
WARNING! I HAVE BEEN INFORMED THAT I SHOULD BACK UP MY HARD DISK PRIOR TO THE
INSTALLATION OF THE METROSCAN(TM) CD-ROM DRIVE INTERFACE CARD. I HOLD TIMS
HARMLESS FOR THE INSTALLATION.
Licensee's Initials: _______________
TERMS AND CONDITIONS
--------------------
CAREFULLY READ THE FOLLOWING TERMS AND CONDITIONS BEFORE YOU ENTER THIS LICENSE
AGREEMENT. YOUR SIGNATURE BELOW CONSTITUTES YOUR ACCEPTANCE OF THESE TERMS AND
CONDITIONS.
OWNERSHIP OF METROSCAN(TM)
MetroScan(TM) shall remain the property of Transamerica Information Management
Services (TIMS) at all times and shall be surrendered to TIMS at the licensee's
expense at such time as the License and Subscription Agreement shall be
terminated. TIMS reserve the right to request that Licensee return all CD-ROM's,
monthly updates, and documentation within 10 days of receipt of each new month's
updates.
PROHIBITED USES/YOU MAY:
. Use MetroScan(TM) on any compatible computer, provided you use it only
one computer at a time.
. Use MetroScan(TM) on a network, file server or virtual disk, provided
that access is limited to one user at a time and that you have the original copy
of the documentation and the program disks. If MetroScan is used by multiple-
users on a network, then each network node will bear a surcharge for MetroScan's
network pricing schedule. TIMS is not responsible for the functionality or
performance of the network operating system or software.
PROHIBITED USES/YOU MAY NOT
---
. Make copies of the documentation or program disks, except as described
in the documentation.
. Loan, rent, sub-license, or otherwise transfer the software or the
documentation, except as provided above.
. Alter, modify or adapt the software or documentation, including, but
not limited to, translating, decompiling, disassembling or creating derivative
works.
Licensee if not permitted to download more than 5,000 data records without
explicit written permission from licensor.
THIS LICENSE AND YOUR RIGHT TO USE THE SOFTWARE AUTOMATICALLY TERMINATE IF YOU
FAIL TO COMPLY WITH ANY PROVISION OF THIS LICENSE AGREEMENT. UPON TERMINATION,
YOU WILL IMMEDIATELY RETURN ALL DOCUMENTATION AND DISKS. LIMITED WARRANTY
LIMITED WARRANTY
TIMS warrants that MetroScan(TM) will substantially conform to published
specifications and to the documentation, provided that it is used on the
computer hardware and with the operating system for which it was designed.
TIMS also warrants that the magnetic media on which the software is distributed
and the documentation are free from defects in materials and workmanship. TIMS
will replace defective media or documentation or correct substantial software
errors at no charge, provided Licensee returns the item with dated proof of
payment to TIMS within ten (10) days of the date of delivery. If TIMS is unable
to replace defective media or documentation or to correct substantial software
errors, TIMS will refund the license fee. These are the Licensee's sole remedies
for any breach of warranty.
DISCLAIMER
(1) EXCEPT AS SPECIFICALLY PROVIDED ABOVE, TIMS MAKES NO WARRANTY OR
REPRESENTATION, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THIS SOFTWARE OR
DOCUMENTATION, INCLUDING THEIR QUALITY, PERFORMANCE, MERCHANTABILITY, OR FITNESS
FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL TIMS BE LIABLE FOR DIRECT, INDIRECT,
SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES ARISING OUT OF THE USE OF OR
INABILITY TO USE METROSCAN(TM) (AND/OR ASSOCIATED SOFTWARE OR DOCUMENTATION),
EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. In particular, TIMS is not
responsible for any costs, including, but not limited to, those incurred as a
result of lost profits or revenue, loss of MetroScan(TM), loss of data, the cost
of recovering such software or data, the cost of substitute software, or claims
by third parties. In no case shall TIMS' liability exceed the amount of the
license fee.
(2) The information contained in MetroScan(TM) has been compiled from
public records. However, it does not represent the official records of the
County Assessor. These records are for information purposes only. No liability
is assumed by the County Assessor or TIMS for the accuracy or completeness of
this information. The user is directed to the office of the County Assessor for
official assessment records.
(3) THE WARRANTY AND LIMITATIONS SET FORTH ABOVE ARE EXCLUSIVE AND IN LIEU
OF ALL OTHERS, ORAL OR WRITTEN, EXPRESS OR IMPLIED. No TIMS dealer,
distributor, agent, or employee is authorized to make any modification or
addition to the Limited Warranty set forth above.
(4) Some states do not allow the exclusion or limitation of implied
warranties or limitations of liability for incidental or consequential damages,
so the above limitations or exclusions may not apply to this License.
NOTE: All orders are subject to approval by TIMS.
TRANSAMERICA INFORMATION MANAGEMENT
SUBSCRIBER /s/ Christopher A. Crane REPRESENTATIVE JAMES S. GREGG
------------------------------- --------------------
AUTHORIZED SIGNATURE PRESIDENT
DATE: _____________________________
DATE: 12/17/92 APPROVED BY: /s/ James E. Gregg
------------------------------------- ----------------------
DATE: 12/17/92
------------------------------
<PAGE>
ADDENDUM TO LICENSE AND SUBSCRIPTION AGREEMENT
BETWEEN
BUSINESS REAL ESTATE INFORMATION CORP.
AND
TRANSAMERICA INFORMATION MANAGEMENT SERVICES
The License and Subscription Agreement ("Agreement") between Business Real
Estate Information Corp., dba COMPS ("COMPS") and Transamerica Information
Management Services ("TIMS") for METROSCAN services is clarified or modified in
the following respects:
1. ANNUAL PRICING: The prices set forth in the Agreement are annual charges
and are due and payable at the beginning of the 1 year term.
2. DELIVERIES AND ACCESS TO INFORMATION: TIMS will use its best efforts to
deliver periodic updates of METROSCAN information to COMPS on a first priority
basis. TIMS will make METROSCAN data available to COMPS for those counties to
which COMPS has subscribed through its planned on-line services, modern transfer
or floppy disks services as soon as they become available, and permit COMPS
access to that information as frequently as reasonably possible.
3. USE OF MERTOSCAN INFORMATION. TIMS acknowledges that COMPS will be using
the METROSCAN information it receives in connection with its activities as a
provider of "value added information". It is agreed, therefore, that COMPS may
use the METROSCAN information in the following ways:
A. COMPS may use the information for initial research purposes and then
republish that information in a "value added" format, i.e. in
conjunction with additional information obtained by COMPS from other
sources or through it own research.
B. COMPS may directly publish copies of the METROSCAN maps provided as
part of the service, with appropriate credit to METROCSAN and
protections for METROSCAN'S copyrights and trademarks.
C. COMPS may use the METROSCAN information through a local area network
wholly within the COMPS offices.
D. COMPS understand that METROSCAN data will be used in conjunction with
existing COMPS services. This information will not be sold or
distributed to any organization outside of COMPS.
4. PROSPECT LIST - BROKERS: COMPS will provide names to TIMS from its
Qualified Prospect List of Brokers at a 25% discount off the regular published
<PAGE>
price, with the understanding that TIMS will not republish this information or
any other information which may be published by or obtained from COMPS, either
alone or together with other information, without COMPS' prior written approval.
5. RIGHT TO RENEW: At the end of each of the initial term of the Agreement and
each of the 9 year following the initial term of the Agreement, COMPS shall have
the right to renew this Agreement for an additional year on the following terms:
A. The annual pricing on a renewal of the Agreement shall be the same as
the initial pricing, plus any regular price increase instituted by
TIMS effective for that renewal year, but adjusted to account for the
25% discount granted to COMPS in the Agreement's initial pricing. The
annual fee shall be paid by COMPS at the commencement of the renewal
term.
B. At any time during the term of the original Agreement or any renewal
thereof, COMPS may add or reinstate, at the end of any term
discontinue, the METROSCAN service for any county for which the
METROSCAN service of offered. Pricing shall reflect the initial 25%
discount and, for additions or reinstatements during the term of an
Agreement, will be prorated on an annual basis. Payment for additions
or reinstatements during the term of the Agreement will be made at the
time of the addition or reinstatement.
6. SUCCESSORS: The Agreement be assumed by successors to COMPS in the provision
of the value added information services it currently or in the future may offer.
Business Real Estate Information Corp.
By: /s/ Christopher A. Crane, President
12/17/92
Transamerica Information Management Services
By: /s/ James E. Gregg
Vice President 12/17/92
<PAGE>
EXHIBIT 10.26
LICENSE AGREEMENT
This License Agreement (this "Agreement") is made and entered into this 2nd day
of Dec., 1998, between COMPS INFOSYSTEMS, INC., having an office at Suite 100,
9888 Carroll Centre Road, San Diego, California USA 92126 ("LICENSEE") and
NCOMPASS LABS INC., having an office at Second Floor, Hudson House, 321 Water
Street, Vancouver, British Columbia Canada V6B 1B8 ("NCompass").
RECITALS
A. LICENSEE and NCompass are manufacturers of computer software;
B. NCompass is the manufacturer and owner of a certain computer software
program known as the NCompass ScriptActive(TM) ActiveX(TM) Plug-in;
C. LICENSEE is the manufacturer of certain computer software programs which use
ActiveX technology ("ActiveX");
D. LICENSEE desires to obtain, and NCompass is willing to grant, a license to a
modified version of the NCompass ScriptActive(TM) ActiveX(TM) Plug-in to
enable LICENSEE's end users using a Netscape browser platform to view
LICENSEE's Spectrum software product and/or any successor products.
AGREEMENT
IN CONSIDERATION OF the premises and mutual covenants contained in this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. INTERPRETATION
1.1 DEFINITIONS. In this Agreement, the following words shall have the
following meanings:
(a) "CONFIDENTIAL INFORMATION" shall mean all information, documentation,
knowledge or data of an intellectual, technical, scientific,
commercial or industrial nature relating to the business or
Intellectual Property of the disclosing party, including, without
limitation, the Source Code of the Licensed Material and information
of a financial, planning, cost, pricing or marketing nature which
derives actual or potential value from not being generally known or
reasonably ascertainable, whether developed by the disclosing party or
received by the disclosing party from a third party in circumstances
which oblige it to protect such information from unauthorized use or
disclosure, but shall not include any information which:
(i) now or hereafter becomes generally known to the public or is
generally known within the computer software industry, without
breach of this Agreement;
(ii) can be proved by the receiving party to have been known by it
before disclosure;
(iii) can be proved by the receiving party to have been received by a
third party without breach of a duty of confidentiality or
wrongful appropriation of trade secrets;
(iv) can be proved by the receiving party to have been developed by
it independently of any disclosure hereunder; or
<PAGE>
(v) is required to be disclosed by law, court order or regulatory
process.
(b) "INTELLECTUAL PROPERTY" shall mean any discoveries, improvements,
ideas, patents, copyrights, trade marks, industrial designs, mask
works, trade secrets, goodwill and the like, including, without
limitation, computer programs, source codes, technical writings,
pictorial reproductions, drawings and other graphic representations,
whether or not copyrighted or patented or registered or protected, or
capable of such registration or protection.
(c) "LICENSED MATERIAL" shall mean the Source Code to the NCompass
ScriptActive(TM) ActiveX(TM) Plug-in installation program and the
Object Code to the modified version of the NCompass ScriptActive(TM)
ActiveX(TM) Plug-in (customized to function only with the LICENSEE
Product), which is more fully described in Schedule A attached to
this Agreement, together with all Updates to which LICENSEE is
entitled under the terms of this Agreement.
(d) "OBJECT CODE" shall mean computer code in a form for execution on a
computer and/or the code that results from running Source Code through
a compiler.
(e) "SOURCE CODE" shall mean computer code in high-level, human readable
language, including comments, and all tools and documentation
reasonably necessary to build and/or modify such code.
(f) "TECHNICAL SUPPORT SERVICES" shall mean the technical support services
provided by NCompass to LICENSEE as set out in Schedule B.
(g) "BUG" shall mean any failure of the Licensed Materials to function
within the specifications as set forth in Schedule A and the
documentation accompanying the Licensed Materials, except for those
failures which do not cause loss of end user data and do not prevent
end users from performing production tasks or for which there is a
known work-around which has been provided to LICENSEE.
(h) "DEVELOPMENT SERVICES" shall mean development services which generate
enhancements to the Licensed Material specific to the requirements of
LICENSEE (including development services required to enable LICENSEE's
end users using a Netscape Navigator platform to view any successor
products to LICENSEE's software product) and which are in addition to
the functionality described in Schedule A and Updates, as described
herein.
(i) "UPDATES" shall mean all maintenance releases, releases supporting
any and all releases of Netscape Navigator or Netscape's WWW browser
which are made commercially available during the terms of this
Agreement, patches, Bug fixes and error corrections to the Licensed
Material that do not provide significant additional functionality to
the Licensed Material and, for avoidance of doubt, does not include
enhancements generated by Development Services.
(j) "LICENSEE PRODUCT" shall mean LICENSEE's Spectrum software product
and/or any successor products which use ActiveX technology.
1.2 CURRENCY. All references to monetary amounts in this Agreement shall mean
the lawful currency of the United States of America and all payments
hereunder shall be made in such currency.
2. GRANT OF RIGHTS AND OBLIGATIONS
2.1 GRANT OF LICENSE. NCompass hereby grants to LICENSEE a non-transferable,
non-exclusive, worldwide license directly and through third parties
(including the right of any third party at any tier to further sublicense
solely in conjunction with the distribution of the LICENSEE Product) to
reproduce, distribute, license, sell, rent and lease copies of the Licensed
Material in Object Code form only, and derivative works
Page 2 of 15
<PAGE>
thereof, as a component of the LICENSEE Product for a 12 month period
commencing upon the date of execution of this Agreement (the "Initial
Term").
2.2 RENEWAL. Provided that LICENSEE is not in material breach of this
Agreement, LICENSEE may renew the grant of license for a further 12 month
period upon expiration of the Initial Term (the "Renewal Term") subject to
the terms contained herein and by providing NCompass with written notice
thereof at least 30 days prior to expiration of the Initial Term and by
paying to NCompass the renewal license fee at a price to be agreed upon
between the parties.
2.3 MANUFACTURING COSTS. Except as otherwise set out in this Agreement,
NCompass shall not be responsible for any manufacturing or distribution
costs of LICENSEE relating to the use of the Licensed Material by LICENSEE.
LICENSEE shall bear all costs of reproducing and distributing the Licensed
Material in accordance with the terms and conditions of this Agreement.
3. LICENSE FEE
3.1 LICENSE FEE. LICENSEE shall pay to NCompass a royalty (the "License Fee")
for all copies of the LICENSEE Product sold by LICENSEE as follows:
(a) within 30 days of execution of this Agreement, LICENSEE shall make the
first nonrefundable royalty prepayment of three thousand six hundred
(US$3,600) against the first 1,000 client computers upon which the
Licensed Material in installed ("Copies") during the Initial Term;
(b) within 120 days of execution of this Agreement, LICENSEE shall make
the second nonrefundable royalty prepayment of three thousand six
hundred (US$3,600) against the first 1,000 client computers upon which
the Licensed Material is installed ("Copies") during the Initial Term;
(c) LICENSEE shall pay NCompass a royalty of four dollars (US$4.00) per
copy for the next 2,000 Copies or any portion thereof of Copies
licensed during the Initial Term; and
(d) LICENSEE shall pay NCompass a royalty of three dollars (US$3.00) per
copy for any copies in excess of the first 3,000 Copies licensed
during the Initial Term.
LICENSEE agrees to furnish to NCompass, within 30 days of the end of each
three month period following execution of this Agreement, a written report
certified by the Chief Financial Officer of LICENSEE verifying the number
of Copies licensed during the preceding three month period, and to make
full payment of all monies due NCompass within 30 days thereafter.
3.2 TAXES. All amounts payable under this Agreement do not include taxes.
LICENSEE shall be responsible for the payment of any federal, provincial,
state or local taxes which may apply to the payments hereunder; provided,
that LICENSEE shall not be responsible for the payment of any taxes based
on the income or revenue of NCompass.
3.3 MODIFICATIONS. Except as expressly authorized by NCompass in writing,
LICENSEE shall not, and shall ensure that its sublicensees, employees,
agents or others acting on its behalf, do not:
(a) modify, translate, reverse engineer, decompile, disassemble, create
derivative works of or copy the Licensed Material or any accompanying
documentation; and
(b) remove, alter, cover, or fail to reproduce any copyright notices or
other proprietary rights, notices, placed on or embedded in the
Licensed Material by NCompass.
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<PAGE>
4. DELIVERY OF LICENSED MATERIAL
4.1 DELIVERY. NCompass shall deliver the Licensed Material to LICENSEE
electronically within seven business days of execution of this Agreement,
in such form and content as instructed by LICENSEE. The Licensed Material
shall be deemed delivered upon delivery by NCompass to LICENSEE of the
Licensed Materials and LICENSEE's successful download of the Licensed
Materials.
4.2 ACCEPTANCE. Upon receipt of the Licensed Material, LICENSEE shall evaluate
the Licensed Material and shall submit a written notice of acceptance or
written notice of rejection to NCompass within 15 business days of receipt
by LICENSEE of the Licensed Material (the "Acceptance Period"). Conformity
to the specifications and warranties set out in this Agreement shall solely
determine LICENSEE's right to accept or reject the Licensed Material.
4.3 DEEMED ACCEPTANCE. If LICENSEE fails to notify NCompass of acceptance
within the Acceptance Period, or notifies NCompass of the acceptance of the
Licensed Material within the Acceptance Period but fails to provide
confirmation in writing, the Licensed Material shall be deemed accepted and
such an event shall constitute approval, sign-off and acceptance by
LICENSEE of the Licensed Material provided by NCompass under this
Agreement.
4.4 NON-COMPLIANCE. If LICENSEE provides NCompass with a notice of rejection
within the Acceptance Period stating that the Licensed Material does not
comply with the specifications or warranties set out in this Agreement, and
provides NCompass with a full disclosure of how the Licensed Material is
unsatisfactory, NCompass shall promptly correct such portion of the
Licensed Material. If NCompass fails to correct any portion of the Licensed
Material within 15 days after receipt of the notice of rejection, or fails
to deliver any portion of the Licensed Material within the dates specified
in the delivery schedule set out in Article 4.1 of this Agreement, LICENSEE
may, at LICENSEE's option:
(a) extend the correction or delivery period for such portion of the
Licensed Material; or
(b) return the Licensed Material to NCompass and receive a full refund of
any monies paid and terminate this Agreement with no further
obligation to NCompass.
This is the sole remedy available to LICENSEE in connection with such
termination.
5. TECHNICAL SUPPORT, MAINTENANCE AND DEVELOPMENT SERVICES
5.1 INITIAL TERM SUPPORT SERVICES. NCompass shall provide to LICENSEE, during
the Initial Term, the Technical Support Services, for a fee in the amount
of two thousand eight hundred dollars (US$2,800) for the Initial Tenn.
Within 30 days of execution of this Agreement, LICENSEE shall make the
first installment payment against the Technical Support Services fee of one
thousand four hundred dollars (US$1,400) and within 120 days of execution
of this Agreement, LICENSEE shall make the second installment payment
against the Technical Support Services fee of one thousand four hundred
dollars (US$1,400).
5.2 RENEWAL TERM SUPPORT SERVICES. LICENSEE may renew the Technical Support
Services provided by NCompass under Article 5.1 for the Renewal Term, upon
written notice at least 30 days prior to expiration of the Initial Term.
LICENSEE shall pay to NCompass for the Renewal Term, a fee in the amount of
two thousand eight hundred dollars (US$2,800), for Technical Support
Services. Such fee shall be due and payable within 60 days of the
commencement of the Renewal Term.
5.3 AUTHORIZED REPRESENTATIVES. LICENSEE shall appoint up to three persons and
NCompass shall appoint up to three persons as their respective authorized
support representatives who shall deal exclusively in the receipt and
provision of the Technical Support Services.
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<PAGE>
5.4 BEST EFFORTS. In providing the Technical Support Services, NCompass shall
cooperate with LICENSEE and use its best efforts to resolve reported
support issues or correct errors within its control in the Licensed
Material and will issue such materials as are required to effect such
corrections.
5.5 NO ADDITIONAL SUPPORT. LICENSEE shall be responsible for all technical
support services provided to its sublicensees, distributors and end users.
NCompass shall not be responsible for the provision of Technical Support
Services or any other technical support services to any person other than
LICENSEE. LICENSEE shall not direct its sublicensees, distributors or end
users to contact NCompass without the prior consent of NCompass.
5.6 UPDATES. LICENSEE acknowledges and agrees that NCompass may, from time to
time, develop Updates. For so long as LICENSEE is paying to NCompass the
fee for Technical Support Services, NCompass shall provide Updates to
LICENSEE at no additional cost. NCompass shall provide LICENSEE advance
notice of the release of any Update and shall promptly provide LICENSEE
with copies of such Updates upon their initial release.
5.7 TRAINING. During the Initial Term and the Renewal Term, NCompass shall
provide to LICENSEE training in the use of the Licensed Material at the
rate of one hundred and twenty-five dollars (US$125) per hour. LICENSEE
shall also reimburse NCompass for its reasonable travel and accommodation
expenses incurred in providing such training.
5.8 DEVELOPMENT SERVICES. During the Initial Term and the Renewal Term,
NCompass shall make available to LICENSEE, software development services
relating to enhancements of the Licensed Material specific to the
requirements of LICENSEE and in addition to the functionality as set out in
Schedule A, at the rate of one hundred and twenty-five dollars (US$125) per
hour.
6. PROPRIETARY RIGHTS AND OBLIGATIONS
6.1 ACKNOWLEDGMENT OF RIGHTS. LICENSEE hereby acknowledges and agrees that the
Licensed Material embodies NCompass' Intellectual Property and all right,
title and interest in and to NCompass' Intellectual Property, including the
Licensed Material. LICENSEE agrees that such rights shall remain the sole
and exclusive property of NCompass and no rights therein shall vest in
LICENSEE, except as expressly set out in this Agreement. LICENSEE shall
indicate to each of its sublicensees that NCompass' Licensed Material is
owned by or licensed to NCompass.
6.2 PROTECTION OF CONFIDENTIAL INFORMATION. Except as provided in this
agreement, LICENSEE and NCompass shall maintain all Confidential
Information of the other party disclosed to it in strict confidence and
shall not disclose same to any person except to its employees or
contractors having a need to know under this Agreement. LICENSEE and
NCompass agree to take all safeguards and actions to maintain the
confidentiality of the other party's Confidential Information to the extent
normally taken in protecting their own Confidential Information and in any
event to a commercially reasonable standard.
6.3 PROTECTION OF INTELLECTUAL PROPERTY. LICENSEE and NCompass agree to take
all safeguards and lawful actions reasonably requested by the other party
to protect the Intellectual Property of the other party, including, without
limitation, promptly notifying the other party upon becoming aware of:
(a) any notices, actions, threats, or allegations regarding the Licensed
Material or any of the other party's Intellectual Property; or
(b) any infringement or suspected infringement by any third parties of
any of the other party's Intellectual Property.
Each party agrees to provide, at the other party's expense, all reasonable
assistance in the registration of any of the other party's Intellectual
Property in any jurisdiction.
Page 5 of 15
<PAGE>
6.4 USE OF NCOMPASS TRADEMARKS. "NCompass", "ScriptActive", and all other
trademarks and trade names adopted by NCompass to identify the Licensed
Material and other NCompass products or services are and shall remain the
property of NCompass and the benefit and goodwill accruing from the usage
of such trademarks and trade names by LICENSEE shall belong to NCompass.
LICENSEE shall have the right to use the trademarks "NCompass" and
"ScriptActive" solely to refer to the Licensed Material, provided that
LICENSEE shall:
(a) comply with NCompass' trademark guidelines as set forth on Schedule C
attached hereto;
(b) include, in any use of any trademark of NCompass, the symbol "TM" and
the following statement "___________ is a trademark of NCompass Labs
Inc., Vancouver, Canada";
(c) not use the trademarks "NCompass" and "ScriptActive" as any portion
of the LICENSEE trade name or for any of LICENSEE's products;
(d) at no time challenge or assist others in challenging any NCompass
trademark or the registration thereof;
(e) at no time attempt to register any trademarks or trade names
confusingly similar to any NCompass trademark or trade name;
(f) at no time register, translate or substitute any NCompass trademark or
trade names anywhere in the world without NCompass' express prior
written consent; and
(g) include within the packaging of the LICENSEE Product, a graphic
design of the NCompass logo and text identifying NCompass as the
supplier of the Licensed Material.
NCompass shall provide copies of its trademark guidelines as they may be
modified from time to time in quantities reasonably requested by LICENSEE,
and LICENSEE may distribute copies of such guidelines to users of the
Licensed Material. LICENSEE shall have no other rights to use the
trademarks or trade names except as provided herein.
6.5 USE OF LICENSEE LOGO. LICENSEE hereby grants to NCompass a non-
transferable, non-exclusive, fully paid-up, worldwide license to exhibit
the LICENSEE logo on the NCompass Web site, until such right is revoked by
LICENSEE by notice in writing to NCompass. NCompass acknowledges and agrees
that the logo shall remain the property of LICENSEE and that any benefit
and goodwill accruing from the usage of such logo by NCompass shall belong
to LICENSEE. NCompass shall have no other rights to use the logo, except as
provided herein.
6.6 MARKETING RESPONSIBILITIES OF LICENSEE. In marketing and selling the
Licensed Material, LICENSEE shall take all reasonable steps to avoid
deceptive or misleading practices which may be detrimental to NCompass or
to the market for the Licensed Material.
7. REPRESENTATIONS AND WARRANTIES
7.1 NCOMPASS REPRESENTATIONS AND WARRANTIES. NCompass represents and warrants:
(a) that it has the right and power to license the Licensed Material;
(b) that the execution and delivery of this Agreement does not violate or
constitute a breach of the terms of any agreement, document, charter
or by laws to which NCompass is a party or otherwise bound;
(c) to the best of its knowledge and belief, the Licensed Materials do not
infringe any patent, copyright, trademark, trade secret or other
intellectual property rights of any third party;
Page 6 of 15
<PAGE>
(d) that it has full corporate right, power and authority to enter into
this Agreement and performs the acts required of it hereunder; and
(e) neither this Agreement (or any term hereof) nor the performance of its
obligations under this Agreement, is restricted by, contrary to, in
conflict with, ineffective under, requires registration or approval or
tax withholding under any law or regulation.
7.2 LICENSEE REPRESENTATIONS AND WARRANTIES. LICENSEE represents and warrants:
(a) that it has full corporate right, power and authority to enter into
this Agreement and performs the acts required of it hereunder; and
(b) neither this Agreement (or any term hereof) nor the performance of its
obligations under this Agreement, is restricted by, contrary to, in
conflict with, ineffective under, requires registration or approval or
tax withholding under any law or regulation.
8. SOFTWARE WARRANTY
8.1 SOFTWARE FUNCTIONALITY. NCompass warrants that the Licensed Material, if
operated as directed, will substantially achieve the functionality
described in Schedule A and in its documentation. NCompass does not warrant
that the use of the Licensed Material will be uninterrupted or that the
operation of the Licensed Material will be error-free or secure.
8.2 SOFTWARE REPRODUCTION. NCompass accepts no responsibility for defects in
material and workmanship associated with the reproduction of the Licensed
Material by LICENSEE, nor in the media containing the Licensed Material
provided by LICENSEE to its sublicensees and end users.
8.3 INDEMNITY. NCompass shall indemnify and hold LICENSEE harmless and will
defend, at its own expense (including reasonable legal fees of LICENSEE),
any threatened or actual suit against LICENSEE based upon a claim that the
Licensed Material, its use or the documentation therefor infringes upon a
patent, copyright, trade secret or other intellectual property right of any
third party, and will pay any settlement, costs and damages awarded;
provided that:
(a) such infringement has not resulted from a modification of the Licensed
Material which has been effected by or for LICENSEE including without
limitation as a result of the provision of Development Services. For
avoidance of doubt, the indemnification obligation of NCompass, if
any, relating to the provision to LICENSEE of Development Services may
be addressed by the parties in any separate agreement relating to the
provision of Development Services;
(b) NCompass is promptly notified in writing of any notice received by
LICENSEE of any claim or of any threatened or actual suit, but the
failure to give such prompt notice shall not relieve NCompass of its
obligations hereunder unless such delay results in a material
prejudice to the defense thereof;
(c) NCompass shall have the right to control the defense of any claims,
suits or proceedings and LICENSEE shall not settle any claims, suits,
or proceedings without NCompass' prior consent;
(d) at NCompass' request and expense, LICENSEE shall provide all
reasonable aid and assistance for the defense of any such claims,
suits or proceedings;
(e) such infringement has not resulted from a combination of the Licensed
Material with any other products, processes or material where the
alleged infringement relates to such combination (but not, for
clarification, where the alleged infringement relates wholly to the
Licensed Materials not in combination with any other product, process
or material) including, without limitation, the LICENSEE Product; and
Page 7 of 15
<PAGE>
(f) LICENSEE does not, within a period of time which is commercially
reasonable in the circumstances, continue any allegedly infringing
activity after being notified thereof or after having been informed of
modifications that would have avoided the alleged infringement.
In the event that, at any time, LICENSEE or its sublicensees are deprived
by a court order of the right to market, distribute or sell the Licensed
Material based on a claim that the Licensed Materials infringe upon any
patent, copyright, trademark, trade secret or other intellectual property
right of a third party, NCompass shall, at its sole expense, use reasonable
efforts to: (i) procure on commercially reasonable terms such rights as may
be required; or (ii) modify the Licensed Material in a manner sufficient to
assure LICENSEE and its sublicensees that they have the right to continue
to market, distribute or sell the Licensed Material in the manner
contemplated by this Agreement and in such a manner that the modified
Licensed Material will substantially conform to the technical
specifications of the current Licensed Material, as updated from time to
time, without further infringement. If in the reasonable opinion of
NCompass such options are not viable, NCompass may terminate this Agreement
and refund all fees paid by LICENSEE to NCompass whereupon LICENSEE shall
have no further remedies or recourse to NCompass.
THE FOREGOING STATES THE SOLE AND EXCLUSIVE LIABILITY OF NCOMPASS FOR
PATENT, COPYRIGHT, TRADE SECRET OR OTHER INTELLECTUAL PROPERTY RIGHT
INFRINGEMENT FROM ANY THIRD PARTY AND IS IN LIEU OF ANY AND ALL WARRANTIES,
EXPRESS OR IMPLIED, OR STATUTORY IN REGARD THERETO.
8.4 LIMITATION OF LIABILITY. EXCEPT FOR A BREACH OF WARRANTY CLAIM WHICH IS
COVERED BY ARTICLE 8.1 AND THE REMEDIES AVAILABLE TO LICENSEE UNDER ARTICLE
4.4 IN CONNECTION WITH A NOTICE OF REJECTION PROVIDED BY LICENSEE WITHIN
THE ACCEPTANCE PERIOD, NCOMPASS' LIABILITY UNDER, OR FOR BREACH OF, OR
ARISING OUT OF THIS AGREEMENT AND/OR THE LICENSE OF THE LICENSED MATERIAL,
IS LIMITED TO AN AMOUNT EQUAL TO THE AMOUNT PAID BY LICENSEE UNDER ARTICLE
3.1 OF THIS AGREEMENT. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY
CONSEQUENTIAL (INCLUDING, WITHOUT LIMITATION, LOST PROFITS AND BUSINESS
INTERRUPTION), INDIRECT, INCIDENTAL, SPECIAL, ECONOMIC, OR PUNITIVE DAMAGES
ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED UNDER THIS
AGREEMENT, WHETHER FOR BREACH OR REPUDIATION OF CONTRACT, BREACH OF
WARRANTY, NEGLIGENCE OR OTHERWISE, EVEN IF THE OTHER PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES.
8.5 SPECIFIC EXCLUSION OF OTHER WARRANTIES. EXCEPT FOR A BREACH OF WARRANTY
CLAIM WHICH IS COVERED BY ARTICLE 8.1 AND THE REMEDIES AVAILABLE TO
LICENSEE UNDER ARTICLE 4.4 IN CONNECTION WITH A NOTICE OF REJECTION
PROVIDED BY LICENSEE WITHIN THE ACCEPTANCE PERIOD, NCOMPASS MAKES NO OTHER
WARRANTIES, REPRESENTATIONS OR GUARANTEES OF ANY KIND WHATSOEVER, EITHER
EXPRESS OR IMPLIED WHETHER ARISING BY STATUTE, CONTRACT, TORT, PRODUCT
LIABILITY OR OTHERWISE, REGARDING THE LICENSED MATERIAL OR ANY OTHER
MATERIALS OR SERVICES TO BE SUPPLIED HEREUNDER BY NCOMPASS, INCLUDING, BUT
NOT LIMITED TO, WARRANTIES, REPRESENTATIONS AND GUARANTEES AS TO
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, DESIGN, TITLE, CONDITION
OR QUALITY OF THE LICENSED MATERIALS OR OTHER MATERIALS AND SERVICES
SUPPLIED BY NCOMPASS HEREUNDER.
8.6 RISK ALLOCATION. THE PROVISIONS OF THIS ARTICLE ALLOCATE THE RISKS BETWEEN
THE PARTIES UNDER THIS AGREEMENT. THE FEES PROVIDED FOR IN THIS AGREEMENT
REFLECT THIS ALLOCATION OF RISK AND THE LIMITATION OF LIABILITY SPECIFIED
HEREIN.
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<PAGE>
9. TERMINATION AND DEFAULT
9.1 TERMINATION. This Agreement may be terminated:
(a) by LICENSEE at any time, in which event LICENSEE shall have no
liability for future scheduled payments under Article 3.1 hereof;
(b) by NCompass in accordance with Article 8.3 of this Agreement;
(c) at either party's option if the other party materially defaults in the
performance or observance of any of its material obligations under
this Agreement and does not remedy the default within 30 days of
receiving written demand to do so;
(d) by NCompass if LICENSEE fails to pay promptly any amount due and
payable under this Agreement; or
(e) at either party's option if the other party becomes insolvent or
bankrupt or makes an assignment for the benefit of creditors, or if a
receiver or trustee in bankruptcy is appointed for the other party, or
if any proceeding in bankruptcy, receivership, or liquidation is
instituted against the other party and is not dismissed within 30
days.
The right of termination will be in addition to all other rights and
remedies available for default or wrong doing, for example, either party
may seek injunctive relief. When either party has the option to terminate,
it may exercise that option by giving the other party written notice of
such termination, which will be effective upon receipt.
LICENSEE EXPRESSLY WAIVES AND RENOUNCES ANY CLAIM TO COMPENSATION OR
INDEMNITIES THAT MAY EXIST UNDER THE LAWS OF ANY APPLICABLE JURISDICTION
FOR ANY TERMINATION OF BUSINESS RELATIONSHIP BY A FOREIGN BUSINESS ENTITY
EXCEPT FOR THE TERMS DELINEATED IN THIS AGREEMENT.
9.2 EFFECT OF TERMINATION. Upon termination of this Agreement for LICENSEE's
material breach, LICENSEE shall cease using, reproducing, marketing,
distributing and selling the Licensed Material, shall discontinue all use
of any of NCompass' trademarks, and shall not use any other trademarks that
are confusingly similar to the NCompass trademarks. NCompass agrees that
upon expiration or termination of this Agreement, for any reason other than
for a material breach by LICENSEE, LICENSEE may have the right to continue
to sublicense and distribute the LICENSEE Products containing the Licensed
Materials, as follows:
(a) upon the expiry of the term of this Agreement, then for no longer
than 30 days thereafter; or
(b) upon breach of this Agreement by NCompass, then for no longer than 90
days after the termination date.
9.3 RETURN OF DOCUMENTATION. Except as otherwise provided for in this
Agreement, within 30 days of termination of this Agreement, LICENSEE shall,
at its own expense, return to NCompass, or certify in writing, that it has
destroyed all NCompass documentation in its possession, including, without
limitation, all material in its possession or control which contains or
refers to any of NCompass' Confidential Information.
9.4 RIGHTS OF END USERS SURVIVE TERMINATION. All end user licenses properly
granted by LICENSEE prior to the expiry or termination of this Agreement
shall survive any expiry or termination of this Agreement.
9.5 SUBLICENSES. LICENSEE agrees to provide in all of its sublicense
agreements with third parties that any rights to further sublicense or
distribute the Licensed Material under such agreements will terminate upon
termination of this Agreement. All such sublicenses shall contain
provisions for the protection of
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<PAGE>
NCompass' rights in the Licensed Material that are no less restrictive
than those provisions set forth in Articles 2.1, 6.1, 6.2, 6.3, 6.4 and
10.10 and those provisions for the limitation of liability as set forth in
Article 8 of this Agreement. In each jurisdiction in which the Licensed
Material is distributed, LICENSEE shall be responsible to ensure that all
sublicenses are enforceable and in compliance with the laws of those
jurisdictions. LICENSEE shall be solely responsible for, and NCompass
shall have no obligation to honor, any warranty or indemnification
obligations made by LICENSEE to any sublicensee to the extent that such
obligations exceed those of NCompass to LICENSEE under this Agreement.
9.6 TERMINATION OF TECHNICAL SUPPORT SERVICES. In the event that NCompass is
unable or unwilling to provide Technical Support Services under Articles
5.1, 5.2 or 5.6 (as applicable) during the period for which the License
Fee described in Article 3.1 has been paid in full, then, upon written
request by LICENSEE, NCompass shall grant to LICENSEE a non-transferable,
non-exclusive limited license to use the Source Code of the Licensed
Material for the sole purpose of correcting Bugs, performing the limited
fixes and enhancements described in Schedule B hereto and the development
of Updates as defined in Article 5.6. This limited license shall terminate
on the earlier of;
(a) the date of termination or expiry of this Agreement; and
(b) the date, if any, upon which NCompass recommences the provision of
the Technical Support Services.
Notwithstanding any other provision of this Agreement, LICENSEE shall not
license to, or permit the use of, the Source Code of the Licensed Material
by any other person. LICENSEE acknowledges that the use by LICENSEE of the
Source Code of the Licensed Material shall in no event give it or be
deemed to give it any legal or equitable, proprietary right, title or
interest in and to such Bug corrections, fixes, enhancements and Updates
resulting therefrom, except for LICENSEE's right to use the same solely as
provided in this Agreement.
10. GENERAL PROVISIONS
10.1 AMENDMENT. This Agreement shall not be subject to amendment, modification
or discharge in whole or in part except by written instrument signed by
NCompass and LICENSEE. Any and all riders or endorsements attached to this
Agreement and signed by the parties hereto shall have the same force and
effect as if incorporated into the numbered terms and provisions of this
Agreement.
10.2 ASSIGNMENT. LICENSEE and NCompass may not assign this Agreement in whole
or in part, except with the prior written consent of the other, such
consent not to be unreasonably withheld. LICENSEE may not delegate its
authority hereunder without the prior written consent of NCompass.
Notwithstanding the foregoing, either party may assign its interest in
this Agreement without the prior written consent of the other party, if
such assignment is to a third party that is acquiring substantially all of
the assignee's business assets or stock.
10.3 CORPORATE AUTHORITY. The persons executing this Agreement covenant and
warrant that they have the right, power, legal capacity, and appropriate
corporate authority to enter into this Agreement on behalf of the
corporation for which they sign below.
10.4 COUNTERPARTS. This Agreement may be executed in counterparts with the
same effect as if both parties had signed the same document. Both
counterparts shall be construed together and shall constitute one and the
same agreement. This Agreement may be executed by the parties and
transmitted by facsimile transmission and if so executed and transmitted
this Agreement shall be for all purposes as effective as if the parties
had delivered an executed original Agreement.
10.5 ENTIRE AGREEMENT. This Agreement supersedes all prior agreements and
understandings between the parties about its subject matter and is the
entire agreement between the parties in respect to the Licensed Material.
This Agreement may not be amended except by written agreement signed by
both parties.
Page 10 of 15
<PAGE>
10.6 ENUREMENT. This Agreement shall be binding upon and enure to the
benefit of the parties, and their successors and permitted assigns.
10.7 FURTHER ASSURANCES. NCompass and LICENSEE shall both execute and
deliver such further instruments and do such further acts as may be
required to implement the intent of this Agreement.
10.8 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Province of British Columbia, and the
parties hereto irrevocably submit to the jurisdiction of the courts of
such province. In any action or suit to enforce any right or remedy
under this Agreement or to interpret any provision of this Agreement,
the prevailing party shall be entitled to recover its costs, including
reasonable attorneys' fees.
10.9 INDEPENDENT CONTRACTORS. The parties are independent contractors. No
employment, partnership, joint venture or agency relationship is created
by this Agreement and one party cannot commit the other.
10.10 EXPORT LAWS. LICENSEE shall comply with the U.S. Foreign Corrupt
Practices Act and all export laws, restrictions and regulations of the
Department of Commerce or other United States or foreign agency or
authority and will not export or allow the export of any Licensed
Material in violation of any such restrictions, laws or regulations.
10.11 FORCE MAJEURE. Neither party shall be liable for its failure to
perform any of its obligations hereunder (other than failure to make any
payments when due hereunder) during any period in which performance is
prevented, interrupted or delayed by fire, flood, war, embargo, riot,
the intervention of any government authority, shortages of labor,
materials or delay in transportation beyond the reasonable control of
the party expecting same (each a "Force Majeure"), except that lack of
funds or credit shall not constitute a Force Majeure. The party
suffering such Force Majeure shall immediately notify the other party of
the Force Majeure.
10.12 NOTICE. Any notice or other communication, except a notice of
termination or default, required or permitted to be given under this
Agreement may be delivered personally or be sent by first class mail,
postage prepaid, or by overnight courier to LICENSEE or NCompass at the
address indicated on page one hereof, and any such notice or other
communication shall be deemed to have been given to the party to whom it
was addressed and received by that party on delivery, if delivered
personally, and on the fifth business day following the mailing thereof,
if mailed. Either party may change the address to which notice is to be
given as provided herein. A notice of termination or default shall be
sent by registered mail, return receipt requested.
10.13 SEVERABILITY. If any provision of this Agreement is held unenforceable
by a court of competent jurisdiction for any reason whatsoever, the
unenforceability shall not affect the enforceability of the remaining
provisions of this Agreement and the unenforceable or invalid provision
shall be severable from the remainder of this Agreement.
10.14 SURVIVAL. Articles 6.2, 8.3, 9.2, 9.3 and 9.4 shall survive termination
of this Agreement.
10.15 WAIVER. No notice of waiver of any term of this Agreement will be
effective unless in writing signed by the party making such waiver and
no waiver of any breach will constitute a waiver of any subsequent or
continuing breach. The failure of either party to assert any claim in
timely fashion will not alter or restrict any such party's fight to
assert any claim for a subsequent breach.
10.16 HEADINGS. The section headings appearing in this Agreement are inserted
only as a matter of convenience and in no way define, limit, construe or
describe the scope or intent of any such section nor in any way effect
this Agreement.
Page 11 of 15
<PAGE>
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of
the date first above written.
NCOMPASS LABS INC.
by its authorized signatory:
/s/ /Dane Chauvel December 3, 1998
- ------------------------------------ ------------------------------------
Dane Chauvel Date
Chief Financial Officer
COMPS INFOSYSTEMS, INC.
by its authorized signatory:
/s/ Bob Evatt 12/2/98
- ------------------------------------ ------------------------------------
Name: Bob Evatt Date
Title: AVP, PRODUCT DEVELOPMENT
Page 12 of 15
<PAGE>
SCHEDULE A
LICENSED MATERIAL SPECIFICATIONS
MODIFIED VERSION OF THE NCOMPASS SCRIPTACTIVE(TM) PLUG-IN
VERSION 2.9.0.5
PLATFORMS SUPPORTED
Runs under Windows(TM) NT 4.0 and Windows(TM) 95.
Works with Netscape Navigator(TM) 3.0, 3.01, 3.02, 3.03 and 3.04 and
Communicator(TM) 4.0, 4.01, 4.02, 4.03, 4.04, 4.05 and 4.06.
ARCHITECTURE
Written using Visual C++ 5.0 with Service Pack 3.
FUNCTIONALITY
Supports the ActiveX framework, including ActiveX Controls and ActiveX Scripting
through VBScript. Supports signed ActiveX Controls.
Contains the NCompass Conversion Tool which is used to modify Internet Explorer
specific HTML files to a format compatible with the Netscape browser.
Page 13 of 15
<PAGE>
SCHEDULE B
TECHNICAL SUPPORT SERVICES
NCompass shall:
1. promptly provide LICENSEE written notice of known Bugs found in the
Licensed Material; and
2. upon receipt of notice from LICENSEE of a Bug, in sufficient detail to
permit NCompass to identify the Bug, provide to LICENSEE one of the
following solutions, such choice to be at the discretion of NCompass:
(a) an existing correction to the Licensed Material,
(b) a new correction to the Licensed Material,
(c) a request for more information regarding the Bug, or
(d) a report explaining how and when NCompass plans to address the
Bug; and
3. make reasonable efforts to resolve Bugs within its control in the
Licensed Material within a reasonable period of time; and
4. use its best efforts to remedy the error or Bug as soon as is feasible
if an error or Bug occurs in the Licensed Materials which renders the
Licensed Materials or the LICENSEE Product inoperable.
NCompass shall ship Updates to LICENSEE when they become available and such
releases will list the Bug fixes and enhancements.
NCompass shall provide the Technical Support Services to LICENSEE by telephone,
e-mail, facsimile or mail between the regular business hours of 8:30 AM (PST)
and 5:30 PM (PST).
Page 14 of 15
<PAGE>
SCHEDULE C
NCOMPASS GUIDELINES FOR PROPRIETARY NOTICES AND DEVICES
1 All trademarks that do not use designs must be presented as follows:
NCOMPASS
2 The symbol TM should appear beside all trademarks on the right shoulder of
the trademarks, unless there is a good reason for not doing so. By way of
example:
NCOMPASS(TM)
3 A legend or footnote should appear where the trademark is used reading:
(TM) denotes trademarks of NCompass Labs Inc., used under license by
USER.
This type of system requires fairly extensive usage of the symbol (TM) in
the material to which the footnote refers. If that is not possible, the
symbol can be used only with the first appearance of each trademark, or
asterisks can be used, or a statement similar to the following can be used:
NCOMPASS is a trademark of NCompass Labs Inc., used under license by
USER.
4 After a trademark is registered in the United States Patent and Trademark
Office, when that trademark is used, the (TM) symbol will be replaced by
the (R) symbol for all of the foregoing purposes.
5 All written and graphic material bearing the trademarks, including print
advertising, should bear a copyright notice consisting of all the following
components:
(a) the symbol (C);
(b) the name NCompass Labs Inc.; and
(c) the year that copies of the subject material is first published by
distribution of copies to the public.
By way of example, if an item is first published in the year 1998, an
appropriate notice would be:
"(C) NCompass Labs Inc. 1998".
Page 15 of 15
<PAGE>
EXHIBIT 10.27
AMENDED AND RESTATED STOCK OPTION PLAN
OF
COMPS INFOSYSTEMS, INC.
COMPS InfoSystems, Inc., a corporation organized under the laws of the
State of Delaware, hereby adopts this Stock Option Plan of COMPS InfoSystems,
Inc. The purposes of this Plan are as follows:
(1) To further the growth, development and financial success of the
Company by providing additional incentives to certain of its executive and other
key Employees who have been or will be given responsibility for the management
or administration of the Company's business affairs, by assisting them to become
owners of the Company's Class B non-voting Common Stock and thus to benefit
directly from its growth, development and financial success.
(2) To enable the Company to obtain and retain the services of the
type of professional, technical and managerial Employees, consultants and
independent contractors considered essential to the long-range success of the
Company by providing and offering them an opportunity, to become owners of the
Company's Class B non-voting Common Stock under options, including options (in
the case of Employees), that are intended to qualify as "incentive stock
options" under Section 422 of the Code.
1
DEFINITIONS
-----------
Whenever the following terms are used in this Plan, they shall have
the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter and the
singular shall include the plural, where the context so indicates.
1.1 - Administrator
- --- -------------
"Administrator" shall have the meaning set forth in Section 6. 1 (b).
1.2 - Board
- --- -----
"Board" shall mean the Board of Directors of the Company.
1.3 - Code
- --- ----
"Code" shall mean the Internal Revenue Code of 1986, as amended.
<PAGE>
1.4 - Committee
- --- ---------
"Committee" shall mean the Stock Option Committee of the Board,
appointed as provided in Section 6. 1.
1.5 - Company
- --- -------
"Company" shall mean COMPS InfoSystems, Inc.
1.6 - Director
- --- --------
"Director" shall mean a member of the Board.
1.7 - Employee
- --- --------
"Employee" shall mean any employee (as defined in accordance with the
regulations and revenue rulings then applicable under Section 3401(c) of the
Code) of the Company, or of any corporation which is then a Parent Corporation
or a Subsidiary, whether such employee is so employed at the time this Plan is
adopted or becomes so employed subsequent to the adoption of this Plan.
1.8 - Exchange Act
- --- ------------
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
1.9 - Initial Public Offering
- --- -----------------------
"Initial Public Offering" shall mean the closing of the sale of the
Company's securities pursuant to an underwritten public offering.
1.10 - Incentive Stock Option
- ---- ----------------------
"Incentive Stock Option" shall mean an Option which qualifies under
Section 422 of the Code and which is designated as an Incentive Stock Option by
the Administrator.
1.11 - Non-Qualified Option
- ---- --------------------
"Non-Qualified Option" shall mean an Option which is not an Incentive
Stock Option and which is designated as a Non-Qualified Option by the
Administrator.
1.12 - Officer
- ---- -------
"Officer" shall mean an officer of the Company, as defined in Rule
16a-l(f) under the Exchange Act, as such Rule may be amended in the future.
2
<PAGE>
1.13 - Option
- ---- ------
"Option" shall mean an option to purchase Class B non-voting Common
Stock of the Company, granted under the Plan. "Options" includes both Incentive
Stock Options and Non-Qualified Options.
1.14 - Optionee
- ---- --------
"Optionee" shall mean an Employee or other individual to whom an
Option is granted under the Plan.
1.15 - Parent Corporation
- ---- ------------------
"Parent Corporation" shall mean any corporation in an unbroken chain
of corporations ending with the Company if each of the corporations other than
the Company then owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.
1.16 - Plan
- ---- ----
"Plan" shall mean this Stock Option Plan of COMPS InfoSystems, Inc.
1.17 - Rule 16b-3
- ---- ----------
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange
Act, as such Rule may be amended in the future.
1.18 - Secretary
- ---- ---------
"Secretary" shall mean the Secretary of the Company.
1.19 - Securities Act
- ---- --------------
"Securities Act" shall mean the Securities Act of 1933, as amended.
1.20 - Subsidiary
- ---- ----------
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.
1.21 - Termination of Employment
- ---- -------------------------
"Termination of Employment" shall mean the time when the employee-
employer relationship between the Optionee and the Company, a Parent Corporation
or a Subsidiary is terminated for any reason, with or without cause, including,
but not by way of limitation, a termination by resignation, discharge, death or
retirement, but excluding terminations where there is a simultaneous
reemployment by the Company, a Parent Corporation or a Subsidiary.
3
<PAGE>
The Administrator in its absolute discretion, shall determine the effect of all
other matters and questions relating to Termination of Employment, including,
but not by way of limitation, the question of whether a Termination of
Employment resulted from a discharge for good cause, and all questions of
whether particular leaves of absence constitute Terminations of Employment;
provided, however, that, with respect to Incentive Stock Options, a leave of
absence shall constitute a Termination of Employment if, and to the extent that,
such leave of absence interrupts employment for the purposes of Section
422(a)(2) of the Code and the then applicable regulations and revenue rulings
under said Section.
1.22 - Termination of Business Relationship
- ---- ------------------------------------
"Termination of Business Relationship" shall mean the time when the
business relationship between the Optionee and the Company, a Parent Corporation
or a Subsidiary is terminated for any reason, with or without cause, including,
but not by way of limitation, a termination by cessation of business,
bankruptcy, contract termination, resignation, discharge or death. The
Administrator, in its absolution discretion, shall determine the effect of all
other matters and questions relating to Termination of Business Relationship.
2
SHARES SUBJECT TO PLAN
----------------------
2.1 - Shares Subject to Plan
- --- ----------------------
The shares of stock subject to Options shall be shares of the
Company's $.0l par value non-voting Class B Common Stock (the "Common Stock").
The aggregate number of such shares which may be issued upon exercise of Options
shall not exceed 1,719,909. The number of such shares which may be issued upon
exercise of Options granted to any single Optionee shall not exceed 300,000.
2.2 - Unexercised Options
- --- -------------------
If any Option expires or is cancelled without having been fully
exercised, the number of shares subject to such Option but as to which such
Option was not exercised prior to its expiration or cancellation may again be
optioned hereunder, subject to the limitations of Section 2.1.
2.3 - Changes in Company's Shares
- --- ---------------------------
In the event that the outstanding shares of Common Stock of the
Company are hereafter changed into or exchanged for a different number or kind
of shares or other securities of the Company, or of another corporation, by
reason of reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, stock dividend or combination of shares,
appropriate adjustments shall be made by the Administrator in the number and
kind of shares for the purchase of which Options may be granted, including
adjustments of the limitations in Section 2.1 on the maximum number and kind of
shares which may be issued on exercise of Options.
4
<PAGE>
3
GRANTING OF OPTIONS
-------------------
3.1 - Eligibility
- --- -----------
Any executive or other key Employee of the Company or of any
corporation which is then a Parent Corporation or a Subsidiary shall be eligible
to be granted Options. except as provided in Section 3.2. In addition, any
individual maintaining a significant business relationship with the Company or a
Subsidiary shall be eligible to be granted a Non-Qualified Option.
3.2 - Qualification of Incentive Stock Options
- --- ----------------------------------------
No Incentive Stock Option shall be granted unless such Option, when
granted, qualifies as an "incentive stock option" under Section 422 of the Code.
Only Employees may be granted Incentive Stock Options.
3.3 - Granting of Options
- --- -------------------
(a) The Administrator shall from time to time, in its absolute
discretion:
(i) Determine which Employees are executive or other key
Employees;
(ii) Determine which individuals maintain a significant
business relationship with the Company or a Subsidiary;
(iii) Select from among the executive or other key Employees and
other individuals (including those to whom Options have been previously
granted under the Plan) such of them as in its opinion should be granted
Options; and
(iv) Determine the number of shares to be subject to such
Options granted to such selected executive or other key Employees and
other individuals, and determine (in the case of Employees) whether such
Options are to be Incentive Stock Options or Non-Qualified Options; and
(v) Determine the terms and conditions of such Options,
consistent with the Plan.
(b) Upon the selection of an executive or other key Employee or other
individual to be granted an Option, the Administrator shall instruct the
Secretary to issue such Option and may impose such conditions on the grant of
such Option as it deems appropriate. Without limiting the generality of the
preceding sentence, the Administrator may, in its discretion and on such terms
as it deems appropriate, require as a condition on the grant of an Option to an
Employee or other individuals that the Employee or other individual surrender
for cancellation some or all of the unexercised Options which have been
previously granted to him. An Option the grant of which is conditioned upon such
surrender may have an option price lower (or higher) than the option price of
the surrendered Option, may cover the same (or a lesser or greater) number of
5
<PAGE>
shares as the surrendered Option, may contain such other terms as the
Administrator deems appropriate and shall be exercisable in accordance with its
terms, without regard to the number of shares, price, option period or any other
term or condition of the surrendered Option.
4
TERMS OF OPTIONS
----------------
4.1 - Option Agreement
- --- ----------------
Each Option shall be evidenced by a written Stock Option Agreement,
which shall be executed by the Optionee and an authorized Officer of the Company
and which shall contain such terms and conditions as the Administrator shall
determine, consistent with the Plan. Stock Option Agreements evidencing
Incentive Stock Options shall contain such terms and conditions as may be
necessary to qualify such Options as "incentive stock options" under Section 422
of the Code.
4.2 - Option Price
- --- ------------
(a) The price of the shares subject to each Option shall be set by
the Administrator; provided, however, that the price per share shall be not less
than 100% of the fair market value of such shares on the date such Option is
granted; provided, further, that, in the case of an Incentive Stock Option, the
price per share shall not be less than 110% of the fair market value of such
shares on the date such Option is granted in the case of an individual then
owning (within the meaning of Section 424(d) of the Code) more than 10% of the
total combined voting power of all classes of stock of the Company, any
Subsidiary or any Parent Corporation.
(b) For purposes of the Plan, the fair market value of a share of the
Company's Common Stock as of a given date shall be: (i) the closing price of a
share of the Company's Common Stock on the principal exchange on which shares of
the Company's Common Stock are then trading, if any, on the trading day previous
to such date, or, if shares were not traded on the day previous to such date,
then on the next preceding trading day during which a sale occurred; or (ii) if
such Common Stock is not traded on an exchange but is quoted on Nasdaq or a
successor quotation system, (1) the last sales price (if the Company's Common
Stock is then listed as a National Market Issue under the Nasdaq National
Market) or (2) the mean between the closing representative bid and asked prices
(in all other cases) for the Company's Common Stock on the trading day previous
to such date as reported by Nasdaq or such successor quotation system; or (iii)
if such Common Stock is not publicly traded on an exchange and not quoted on
Nasdaq or a successor quotation system, the mean between the closing bid and
asked prices for the Company's Common Stock, on the trading day previous to such
date, as determined in good faith by the Administrator; or (iv) if the Company's
Common Stock is not publicly traded, the fair market value established by the
Administrator acting in good faith or as otherwise provided in an agreement
evidencing an Option.
6
<PAGE>
4.3 - Commencement of Exercisability
- --- ------------------------------
(a) Except as the Administrator may otherwise provide with respect to
Options granted to Optionees who are not Officers, no Option may be exercised in
whole or in part during the first year after such Option is granted.
(b) Subject to the provisions of Sections 4.3(a), 4.3(c), 4.3(d), and
7.3, Options shall become exercisable at such times and in such installments
(which may be cumulative) as the Administrator shall provide in the terms of
each individual Option; provided, however, that by a resolution adopted after an
Option is granted the Committee may, on such terms and conditions as it may
determine to be appropriate and subject to Sections 4.3(a), 4.3(c), 4.3(d), and
7.3, accelerate the time at which such Option or any portion thereof may be
exercised.
(c) No portion of an Option which is unexercisable at Termination of
Employment or Termination of Business Relationship, as the case may be, shall
thereafter become exercisable.
(d) Notwithstanding any other provision of this Plan, in the case of
an Incentive Stock Option, the aggregate fair market value (determined at the
time the Incentive Stock Option is granted) of the shares of the Company's stock
with respect to which "incentive stock options" (within the meaning of Section
422 of the Code) are exercisable for the first time by the Optionee during any
calendar year (under the Plan and all other incentive stock option plans of the
Company, any Subsidiary and any Parent Corporation) shall not exceed $100,000.
4.4 - Expiration of Options
- --- ---------------------
(a) No Option may be exercised to any extent by anyone after the
first to occur of the following events:
(i) The expiration of ten years from the date the Option was
granted; or
(ii) With respect to an Incentive Stock Option in the case of
an Optionee owning (within the meaning of Section 424(d) of the Code), at
the time the Incentive Stock Option was granted, more than 10% of the
total combined voting power of all classes of stock of the Company, any
Subsidiary or any Parent Corporation, the expiration of five years from
the date the Incentive Stock Option was granted; or
(iii) Except in the case of any Optionee who is disabled (within
the meaning of Section 22(e)(3) of the Code), the expiration of three
months from the date of the Optionee's Termination of Employment or
Termination of Business Relationship, as the case may be, for any reason
other than such Optionee's death unless the Optionee dies within said
three-month period; or
(iv) In the case of an Optionee who is disabled (within the
meaning of Section 22(e)(3) of the Code), the expiration of one year from
the date of the Optionee's Termination of Employment or Termination of
Business Relationship, as the case may
7
<PAGE>
be, for any reason other than such Optionee's death unless the Optionee
dies within said one-year period; or
(v) The expiration of one year from the date of the
Optionee's death.
(b) Subject to the provisions of Section 4.4(a), the Administrator
shall provide, in the terms of each individual Option, when such Option expires
and becomes unexercisable; and (without limiting the generality of the
foregoing) the Administrator may provide in the terms of individual Options that
said Options expire immediately upon a Termination of Employment for any reason.
4.5 - Consideration
- --- -------------
In consideration of the granting of an Option. the Optionee shall
agree, in the written Stock Option Agreement, to remain in the employ or in a
business relationship with of the Company, a Parent Corporation or a Subsidiary
for a period of at least one year after the Option is granted. Nothing in this
Plan or in any Stock Option Agreement hereunder shall confer upon any Optionee
any right to continue in the employ of or in a business relationship with the
Company, any Parent Corporation or any Subsidiary or shall interfere with or
restrict in any way the rights of the Company, its Parent Corporations and its
Subsidiaries, which are hereby expressly reserved, to discharge or to terminate
the business relationship with, any Optionee at any time for any reason
whatsoever, with or without cause.
4.6 - Adjustments in Outstanding Options
- --- ----------------------------------
In the event that the outstanding shares of the stock subject to
Options are changed into or exchanged for a different number or kind of shares
of the Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split-up, stock
dividend or combination of shares, the Administrator shall make an appropriate
and equitable adjustment in the number and kind of shares as to which all
outstanding Options, or portions thereof then unexercised, shall be exercisable,
to the end that after such event the Optionee's proportionate interest shall be
maintained as before the occurrence of such event. Such adjustment in an
outstanding Option shall be made without change in the total price applicable to
the Option or the unexercised portion of the Option (except for any change in
the aggregate price resulting from rounding-off of share quantities or prices)
and with any necessary corresponding adjustment in Option price per share;
provided, however, that, in the case of Incentive Stock Options, each such
adjustment shall be made in such manner as not to constitute a "modification"
within the meaning of Section 424(h)(3) of the Code. Any such adjustment made
by the Administrator shall be final and binding upon all Optionees, the Company
and all other interested persons.
4.7 - Merger, Consolidation, Acquisition, Liquidation or Dissolution
- --- --------------------------------------------------------------
Notwithstanding the provisions of Section 4.6, in its absolute
discretion, and on such terms and conditions as it deems appropriate, the
Administrator may provide by the terms of any Option that such Option cannot be
exercised after the merger or consolidation of the Company with or into another
corporation, the acquisition by another corporation or person of all or
substantially all of the Company's assets or 80% or more of the Company's then
outstanding
8
<PAGE>
voting stock or the liquidation or dissolution of the Company; and if the
Administrator so provides, it may, in its absolute discretion and on such terms
and conditions as it deems appropriate, also provide, either by the terms of
such Option or by a resolution adopted prior to the occurrence of such merger,
consolidation, acquisition, liquidation or dissolution, that, for some period of
time prior to such event, such Option shall be exercisable as to all shares
covered thereby, notwithstanding anything to the contrary in Section 4.3(a),
Section 4.3(b), and/or any installment provisions of such Option, but subject to
Section 4.3(d).
5
EXERCISE OF OPTIONS
-------------------
5.1 - Person Eligible to Exercise
- --- ---------------------------
During the lifetime of the Optionee, only the Optionee may exercise an
Option (or any portion thereof) granted to the Optionee. After the death of the
Optionee, any exercisable portion of an Option may, prior to the time when such
portion becomes unexercisable under the Plan or the applicable Stock Option
Agreement, be exercised by the Optionee's personal representative or by any
person empowered to do so under the deceased Optionee's will or under the then
applicable laws of descent and distribution.
5.2 - Partial Exercise
- --- ----------------
At any time and from time to time prior to the time when any
exercisable Option or exercisable portion thereof becomes unexercisable under
the Plan or the applicable Stock Option Agreement, such Option or portion
thereof may be exercised in whole or in part; provided, however, that the
Company shall not be required to issue fractional shares and the Administrator
may, by the terms of the Option, require any partial exercise to be with respect
to a specified minimum number of shares.
5.3 - Manner of Exercise
- --- ------------------
An exercisable Option, or any exercisable portion thereof, may be
exercised solely by delivery to the Secretary or his office of all of the
following prior to the time when such Option or such portion becomes
unexercisable under the Plan or the applicable Stock Option Agreement:
(a) Notice in writing signed by the Optionee or other person then
entitled to exercise such Option or portion, stating that such Option or
portion is exercised, such notice complying with all applicable rules
established by the Administrator; and
(i) Full payment (by cashier's check or wire transfer) for the
shares with respect to which such Option or portion is thereby exercised;
or
(ii) With the consent of the Administrator, (A) shares of the
Company's Common Stock owned by the Optionee duly endorsed for transfer to
the Company or (B) subject to the timing requirements of Section 5.4,
shares of the Company's Common Stock issuable to the Optionee upon
exercise of the Option, with a fair market value (as
9
<PAGE>
determined under Section 4.2(b)) on the date of Option exercise equal to
the aggregate Option price of the shares with respect to which such Option
or portion is thereby exercised; or
(iii) With the consent of the Administrator, a promissory note
bearing interest (at no less than such rate as shall then preclude the
imputation of interest under the Code or successor provision) and payable
upon such terms as may be prescribed by the Administrator. The
Administrator may also prescribe the form of such note and the security to
be given for such note. `The Option may not be exercised, however, by
delivery of a promissory note or by a loan from the Company when or where
such loan or other extension of credit is prohibited by law; or
(iv) With the consent of the Administrator, any combination of
the consideration provided in the foregoing subsections (i), (ii) and
(iii); and
(b) The payment to the Company (or other corporation) of all amounts
which it is required to withhold under federal, state or local law in connection
with the exercise of the Option; with the consent of the Committee, (i) shares
of the Company's Common Stock owned by the Optionee duly endorsed for transfer
or (ii) except with respect to Incentive Stock Options and subject to the timing
requirements of Section 5.4, shares of the Company's Common Stock issuable to
the Optionee upon exercise of the Option, valued in accordance with Section
4.2(b) at the date of Option exercise, may be used to make all or part of such
payment;
(c) Such representations and documents as the Administrator, in its
absolute discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act and any other federal or state
securities laws or regulations. The Administrator may, in its absolute
discretion, also take whatever additional actions it deems appropriate to effect
such compliance including, without limitation, placing legends on share
certificates and issuing stop-transfer orders to transfer agents and registrars;
and
(d) In the event that the Option or portion thereof shall be
exercised pursuant to Section 5.1 by any person or persons other than the
Optionee, appropriate proof of the right of such person or persons to exercise
the Option or portion thereof.
5.4 - Certain Timing Requirements
- --- ---------------------------
Shares of the Company's Common Stock issuable to the Optionee upon
exercise of the Option may be used to satisfy the Option price or the tax
withholding consequences of such exercise only (i) during the period beginning
on the third business day following the date of release of the quarterly or
annual summary statement of sales and earnings of the Company and ending on the
twelfth business day following such date or (ii) pursuant to an irrevocable
written election by the Optionee to use shares of the Company's Common Stock
issuable to the Optionee upon exercise of the Option to pay all or part of the
Option price or the withholding taxes (subject to the approval of the
Administrator) made at least six months prior to the payment of such Option
price or withholding taxes.
10
<PAGE>
5.5 - Conditions to Issuance of Stock Certificates
- --- --------------------------------------------
The shares of stock issuable and deliverable upon the exercise of an
Option, or any portion thereof, may be either previously authorized but unissued
shares or issued shares which have then been reacquired by the Company. The
Company shall not be required to issue or deliver any certificate or
certificates for shares of stock purchased upon the exercise of any Option or
portion thereof prior to fulfillment of all of the following conditions:
(a) The obtaining of any approval or other clearance from any state
or federal governmental agency which the Committee shall, in its absolute
discretion, determine to be necessary or advisable; and
(b) The payment to the Company (or other employer corporation) of all
amounts which it is required to withhold under federal, state or local law in
connection with the exercise of the Option; and
(c) The lapse of such reasonable period of time following the
exercise of the Option as the Administrator may establish from time to time for
reasons of administrative convenience.
5.6 - Rights as Shareholders
- --- ----------------------
The holders of Options shall not be, nor have any of the rights or
privileges of, shareholders of the Company in respect of any shares purchasable
upon the exercise of any part of an Option unless and until certificates
representing such shares have been issued by the Company to such holders.
5.7 - Transfer Restrictions
- --- ---------------------
Unless otherwise approved in writing by the Administrator, no shares
acquired upon exercise of any Option by any Officer may be sold, assigned,
pledged, encumbered or otherwise transferred until at least six months have
elapsed from (but excluding) the date that such Option was granted. The
Administrator, in its absolute discretion, may impose such other restrictions on
the transferability of the shares purchasable upon the exercise of an Option as
it deems appropriate. Any such other restriction shall be set forth in the
respective Stock Option Agreement and may be referred to on the certificates
evidencing such shares. The Administrator may require the Optionee to give the
Company prompt notice of any disposition of shares of stock, acquired by
exercise of an Incentive Stock Option, within two years from the date of
granting such Option or one year after the transfer of such shares to such
Employee. The Administrator may direct that the certificates evidencing shares
acquired by exercise of an Incentive Stock Option refer to such requirement to
give prompt notice of disposition.
11
<PAGE>
6
ADMINISTRATION
--------------
6.1 - Administration by Board or Stock Option Committee
- --- -------------------------------------------------
(a) The Plan shall be administered by the Administrator.
(b) Prior to the Initial Public Offering, the Administrator shall be
the Board, or, in the sole and absolute discretion of the Board, the Committee.
After the Initial Public Offering, the Administrator shall be the Committee.
(c) The Stock Option Committee shall consist of two or more
Directors, appointed by and holding office at the pleasure of the Board, each of
whom is both (a) a "disinterested person" as defined by Rule 16b-3 and (b) an
"outside director" within the meaning of Section 162(m)(4)(C)(ii) of the Code.
Appointment of Committee members shall be effective upon acceptance of
appointment. Committee members may resign at any time by delivering written
notice to the Board. Vacancies in the Committee shall be filled by the Board.
6.2 - Duties and Powers of Administrator
- --- ----------------------------------
It shall be the duty of the Administrator to conduct the general
administration of the Plan in accordance with its provisions. The Administrator
shall have the power to interpret the Plan and the Options and to adopt such
rules for the administration, interpretation and application of the Plan as are
consistent therewith and to interpret, amend or revoke any such rules. Any such
interpretations and rules in regard to Incentive Stock Options shall be
consistent with the basic purpose of the Plan to grant "incentive stock options"
within the meaning of Section 422 of the Code. In the event that the
Administrator is the Committee, the Board shall have no right to exercise any of
the rights or duties of the Committee under the Plan.
6.3 - Majority Rule
- --- -------------
The Administrator shall act by (a) a majority of the members of the
Board, if the Board is the Administrator; or (b) a majority of the members of
the Committee, if the Committee is the Administrator. The Committee may act
either by vote at a meeting or by a memorandum or other written instrument
signed by a majority of the Committee.
6.4 - Compensation; Professional Assistance; Good Faith Actions
- --- ---------------------------------------------------------
Members of the Administrator shall receive such compensation for their
services as members as may be determined by the Board. All expenses and
liabilities incurred by members of the Administrator in connection with the
administration of the Plan shall be borne by the Company. The Administrator may
employ attorneys, consultants, accountants, appraisers, brokers or other
persons. The Administrator the Company and its Officers and Directors shall be
entitled to rely upon the advice, opinions or valuations of any such persons.
All actions taken and all interpretations and determinations made by the
Administrator in good faith shall be final and binding upon all Optionees, the
Company and all other interested persons. No member of the Administrator shall
be personally liable for any action, determination or interpretation made
12
<PAGE>
in good faith with respect to the Plan or the Options, and all members of the
Administrator shall be fully protected by the Company in respect to any such
action, determination or interpretation.
7
OTHER PROVISIONS
----------------
7.1 - Options Not Transferable
- --- ------------------------
No Option or interest or right therein or part thereof shall be liable
for the debts, contracts or engagements of the Optionee or his successors in
interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect; provided, however, that nothing in this Section 7.1 shall
prevent transfers by will or by the applicable laws of descent and distribution.
7.2 - Amendment, Suspension or Termination of the Plan
- --- ------------------------------------------------
The Plan may be wholly or partially amended or otherwise modified,
suspended or terminated at any time or from time to time by the Administrator.
However, without approval of the Company's shareholders given within 12 months
before or after the action by the Administrator, no action of the Administrator
may, except as provided in Section 2.3, increase any limit imposed in Section
2.1 on the maximum number of shares which may be issued on exercise of Options,
materially modify the eligibility requirements of Section 3.1, reduce the
minimum Option price requirements of Section 4.2(a) or extend the limit imposed
in this Section 7.2 on the period during which Options may be granted or amend
or modify the Plan in a manner requiring shareholder approval under Rule 16b-3.
Neither the amendment, suspension nor termination of the Plan shall, without the
consent of the holder of the Option, impair any rights or obligations under any
Option theretofore granted. No Option may be granted during any period of
suspension nor after termination of the Plan, and in no event may any Option be
granted under this Plan after the first to occur of the following events:
(a) The expiration of ten years from the date the Plan is adopted by
the Board; or
(b) The expiration of ten years from the date the Plan is approved by
the Company's shareholders under Section 7.3.
7.3 - Approval of Plan by Shareholders
- --- --------------------------------
This Plan will be submitted for the approval of the Company's
shareholders within 12 months after the date of the Board's initial adoption of
the Plan. Options may be granted prior to such shareholder approval; provided,
however, that such Options shall not be exercisable prior to the time when the
Plan is approved by the shareholders; provided, further, that if such approval
has not been obtained at the end of said 12-month period, all Options previously
granted under the Plan shall thereupon be cancelled and become null and void.
The
13
<PAGE>
Company shall take such actions with respect to the Plan as may be necessary to
satisfy the requirements of Rule 16b-3(b).
7.4 - Effect of Plan Upon Other Option and Compensation Plans
- --- -------------------------------------------------------
The adoption of this Plan shall not affect any other compensation or
incentive plans in effect for the Company, any Parent Corporation or any
Subsidiary. Nothing in this Plan shall be construed to limit the right of the
Company, any Parent Corporation or any Subsidiary (a) to establish any other
forms of incentives or compensation for employees of the Company, any Parent
Corporation or any Subsidiary or (b) to grant or assume options otherwise than
under this Plan in connection with any proper corporate purpose, including, but
not by way of limitation, the grant or assumption of options in connection with
the acquisition by purchase, lease, merger, consolidation or otherwise, of the
business, stock or assets of any corporation, firm or association.
7.5 - Titles
- --- ------
Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of the Plan.
7.6 - Conformity to Securities Laws
- --- -----------------------------
The Plan is intended to conform to the extent necessary with all
provisions of the Securities Act and the Exchange Act and any and all
regulations and rules promulgated by the Securities and Exchange Commission
thereunder, including without limitation Rule 16b-3. Notwithstanding anything
herein to the contrary, the Plan shall be administered, and Options shall be
granted and may be exercised, only in such a manner as to conform to such laws,
rules and regulations. To the extent permitted by applicable law, the Plan and
Options granted hereunder shall be deemed amended to the extent necessary to
conform to such laws, rules and regulations.
14
<PAGE>
* * * * *
I hereby certify that the foregoing Plan was duly adopted by the Board
of Directors of COMPS InfoSystems, Inc. on January 30, 1997.
Executed effective August 6, 1996.
/s/ Robert C. Beasley
-------------------------------------
Secretary
* * * *
I hereby certify that the foregoing Plan was duly approved by the
shareholders of COMPS InfoSystems, Inc. on January 30, 1997.
Executed effective August 6, 1996.
/s/ Robert C. Beasley
-------------------------------------
Secretary
15
<PAGE>
EXHIBIT 10.28
FORM OF INCENTIVE STOCK OPTION AGREEMENT
----------------------------------------
THIS AGREEMENT, dated ___________, 1997 is made by and between COMPS
InfoSystems, Inc., a Delaware corporation hereinafter referred to as "Company,"
and ___________, an employee of the Company or a Parent Corporation or
Subsidiary of the Company, hereinafter referred to as "Employee" or "Optionee":
WHEREAS, the Company wishes to afford the Employee the opportunity to
purchase shares of its $.0l par value non-voting Class B Common Stock; and
WHEREAS, the Company wishes to carry out the Plan (the terms of which
are hereby incorporated by reference and made a part of this Agreement); and
WHEREAS, the Administrator, appointed to administer the Plan, has
determined that it would be to the advantage and best interest of the Company
and its shareholders to grant the Incentive Stock Option provided for herein to
the Employee as an inducement to perform future services for the Company, its
Parent Corporations or its Subsidiaries and as an incentive for increased
efforts during such service, and has advised the Company thereof and instructed
the undersigned officers to issue said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
1
DEFINITIONS
-----------
Whenever the following terms are used in this Agreement, they shall
have the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.
1.1 - Administrator
- --- -------------
"Administrator" shall mean: (a) prior to the Initial Public Offering,
the Board, or, in the sole and absolute discretion of the Board, the Committee;
and (b) after the Initial Public Offering, the Committee.
1.2 - Board
- --- -----
"Board" shall mean the Board of Directors of the Company.
1.3 - Code
- --- ----
"Code" shall mean the Internal Revenue Code of 1986, as amended.
<PAGE>
1.4 - Committee
- --- ---------
"Committee" shall mean the Stock Option Committee of the Board,
appointed as provided in the Plan.
1.5 - Common Stock
- --- ------------
"Common Stock" shall mean the Company's non-voting Class B Common
Stock, par value $.0l per share.
1.6 - Company
- --- -------
"Company" shall mean COMPS InfoSystems, Inc.
1.7 - Director
- --- --------
"Director" shall mean a member of the Board.
1.8 - Exchange Act
- --- ------------
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
1.9 - Initial Public Offering
- --- -----------------------
"Initial Public Offering" shall mean the closing of the sale of the
Company's securities pursuant to an underwritten public offering.
1.10 - Officer
- ---- -------
"Officer" shall mean an officer of the Company, as defined in Rule
16a-l(f) under the Exchange Act, as such Rule may be amended in the future.
1.11 - Option
- ---- ------
"Option" shall mean the incentive stock option to purchase Common
Stock of the Company granted under this Agreement.
1.12 - Parent Corporation
- ---- ------------------
"Parent Corporation" shall mean any corporation in an unbroken chain
of corporations ending with the Company if each of the corporations other than
the Company then owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one (1) of the other
corporations in such chain.
1.13 - Plan
- ---- ----
"Plan" shall mean the Amended and Restated Stock Option Plan of COMPS
InfoSystems, Inc.
2
<PAGE>
1.14 - Rule 16b-3
- ---- ----------
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange
Act, as such Rule may be amended in the future.
1.15 - Secretary
- ---- ---------
"Secretary" shall mean the Secretary of the Company.
1.16 - Securities Act
- ---- --------------
"Securities Act" shall mean the Securities Act of 1933, as amended.
1.17 - Subsidiary
- ---- ----------
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one (1) of the other corporations in such chain.
1.18 - Termination of Employment
- ---- -------------------------
"Termination of Employment" shall mean the time when the employee-
employer relationship between the Optionee and the Company, a Parent Corporation
or a Subsidiary is terminated for any reason, with or without cause, including,
but not by way of limitation, a termination by resignation, discharge, death or
retirement, but excluding any termination where there is a simultaneous
reemployment by the Company, a Parent Corporation or a Subsidiary. The
Administrator, in its absolute discretion, shall determine the effect of all
other matters and questions relating to Termination of Employment, including,
but not by way of limitation, the question of whether a Termination of
Employment resulted from a discharge for good cause, and all questions of
whether particular leaves of absence constitute Terminations of Employment;
provided, however, that a leave of absence shall constitute a Termination of
Employment if, and to the extent that, such leave of absence interrupts
employment for purposes of Section 422(a)(2) of the Code and the then applicable
regulations and revenue rulings under said Section.
2
GRANT OF OPTION
---------------
2.1 - Grant of Option
- --- ---------------
In consideration of the Employee's agreement to remain in the employ
of the Company, its Parent Corporations or its Subsidiaries and for other good
and valuable consideration, including the Company's desire to reward future
services and contributions of the Employee, on the date hereof the Company
irrevocably grants to the Employee the option to purchase any part or all of an
aggregate of ________ shares of its $.0l par value non-voting Class B Common
Stock upon the terms and conditions set forth in this Agreement.
3
<PAGE>
2.2 - Purchase Price
- --- --------------
The purchase price of the shares of stock covered by the Option shall
be $.30 per share without commission or other charge.
2.3 - Consideration to Company
- --- ------------------------
In consideration of the granting of this Option by the Company, the
Employee agrees to render faithful and efficient services to the Company, a
Parent Corporation or a Subsidiary, with such duties and responsibilities as the
Company shall from time to time prescribe, for a period of at least one (1) year
from the date this Option is granted. Nothing in this Agreement or in the Plan
shall confer upon the Employee any right to continue in the employ of the
Company, any Parent Corporation or any Subsidiary or shall interfere with or
restrict in any way the rights of the Company, its Parent Corporations and its
Subsidiaries, which are hereby expressly reserved, to discharge the Employee at
any time for any reason whatsoever, with or without cause.
2.4 - Adjustments in Option
- --- ---------------------
In the event that the outstanding shares of the stock subject to the
Option are changed into or exchanged for a different number or kind of shares of
the Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split up, stock
dividend or combination of shares, the Administrator shall make an appropriate
and equitable adjustment in the number and kind of shares as to which the
Option, or portions thereof then unexercised, shall be exercisable, to the end
that after such event the Employee's proportionate interest shall be maintained
as before the occurrence of such event. Such adjustment in the Option shall be
made without change in the total price applicable to the unexercised portion of
the Option (except for any change in the aggregate price resulting from
rounding-off of share quantities or prices) and with any necessary corresponding
adjustment in the Option price per share; provided, however, that each such
adjustment shall be made in such manner as not to constitute a "modification"
within the meaning of Section 424(h)(3) of the Code. Any such adjustment made
by the Administrator shall be final and binding upon the Employee, the Company
and all other interested persons.
3
PERIOD OF EXERCISABILITY
------------------------
3.1 - Commencement of Exercisability
- --- ------------------------------
(a) Subject to Sections 3.5 and 5.6, the Option shall become
exercisable in five (5) cumulative installments as follows:
(i) The first installment shall consist of twenty percent
(20%) of the shares covered by the Option and shall become exercisable upon
the first anniversary of the date the Option is granted.
4
<PAGE>
(ii) The second installment shall consist of twenty percent
(20%) of the shares covered by the Option and shall become exercisable upon
the second anniversary of the date the Option is granted.
(iii) The third installment shall consist of twenty percent
(20%) of the shares covered by the Option and shall become exercisable upon
the third anniversary of the date the Option is granted.
(iv) The fourth installment shall consist of twenty percent
(20%) of the shares covered by the Option and shall become exercisable upon
the fourth anniversary of the date the Option is granted.
(v) The fifth installment shall consist of twenty percent
(20%) of the shares covered by the Option and shall become exercisable upon
the fifth anniversary of the date the Option is granted.
(b) No portion of the Option which is unexercisable at Termination of
Employment shall thereafter become exercisable.
3.2 - Duration of Exercisability
- --- --------------------------
The installments provided for in Section 3.1 are cumulative. Each
such installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
3.3 - Expiration of Option
- --- --------------------
The Option may not be exercised to any extent by anyone after the
first to occur of the following events:
(a) The expiration of ten (10) years from the date the Option was
granted; or
(b) If the Employee owned (within the meaning of Section 424(d) of
the Code), at the time the Option was granted, more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company, any
Subsidiary or any Parent Corporation, the expiration of five (5) years from the
date the Option was granted; or
(c) The time of the Employee's Termination of Employment unless such
Termination of Employment results from his death, his retirement, his disability
(within the meaning of Section 22(e)(3) of the Code) or his being discharged not
for good cause; or
(d) The expiration of three (3) months from the date of the
Employee's Termination of Employment by reason of his retirement or his being
discharged not for good cause, unless the Employee dies within said three-month
period; or
(e) The expiration of one (1) year from the date of the Employee's
Termination of Employment by reason of his disability (within the meaning of
Section 22(e)(3) of the Code); or
5
<PAGE>
(f) The expiration of one (1) year from the date of the Employee's
death; or
(g) The effective date of either the merger or consolidation of the
Company with or into another corporation, or the acquisition by another
corporation or person of all or substantially all of the Company's assets or
eighty percent (80%) or more of the Company's then outstanding voting stock, or
the liquidation or dissolution of the Company, unless the Administrator waives
this provision in connection with such transaction. At least ten (10) days
prior to the effective date of such merger, consolidation, acquisition,
liquidation or dissolution, the Administrator shall give the Employee notice of
such event if the Option has then neither been fully exercised nor become
unexercisable under this Section 3.3.
3.4 - Acceleration of Exercisability
- --- ------------------------------
In the event of the merger or consolidation of the Company with or
into another corporation, or the acquisition by another corporation or person of
all or substantially all of the Company's assets or eighty percent (80%) or more
of the Company's then outstanding voting stock, or the liquidation or
dissolution of the Company, the Administrator may, in its absolute discretion
and upon such terms and conditions as it deems appropriate, provide by
resolution, adopted prior to such event and incorporated in the notice referred
to in Section 3.3(g), that at some time prior to the effective date of such
event this Option shall be exercisable as to all the shares covered hereby,
notwithstanding that this Option may not yet have become fully exercisable under
Section 3.1(a); provided, however, that this acceleration of exercisability
shall not take place if:
(a) This Option becomes unexercisable under Section 3.3 prior to said
effective date; or
(b) In connection with such an event, provision is made for an
assumption of this Option or a substitution therefor of a new option by an
employer corporation, or a parent or subsidiary of such corporation, so that
such assumption or substitution complies with the provisions of Section 424(a)
of the Code; and provided, further, that nothing in this Section 3.4 shall make
this Option exercisable if it is otherwise unexercisable by reason of Section
3.5 or Section 5.6.
The Administrator may make such determinations and adopt such rules
and conditions as it, in its absolute discretion, deems appropriate in
connection with such acceleration of exercisability, including, but not by way
of limitation, provisions to ensure that any such acceleration and resulting
exercise shall be conditioned upon the consummation of the contemplated
corporate transaction, and determinations regarding whether provisions for
assumption or substitution have been made as defined in subsection (b) above.
3.5 - Limitation on Exercisability
- --- ----------------------------
Notwithstanding any other provision of this Agreement, the aggregate
fair market value (determined at the time the Option is granted) of the shares
of the Company's stock with respect to which "incentive stock options" (within
the meaning of Section 422 of the Code) are exercisable for the first time by
the Employee during any calendar year (under the Plan and all
6
<PAGE>
other incentive stock option plans of the Company, any Subsidiary and any Parent
Corporation) shall not exceed $100,000.
4
EXERCISE OF OPTION
------------------
4.1 - Person Eligible to Exercise
- --- ---------------------------
During the lifetime of the Employee, only he may exercise the Option
or any portion thereof. After the death of the Employee, any exercisable
portion of the Option may, prior to the time when the Option becomes
unexercisable under Section 3.3, be exercised by his personal representative or
by any person empowered to do so under the Employee's will or under the then
applicable laws of descent and distribution.
4.2 - Partial Exercise
- --- ----------------
Any exercisable portion of the Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable under Section
3.3; provided, however, that each partial exercise shall be for not less than
One Thousand (1000) shares (or the minimum installment set forth in Section 3.1,
if a smaller number of shares) and shall be for whole shares only.
4.3 - Manner of Exercise
- --- ------------------
The Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary or his office of all of the following prior
to the time when the Option or such portion becomes unexercisable under Section
3.3:
(a) Notice in writing signed by the Employee or the other person then
entitled to exercise the Option or portion, stating that the Option or portion
is thereby exercised, such notice complying with all applicable rules
established by the Administrator; and
(i) Full payment (by cashiers check or wire transfer) for the
shares with respect to which such Option or portion is exercised; or
(ii) With the consent of the Administrator, (A) shares of the
Company's Common Stock owned by the Employee duly endorsed for transfer to
the Company or (B) subject to the timing requirements of Section 4.4,
shares of the Company's Common Stock issuable to the Employee upon exercise
of the Option, with a fair market value (as determined under Section 4.2(b)
of the Plan) on the date of Option exercise equal to the aggregate purchase
price of the shares with respect to which such Option or portion is
exercised; or
(iii) With the consent of the Administrator; a promissory note
bearing interest (at no less than such rate as shall then preclude the
imputation of interest under the Code or successor provision) and payable
upon such terms as may be prescribed by the Administrator. The
Administrator may also prescribe the form of such note and the
7
<PAGE>
security to be given for such note. That Option may not be exercised,
however, by delivery of a promissory note or by a loan from the Company
when or where such loan or other extension of credit is prohibited by law;
or
(iv) With the consent of the Administrator, any combination of
the consideration provided in the foregoing subparagraphs (i) - (iii); and
(b) A bona fide written representation and agreement, in a form
satisfactory to the Administrator, signed by the Employee or other person then
entitled to exercise such Option or portion, stating that the shares of stock
are being acquired for his own account, for investment and without any present
intention of distributing or reselling said shares or any of them except as may
be permitted under the Securities Act and then applicable rules and regulations
thereunder, and that the Employee or other person then entitled to exercise such
Option or portion will indemnify the Company against and hold it free and
harmless from any loss, damage, expense or liability resulting to the Company if
any sale or distribution of the shares by such person is contrary to the
representation and agreement referred to above. The Administrator may, in its
absolute discretion, take whatever additional actions it deems appropriate to
insure the observance and performance of such representation and agreement and
to effect compliance with the Securities Act and any other federal or state
securities laws or regulations. Without limiting the generality of the
foregoing, the Administrator may require an opinion of counsel acceptable to it
to the effect that any subsequent transfer of shares acquired on an Option
exercise does not violate the Securities Act, and may issue stop-transfer orders
covering such shares. Share certificates evidencing stock issued on exercise of
this Option shall bear an appropriate legend referring to the provisions of this
subsection (c) and the agreements herein. The written representation and
agreement referred to in the first sentence of this subsection (c) shall,
however, not be required if the shares to be issued pursuant to such exercise
have been registered under the Securities Act, and such registration is then
effective in respect of such shares;
(c) Full payment to the Company (or other employer corporation) of
all amounts which, under federal, state or local tax law, it is required to
withhold upon exercise of the Option; with the consent of the Administrator, (i)
shares of the Company's Common Stock owned by the Employee duly endorsed for
transfer or (ii) subject to the timing requirements of Section 4.4, shares of
the Company's Common Stock issuable to the Employee upon exercise of the Option,
valued in accordance with Section 4.2(b) of the Plan at the date of Option
exercise, may be used to make all or part of such payment; and
(d) In the event the Option or portion shall be exercised pursuant to
Section 4.1 by any person or persons other than the Employee, appropriate proof
of the right of such person or persons to exercise the Option.
4.4 - Certain Timing Requirements
- --- ---------------------------
Shares of the Company's Common Stock issuable to the Employee upon
exercise of the Option may be used to satisfy the Option price or the tax
withholding consequences of such exercise only (i) during the period beginning
on the third (3rd) business day following the date of release of the quarterly
or annual summary statement of sales and earnings of the Company and ending on
the twelfth (12th) business day following such date or (ii) pursuant to an
8
<PAGE>
irrevocable written election by the Employee to use shares of the Company's
Common Stock issuable to the Employee upon exercise of the Option to pay all or
part of the Option price or the withholding taxes (subject to the approval of
the Administrator) made at least six (6) months prior to the payment of such
Option price or withholding taxes.
4.5 - Conditions to Issuance of Stock Certificates
- --- --------------------------------------------
The shares of stock deliverable upon the exercise of the Option, or
any portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The obtaining of any approval or other clearance from any state
or federal governmental agency which the Administrator shall, in its absolute
discretion, determine to be necessary or advisable; and
(b) The payment to the Company (or other employer corporation) of all
amounts which, under federal, state or local tax law, it is required to withhold
upon exercise of the Option; and
(e) The lapse of such reasonable period of time following the
exercise of the Option as the Administrator may from time to time establish for
reasons of administrative convenience.
4.6 - Rights as Shareholder
- --- ---------------------
The holder of the Option shall not be, nor have any of the rights or
privileges of, a shareholder of the Company in respect of any shares purchasable
upon the exercise of any part of the Option unless and until certificates
representing such shares shall have been issued by the Company to such holder.
5
OTHER PROVISIONS
----------------
5.1 - Administration
- --- --------------
The Administrator shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or revoke
any such rules. All actions taken and all interpretations and determinations
made by the Administrator in good faith shall be final and binding upon the
Employee, the Company and all other interested persons. No member of the
Administrator shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Option. In
the event the Administrator is the Committee, the Board shall have no right to
exercise any of the rights or duties of the Committee under the Plan and this
Agreement.
9
<PAGE>
5.2 - Option Not Transferable
- --- -----------------------
Neither the Option nor any interest or right therein or part thereof
shall be liable for the debts, contracts or engagements of the Employee or his
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 5.2
shall not prevent transfers by will or by the applicable laws of descent and
distribution.
5.3 - Shares to Be Reserved
- --- ---------------------
The Company shall at all times during the term of the Option reserve
and keep available such number of shares of stock as will be sufficient to
satisfy the requirements of this Agreement.
5.4 - Notices
- --- -------
Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Employee shall be addressed to him at the address
given beneath his signature hereto. By a notice given pursuant to this Section
5.4, either party may hereafter designate a different address for notices to be
given to him. Any notice which is required to be given to the Employee shall,
if the Employee is then deceased, be given to the Employee's personal
representative if such representative has previously informed the Company of his
status and address by written notice under this Section 5.4. Any notice shall be
deemed duly given when enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, deposited (with postage prepaid) in a post office or
branch post office regularly maintained by the United States Postal Service.
5.5 - Titles
- --- ------
Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.
5.6 - Shareholder Approval
- --- --------------------
The Plan will be submitted for approval by the Company's shareholders
within twelve (12) months after the date the Plan was initially adopted by the
Board. This Option may not be exercised to any extent by anyone prior to the
time when the Plan is approved by the shareholders, and if such approval has not
been obtained by the end of said twelve-month period, this Option shall
thereupon be cancelled and become null and void. The Company shall take such
actions as may be necessary to satisfy the requirements of Rule 16b-3(b).
5.7 - Notification of Disposition
- --- ---------------------------
The Employee shall give prompt notice to the Company of any
disposition or other transfer of any shares of stock acquired under this
Agreement if such disposition or transfer
10
<PAGE>
is made (a) within two (2) years from the date of granting the Option with
respect to such shares or (b) within one (1) year after the transfer of such
shares to him. Such notice shall specify the date of such disposition or other
transfer and the amount realized, in cash, other property, assumption of
indebtedness or other consideration, by the Employee in such disposition or
other transfer.
5.8 - Construction
- --- ------------
This Agreement shall be administered, interpreted and enforced under
the laws of the State of Delaware.
5.9 - Conformity to Securities Laws
- --- -----------------------------
The Employee acknowledges that the Plan is intended to conform to the
extent necessary with all provisions of the Securities Act and the Exchange Act
and any and all regulations and rules promulgated by the Securities and Exchange
Commission thereunder, including without limitation Rule 16b-3. Notwithstanding
anything herein to the contrary, the Plan shall be administered, and the Option
is granted and may be exercised, only in such a manner as to conform to such
laws, rules and regulations. To the extent permitted by applicable law, the
Plan and this Agreement shall be deemed amended to the extent necessary to
conform to such laws, rules and regulations.
5.10 - Company's Right to Repurchase Shares
- ---- ------------------------------------
Upon Termination of Employment, the Company shall have the option to
repurchase all (but not less than all) of the shares of stock which have been
purchased by the Employee pursuant to exercise of the Option and which the
Employee then holds. The repurchase price payable by the Company if it
exercises its repurchase option shall be the greater of the purchase price of
the shares pursuant to Section 2.2 or the fair market value of the shares of
stock on the date of repurchase, determined in accordance with Section 4.2 of
the Plan, except that if at the date of such repurchase, the Company's common
stock is not publicly traded, the fair market value of the shares of stock shall
be determined for purposes of this Section 5.10 on the basis of the following
formula: eight (8) times the Company's pre-tax earnings for the Company's most
recently audited fiscal year divided by the number of outstanding shares of the
Company's common stock (including shares issuable upon the conversion of
outstanding shares of preferred stock) on the date of repurchase.
The Company's repurchase option shall be exercisable by giving written
notice to the Employee within thirty (30) calendar days after the Termination of
Employment provided, however, that in the event that the Optionee exercises the
-------- -------
Option after the Optionee's Termination of Employment but prior to the
expiration of the Option pursuant to the provisions of Section 3.3, the
Company's repurchase option shall be exercisable by giving written notice within
thirty (30) calendar days after the exercise of the Option by the Optionee. In
the event that the Company exercises its option to repurchase shares of stock
from the Optionee pursuant to this Section 5.10, Optionee's shares of stock
shall automatically be cancelled, and Optionee shall have no further right,
claim or title to such shares, other than the right to receive the
11
<PAGE>
repurchase price provided for in this Section 5.10. Upon receipt of a general
release and the stock certificates representing the shares, the Company shall
forward payment for such shares.
5.11 - Restrictions on Transfer of Shares
- ---- ----------------------------------
(a) There can be no valid transfer (as hereinafter defined) of any
shares of stock purchased on exercise of the Option, or any interest in such
shares, by any holder of such shares or interests unless such transfer is solely
for cash consideration and is made in compliance with the following provisions:
(i) Before there can be a valid transfer of any shares or any
interest therein, the record holder of the shares to be transferred (the
"Offered Shares") shall give written notice (by registered or certified
mail) to the Company. Such notice shall specify the identity of the
proposed transferee, the cash price offered for the Offered Shares by the
proposed transferee and the other terms and conditions of the proposed
transfer. The date such notice is mailed shall be hereinafter referred to
as the "notice date" and the record holder of the Offered Shares shall be
hereinafter referred to as the "Offeror."
(ii) For a period of thirty (30) calendar days after the notice
date, the Company shall have the option to purchase all (but not less than
all) of the Offered Shares at the purchase price and on the terms set forth
in subsection (a)(iii) of this Section 5.11. This option shall be
exercisable by the Company by mailing (by registered or certified mail)
written notice of exercise to the Offeror prior to the end of said thirty
(30) days.
(iii) The price at which the Company may purchase the Offered
Shares pursuant to the exercise of such option shall be the lower of (a)
the cash price offered for the Offered Shares by the proposed transferee
(as set forth in the notice required under subsection (a)(i) of this
Section 5.11) or (b) the greater of the purchase price of the shares
pursuant to Section 2.2 or fair market value of the shares of stock on the
notice date, determined in accordance with Section 4.2 of the Plan, except
that if at the notice date, the Company's common stock is not publicly
traded, the fair market value of the shares of stock shall be determined
for purposes of this Section 5.11 on the basis of the following formula:
eight (8) times the Company's pre-tax earnings for the Company's most
recently audited fiscal year divided by the number of outstanding shares of
the Company's common stock (including shares issuable upon the conversion
of outstanding shares of preferred stock) on the notice date. The
Company's notice of exercise of such option shall be accompanied by full
payment for the Offered Shares and, upon such payment by the Company, the
Company shall acquire full right, title and interest to all of the Offered
Shares.
(iv) If, and only if, the option given pursuant to subsection
(a)(ii) of this Section 5.11 is not exercised, the transfer proposed in the
notice given pursuant to subsection (a)(i) of this Section 5.11 may take
place; provided, however, that such transfer must, in all respects, be
exactly as proposed in said notice except that such transfer may not take
place either before the tenth (10th) calendar day after the expiration of
said thirty-day option exercise period or after the ninetieth (90th)
calendar day after the
12
<PAGE>
expiration of said thirty-day option exercise period, and if such transfer
has not taken place prior to said ninetieth (90th) day, such transfer may
not take place without once again complying with subsection (a) of this
Section 5.11.
(b) As used in this Section 5.11, the term "transfer" means any sale,
encumbrance, pledge, gift or other form of disposition or transfer of shares of
the Company's stock or any legal or equitable interest therein; provided,
however, that the term "transfer" does not include a transfer of such shares or
interests by will or by the applicable laws of descent and distribution or a
gift of such shares if the transferee or donee agrees to be bound by the
provisions of this Section 5.11.
(c) None of the shares of the Company's stock purchased on exercise
of the Option shall be transferred on the Company's books nor shall the Company
recognize any such transfer of any such shares or any interest therein unless
and until all applicable provisions of this Section 5.11 have been complied with
in all respects. The certificates of stock evidencing shares of stock purchased
on exercise of the Option shall bear an appropriate legend referring to the
transfer restrictions imposed by this Section 5.11 and to the repurchase option
provided for in Section 5.10.
5.12 - Company's Right to Non-Disclosure of Financial Information
- ---- ----------------------------------------------------------
The Company shall have the right not to disclose the Company's
financial information as long as the Company's common stock is not publicly
traded. Whether an optionee or shareholder, the Employee agrees that Employee's
access to the Company's financial information and financial records will be
strictly prohibited as long as the Company's common stock is not publicly
traded. Access to such financial information may only be granted by the
Company's President or Chairman, in his or her sole discretion.
5.13 - Lock-up in Event of Initial Public Offering
- ---- -------------------------------------------
The Optionee agrees that, during a period of 180 days from the date of
the Initial Public Offering, Optionee will not, without the prior written
consent of the underwriter(s) of the Initial Public Offering, directly or
indirectly, sell, offer to sell, grant any option for the sale of, or otherwise
dispose of or transfer, any shares of Common Stock issuable upon exercise of the
Option.
5.14 - Dispute Resolution
- ---- ------------------
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 resolved by binding arbitration before a single neutral
arbitrator. The arbitrator shall be selected from the American Arbitration
Association through its procedures. All rules governing the arbitration shall
be the rules as set forth by the American Arbitration Association. The
arbitrator is bound to rule only on whether or not there has been a violation of
the terms of this Agreement and to render an award, if any, that is consistent
with the terms of this Agreement. Neither party to this Agreement is entitled
to any legal recourse or rights or remedies other than those provided within
this Agreement. The arbitrator may apportion the costs of the arbitration,
including arbitrator's
13
<PAGE>
fees, among the parties, but shall have no power to award attorneys' fees. Each
party shall be responsible for its own attorneys' fees.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto.
By
--------------------------------------
President
By
--------------------------------------
Secretary
- -------------------------------
Employee
- -------------------------------
Address
Employee's Taxpayer
Identification Number:
- -------------------------------
14
<PAGE>
EXHIBIT 10.29
FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT
--------------------------------------------
THIS AGREEMENT, dated _________ ___, 1995 is made by and between COMPS
InfoSystems, Inc., a Delaware corporation hereinafter referred to as "Company,"
and __________, hereinafter referred to as "Optionee":
WHEREAS, the Company wishes to afford the Optionee the opportunity to
purchase shares of its $.01 par value non-voting Class B Common Stock; and
WHEREAS, the Company wishes to carry out the Plan (the terms of which are
hereby incorporated by reference and made a part of this Agreement); and
WHEREAS, the Administrator appointed to administer the Plan, has determined
that it would be to the advantage and best interest of the Company and its
shareholders to grant the Non-Qualified Option provided for herein to the
Optionee as an inducement to enter into or remain in a business relationship
with the Company, its Parent Corporations or its Subsidiaries and as an
incentive for increased efforts during such service, and has advised the Company
thereof and instructed the undersigned officers to issue said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
1
DEFINITIONS
-----------
Whenever the following terms are used in this Agreement, they shall have
the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.
1.1 - Administrator
- --- -------------
"Administrator" shall mean: (a) prior to the Initial Public Offering,
the Board, or, in the sole and absolute discretion of the Board, the Committee;
and (b) after the Initial Public Offering, the Committee.
1.2 - Board
- --- -----
"Board" shall mean the Board of Directors of the Company.
1.3 - Code
- --- ----
"Code" shall mean the Internal Revenue Code of 1986, as amended.
<PAGE>
1.4 - Committee
- --- ---------
"Committee" shall mean the Stock Option Committee of the Board,
appointed as provided in the Plan.
1.5 - Common Stock
- --- ------------
"Common Stock" shall mean the Company's non-voting Class B Common
Stock, par value $.01 per share.
1.6 - Company
- --- -------
"Company" shall mean COMPS InfoSystems, Inc.
1.7 - Director
- --- --------
"Director" shall mean a member of the Board.
1.8 - Exchange Act
- --- ------------
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
1.9 - Initial Public Offering
- --- ------------------------
"Initial Public Offering" shall mean the closing of the sale of the
Company's securities pursuant to an underwritten public offering.
1.10 - Officer
- ---- -------
"Officer" shall mean an officer of the Company, as defined in Rule
16a-l(f) under the Exchange Act, as such Rule may be amended in the future.
1.11 - Option
- ---- ------
"Option" shall mean the non-qualified option to purchase Common Stock
of the Company granted under this Agreement.
1.12 - Parent Corporation
- ---- ------------------
"Parent Corporation" shall mean any corporation in an unbroken chain
of corporations ending with the Company if each of the corporations other than
the Company then owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one (1) of the other
corporations in such chain.
1. 13 - Plan
- ----- ----
"Plan" shall mean the Stock Option Plan of COMPS InfoSystems, Inc.
2
<PAGE>
1.14 - Rule 16b-3
- ---- ----------
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange
Act, as such Rule may be amended in the future.
1.15 - Secretary
- ---- ---------
"Secretary" shall mean the Secretary of the Company.
1.16 - Securities Act
- ---- --------------
"Securities Act" shall mean the Securities Act of 1933, as amended.
1.17 - Subsidiary
- ---- ----------
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one (1) of the other corporations in such chain.
1.18 - Termination of Business Relationship
- ---- ------------------------------------
"Termination of Business Relationship" shall mean the time when the
business relationship between the Optionee and the Company, a Parent Corporation
or a Subsidiary is terminated for any reason, with or without cause, including,
but not by way of limitation, a termination by cessation of business,
bankruptcy, contract termination, resignation, discharge or death. The
Administrator, in its absolute discretion, shall determine the effect of all
other matters and questions relating to Termination of Business Relationship,
including, but not by way of limitation, the question of whether a Termination
of Business Relationship resulted from a discharge for good cause.
2
GRANT OF OPTION
---------------
2.1 - Grant of Option
- --- ---------------
In consideration of the Optionee's agreement to remain in the business
relationship with the Company, its Parent Corporations or its Subsidiaries and
for other good and valuable consideration, on the date hereof the Company
irrevocably grants to the Optionee the option to purchase any part or all of an
aggregate of 7,500 shares of its $.01 par value non-voting Class B Common Stock
upon the terms and conditions set forth in this Agreement.
2.2 - Purchase Price
- --- --------------
The purchase price of the shares covered by the Option and shall be
$.30 per share without commission or other charge.
3
<PAGE>
2.3 - Consideration to Company
- --- ------------------------
In consideration of the granting of this Option by the Company, the
Optionee agrees to remain in the business relationship with the Company, a
Parent Corporation or a Subsidiary, with such duties and responsibilities as the
Company shall from time to time prescribe, for a period of at least one (1) year
from the date this Option is granted. Nothing in this Agreement or in the Plan
shall confer upon the Optionee any right to continue in a business relationship
with the Company, any Parent Corporation or any Subsidiary or shall interfere
with or restrict in any way the rights of the Company, its Parent Corporations
and its Subsidiaries, which are hereby expressly reserved, to terminate such
business relationship at any time for any reason whatsoever, with or without
cause.
2.4 - Adjustments in Option
- --- ---------------------
In the event that the outstanding shares of the stock subject to the
Option are changed into or exchanged for a different number or kind of shares of
the Company or other securities of the Company by reason or merger,
consolidation, recapitalization, reclassification, stock split up, stock
dividend or combination of shares, the Administrator shall make an appropriate
and equitable adjustment in the number and kind of shares as to which the
Option, or portions thereof then unexercised, shall be exercisable, to the end
that after such event the Optionee's proportionate interest shall be maintained
as before the occurrence of such event. Such adjustment in the Option shall be
made without change in the total price applicable to the unexercised portion of
the Option (except for any change in the aggregate price resulting from
rounding-off of share quantities or prices) and with any necessary corresponding
adjustment in the Option price per share. Any such adjustment made by the
Administrator shall be final and binding upon the Optionee, the Company and all
other interested persons.
3
PERIOD OF EXERCISABILITY
------------------------
3.1 - Commencement of Exercisability
- --- ------------------------------
(a) Subject to Section 5.6, the Option shall become exercisable in
five (5) cumulative installments as follows:
(i) The first installment shall consist of twenty percent
(20%) of the shares covered by the Option and shall become exercisable upon
the first anniversary of the date the Option is granted.
(ii) The second installment shall consist of twenty percent
(20%) of the shares covered by the Option and shall become exercisable upon
the second anniversary of the date the Option is granted.
(iii) The third installment shall consist of twenty percent
(20%) of the shares covered by the Option and shall become exercisable upon
the third anniversary of the date the Option is granted.
4
<PAGE>
(iv) The fourth installment shall consist of twenty percent
(20%) of the shares covered by the Option and shall become exercisable upon
the fourth anniversary of the date the Option is granted.
(v) The fifth installment shall consist of twenty percent
(20%) of the shares covered by the Option and shall become exercisable upon
the fifth anniversary of the date the Option is granted.
(b) No portion of the Option which is unexercisable at Termination of
Business Relationship shall thereafter become exercisable.
3.2 - Duration of Exercisability
- --- --------------------------
The installments provided for in Section 3.1 are cumulative. Each
such installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
3.3 - Expiration of Option
- --- --------------------
The Option may not be exercised to any extent by anyone after the
first to occur of the following events:
(a) The expiration of ten (10) years from the date the Option was
granted; or
(b) The time of the Optionee's Termination of Business Relationship
unless such Termination of Business Relationship results from his death, his
retirement, his disability or his being discharged not for good cause; or
(c) The expiration of three (3) months from the date of the Optionee's
Termination of Business Relationship by reason of his retirement or his being
discharged not for good cause, unless the Optionee dies within said three-month
period; or
(d) The expiration of one (1) year from the date of the Optionee's
Termination of Business Relationship by reason of his disability; or
(e) The expiration of one (1) year from the date of the Optionee's
death; or
(f) The effective date of either the merger or consolidation of the
Company with or into another corporation, or the acquisition by another
corporation or person of all or substantially all of the Company's assets or
eighty percent (80%) or more of the Company's then outstanding voting stock, or
the liquidation or dissolution of the Company, unless the Administrator waives
this provision in connection with such transaction. At least ten (10) days
prior to the effective date of such merger, consolidation, acquisition,
liquidation or dissolution, the Administrator shall give the Optionee notice of
such event if the Option has then neither been fully exercised nor become
unexercisable under this Section 3.3.
5
<PAGE>
3.4 - Acceleration of Exercisability
- --- ------------------------------
In the event of the merger or consolidation of the Company with or
into another corporation, or the acquisition by another corporation or person of
all or substantially all of the Company's assets or eighty percent (80%) or more
of the Company's then outstanding voting stock, or the liquidation or
dissolution of the Company, the Administrator may, in its absolute discretion
and upon such terms and conditions as it deems appropriate, provide by
resolution, adopted prior to such event and incorporated in the notice referred
to in Section 3.3(f), that at some time prior to the effective date of such
event this Option shall be exercisable as to all the shares covered hereby,
notwithstanding that this Option may not yet have become fully exercisable under
Section 3.1(a); provided, however, that this acceleration of exercisability
shall not take place if:
(a) This Option becomes unexercisable under Section 3.3 prior to said
effective date; or
(b) In connection with such an event, provision is made for an
assumption of this Option or a substitution therefor of a new option by an
employer corporation or a parent or subsidiary of such corporation; and
provided, further, that nothing in this Section 3.4 shall make this Option
exercisable if it is otherwise unexercisable by reason of Section 5.6.
The Administrator may make such determinations and adopt such rules
and conditions as it, in its absolute discretion, deems appropriate in
connection with such acceleration of exercisability, including, but not by way
of limitation, provisions to ensure that any such acceleration and resulting
exercise shall be conditioned upon the consummation of the contemplated
corporate transaction.
4
EXERCISE OF OPTION
------------------
4.1 - Person Eligible to Exercise
- --- ---------------------------
During the lifetime of the Optionee, only he may exercise the Option
or any portion thereof. After the death of the Optionee, any exercisable
portion of the Option may, prior to the time when the Option becomes
unexercisable under Section 3.3, be exercised by his personal representative or
by any person empowered to do so under the Optionee's will or under the then
applicable laws of descent and distribution.
4.2 - Partial Exercise
- --- ----------------
Any exercisable portion of the Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable under Section
3.3; provided, however, that each partial exercise shall be for not less than
One Thousand (1000) shares (or the minimum installment set forth in Section 3.
1, if a smaller number of shares) and shall be for whole shares only.
6
<PAGE>
4.3 - Manner of Exercise
- --- ------------------
The Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary or his office of all of the following prior
to the time when the Option or such portion becomes unexercisable under Section
3.3:
(a) Notice in writing signed by the Optionee or the other person then
entitled to exercise the Option or portion, stating that the Option or portion
is thereby exercised, such notice complying with all applicable rules
established by the Committee; and
(b) (i) Full payment (by cashiers check or wire transfer) for the
shares with respect to which such Option or portion is exercised; or
(i) With the consent of the Administrator, (A) shares of the
Company's Common Stock owned by the Optionee duly endorsed for transfer to
the Company or (B) subject to the timing requirements of Section 4.4,
shares of the Company's Common Stock issuable to the Optionee upon exercise
of the Option, with a fair market value (as determined under Section 4.2(b)
of the Plan) on the date of Option exercise equal to the aggregate purchase
price of the shares with respect to which such Option or portion is
exercised; or
(ii) With the consent of the Administrator, a promissory note
bearing interest (at no less than such rate as shall then preclude the
imputation of interest under the Code or successor provision) and payable
upon such terms as may be prescribed by the Administrator. The
Administrator may also prescribe the form of such note and the security to
be given for such note. That Option may not be exercised, however, by
delivery of a promissory note or by a loan from the Company when or where
such loan or other extension of credit is prohibited by law; or
(iii) With the consent of the Administrator, any combination of
the consideration provided in the foregoing subparagraphs (i) - (iii); and
(c) A bona fide written representation and agreement, in a form
satisfactory to the Administrator, signed by the Optionee or other person then
entitled to exercise such Option or portion, stating that the shares of stock
are being acquired for his own account, for investment and without any present
intention of distributing or reselling said shares or any of them except as may
be permitted under the Securities Act and then applicable rules and regulations
thereunder, and that the Optionee or other person then entitled to exercise such
Option or portion will indemnify the Company against and hold it free and
harmless from any loss, damage, expense or liability resulting to the Company if
any sale or distribution of the shares by such person is contrary to the
representation and agreement referred to above. The Administrator may, in its
absolute discretion, take whatever additional actions it deems appropriate to
insure the observance and performance of such representation and agreement and
to effect compliance with the Securities Act and any other federal or state
securities laws or regulations. Without limiting the generality of the
foregoing, the Administrator may require an opinion of counsel acceptable to it
to the effect that any subsequent transfer of shares acquired on an Option
exercise does not violate the Securities Act, and may issue stop-transfer orders
covering such shares. Share
7
<PAGE>
certificates evidencing stock issued on exercise of this Option shall bear an
appropriate legend referring to the provisions of this subsection (c) and the
agreements herein. The written representation and agreement referred to in the
first sentence of this subsection (c) shall, however, not be required if the
shares to be issued pursuant to such exercise have been registered under the
Securities Act, and such registration is then effective in respect of such
shares; and
(d) Full payment to the Company (or other employer corporation) of all
amounts which, under federal, state or local tax law, it is required to withhold
upon exercise of the Option; with the consent of the Administrator, (i) shares
of the Company's Common Stock owned by the Optionee duly endorsed for transfer,
or (ii) subject to the timing requirements of Section 4.4, shares of the
Company's Common Stock issuable to the Optionee upon exercise of the Option,
valued in accordance with Section 4.2(b) of the Plan at the date of Option
exercise, may be used to make all or part of such payment; and
(e) In the event the Option or portion shall be exercised pursuant to
Section 4.1 by any person or persons other than the Optionee, appropriate proof
of the right of such person or persons to exercise the Option.
4.4 - Certain Timing Requirements
- --- ---------------------------
Shares of the Company's Common Stock issuable to the Optionee upon
exercise of the Option may be used to satisfy the Option price or the tax
withholding consequences of such exercise only (i) during the period beginning
on the third (3rd) business day following the date of release of the quarterly
or annual summary statement of sales and earnings of the Company and ending on
the twelfth (12th) business day following such date or (ii) pursuant to an
irrevocable written election by the Optionee to use shares of the Company's
Common Stock issuable to the Optionee upon exercise of the Option to pay all or
part of the Option price or the withholding taxes (subject to the approval of
the Administrator) made at least six (6) months prior to the payment of such
Option price or withholding taxes.
4.5 - Conditions to Issuance of Stock Certificates
- --- --------------------------------------------
The shares of stock deliverable upon the exercise of the Option, or
any portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The admission of such shares to listing on all stock exchanges on
which such class of stock is then listed; and
(b) The completion of any registration or other qualification of such
shares under any state or federal law or under rulings or regulations of the
Securities and Exchange Commission or of any other governmental regulatory body,
which the Administrator shall, in its absolute discretion, deem necessary or
advisable; and
8
<PAGE>
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Administrator shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The payment to the Company (or other employer corporation) of all
amounts which, under federal, state or local tax law, it is required to withhold
upon exercise of the Option; and
(e) The lapse of such reasonable period of time following the exercise
of the Option as the Administrator may from time to time establish for reasons
of administrative convenience.
4.6 - Rights as Shareholder
- --- ---------------------
The holder of the Option shall not be, nor have any of the rights or
privileges of, a shareholder of the Company in respect of any shares purchasable
upon the exercise of any part of the Option unless and until certificates
representing such shares shall have been issued by the Company to such holder.
5
OTHER PROVISIONS
5.1 - Administration
- --- --------------
The Administrator shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or revoke
any such rules. All actions taken and all interpretations and determinations
made by the Administrator in good faith shall be final and binding upon the
Optionee, the Company and all other interested persons. No member of the
Administrator shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Option. In
the event that the Administrator is the Committee, the Board shall have no right
to exercise any of the rights or duties of the Committee under the Plan and this
Agreement.
5.2 - Option Not Transferable
- --- -----------------------
Neither the Option nor any interest or right therein or part thereof
shall be liable for the debts, contracts or engagements of the Optionee or his
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 5.2
shall not prevent transfers by will or by the applicable laws of descent and
distribution.
9
<PAGE>
5.3 - Shares to Be Reserved
- --- ---------------------
The Company shall at all times during the term of the Option reserve
and keep available such number of shares of stock as will be sufficient to
satisfy the requirements of this Agreement.
5.4 - Notices
- --- -------
Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Optionee shall be addressed to him at the address
given beneath his signature hereto. By a notice given pursuant to this Section
5.4, either party may hereafter designate a different address for notices to be
given to him. Any notice which is required to be given to the Optionee shall,
if the Optionee is then deceased, be given to the Optionee's personal
representative if such representative has previously informed the Company of his
status and address by written notice tinder this Section 5.4. Any notice shall
be deemed duly given when enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, deposited (with postage prepaid) in a post office or
branch post office regularly maintained by the United States Postal Service.
5.5 - Titles
- --- ------
Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.
5.6 - Shareholder Approval
- ---- --------------------
The Plan will be submitted for approval by the Company's shareholders
within twelve (12) months after the date the Plan was initially adopted by the
Board. This Option may not be exercised to any extent by anyone prior to the
time when the Plan is approved by the shareholders, and if such approval has not
been obtained by the end of said twelve-month period, this Option shall
thereupon be cancelled and become null and void. The Company shall take such
actions as may be necessary to satisfy the requirements of Rule 16b-3(b).
5.7 - Construction
- --- ------------
This Agreement shall be administered, interpreted and enforced under
the laws of the State of Delaware.
5.8 - Conformity to Securities Laws
- --- -----------------------------
The Optionee acknowledges that the Plan is intended to conform to the
extent necessary with all provisions of the Securities Act and the Exchange Act
and any and all regulations and rules promulgated by the Securities and Exchange
Commission thereunder, including without limitation Rule 16b-3. Notwithstanding
anything herein to the contrary, the Plan shall be administered, and the Option
is granted and may be exercised, only in such a manner as to conform to such
laws, rules and regulations. To the extent permitted by applicable law, the
Plan and this Agreement shall be deemed amended to the extent necessary to
conform to such laws, rules and regulations.
10
<PAGE>
5.9 - Company's Right to Repurchase Shares
- --- ------------------------------------
Upon Termination of Business Relationship, the Company shall have the
option to repurchase all (but not less than all) of the shares of stock which
have been purchased by the Optionee pursuant to exercise of the Option and which
the Optionee then holds. The repurchase price payable by the Company if it
exercises its repurchase option shall be the fair market value of the shares of
stock on the date of repurchase, determined in accordance with Section 4.2 of
the Plan, except that if at the date of such repurchase, the Company's common
stock is not publicly traded, the fair market value of the shares of stock shall
be determined for purposes of this Section 5.9 on the basis of the following
formula: eight (8) times the Company's pre-tax earnings for the Company's most
recently audited fiscal year divided by the number of outstanding shares of the
Company's common stock (including shares issuable upon the conversion of
outstanding shares of preferred stock) on the date of repurchase.
The Company's repurchase option shall be exercisable by giving written
notice to the Optionee within thirty (30) calendar days after the Termination of
Business Relationship provided, however, that in the event that the Optionee
-------- -------
exercises the Option after the Optionee's Termination of Business Relationship
but prior to the expiration of the Option pursuant to the provisions of Section
3.3, the Company's repurchase option shall be exercisable by giving written
notice within thirty (30) calendar days after the exercise of the Option by the
Optionee. In the event that the Company exercises its option to repurchase
shares of stock from the Optionee pursuant to this Section 5.9, the Optionee
shall sign a general release acknowledging that the Optionee has no further
right, claim or title to such shares. Upon receipt of such general release and
the stock certificates representing the shares, the Company shall forward
payment for such shares.
5.10 - Restrictions on Transfer of Shares
- ---- ----------------------------------
(a) There can be no valid transfer (as hereinafter defined) of any
shares of stock purchased on exercise of the Option, or any interest in such
shares, by any holder of such shares or interests unless such transfer is solely
for cash consideration and is made in compliance with the following provisions:
(i) Before there can be a valid transfer of any shares or any
interest therein, the record holder of the shares to be transferred (the
"Offered Shares") shall give written notice (by registered or certified
mail) to the Company. Such notice shall specify the identity of the
proposed transferee, the cash price offered for the Offered Shares by the
proposed transferee and the other terms and conditions of the proposed
transfer. The date such notice is mailed shall be hereinafter referred to
as the "notice date" and the record holder of the Offered Shares shall be
hereinafter referred to as the "Offeror.
(ii) For a period of thirty (30) calendar days after the notice
date, the Company shall have the option to purchase all (but not less than
all) of the Offered Shares at the purchase price and on the terms set forth
in subsection (a)(3) of this Section 5.10. This option shall be
exercisable by the Company by mailing (by registered or
11
<PAGE>
certified mail) written notice of exercise to the Offeror prior to the end
of said thirty (30) days.
(iii) The price at which the Company may purchase the Offered
Shares pursuant to the exercise of such option shall be the lower of the
cash price offered for the Offered Shares by the proposed transferee (as
set forth in the notice required under subsection (a)(i) of this Section 5.
10) or the fair market value. The Company's notice of exercise of such
option shall be accompanied by full payment for the Offered Shares and,
upon such payment by the Company, the Company shall acquire full right,
title and interest to all of the Offered Shares.
(iv) If, and only if, the option given pursuant to subsection
(a)(ii) of this Section 5.10 is not exercised, the transfer proposed in the
notice given pursuant to subsection (a)(i) of this Section 5.10 may take
place; provided, however, that such transfer must, in all respects, be
exactly as proposed in said notice except that such transfer may not take
place either before the tenth (10th) calendar day after the expiration of
said thirty-day option exercise period or after the ninetieth (90th)
calendar day after the expiration of said thirty-day option exercise
period, and if such transfer has not taken place prior to said ninetieth
(90th) day, such transfer may not take place without once again complying
with subsection (a) of this Section 5.10.
(b) As used in this Section 5. 10, the term "transfer" means any sale,
encumbrance, pledge, gift or other form of disposition or transfer of shares of
the Company's stock or any legal or equitable interest therein; provided,
however, that the term "transfer" does not include a transfer of such shares or
interests by will or by the applicable laws of descent and distribution or a
gift of such shares if the transferee or donee agrees to be bound by the
provisions of this Section 5. 10.
(c) None of the shares of the Company's stock purchased on exercise of
the Option shall be transferred on the Company's books nor shall the Company
recognize any such transfer of any such shares or any interest therein unless
and until all applicable provisions of this Section 5.10 have been complied with
in all respects. The certificates of stock evidencing shares of stock purchased
on exercise of the Option shall bear an appropriate legend referring to the
transfer restrictions imposed by this Section 5.10 and to the repurchase option
provided for in Section 5.9.
5.11 - Lock-up in Event of Initial Public Offering
- ---- -------------------------------------------
The Optionee agrees that, during a period of 180 days from the date of
the Initial Public Offering, Optionee will not, without the prior written
consent of the underwriter(s) of the Initial Public Offering, directly or
indirectly, sell, offer to sell, grant any option for the sale of, or otherwise
dispose of or transfer, any shares of Common Stock issuable upon exercise of the
Option.
12
<PAGE>
5.12 - Dispute Resolution
- ---- ------------------
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 resolved by binding arbitration before a single neutral
arbitrator. The arbitrator shall be selected from the American Arbitration
Association through its procedures. All rules governing the arbitration shall
be the rules as set forth by the American Arbitration Association. The
arbitrator is bound to rule only on whether or not there has been a violation of
the terms of this Agreement and to render an award, if any, that is consistent
with the terms of this Agreement. Neither party to this Agreement is entitled
to any legal recourse or rights or remedies other than those provided within
this Agreement. The arbitrator may apportion the costs of the arbitration,
including arbitrator's fees, among the parties, but shall have no power to award
attorneys' fees. Each party shall be responsible for its own attorneys' fees.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto.
By
------------------------------
President
By
------------------------------
Secretary
- ------------------------------
Optionee
- ------------------------------
- ------------------------------
Address
Optionee's Taxpayer
Identification Number:
- ------------------------------
13
<PAGE>
EXHIBIT 10.30
THE 1998 EQUITY PARTICIPATION PLAN
OF
COMPS INFOSYSTEMS, INC.
COMPS InfoSystems, Inc., a Delaware corporation, has adopted The 1998
Equity Participation Plan of COMPS InfoSystems, Inc. (the "Plan"), effective
October 28, 1998, for the benefit of its eligible employees, consultants and
directors.
The purposes of the Plan are as follows:
(1) To provide an additional incentive for directors, key Employees
and Consultants (as such terms are defined below) to further the growth,
development and financial success of the Company by personally benefiting
through the ownership of Company stock and/or rights which recognize such
growth, development and financial success.
(2) To enable the Company to obtain and retain the services of
directors, key Employees and Consultants considered essential to the long range
success of the Company by offering them an opportunity to own stock in the
Company and/or rights which will reflect the growth, development and financial
success of the Company.
ARTICLE I.
DEFINITIONS
1.1. General. Wherever the following terms are used in the Plan they
-------
shall have the meanings specified below, unless the context clearly indicates
otherwise.
1.2. Administrator. "Administrator" shall mean the entity that
-------------
conducts the general administration of the Plan as provided herein. With
reference to the administration of the Plan with respect to Options granted to
Independent Directors, the term "Administrator" shall refer to the Board. With
reference to the administration of the Plan with respect to any other award, the
term "Administrator" shall refer to the Committee unless the Board has assumed
the authority for administration of the Plan generally as provided in Section
10.1.
1.3. Award. "Award" shall mean an Option, a Restricted Stock award,
-----
a Performance Award, a Dividend Equivalents award, a Deferred Stock award, a
Stock Payment award or a Stock Appreciation Right which may be awarded or
granted under the Plan (collectively, "Awards").
1.4. Award Agreement. "Award Agreement" shall mean a written
---------------
agreement executed by an authorized officer of the Company and the Holder which
shall contain such terms and conditions with respect to an Award as the
Administrator shall determine, consistent with the Plan.
1.5. Award Limit. "Award Limit" shall mean 400,000 shares of Common
-----------
Stock, as adjusted pursuant to Section 11.3 of the Plan.
<PAGE>
1.6. Board. "Board" shall mean the Board of Directors of the
-----
Company.
1.7. Code. "Code" shall mean the Internal Revenue Code of 1986, as
----
amended.
1.8. Committee. "Committee" shall mean the Compensation Committee of
---------
the Board, or another committee or subcommittee of the Board, appointed as
provided in Section 10.1.
1.9. Common Stock. "Common Stock" shall mean the non-voting Class B
------------
common stock of the Company, par value $.01 per share, and any equity security
of the Company issued or authorized to be issued in the future, but excluding
any preferred stock and any warrants, options or other rights to purchase Common
Stock.
1.10. Company. "Company" shall mean COMPS InfoSystems, Inc., a
-------
Delaware corporation.
1.11. Consultant. "Consultant" shall mean any consultant or adviser
----------
if:
(a) the consultant or adviser renders bona fide services to the
Company;
(b) the services rendered by the consultant or adviser are not in
connection with the offer or sale of securities in a capital-raising transaction
and do not directly or indirectly promote or maintain a market for the Company's
securities; and
(c) the consultant or adviser is a natural person who has contracted
directly with the Company to render such services.
1.12. Deferred Stock. "Deferred Stock" shall mean Common Stock
--------------
awarded under Article VIII of the Plan.
1.13. Director. "Director" shall mean a member of the Board.
--------
1.14. Dividend Equivalent. "Dividend Equivalent" shall mean a right
-------------------
to receive the equivalent value (in cash or Common Stock) of dividends paid on
Common Stock, awarded under Article VIII of the Plan.
1.15. DRO. "DRO" shall mean a domestic relations order as defined by
---
the Code or Title I of the Employee Retirement Income Security Act of 1974, as
amended, or the rules thereunder.
1.16. Employee. "Employee" shall mean any officer or other employee
--------
(as defined in accordance with Section 3401(c) of the Code) of the Company, or
of any corporation which is a Subsidiary.
1.17. Exchange Act. "Exchange Act" shall mean the Securities
------------
Exchange Act of 1934, as amended.
2
<PAGE>
1.18. Fair Market Value. "Fair Market Value" of a share of Common
-----------------
Stock as of a given date shall be (a) the closing price of a share of Common
Stock on the principal exchange on which shares of Common Stock are then
trading, if any (or as reported on any composite index which includes such
principal exchange), on the trading day previous to such date, or if shares were
not traded on the trading day previous to such date, then on the next preceding
date on which a trade occurred, or (b) if Common Stock is not traded on an
exchange but is quoted on NASDAQ or a successor quotation system, the mean
between the closing representative bid and asked prices for the Common Stock on
the trading day previous to such date as reported by NASDAQ or such successor
quotation system; or (c) if Common Stock is not publicly traded on an exchange
and not quoted on NASDAQ or a successor quotation system, the Fair Market Value
of a share of Common Stock as established by the Administrator acting in good
faith.
1.19. Holder. "Holder" shall mean a person who has been granted or
------
awarded an Award.
1.20. Incentive Stock Option. "Incentive Stock Option" shall mean an
----------------------
option which conforms to the applicable provisions of Section 422 of the Code
and which is designated as an Incentive Stock Option by the Administrator.
1.21. Independent Director. "Independent Director" shall mean a
--------------------
member of the Board who is not an Employee of the Company.
1.22. Non-Qualified Stock Option. "Non-Qualified Stock Option" shall
--------------------------
mean an Option which is not designated as an Incentive Stock Option by the
Administrator.
1.23. Option. "Option" shall mean a stock option granted under
------
Article IV of the Plan. An Option granted under the Plan shall, as determined
by the Administrator, be either a Non-Qualified Stock Option or an incentive
Stock Option; provided, however, that Options granted to Independent Directors
and Consultants shall be Non-Qualified Stock Options.
1.24. Performance Award. "Performance Award" shall mean a cash
-----------------
bonus, stock bonus or other performance or incentive award that is paid in cash,
Common Stock or a combination of both, awarded under Article VIII of the Plan.
1.25. Performance Criteria. "Performance Criteria" shall mean the
--------------------
following business criteria with respect to the Company, any Subsidiary or any
division or operating unit: (a) net income, (b) pre-tax income, (c) operating
income, (d) cash flow, (e) earnings per share, (f) return on equity, (g) return
on invested capital or assets, (h) cost reductions or savings, (i) funds from
operations, (j) appreciation in the fair market value of Common Stock and (k)
earnings before any one or more of the following items: interest, taxes,
depreciation or amortization.
1.26. Plan. "Plan" shall mean The 1998 Equity Participation Plan of
----
COMPS Infosystems, Inc.
1.27. Restricted Stock. "Restricted Stock" shall mean Common Stock
----------------
awarded under Article VII of the Plan.
3
<PAGE>
1.28. Rule 16b-3. "Rule 16b-3" shall mean that certain Rule 16b-3
----------
under the Exchange Act, as such Rule may be amended from time to time.
1.29. Section 162(m) Participant. "Section 162(m) Participant" shall
--------------------------
mean any key Employee designated by the Administrator as a key Employee whose
compensation for the fiscal year in which the key Employee is so designated or a
future fiscal year may be subject to the limit on deductible compensation
imposed by Section 162(m) of the Code.
1.30. Securities Act. "Securities Act" shall mean the Securities Act
--------------
of 1933, as amended.
1.31. Stock Appreciation Right. "Stock Appreciation Right" shall
------------------------
mean a stock appreciation right granted under Article IX of the Plan.
1.32. Stock Payment. "Stock Payment" shall mean (a) a payment in the
-------------
form of shares of Common Stock, or (b) an option or other right to purchase
shares of Common Stock, as part of a deferred compensation arrangement, made in
lieu of all or any portion of the compensation, including without limitation,
salary, bonuses and commissions, that would otherwise become payable to a key
Employee or Consultant in cash, awarded under Article VIII of the Plan.
1.33. Subsidiary. "Subsidiary" shall mean any corporation in an
----------
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain then owns
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.
1.34. Substitute Award. "Substitute Award" shall mean an Option
----------------
granted under this Plan upon the assumption of, or in substitution for,
outstanding equity awards previously granted by a company or other entity in
connection with a corporate transaction, such as a merger, combination,
consolidation or acquisition of property or stock; provided, however, that in no
------- -------
event shall the term "Substitute Award" be construed to refer to an award made
in connection with the cancellation and repricing of an Option.
1.35. Termination of Consultancy. "Termination of Consultancy" shall
--------------------------
mean the time when the engagement of a Holder as a Consultant to the Company or
a Subsidiary is terminated for any reason, with or without cause, including, but
not by way of limitation, by resignation, discharge, death or retirement; but
excluding terminations where there is a simultaneous commencement of employment
with the Company or any Subsidiary. The Administrator, in its absolute
discretion, shall determine the effect of all matters and questions relating to
Termination of Consultancy, including, but not by way of limitation, the
question of whether a Termination of Consultancy resulted from a discharge for
good cause, and all questions of whether a particular leave of absence
constitutes a Termination of Consultancy, Notwithstanding any other provision
of the Plan, the Company or any Subsidiary has an absolute and unrestricted
right to terminate a Consultant's service at any time for any reason whatsoever,
with or without cause, except to the extent expressly provided otherwise in
writing.
1.36. Termination of Directorship. "Termination of Directorship"
---------------------------
shall mean the time when a Holder who is an Independent Director ceases to be a
Director for any reason,
4
<PAGE>
including, but not by way of limitation, a termination by resignation, failure
to be elected, death or retirement. The Board, in its sole and absolute
discretion, shall determine the effect of all matters and questions relating to
Termination of Directorship with respect to Independent Directors.
1.37. Termination of Employment "Termination of Employment" shall
-------------------------
mean the time when the employee-employer relationship between a Holder and the
Company or any Subsidiary is terminated for any reason, with or without cause,
including, but not by way of limitation, a termination by resignation,
discharge, death, disability or retirement; but excluding (a) terminations where
there is a simultaneous reemployment or continuing employment of a Holder by the
Company or any Subsidiary, (b) at the discretion of the Administrator,
terminations which result in a temporary severance of the employee-employer
relationship, and (c) at the discretion of the Administrator, terminations which
are followed by the simultaneous establishment of a consulting relationship by
the Company or a Subsidiary with the former employee. The Administrator, in its
absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Employment, including, but not by way of limitation,
the question of whether a Termination of Employment resulted from a discharge
for good cause, and all questions of whether a particular leave of absence
constitutes a Termination of Employment; provided, however, that, with respect
-------- -------
to Incentive Stock Options, unless otherwise determined by the Administrator in
its discretion, a leave of absence, change in status from an employee to an
independent contractor or other change in the employee-employer relationship
shall constitute a Termination of Employment if, and to the extent that, such
leave of absence, change in status or other change interrupts employment for the
purposes of Section 422(a)(2) of the Code and the then applicable regulations
and revenue rulings under said Section.
ARTICLE II.
SHARES SUBJECT TO PLAN
2.1. Shares Subject to Plan.
----------------------
(a) The shares of stock subject to Awards shall be Common
Stock, initially shares of the Company's Common Stock, par value $.01 per
share. The aggregate number of such shares which may be issued upon
exercise of such Options or rights or upon any such awards under the Plan,
together with the aggregate number of shares of the Company's Common Stock
which may be issued upon exercise of options to acquire shares of the
Company's Common Stock granted under the Amended and Restated Stock Option
Plan of COMPS InfoSystems, Inc., shall not exceed 1,944,909. The shares of
Common Stock issuable upon exercise of such Options or rights or upon any
such awards may be either previously authorized but unissued shares or
treasury shares.
(b) The maximum number of shares which may be subject to
Awards, granted under the Plan to any individual in any fiscal year shall
not exceed the Award Limit. To the extent required by Section 162(m) of the
Code, shares subject to Options which are canceled continue to be counted
against the Award Limit.
5
<PAGE>
2.2. Add-back of Options and Other Rights. If any Option, or other
------------------------------------
right to acquire shares of Common Stock under any other Award under the Plan,
expires or is canceled without having been fully exercised, or is exercised in
whole or in part for cash as permitted by the Plan, the number of shares subject
to such Option or other right but as to which such Option or other right was not
exercised prior to its expiration, cancellation or exercise may again be
optioned, granted or awarded hereunder, subject to the limitations of Section
2.1. Furthermore, any shares subject to Awards which are adjusted pursuant to
Section 11.3 and become exercisable with respect to shares of stock of another
corporation shall be considered canceled and may again be optioned, granted or
awarded hereunder, subject to the limitations of Section 2.1. Shares of Common
Stock which are delivered by the Holder or withheld by the Company upon the
exercise of any Award under the Plan, in payment of the exercise price thereof
or tax withholding thereon, may again be optioned, granted or awarded hereunder,
subject to the limitations of Section 2.1. If any shares of Restricted Stock
are surrendered by the Holder or repurchased by the Company pursuant to Section
7.4 or 7.5 hereof, such shares may again be optioned, granted or awarded
hereunder, subject to the limitations of Section 2.1. Notwithstanding the
provisions of this Section 2.2, no shares of Common Stock may again be optioned,
granted or awarded if such action would cause an Incentive Stock Option to fail
to qualified as an incentive stock option under Section 422 of the Code.
ARTICLE III.
GRANTING OF AWARDS
3.1. Award Agreement. Each Award shall be evidenced by an Award
---------------
Agreement. Award Agreements evidencing Awards intended to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the Code
shall contain such terms and conditions as may be necessary to meet the
applicable provisions of Section 162(m) of the Code. Award Agreements
evidencing Incentive Stock Options shall contain such terms and conditions as
may be necessary to meet the applicable provisions of Section 422 of the Code.
3.2. Provisions Applicable to Section 167(m) Participants.
----------------------------------------------------
(a) The Committee, in its discretion, may determine whether an Award
is to qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code.
(b) Notwithstanding anything in the Plan to the contrary, the
Committee may grant any Award to a Section 162(m) Participant, including
Restricted Stock, the restrictions with respect to which lapse upon the
attainment of performance goals which are related to one or more of the
Performance Criteria and any performance or incentive award described in Article
VIII that vests or becomes exercisable or payable upon the attainment of
performance goals which are related to one or more of the Performance Criteria.
(c) To the extent necessary to comply with the performance-based
compensation requirements of Section 162(m)(4)(C) of the Code, with respect to
any Award granted under Articles VII and VIII which may be granted to one or
more Section 162(m) Participants, no later than ninety (90) days following the
commencement of any fiscal year in question or any other designated fiscal
period or period of service (or such other time as may be
6
<PAGE>
required or permitted by Section 162(m) of the Code), the Committee shall, in
writing, (i) designate one or more Section 162(m) Participants, (ii) select the
Performance Criteria applicable to the fiscal year or other designated fiscal
period or period of service, (iii) establish the various performance targets, in
terms of an objective formula or standard, and amounts of such Awards, as
applicable, which may be earned for such fiscal year or other designated fiscal
period or period of service and (iv) specify the relationship between
Performance Criteria and the performance targets and the amounts of such Awards,
as applicable, to be earned by each Section 162(m) Participant for such fiscal
year or other designated fiscal period or period of service. Following the
completion of each fiscal year or other designated fiscal period or period of
service, the Committee shall certify in writing whether the applicable
performance targets have been achieved for such fiscal year or other designated
fiscal period or period of service. In determining the amount earned by a
Section 162(m) Participant, the Committee shall have the right to reduce (but
not to increase) the amount payable at a given level of performance to take into
account additional factors that the Committee may deem relevant to the
assessment of individual or corporate performance for the fiscal year or other
designated fiscal period or period of service.
(d) Furthermore, notwithstanding any other provision of the Plan or
any Award which is granted to a Section 162(m) Participant and is intended to
qualify as performance-based compensation as described in Section 162(m)(4)(C)
of the Code shall be subject to any additional limitations set forth in Section
162(m) of the Code (including any amendment to Section 162(m) of the Code) or
any regulations or rulings issued thereunder that are requirements for
qualification as performance-based compensation as described in Section
162(m)(4)(C) of the Code, and the Plan shall be deemed amended to the extent
necessary to conform to such requirements.
3.3. Limitations Applicable to Section 16 Persons. Notwithstanding
--------------------------------------------
any other provision of the Plan, the Plan, and any Award granted or awarded to
any individual who is then subject to Section 16 of the Exchange Act, shall be
subject to any additional limitations set forth in any applicable exemptive rule
under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of
the Exchange Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, the Plan and Awards granted or
awarded hereunder shall be deemed amended to the extent necessary to conform to
such applicable exemptive rule.
3.4. Consideration. In consideration of the granting of an Award
-------------
under the Plan, the Holder shall agree, in the Award Agreement, to remain in the
employ of (or to consult for or to serve as an Independent Director of, as
applicable) the Company or any Subsidiary for a period of at least one year (or
such shorter period as may be fixed in the Award Agreement or by action of the
Administrator following grant of the Award) after the Award is granted (or, in
the case of an Independent Director, until the next annual meeting of
stockholders of the Company).
3.5. At-Will Employment. Nothing in the Plan or in any Award
------------------
Agreement hereunder shall confer upon any Holder any right to continue in the
employ of, or as a Consultant for, the Company or any Subsidiary, or as a
director of the Company, or shall interfere with or restrict in any way the
rights of the Company and any Subsidiary, which are hereby expressly reserved,
to discharge any Holder at any time for any reason whatsoever, with or without
cause,
7
<PAGE>
except to the extent expressly provided otherwise in a written employment
agreement between the Holder and the Company and any Subsidiary.
ARTICLE IV.
GRANTING OF OPTIONS TO EMPLOYEES,
CONSULTANTS AND INDEPENDENT DIRECTORS
4.1. Eligibility. Any Employee or Consultant selected by the
-----------
Committee pursuant to Section 4.4(a)(i) shall be eligible to be granted an
Option. Each Independent Director of the Company shall be eligible to be
granted Options at the times and in the manner set forth in Section 4.5.
4.2. Disqualification for Stock Ownership. No person may be granted
------------------------------------
an Incentive Stock Option under the Plan if such person, at the time the
Incentive Stock Option is granted, owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or any then existing Subsidiary or parent corporation (within the meaning of
Section 422 of the Code) unless such Incentive Stock Option conforms to the
applicable provisions of Section 422 of the Code.
4.3. Qualification of Incentive Stock Options. No Incentive Stock
----------------------------------------
Option shall be granted to any person who is not an Employee.
4.4. Granting of Options to Employees and Consultants.
------------------------------------------------
(a) The Committee shall from time to time, in its absolute
discretion, and subject to applicable limitations of the Plan:
(i) Determine which Employees are key Employees and select
from among the key Employees or Consultants (including Employees or
Consultants who have previously received Awards under the Plan) such of
them as in its opinion should be granted Options;
(ii) Subject to the Award Limit, determine the number of shares
to be subject to such Options granted to the selected key Employees or
Consultants;
(iii) Subject to Section 4.3, determine whether such Options are
to be Incentive Stock Options or Non-Qualified Stock Options and whether
such Options are to qualify as performance-based compensation as described
in Section 162(m)(4)(C) of the Code; and
(iv) Determine the terms and conditions of such Options,
consistent with the Plan; provided, however, that the terms and conditions
-------- -------
of Options intended to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code shall include, but not be
limited to, such terms and conditions as may be necessary to meet the
applicable provisions of Section 162(m) of the Code.
8
<PAGE>
(b) Upon the selection of a key Employee or Consultant to be granted
an Option, the Committee shall instruct the Secretary of the Company to issue
the Option and may impose such conditions on the grant of the Option as it deems
appropriate.
(c) Any Incentive Stock Option granted under the Plan may be
modified by the Committee, with the consent of the Holder, to disqualify such
Option from treatment as an "incentive stock option" under Section 422 of the
Code.
4.5. Granting of Options to Independent Directors.
--------------------------------------------
(a) During the term of the Plan, a person who is an
Independent Director at the time of his or her initial election to the
Board automatically shall be granted an Option to purchase 5,000 shares of
Common Stock (subject to adjustment as provided in Section 11.3). Members
of the Board who are employees of the Company who subsequently retire from
the Company and remain on the Board will not receive an initial Option
grant pursuant to the preceding sentence.
(b) Notwithstanding Section 4.5(a), the Board shall from time
to time, in its absolute discretion, and subject to applicable limitations
of the Plan:
(i) Select from among the Independent Directors
(including Independent Directors) who have previously received Options
under the Plan such of them as in its opinion should be granted
Options;
(ii) Subject to the Award Limit, determine the number of
shares to be subject to such Options granted to the selected
Independent Directors;
(iv) Subject to the provisions of Article V, determine the
terms and conditions of such Options, consistent with the Plan.
(c) All the foregoing Option grants authorized by this Section
4.5 are subject to stockholder approval of the Plan.
ARTICLE V.
TERMS OF OPTIONS
5.1. Option Price. The price per share of the shares subject to each
------------
Option granted to Employees and Consultants shall be set by the Committee;
provided, however, that such price shall be no less than 85% of the Fair Market
- -------- -------
Value of a share of Common Stock on the date the Option is granted and:
(a) in the case of Incentive Stock Options, such price shall
not be less than 100% of the Fair Market Value of a share of Common Stock
on the date the Option is granted (or the date the Option is modified,
extended or renewed for purposes of Section 424(h) of the Code); and
9
<PAGE>
(b) in the case of Options granted to an individual then
owning (within the meaning of Section 424(d) of the Code) more than 10% of
the total combined voting power of all classes of stock of the Company or
any Subsidiary or parent corporation thereof (within the meaning of Section
422 of the Code), such price shall not be less than 110% of the Fair Market
Value of a share of Common Stock on the date the Option is granted (or the
date the Option is modified, extended or renewed for purposes of Section
424(h) of the Code).
5.2. Option Term. The term of an Option granted to an Employee or
-----------
consultant shall be set by the Committee in its discretion; provided, however,
-------- --------
that the term of any Option shall not be more than ten (10) years from the date
the Option is granted or, in the case of any Incentive Stock Option, five (5)
years from the date the Incentive Stock Option is granted if the Incentive Stock
Option is granted to an individual then owning (within the meaning of Section
424(d) of the Code) more than 10% of the total combined voting power of all
classes of stock of the Company or any Subsidiary or parent corporation thereof
(within the meaning of Section 422 of the Code). Except as limited by
applicable state law or the requirements of Section 422 of the Code and
regulations and rulings thereunder applicable to Incentive Stock Options, the
Committee may extend the term of any outstanding Option in connection with any
Termination of Employment or Termination of Consultancy of the Holder, or amend
any other term or condition of such Option relating to such a termination.
5.3. Option Vesting
--------------
(a) The period during which the right to exercise, in whole or
in part, an Option granted to an Employee or a Consultant vests in the
Holder shall be set by the Committee and the Committee may determine that
an Option may not be exercised in whole or in part for a specified period
after it is granted; provided, however, that the rate at which an Option
-------- -------
granted to an Employee or a Consultant vests shall be no less than 20% per
year over five (5) years from the date the Option is granted, and provided,
--------
further, that, unless the Committee otherwise provides in the terms of the
-------
Award Agreement or otherwise, no Option shall be exercisable by any Holder
who is then subject to Section 16 of the Exchange Act within the period
ending six months and one day after the date the Option is granted. At any
time after grant of an Option, the Committee may, in its sole and absolute
discretion and subject to whatever terms and conditions it selects,
accelerate the period during which an Option granted to an Employee or
Consultant vests.
(b) No portion of an Option granted to an Employee or
Consultant which is unexercisable at Termination of Employment or
Termination of Consultancy, as applicable, shall thereafter become
exercisable, except as may be otherwise provided by the Committee either in
the Award Agreement or by action of the Committee following the grant of
the Option.
(c) To the extent that the aggregate Fair Market Value of
stock with respect to which "incentive stock options" (within the meaning
of Section 422 of the Code, but without regard to Section 422(d) of the
Code) are exercisable for the first time by a Holder during any calendar
year (under the Plan and all other incentive stock option
10
<PAGE>
plans of the Company and any parent or subsidiary corporation, within the
meaning of Section 422 of the Code) of the Company, exceeds $100,000, such
Options shall be treated as Non-Qualified Options to the extent required by
Section 422 of the Code. The rule set forth in the preceding sentence shall
be applied by taking Options into account in the order in which they were
granted. For purposes of this Section 5.3(c), the Fair Market Value of
stock shall be determined as of the time the Option with respect to such
stock is granted.
5.4. Terms of Options Granted to Independent Directors. The price
-------------------------------------------------
per share of the shares subject to each Option granted to an Independent
Director shall equal 100% of the Fair Market Value of a share of Common Stock on
the date the Option is granted. Options granted to Independent Directors shall
become exercisable in cumulative annual installments of 25% on each of the
first, second, third and fourth anniversaries of the date of Option grant and,
subject to Section 6.7, the term of each Option granted to an Independent
Director shall be ten (10) years from the date the Option is granted. No
portion of an Option which is unexercisable at Termination of Directorship shall
thereafter become exercisable.
5.5. Substitute Awards.
-----------------
Notwithstanding the foregoing provisions of this Article V to the
contrary, in the case of an Option that is a Substitute Award, the price per
share of the shares subject to such Option may be less than the Fair Market
Value per share on the date of grant, provided, that the excess of:
---------
(a) the aggregate Fair Market Value (as of the date such
Substitute Award is granted) of the shares subject to the Substitute Award;
over
(b) the aggregate exercise price thereof; does not exceed the
excess of;
(c) the aggregate fair market value (as of the time
immediately preceding the transaction giving rise to the Substitute Award,
such fair market value to be determined by the Committee) of the shares of
the predecessor entity that were subject to the grant assumed or
substituted for by the Company; over
(d) the aggregate exercise price of such shares.
ARTICLE VI.
EXERCISE OF OPTIONS
6.1. Partial Exercise. An exercisable Option may be exercised in
----------------
whole or in part. However, an Option shall not be exercisable with respect to
fractional shares and the Administrator may require that, by the terms of the
Option, a partial exercise be with respect to a minimum number of shares.
6.2. Manner of Exercise. All or a portion of an exercisable Option
------------------
shall be deemed exercised upon delivery of all of the following to the Secretary
of the Company or his office:
11
<PAGE>
(a) A written notice complying with the applicable rules
established by the Administrator stating that the Option, or a portion
thereof, is exercised. The notice shall be signed by the Holder or other
person then entitled to exercise the Option or such portion of the Option;
(b) Such representations and documents as the Administrator,
in its absolute discretion, deems necessary or advisable to effect
compliance with all applicable provisions of the Securities Act and any
other federal or state securities laws or regulations. The Administrator
may, in its absolute discretion, also take whatever additional actions it
deems appropriate to effect such compliance including, without limitation,
placing legends on share certificates and issuing stop-transfer notices to
agents and registrars;
(c) In the event that the Option shall be exercised pursuant
to Section 11.1 by any person or persons other than the Holder, appropriate
proof of the right of such person or persons to exercise the Option; and
(d) Full cash payment to the Secretary of the Company for the
shares with respect to which the Option, or portion thereof, is exercised.
However, the Administrator, may in its discretion (i) allow a delay in
payment up to thirty (30) days from the date the Option, or portion
thereof, is exercised; (ii) allow payment, in whole or in part, through the
delivery of shares of Common Stock which have been owned by the Holder for
at least six months, duly endorsed for transfer to the Company with a Fair
Market Value on the date of delivery equal to the aggregate exercise price
of the Option or exercised portion thereof; (iii) allow payment, in whole
or in part, through the surrender of shares of Common Stock then issuable
upon exercise of the Option having a Fair Market Value on the date of
Option exercise equal to the aggregate exercise price of the Option or
exercised portion thereof; (iv) allow payment, in whole or in part, through
the delivery of property of any kind which constitutes good and valuable
consideration; (v) allow payment, in whole or in part, through the delivery
of a full recourse promissory note bearing interest (at no less than such
rate as shall then preclude the imputation of interest under the Code) and
payable upon such terms as may be prescribed by the Administrator; (vi)
allow payment, in whole or in part, through the delivery of a notice that
the Holder has placed a market sell order with a broker with respect to
shares of Common Stock then issuable upon exercise of the Option, and that
the broker has been directed to pay a sufficient portion of the net
proceeds of the sale to the Company in satisfaction of the Option exercise
price, provided that payment of such proceeds is then made to the Company
--------
upon settlement of such sale; or (vii) allow payment through any
combination of the consideration provided in the foregoing subparagraphs
(ii), (iii), (iv), (v) and (vi). In the case of a promissory note, the
Administrator may also prescribe the form of such note and the security to
be given for such note. The Option may not be exercised, however, by
delivery of a promissory note or by a loan from the Company when or where
such loan or other extension of credit is prohibited by law.
6.3. Conditions to Issuance of Stock Certificates. The Company shall
--------------------------------------------
not be required to issue or deliver any certificate or certificates for shares
of stock purchased upon the exercise of any Option or portion thereof prior to
fulfillment of all of the following conditions:
12
<PAGE>
(a) The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed;
(b) The completion of any registration or other qualification
of such shares under any state or federal law, or under the rulings or
regulations of the Securities and Exchange Commission or any other
governmental regulatory body which the Administrator shall, in its absolute
discretion, deem necessary or advisable;
(c) The obtaining of any approval or other clearance from any
state or federal governmental agency which the Administrator shall, in its
absolute discretion, determine to be necessary or advisable;
(d) The lapse of such reasonable period of time following the
exercise of the Option as the Administrator may establish from time to time
for reasons of administrative convenience; and
(e) The receipt by the Company of full payment for such
shares, including payment of any applicable withholding tax, which in the
discretion of the Administrator may be in the form of consideration used by
the Holder to pay for such shares under Section 6.2(d).
6.4. Rights as Stockholders. Holders shall not be, nor have any of
----------------------
the rights or privileges of, stockholders of the Company in respect of any
shares purchasable upon the exercise of any part of an Option unless and until
certificates representing such shares have been issued by the Company to such
Holders.
6.5. Ownership and Transfer Restrictions. The Administrator, in its
-----------------------------------
absolute discretion, may impose such restrictions on the ownership and
transferability of the shares purchasable upon the exercise of an Option as it
deems appropriate. Any such restriction shall be set forth in the respective
Award Agreement and may be referred to on the certificates evidencing such
shares. The Holder shall give the Company prompt notice of any disposition of
shares of Common Stock acquired by exercise of an Incentive Stock Option within
(a) two years from the date of granting (including the date the Option is
modified, extended or renewed for purposes of Section 424(h) of the Code) such
Option to such Holder or (b) one year after the transfer of such shares to such
Holder.
6.6. Limitations on Exercise of Options Granted to Employees or
----------------------------------------------------------
Consultants. Notwithstanding anything herein to the contrary, except in the
- -----------
case of Termination of Employment for cause or Termination of Consultancy for
cause (as determined by the Administrator), to the extent that any portion of an
Option granted to an Employee or Consultant is exercisable at Termination of
Employment or Termination of Consultancy, as applicable, such portion shall be
exercisable following Termination of Employment or Termination of Consultancy
for a period which shall be determined by the Administrator in its sole
discretion; provided, however, that such period shall end no sooner than
-------- -------
(a) The earlier of (x) the expiration of the Option's term or
(y) the expiration of six (6) months from the date of Termination of
Employment or Termination
13
<PAGE>
of Consultancy, as applicable, if the Holder's termination is caused by the
Holder's death or Disability; or
(b) The earlier of (x) the expiration of the Option's term, or
(y) the expiration of at least thirty (30) days from the date of
Termination of Employment or Termination of Consultancy, as applicable, if
the Holder's termination is caused by other than the Holder's death or
Disability.
In the case of Termination of Employment or Termination of Consultancy for cause
(as determined by the Administrator), the period within which any portion of an
Option which is exercisable at the date of the Holder's termination may be
exercised following such termination shall be determined by the Administrator in
its sole discretion, but in no event shall extend beyond the expiration of the
Option's term.
6.7. Limitations on Exercise of Options Granted to Independent
---------------------------------------------------------
Directors. No Option granted to an Independent Director may be exercised to any
- ---------
extent by anyone after the first to occur of the following events:
(a) The expiration of twelve (12) months from the date of the
Holder's death;
(b) the expiration of twelve (12) months from the date of the
Holder's Termination of Directorship by reason of his permanent and total
disability (within the meaning of Section 22(e)(3) of the Code);
(c) the expiration of three (3) months from the date of the
Holder's Termination of Directorship for any reason other than such
Holder's death or his permanent and total disability, unless the Holder
dies within said three-month period; or
(d) The expiration of ten (10) years from the date the Option
was granted.
6.8. Additional Limitations on Exercise of Options. Holders may be
---------------------------------------------
required to comply with any timing or other restrictions with respect to the
settlement or exercise of an Option, including a window-period limitation, as
may be imposed in the discretion of the Administrator.
ARTICLE VII.
AWARD OF RESTRICTED STOCK
7.1. Eligibility. Subject to the Award Limit, Restricted Stock may
-----------
be awarded to any Employee who the Committee determines is a key Employee or any
Consultant who the Committee determines should receive such an Award.
7.2. Award of Restricted Stock
-------------------------
(a) The Committee may from time to time, in its absolute
discretion:
14
<PAGE>
(i) Determine which Employees are key Employees and
select from among the key Employees or Consultants (including
Employees or Consultants who have previously received other awards
under the Plan) such of them as in its opinion should be awarded
Restricted Stock; and
(ii) Determine the purchase price, if any, and other
terms and conditions applicable to such Restricted Stock, consistent
with the Plan.
(b) The Committee shall establish the purchase price, if any,
and form of payment for Restricted Stock; provided, however, that such
-------- -------
purchase price shall be no less than 85% of the Fair Market Value of a
share of Common Stock on the date the award of Restricted Stock is made or
at the time the purchase of Restricted Stock is consummated, unless
otherwise permitted by applicable state law, and provided, further, that,
-------- -------
in the case of the award of Restricted Stock to an individual then owning
more than 10% of the total combined voting power of all classes of stock of
the Company or any Subsidiary or parent corporation thereof, such purchase
price shall be no less than 100% of the Fair Market Value of a share of
Common Stock on the date the award of Restricted Stock is made or at the
time the purchase of Restricted Stock is consummated, unless otherwise
permitted by applicable state law. In all cases, legal consideration shall
be required for each issuance of Restricted Stock.
(c) Upon the selection of a key Employee or Consultant to be
awarded Restricted Stock, the Committee shall instruct the Secretary of the
Company to issue such Restricted Stock and may impose such conditions on
the issuance of such Restricted Stock as it deems appropriate.
7.3. Rights as Stockholders. Subject to Section 7.4, upon delivery
----------------------
of the shares of Restricted Stock to the escrow holder pursuant to Section 7.6,
the Holder shall have, unless otherwise provided by the Committee, all the
rights of a stockholder with respect to said shares, subject to the restrictions
in his Award Agreement, including the right to receive all dividends and other
distributions paid or made with respect to the shares; provided, however, that
-------- -------
in the discretion of the Committee, any extraordinary distributions with respect
to the Common Stock shall be subject to the restrictions set forth in Section
7.4.
7.4. Restriction. All shares of Restricted Stock issued under the
-----------
Plan (including any shares received by holders thereof with respect to shares of
Restricted Stock as a result of stock dividends, stock splits or any other form
of recapitalization) shall, in the terms of each individual Award Agreement, be
subject to such restrictions as the Committee shall provide, which restrictions
may include, without limitation, restrictions concerning voting rights and
transferability and restrictions based on duration of employment with the
Company, Company performance and individual performance; provided, however,
-------- -------
that, unless the Committee otherwise provides in the terms of the Award
Agreement or otherwise, no share of Restricted Stock granted to a person subject
to Section 16 of the Exchange Act shall be sold, assigned or otherwise
transferred until at least six months and one day have elapsed from the date on
which the Restricted Stock was issued, and provided, further, that, except with
-------- -------
respect to shares of Restricted Stock granted to Section 162(m) Participants, by
action taken after the Restricted Stock is issued, the Committee may, on such
terms and conditions as it may determine
15
<PAGE>
to be appropriate, remove any or all of the restrictions imposed by the terms of
the Award Agreement. Restricted Stock may not be sold or encumbered until all
restrictions are terminated or expire. If no consideration was paid by the
Holder upon issuance, a Holder's rights in unvested Restricted Stock shall
lapse, and such Restricted Stock shall be surrendered to the Company without
consideration, upon Termination of Employment or, if applicable, upon
Termination of Consultancy with the Company; provided, however, that the
-------- -------
Committee in its sole and absolute discretion may provide that such rights shall
not lapse in the event of a Termination of Employment following a "change of
ownership or control" (within the meaning of Treasury Regulation Section 1. 162-
27(e)(2)(v) or any successor regulation thereto) of the Company or because of
the Holder's death or disability; provided, further, except with respect to
-------- -------
shares of Restricted Stock granted to Section 162(m) Participants, the Committee
in its sole and absolute discretion may provide that no such lapse or surrender
shall occur in the event of a Termination of Employment, or a Termination of
Consultancy, without cause or following any change in control of the Company or
because of the Holder's retirement, or otherwise.
7.5. Repurchase of Restricted Stock. The Committee shall provide in
------------------------------
the terms of each individual Award Agreement that the Company shall have the
right to repurchase from the Holder the Restricted Stock then subject to
restrictions under the Award Agreement within ninety (90) days after a
Termination of Employment or, if applicable, after a Termination of Consultancy
between the Holder and the Company, at a cash price per share equal to the price
paid by the Holder for such Restricted Stock; provided, however, that such right
-------- -------
of repurchase shall lapse at a rate of at least 20% of the shares of Restricted
Stock per year over five (5) years from the date the Restricted Stock is
awarded, and provided, further, that the Committee in its sole and absolute
-------- -------
discretion may provide that no such right of repurchase shall exist in the event
of a Termination of Employment following a "change of ownership or control"
(within the meaning of Treasury Regulation Section 1. 162-27(e)(2)(v) or any
successor regulation thereto) of the Company or because of the Holder's death or
disability; provided, further, that, except with respect to shares of Restricted
-------- -------
Stock granted to Section 162(m) Participants, the Committee in its sole and
absolute discretion may provide that no such right of repurchase shall exist in
the event of a Termination of Employment or a Termination of Consultancy without
cause or following any change in control of the Company or because of the
Holder's retirement, or otherwise.
7.6. Escrow. The Secretary of the Company or such other escrow
------
holder as the Committee may appoint shall retain physical custody of each
certificate representing Restricted Stock until all of the restrictions imposed
under the Award Agreement with respect to the shares evidenced by such
certificate expire or shall have been removed.
7.7. Legend. In order to enforce the restrictions imposed upon
------
shares of Restricted Stock hereunder, the Committee shall cause a legend or
legends to be placed on certificates representing all shares of Restricted Stock
that are still subject to restrictions under Award Agreements, which legend or
legends shall make appropriate reference to the conditions imposed thereby.
7.8. Section 83(b) Election. If a Holder makes an election under
----------------------
Section 83(b) of the Code, or any successor section thereto, to be taxed with
respect to the Restricted Stock as of the date of transfer of the Restricted
Stock rather than as of the date or dates upon which the
16
<PAGE>
Holder would otherwise be taxable under Section 83(a) of the Code, the Holder
shall deliver a copy of such election to the Company immediately after filing
such election with the Internal Revenue Service.
ARTICLE VIII.
PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, DEFERRED STOCK AND
STOCK PAYMENTS
8.1. Eligibility. Subject to the Award Limit, one or more
-----------
Performance Awards, Dividend Equivalents, awards of Deferred Stock, and/or Stock
Payments may be granted to any Employee whom the Committee determines is a key
Employee or any Consultant whom the Committee determines should receive such an
Award.
8.2. Performance Awards. Any key Employee or Consultant selected by
------------------
the Committee may be granted one or more Performance Awards. The value of such
Performance Awards may be linked to any one or more of the Performance Criteria
or other specific performance criteria determined appropriate by the Committee,
in each case on a specified date or dates or over any period or periods
determined by the Committee. In making such determinations, the Committee shall
consider (among such other factors as it deems relevant in light of the specific
type of award) the contributions, responsibilities and other compensation of the
particular key Employee or Consultant.
8.3. Dividend Equivalents.
--------------------
(a) Any key Employee or Consultant selected by the Committee
may be granted Dividend Equivalents based on the dividends declared on
Common Stock, to be credited as of dividend payment dates, during the
period between the date a Stock Appreciation Right, Deferred Stock or
Performance Award is granted, and the date such Stock Appreciation Right,
Deferred Stock or Performance Award is exercised, vests or expires, as
determined by the Committee. Such Dividend Equivalents shall be converted
to cash or additional shares of Common Stock by such formula and at such
time and subject to such limitations as may be determined by the Committee.
(b) Any Holder of an Option who is an Employee or Consultant
selected by the Committee may be granted Dividend Equivalents based on the
dividends declared on Common Stock, to be credited as of dividend payment
dates, during the period between the date an Option is granted, and the
date such Option is exercised, vests or expires, as determined by the
Committee. Such Dividend Equivalents shall be converted to cash or
additional shares of Common Stock by such formula and at such time and
subject to such limitations as may be determined by the Committee.
(c) Any Holder of an Option who is an Independent Director
selected by the Board may be granted Dividend Equivalents based on the
dividends declared on Common Stock, to be credited as of dividend payment
dates, during the period between the date an Option is granted, and the
date such Option is exercised, vests or expires, as determined by the
Board. Such Dividend Equivalents shall be converted to cash or
17
<PAGE>
additional shares of Common Stock by such formula and at such time and
subject to such limitations as may be determined by the Board.
(d) Dividend Equivalents granted with respect to Options
intended to be qualified performance-based compensation for purposes of
Section 162(m) of the Code shall be payable, with respect to pre-exercise
periods, regardless of whether such Option is subsequently exercised.
8.4. Stock Payments. Any key Employee or Consultant selected by the
--------------
Committee may receive Stock Payments in the manner determined from time to time
by the Committee. The number of shares shall be determined by the Committee and
may be based upon the Performance Criteria or other specific performance
criteria determined appropriate by the Committee, determined on the date such
Stock Payment is made or on any date thereafter.
8.5. Deferred Stock. Any key Employee or Consultant selected by the
--------------
Committee may be granted an award of Deferred Stock in the manner determined
from time to time by the Committee. The number of shares of Deferred Stock
shall be determined by the Committee and may be linked to the Performance
Criteria or other specific performance criteria determined to be appropriate by
the Committee, in each case on a specified date or dates or over any period or
periods determined by the Committee. Common Stock underlying a Deferred Stock
award will not be issued until the Deferred Stock award has vested, pursuant to
a vesting schedule or performance criteria set by the Committee. Unless
otherwise provided by the Committee, a Holder of Deferred Stock shall have no
rights as a Company stockholder with respect to such Deferred Stock until such
time as the Award has vested and the Common Stock underlying the Award has been
issued.
8.6. Term. The term of a Performance Award, Dividend Equivalent,
----
award of Deferred Stock and/or Stock Payment shall be set by the Committee in
its discretion.
8.7. Exercise or Purchase Price. The Committee may establish the
--------------------------
exercise or purchase price of a Performance Award, shares of Deferred Stock, or
shares received as a Stock Payment; provided, however, that such price shall not
-------- -------
be less than the par value for a share of Common Stock, unless otherwise
permitted by applicable state law.
8.8. Exercise Upon Termination of Employment, Termination of
-------------------------------------------------------
Consultancy or Termination of Directorship. A Performance Award, Dividend
- ------------------------------------------
Equivalent, award of Deferred Stock and/or Stock Payment is exercisable or
payable only while the Holder is an Employee, Consultant or Independent
Director, as applicable; provided, however, that the Administrator in its sole
-------- -------
and absolute discretion may provide that the Performance Award, Dividend
Equivalent, award of Deferred Stock and/or Stock Payment may be exercised or
paid subsequent to a Termination of Employment following a "change of control or
ownership" (within the meaning of Section 1. 162-27(e)(2)(v) or any successor
regulation thereto) of the Company; provided, further, that except with respect
-------- -------
to Performance Awards granted to Section 162(m) Participants, the Administrator
in its sole and absolute discretion may provide that Performance Awards may be
exercised or paid following a Termination of Employment or a Termination of
Consultancy without cause, or following a change in control of the Company, or
because of a Holder's retirement, death or disability, or otherwise.
18
<PAGE>
8.9. Form of Payment. Payment of the amount determined under Section
---------------
8.2 or 8.3 above shall be in cash, in Common Stock or a combination of both, as
determined by the Committee. To the extent any payment under this Article VIII
is effected in Common Stock, it shall be made subject to satisfaction of all
provisions of Section 6.3.
ARTICLE IX.
STOCK APPRECIATION RIGHTS
9.1. Grant of Stock Appreciation Rights. A Stock Appreciation Right
----------------------------------
may be granted to any key Employee or Consultant selected by the Committee. A
Stock Appreciation Right may be granted (a) in connection and simultaneously
with the grant of an Option, (b) with respect to a previously granted Option, or
(c) independent of an Option. A Stock Appreciation Right shall be subject to
such terms and conditions not inconsistent with the Plan as the Committee shall
impose and shall be evidenced by an Award Agreement.
9.2. Coupled Stock Appreciation Rights.
---------------------------------
(a) A Coupled Stock Appreciation Right ("CSAR") shall be
related to a particular Option and shall be exercisable only when and to
the extent the related Option is exercisable.
(b) A CSAR may be granted to the Holder for no more than the
number of shares subject to the simultaneously or previously granted Option
to which it is coupled.
(c) A CSAR shall entitle the Holder (or other person entitled
to exercise the Option pursuant to the Plan) to surrender to the Company
unexercised a portion of the Option to which the CSAR relates (to the
extent then exercisable pursuant to its terms) and to receive from the
Company in exchange therefor an amount determined by multiplying the
difference obtained by subtracting the Option exercise price from the Fair
Market Value of a share of Common Stock on the date of exercise of the CSAR
by the number of shares of Common Stock with respect to which the CSAR
shall have been exercised, subject to any limitations the Committee may
impose.
9.3. Independent Stock Appreciation Rights.
-------------------------------------
(a) An Independent Stock Appreciation Right ("ISAR") shall be
unrelated to any Option and shall have a term set by the Committee. An
ISAR shall be exercisable in such installments as the Committee may
determine. An ISAR shall cover such number of shares of Common Stock as
the Committee may determine; provided, however, that unless the Committee
-------- -------
otherwise provides in the terms of the ISAR or otherwise, no ISAR granted
to a person subject to Section 16 of the Exchange Act shall be exercisable
until at least six months have elapsed from (but excluding) the date on
which the Option was granted. The exercise price per share of Common Stock
subject to each ISAR shall be set by the Committee. An ISAR is exercisable
only while the Holder is an Employee or Consultant; provided that the
Committee may determine that the ISAR may be exercised subsequent to
Termination of Employment or Termination of
19
<PAGE>
Consultancy without cause, or following a Change in Control of the Company,
or because of the Holder's retirement, death or disability, or otherwise.
(b) An ISAR shall entitle the Holder (or other person entitled
to exercise the ISAR pursuant to the Plan) to exercise all or a specified
portion of the ISAR (to the extent then exercisable pursuant to its terms)
and to receive from the Company an amount determined by multiplying the
difference obtained by subtracting the exercise price per share of the ISAR
from the Fair Market Value of a share of Common Stock on the date of
exercise of the ISAR by the number of shares of Common Stock with respect
to which the ISAR shall have been exercised, subject to any limitations the
Committee may impose.
9.4. Payment and Limitations on Exercise.
-----------------------------------
(a) Payment of the amounts determined under Section 9.2(c) and
9.3(b) above shall be in cash, in Common Stock (based on its Fair Market
Value as of the date the Stock Appreciation Right is exercised) or a
combination of both, as determined by the Committee. To the extent such
payment is effected in Common Stock it shall be made subject to
satisfaction of all provisions of Section 6.3 above pertaining to Options.
(b) Holders of Stock Appreciation Rights may be required to
comply with any timing or other restrictions with respect to the settlement
or exercise of a Stock Appreciation Right, including a window-period
limitation, as may be imposed in the discretion of the Committee.
ARTICLE X.
ADMINISTRATION
10.1. Compensation Committee. Prior to the Company's initial
----------------------
registration of Common Stock under Section 12 of the Exchange Act, the
Compensation Committee shall consist of the entire Board. Following such
registration, The Compensation Committee (or another committee or a subcommittee
of the Board assuming the functions of the Committee under the Plan) shall
consist solely of two or more Independent Directors appointed by and holding
office at the pleasure of the Board, each of whom is both a "non-employee
director" as defined by Rule 16b-3 and an "outside director" for purposes of
Section 162(m) of the Code. Appointment of Committee members shall be effective
upon acceptance of appointment. Committee members may resign at any time by
delivering written notice to the Board. Vacancies in the Committee may be
filled by the Board.
10.2. Duties and Powers of Committee. It shall be the duty of the
------------------------------
Committee to conduct the general administration of the Plan in accordance with
its provisions. The Committee shall have the power to interpret the Plan and
the Award Agreements, and to adopt such rules for the administration,
interpretation, and application of the Plan as are consistent therewith, to
interpret, amend or revoke any such rules and to amend any Award Agreement
provided that the rights or obligations of the Holder of the Award that is the
subject of any such Award Agreement are not affected adversely. Any such grant
or award under the Plan need not be the same with respect to each Holder. Any
such interpretations and rules with respect to Incentive Stock
20
<PAGE>
Options shall be consistent with the provisions of Section 422 of the Code. In
its absolute discretion, the Board may at any time and from time to time
exercise any and all rights and duties of the Committee under the Plan except
with respect to matters which under Rule 16b-3 or Section 162(m) of the Code, or
any regulations or rules issued thereunder, are required to be determined in the
sole discretion of the Committee. Notwithstanding the foregoing, the full Board,
acting by a majority of its members in office, shall conduct the general
administration of the Plan with respect to Options and Dividend Equivalents
granted to Independent Directors.
10.3. Majority Rule; Unanimous Written Consent. The Committee shall
----------------------------------------
act by a majority of its members in attendance at a meeting at which a quorum is
present or by a memorandum or other written instrument signed by all members of
the Committee.
10.4. Compensation; Professional Assistance; Good Faith Actions.
---------------------------------------------------------
Members of the Committee shall receive such compensation, if any, for their
services as members as may be determined by the Board. All expenses and
liabilities which members of the Committee incur in connection with the
administration of the Plan shall be borne by the Company. The Committee may,
with the approval of the Board, employ attorneys, consultants. accountants,
appraisers, brokers, or other persons. The Committee, the Company and the
Company's officers and Directors shall be entitled to rely upon the advice,
opinions or valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee or the Board in good
faith shall be final and binding upon all Holders, the Company and all other
interested persons. No members of the Committee or Board shall be personally
liable for any action, determination or interpretation made in good faith with
respect to the Plan or Awards, and all members of the Committee and the Board
shall be fully protected by the Company in respect of any such action,
determination or interpretation.
10.5. Delegation of Authority to Grant Awards. The Committee may,
---------------------------------------
but need not, delegate from time to time some or all of its authority to grant
Awards under the Plan to a committee consisting of one or more members of the
Committee or of one or more officers of the Company; provided, however, that the
Committee may not delegate its authority to grant Awards to individuals (i) who
are subject on the date of the grant to the reporting rules under Section 16(a)
of the Exchange Act, (ii) who are Section 162(m) Participants or (iii) who are
officers of the Company who are delegated authority by the Committee hereunder.
Any delegation hereunder shall be subject to the restrictions and limits that
the Committee specifies at the time of such delegation of authority and may be
rescinded at any time by the Committee. At all times, any committee appointed
under this Section 10.5 shall serve in such capacity at the pleasure of the
Committee.
ARTICLE XI.
MISCELLANEOUS PROVISIONS
11.1. Not Transferable. No Award under the Plan may be sold,
----------------
pledged, assigned or transferred in any manner other than by will or the laws of
descent and distribution or, subject to the consent of the Administrator
pursuant to a DRO, unless and until such Award has been exercised, or the shares
underlying such Award have been issued, and all restrictions applicable to such
shares have lapsed. No Award or interest or right therein shall be liable for
21
<PAGE>
the debts, contracts or engagements of the Holder or his successors in interest
or shall be subject to disposition by transfer, alienation, anticipation,
pledge, encumbrance, assignment or any other means whether such disposition be
voluntary or involuntary or by operation of law by judgment, levy, attachment,
garnishment or any other legal or equitable proceedings (including bankruptcy),
and any attempted disposition thereof shall be null and void and of no effect,
except to the extent that such disposition is permitted by the preceding
sentence.
During the lifetime of the Holder, only he may exercise an Option or
other Award (or any portion thereof) granted to him under the Plan, unless it
has been disposed of with the consent of the Administrator pursuant to a DRO.
After the death of the Holder, any exercisable portion of an Option or other
Award may, prior to the time when such portion becomes unexercisable under the
Plan or the applicable Award Agreement, be exercised by his personal
representative or by any person empowered to do so under the deceased Holder's
will or under the then applicable laws of descent and distribution.
11.2. Amendment, Suspension or Termination of the Plan. Except as
------------------------------------------------
otherwise provided in this Section 11.2, the Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any time or from time
to time by the Administrator. However, without approval of the Company's
stockholders given within twelve months before or after the action by the
Administrator, no action of the Administrator may, except as provided in Section
11.3, increase the limits imposed in Section 2.1 on the maximum number of shares
which may be issued under the Plan. No amendment, suspension or termination of
the Plan shall, without the consent of the Holder alter or impair any rights or
obligations under any Award theretofore granted or awarded, unless the Award
itself otherwise expressly so provides. No Awards may be granted or awarded
during any period of suspension or after termination of the Plan, and in no
event may any Incentive Stock Option be granted under the Plan after the first
to occur of the following events:
(a) The expiration of ten years from the date the Plan is
adopted by the Board; or
(b) The expiration of ten years from the date the Plan is
approved by the Company's stockholders under Section 11.4.
11.3. Changes in Common Stock or Assets of the Company, Acquisition
-------------------------------------------------------------
or Liquidation of the Company and Other Corporate Events.
- --------------------------------------------------------
(a) Subject to Section 11.3(d), in the event that the
Administrator determines that any dividend or other distribution (whether
in the form of cash, Common Stock, other securities, or other property),
recapitalization, reclassification, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, liquidation, dissolution, or sale, transfer, exchange or other
disposition of all or substantially all of the assets of the Company, or
exchange of Common Stock or other securities of the Company, issuance of
warrants or other rights to purchase Common Stock or other securities of
the Company, or other similar corporate transaction or event, in the
Administrator's sole discretion, affects the Common Stock such that an
adjustment is determined by the Administrator to be appropriate in order to
prevent dilution or
22
<PAGE>
enlargement of the benefits or potential benefits intended to be made
available under the Plan or with respect to an Award, then the
Administrator shall, in such manner as it may deem equitable, adjust any or
all of
(i) the number and kind of shares of Common
Stock (or other securities or property) with respect to which
Awards may be granted or awarded (including, but not limited
to, adjustments of the limitations in Section 2.1 on the maximum
number and kind of shares which may be issued and adjustments
of the Award Limit),
(ii) the number and kind of shares of Common
Stock (or other securities or property) subject to outstanding
Awards, and
(iii) the grant or exercise price with respect to
any Award.
(b) Subject to Section 11.3(d), in the event of any
transaction or event described in Section 11.3(a) or any unusual or
nonrecurring transactions or events affecting the Company, any affiliate of
the Company, or the financial statements of the Company or any affiliate,
or of changes in applicable laws, regulations, or accounting principles,
the Administrator, in its sole and absolute discretion, and on such terms
and conditions as it deems appropriate, either by the terms of the Award or
by action taken prior to the occurrence of such transaction or event and
either automatically or upon the Holder's request, is hereby authorized to
take any one or more of the following actions whenever the Administrator
determines that such action is appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made
available under the Plan or with respect to any Award under the Plan, to
facilitate such transactions or events or to give effect to such changes in
laws, regulations or principles:
(i) To provide for either the purchase of any
such Award for an amount of cash equal to the amount that could
have been attained upon the exercise of such Award or realization
of the Holder's rights had such Award been currently exercisable
or payable or fully vested or the replacement of such Award with
other rights or property selected by the Administrator in its sole
discretion;
(ii) To provide that the Award cannot vest, be
exercised or become payable after such event;
(iii) To provide that such Award shall be
exercisable as to all shares covered thereby, notwithstanding
anything to the contrary in Section 5.3 or 5.4 or the provisions
of such Award;
23
<PAGE>
(iv) To provide that such Award be assumed by
the successor or survivor corporation, or a parent or subsidiary
thereof, or shall be substituted for by similar options, rights or
awards covering the stock of the successor or survivor corporation,
or a parent or subsidiary thereof, with appropriate adjustments as
to the number and kind of shares and prices; and
(v) To make adjustments in the number and type
of shares of Common Stock (or other securities or property)
subject to outstanding Awards, and in the number and kind of
outstanding Restricted Stock or Deferred Stock and/or in the terms
and conditions of (including the grant or exercise price), and the
criteria included in, outstanding options, rights and awards and
options, rights and awards which may be granted in the future.
(vi) To provide that, for a specified period of
time prior to such event, the restrictions imposed under an Award
Agreement upon some or all shares of Restricted Stock or Deferred
Stock may be terminated, and, in the case of Restricted Stock,
some or all shares of such Restricted Stock may cease to be subject
to repurchase under Section 7.5 or forfeiture under Section 7.4
after such event.
(c) Subject to Sections 11.3(d), 3.2 and 3.3, the
Administrator may, in its discretion, include such further provisions and
limitations in any Award, agreement or certificate, as it may deem
equitable and in the best interests of the Company.
(d) With respect to Awards which are granted to Section 162(m)
Participants and are intended to qualify as performance-based compensation
under Section 162(m)(4)(C), no adjustment or action described in this
Section 11.3 or in any other provision of the Plan shall be authorized to
the extent that such adjustment or action would cause such Award to fail to
so qualify under Section 162(m)(4)(C), or any successor provisions thereto.
No adjustment or action described in this Section 11.3 or in any other
provision of the Plan shall be authorized to the extent that such
adjustment or action would cause the Plan to violate Section 422(b)(1) of
the Code. Furthermore, no such adjustment or action shall be authorized to
the extent such adjustment or action would result in short-swing profits
liability under Section 16 or violate the exemptive conditions of Rule 16b-
3 unless the Administrator determines that the Award is not to comply with
such exemptive conditions. The number of shares of Common Stock subject to
any Award shall always be rounded to the next whole number.
(e) Notwithstanding the foregoing, in the event that the
Company becomes a party to a transaction that is intended to qualify for
"pooling of interests" accounting treatment and, but for one or more of the
provisions of this Plan or any Award Agreement would so qualify, then this
Plan and any Award Agreement shall be interpreted so as to preserve such
accounting treatment, and to the extent that any provision of the Plan or
any Award Agreement would disqualify the transaction from
24
<PAGE>
pooling of interests accounting treatment (including, if applicable, an
entire Award Agreement), then such provision shall be null and void. All
determinations to be made in connection with the preceding sentence shall
be made by the independent accounting firm whose opinion with respect to
"pooling of interests"' treatment is required as a condition to the
Company's consummation of such transaction.
(f) The existence of the Plan, the Award Agreement and the
Awards granted hereunder shall not affect or restrict in any way the right
or power of the Company or the shareholders of the Company to make or
authorize any adjustment, recapitalization, reorganization or other change
in the Company's capital structure or its business, any merger or
consolidation of the Company, any issue of stock or of options, warrants or
rights to purchase stock or of bonds, debentures, preferred or prior
preference stocks whose rights are superior to or affect the Common Stock
or the rights thereof or which are convertible into or exchangeable for
Common Stock, or the dissolution or liquidation of the company, or any sale
or transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise.
11.4. Approval of Plan by Stockholders. The Plan will be submitted
--------------------------------
for the approval of the Company's stockholders within twelve months after the
date of the Board's initial adoption of the Plan. Awards may be granted or
awarded prior to such stockholder approval, provided that such Awards shall not
be exercisable nor shall such Awards vest prior to the time when the Plan is
approved by the stockholders, and provided further that if such approval has not
been obtained at the end of said twelve-month period, all Awards previously
granted or awarded under the Plan shall thereupon be canceled and become null
and void. In addition, if the Board determines that Awards other than Options
or Stock Appreciation Rights which may be granted to Section 162(m) Participants
should continue to be eligible to qualify as performance-based compensation
under Section 162(m)(4)(C) of the Code, the Performance Criteria must be
disclosed to and approved by the Company's stockholders no later than the first
stockholder meeting that occurs in the fifth year following the year in which
the Company's stockholders previously approved the Performance Criteria.
11.5. Tax Withholding. The Company shall be entitled to require
---------------
payment in cash or deduction from other compensation payable to each Holder of
any sums required by federal, state or local tax law to be withheld with respect
to the issuance, vesting, exercise or payment of any Award. The Administrator
may in its discretion and in satisfaction of the foregoing requirement allow
such Holder to elect to have the Company withhold shares of Common Stock
otherwise issuable under such Award (or allow the return of shares of Common
Stock) having a Fair Market Value equal to the sums required to be withheld.
11.6. Loans. The Committee may, in its discretion, extend one or
-----
more loans to key Employees in connection with the exercise or receipt of an
Award granted or awarded under the Plan, or the issuance of Restricted Stock or
Deferred Stock awarded under the Plan. The terms and conditions of any such
loan shall be set by the Committee.
11.7. Forfeiture Provisions. Pursuant to its general authority to
---------------------
determine the terms and conditions applicable to Awards under the Plan, the
Administrator shall have the right
25
<PAGE>
to provide, in the terms of Awards made under the Plan, or to require a Holder
to agree by separate written instrument, that (a) (i) any proceeds, gains or
other economic benefit actually or constructively received by the Holder upon
any receipt or exercise of the Award, or upon the receipt or resale of any
Common Stock underlying the Award, must be paid to the Company, and (ii) the
Award shall terminate and any unexercised portion of the Award (whether or not
vested) shall be forfeited, if (b)(i) a Termination of Employment, Termination
of Consultancy or Termination of Directorship occurs prior to a specified date,
or within a specified time period following receipt or exercise of the Award, or
(ii) the Holder at any time, or during a specified time period, engages in any
activity in competition with the Company, or which is inimical, contrary or
harmful to the interests of the Company, as further defined by the Administrator
or (iii) the Holder incurs a Termination of Employment, Termination of
Consultancy or Termination of Directorship for cause.
11.8. Effect of Plan Upon Options and Compensation Plans. The
--------------------------------------------------
adoption of the Plan shall not affect any other compensation or incentive plans
in effect for the Company or any Subsidiary. Nothing in the Plan shall be
construed to limit the right of the Company (a) to establish any other forms of
incentives or compensation for Employees, Directors or Consultants of the
Company or any Subsidiary or (b) to grant or assume options or other rights or
awards otherwise than under the Plan in connection with any proper corporate
purpose including but not by way of limitation, the grant or assumption of
options in connection with the acquisition by purchase, lease, merger,
consolidation or otherwise, of the business, stock or assets of any corporation,
partnership, limited liability company, firm or association.
11.9. Compliance with Laws. The Plan, the granting and vesting of
--------------------
Awards under the Plan and the issuance and delivery of shares of Common Stock
and the payment of money under the Plan or under Awards granted or awarded
hereunder are subject to compliance with all applicable federal and state laws,
rules and regulations (including but not limited to state and federal securities
law and federal margin requirements) and to such approvals by any listing,
regulatory or governmental authority as may, in the opinion of counsel for the
Company, be necessary or advisable in connection therewith. Any securities
delivered under the Plan shall be subject to such restrictions, and the person
acquiring such securities shall, if requested by the Company, provide such
assurances and representations to the Company as the Company may deem necessary
or desirable to assure compliance with all applicable legal requirements. To
the extent permitted by applicable law, the Plan and Awards granted or awarded
hereunder shall be deemed amended to the extent necessary to conform to such
laws, rules and regulations.
11.10. Titles. Titles are provided herein for convenience only and
------
are not to serve as a basis for interpretation or construction of the Plan.
11.11. Governing Law. The Plan and any agreements hereunder shall be
-------------
administered, interpreted and enforced under the internal laws of the State of
Delaware without regard to conflicts of laws thereof.
26
<PAGE>
* * *
I hereby certify that the foregoing Plan was duty adopted by the Board
of Directors of COMPS InfoSystems, Inc, on October 28, 1998.
Executed on this 28th day of October, 1998
/s/ ROBERT C. BEASLEY
-------------------------------
Secretary
27
<PAGE>
Exhibit 10.31
1998 EQUITY PARTICIPATION PLAN FORM OF
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT, dated __________, 199__ is made by and between COMPS
InfoSystems, Inc., a Delaware corporation hereinafter referred to as "Company,"
and ___________, an employee of the Company or a Parent Corporation or
Subsidiary of the Company, hereinafter referred to as "Employee" or "Optionee":
WHEREAS, the Company wishes to afford the Employee the opportunity to
purchase shares of its $.0l par value non-voting Class B Common Stock; and
WHEREAS, the Company wishes to carry out the Plan (the terms of which
are hereby incorporated by reference and made a part of this Agreement); and
WHEREAS, the Administrator, appointed to administer the Plan, has
determined that it would be to the advantage and best interest of the Company
and its shareholders to grant the Incentive Stock Option provided for herein to
the Employee as an inducement to perform future services for the Company, its
Parent Corporations or its Subsidiaries and as an incentive for increased
efforts during such service, and has advised the Company thereof and instructed
the undersigned officers to issue said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I.
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall
have the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.
1.1. Administrator
- ---- -------------
"Administrator, shall mean: (a) prior to the Initial Public Offering,
the Board, or, in the sole and absolute discretion of the Board, the Committee;
and (b) after the Initial Public Offering, the Committee.
1.2. Board
- ---- -----
"Board" shall mean the Board of Directors of the Company.
1.3. Code
- ---- ----
"Code" shall mean the Internal Revenue Code of 1986, as amended.
<PAGE>
1.4. Committee
- ---- ---------
"Committee" shall mean the Stock Option Committee of the Board,
appointed as provided in the Plan.
1.5. Common Stock
- ---- ------------
"Common Stock" shall mean the Company's non-voting Class B Common
Stock, par value $.0l per share.
1.6. Company
- ---- -------
"Company" shall mean COMPS InfoSystems, Inc.
1.7. Director
- ---- --------
"Director" shall mean a member of the Board.
1.8. Exchange Act
- ---- ------------
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
1.9. Initial Public Offering
- ---- -----------------------
"Initial Public Offering" shall mean the closing of the sale of the
Company's securities pursuant to an underwritten public offering.
1.10. Officer
- ----- -------
"Officer" shall mean an officer of the Company, as defined in Rule
16a- 1(f) under the Exchange Act, as such Rule may be amended in the future.
1.11. Option
- ----- ------
"Option" shall mean the incentive stock option to purchase Common
Stock of the Company granted under this Agreement.
1.12. Parent Corporation
- ----- -------------------
"Parent Corporation" shall mean any corporation in an unbroken chain
of corporations ending with the Company if each of the corporations other than
the Company then owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one (1) of the other
corporations in such chain.
1.13. Plan
- ----- ----
"Plan" shall mean the 1998 Equity Participation Plan of COMPS
InfoSystems, Inc.
2
<PAGE>
1.14. Rule 16b-3
- ----- ----------
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange
Act, as such Rule may be amended in the future.
1.15 Secretary
- ---- ---------
Secretary" shall mean the Secretary of the Company.
1.16. Securities Act
- ----- --------------
"Securities Act" shall mean the Securities Act of 1933, as amended.
1.17. Subsidiary
- ----- ----------
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one (1) of the other corporations in such chain.
1.18. Termination of Employment
- ----- -------------------------
"Termination of Employment" shall mean the time when the employee-
employer relationship between the Optionee and the Company, a Parent Corporation
or a Subsidiary is terminated for any reason, with or without cause, including,
but not by way of limitation, a termination by resignation, discharge, death or
retirement, but excluding any termination where there is a simultaneous
reemployment by the Company, a Parent Corporation or a Subsidiary. The
Administrator, in its absolute discretion, shall determine the effect of all
other matters and questions relating to Termination of Employment, including,
but not by way of limitation, the question of whether a Termination of
Employment resulted from a discharge for good cause, and all questions of
whether particular leaves of absence constitute Terminations of Employment;
provided, however, that a leave of absence shall constitute a Termination of
Employment if, and to the extent that, such leave of absence interrupts
employment for purposes of Section 422(a)(2) of the Code and the then applicable
regulations and revenue rulings under said Section.
ARTICLE II
GRANT OF OPTION
2.1. Grant of Option
- ---- ---------------
In consideration of the Employee's agreement to remain in the employ
of the Company, its Parent Corporations or its Subsidiaries and for other good
and valuable consideration, including the Company's desire to reward future
services and contributions of the Employee, on the date hereof the Company
irrevocably grants to the Employee the option to purchase any part or all of an
aggregate of ________ shares of its $.01 par value non-voting Class B Common
Stock upon the terms and conditions set forth in this Agreement.
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2.2. Purchase Price
- ---- --------------
The purchase price of the shares of stock covered by the Option shall
be $.__ per share without commission or other charge.
2.3. Consideration to Company
- ---- ------------------------
In consideration of the granting of this Option by the Company, the
Employee agrees to render faithful and efficient services to the Company, a
Parent Corporation or a Subsidiary, with such duties and responsibilities as the
Company shall from time to time prescribe, for a period of at least one (1) year
from the date this Option is granted. Nothing in this Agreement or in the Plan
shall confer upon the Employee any right to continue in the employ of the
Company, any Parent Corporation or any Subsidiary or shall interfere with or
restrict in any way the rights of the Company, its Parent Corporations and its
Subsidiaries, which are hereby expressly reserved, to discharge the Employee at
any time for any reason whatsoever, with or without cause.
2.4. Adjustment in Option
- ---- --------------------
In the event that the outstanding shares of the stock subject to the
Option are changed into or exchanged for a different number or kind of shares of
the Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split up, stock
dividend or combination of shares, the Administrator shall make an appropriate
and equitable adjustment in the number and kind of shares as to which the
Option, or portions thereof then unexercised, shall be exercisable, to the end
that after such event the Employee's proportionate interest shall be maintained
as before the occurrence of such event. Such adjustment in the Option shall be
made without change in the total price applicable to the unexercised portion of
the Option (except for any change in the aggregate price resulting from
rounding-off of share quantities or prices) and with any necessary corresponding
adjustment in the Option price per share; provided, however, that each such
adjustment shall be made in such manner as not to constitute a "modification"
within the meaning of Section 424(h)(3) of the Code. Any such adjustment made
by the Administrator shall be final and binding upon the Employee, the Company
and all other interested persons.
ARTICLE III
PERIOD OF EXERCISABILITY
3.1. Commencement of Exercisability
- ---- ------------------------------
(a) Subject to Sections 3.5 and 5.6, the Option shall become
exercisable in five (5) cumulative installments as follows:
(i) The first installment shall consist of twenty percent
(20%) of the shares covered by the Option and shall become exercisable upon
the first anniversary of the date the Option is granted.
4
<PAGE>
(ii) The second installment shall consist of twenty percent
(20%) of the shares covered by the Option and shall become exercisable upon
the second anniversary of the date the Option is granted.
(iii) The third installment shall consist of twenty percent
(20%) of the shares covered by the Option and shall become exercisable upon
the third anniversary of the date the Option is granted.
(iv) The fourth installment shall consist of twenty percent
(20%) of the shares covered by the Option and shall become exercisable upon
the fourth anniversary of the date the Option is granted.
(v) The fifth installment shall consist of twenty percent
(20%) of the shares covered by the Option and shall become exercisable upon
the fifth anniversary of the date the Option is granted.
(b) No portion of the Option which is unexercisable at Termination of
Employment shall thereafter become exercisable.
3.2. Duration of Exercisability
- ---- --------------------------
The installments provided for in Section 3.1 are cumulative. Each
such installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
3.3. Expiration of Option
- ---- --------------------
The Option may not be exercised to any extent by anyone after the
first to occur of the following events:
(a) The expiration of ten (10) years from the date the Option was
granted; or
(b) If the Employee owned (within the meaning of Section 424(d) of the
Code), at the time the Option was granted, more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company, any
Subsidiary or any Parent Corporation, the expiration of five (5) years from the
date the Option was granted; or
(c) The time of the Employee's Termination of Employment unless such
Termination of Employment results from his death, his retirement, his disability
(within the meaning of Section 22(e)(3) of the Code) or his being discharged not
for good cause; or
(d) The expiration of three (3) months from the date of the Employee's
Termination of Employment by reason of his retirement or his being discharged
not for good cause, unless the Employee dies within said three-month period; or
5
<PAGE>
(e) The expiration of one (1) year from the date of the Employee's
Termination of Employment by reason of his disability (within the meaning of
Section 22(e)(3) of the Code); or
(f) The expiration of one (1) year from the date of the Employee's
death; or
(g) The effective date of either the merger or consolidation of the
Company with or into another corporation, or the acquisition by another
corporation or person of all or substantially all of the Company's assets or
eighty percent (80%) or more of the Company's then outstanding voting stock, or
the liquidation or dissolution of the Company, unless the. Administrator waives
this provision in connection with such transaction. At least ten (10) days.
prior to the effective date of such merger, consolidation, acquisition,
liquidation or dissolution, the Administrator shall give the Employee notice of
such event if the Option has then neither been fully exercised nor become
unexercisable under this Section 3.3.
3.4. Acceleration of Exercisability
- ---- ------------------------------
In the event of the merger or consolidation of the Company with or
into another corporation, or the acquisition by another corporation or person of
all or substantially all of the Company's assets or eighty percent (80%) or more
of the Company's then outstanding voting stock, or the liquidation or
dissolution of the Company, the Administrator may, in its absolute discretion
and upon such terms and conditions as it deems appropriate, provide by
resolution, adopted prior to such event and incorporated in the notice referred
to in Section 3.3(g), that at some time prior to the effective date of such
event this Option shall be exercisable as to all the shares covered hereby,
notwithstanding that this Option may not yet have become fully exercisable under
Section 3.1(a); provided, however, that this acceleration of exercisability
shall not take place if:
(a) This Option becomes unexercisable under Section 3.3 prior to said
effective date; or
(b) In connection with such an event, provision is made for an
assumption of this Option or a substitution therefor of a new option by an
employer corporation, or a parent or subsidiary of such corporation, so that
such assumption or substitution complies with the provisions of Section 424(a)
of the Code; and provided, further, that nothing in this Section 3.4 shall make
this Option exercisable if it is otherwise unexercisable by reason of Section
3.5 or Section 5.6.
The Administrator may make such determinations and adopt such rules
and conditions as it, in its absolute discretion, deems appropriate in
connection with such acceleration of exercisability, including, but not by way
of limitation, provisions to ensure that any such acceleration and resulting
exercise shall be conditioned upon the consummation of the contemplated
corporate transaction, and determinations regarding whether provisions for
assumption or substitution have been made as defined in subsection (b) above.
6
<PAGE>
3.5. Limitation on Exercisability
- ---- ----------------------------
Notwithstanding any other provision of this Agreement, the aggregate
fair market value (determined at the time the Option is granted) of the shares
of the Company's stock with respect to which "incentive stock options" (within
the meaning of Section 422 of the Code) are exercisable for the first time by
the Employee during any calendar year (under the Plan and all other incentive
stock option plans of the Company, any Subsidiary and any Parent Corporation)
shall not exceed $100,000.
ARTICLE IV
EXERCISE OF OPTION
4.1. Person Eligible to Exercise
- ---- ---------------------------
During the lifetime of the Employee, only he may exercise the Option
or any portion thereof. After the death of the Employee, any exercisable
portion of the Option may, prior to the time when the Option becomes
unexercisable under Section 3.3, be exercised by his personal representative or
by any person empowered to do so under the Employee's will or under the then
applicable laws of descent and distribution.
4.2. Partial Exercise
- ---- ----------------
Any exercisable portion of the Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable under Section
3.3; provided, however, that each partial exercise shall be for not less than
One Thousand (1000) shares (or the minimum installment set forth in Section 3.
1, if a smaller number of shares) and shall be for whole shares only.
4.3. Manner of Exercise
- ---- ------------------
The Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary or his office of all of the following prior
to the time when the Option or such portion becomes unexercisable under Section
3.3:
(a) Notice in writing signed by the Employee or the other person then
entitled to exercise the Option or portion, stating that the Option or portion
is thereby exercised, such notice complying with all applicable rules
established by the Administrator; and
(i) Full payment (by cashiers check or wire transfer) for the
shares with respect to which such Option or portion is exercised; or
(ii) With the consent of the Administrator, (A) shares of the
Company's Common Stock owned by the Employee duly endorsed for transfer to
the Company or (B) subject to the timing requirements of Section 4.4,
shares of the Company's Common Stock issuable to the Employee upon exercise
of the Option, with a fair market value (as determined under Section 1.18
of the Plan) on the date of Option
7
<PAGE>
exercise equal to the aggregate purchase price of the shares with respect
to which such Option or portion is exercised; or
(iii) With the consent of the Administrator, a promissory note
bearing interest (at no less than such rate as shall then preclude the
imputation of interest under the Code or successor provision) and payable
upon such terms as may be prescribed by the Administrator. The
Administrator may also prescribe the form of such note and the security to
be given for such note. That Option may not be exercised, however, by
delivery of a promissory note or by a loan from the Company when or where
such loan or other extension of credit is prohibited by law; or
(iv) With the consent of the Administrator, any combination of
the consideration provided in the foregoing subparagraphs (i) - (iii); and
(b) A bona fide written representation and agreement, in a: form
satisfactory to the Administrator, signed by the Employee or other person then
entitled to exercise such Option or portion, stating that the shares of stock
are being acquired for his own account, for investment and without any present
intention of distributing or reselling said shares or any of them except as may
be permitted under the Securities Act and then applicable rules and regulations
thereunder, and that the Employee or other person then entitled to exercise such
Option or portion will indemnify the Company against and hold it free and
harmless from any loss, damage, expense or liability resulting to the Company if
any sale or distribution of the shares by such person is contrary to the
representation and agreement referred to above. The Administrator may, in its
absolute discretion, take whatever additional actions it deems appropriate to
insure the observance and performance of such representation and agreement and
to effect compliance with the Securities Act and any other federal or state
securities laws or regulations. Without limiting the generality of the
foregoing, the Administrator may require an opinion of counsel acceptable to it
to the effect that any subsequent transfer of shares acquired on an Option
exercise does not violate the Securities Act, and may issue stop-transfer orders
covering such shares. Share certificates evidencing stock issued on exercise of
this Option shall bear an appropriate legend referring to the provisions of this
subsection (c) and the agreements herein. The written representation and
agreement referred to in the first sentence of this subsection (c) shall,
however, not be required if the shares to be issued pursuant to such exercise
have been registered under the Securities Act, and such registration is then
effective in respect of such shares;
(c) Full payment to the Company (or other employer corporation) of all
amounts which, under federal, state or local tax law, it is required to withhold
upon exercise of the Option; with the consent of the Administrator, (i) shares
of the Company's Common Stock owned by the Employee duly endorsed for transfer
or (ii) subject to the timing requirements of Section 4.4, shares of the
Company's Common Stock issuable to the Employee upon exercise of the Option,
valued in accordance with Section 1.18 of the Plan at the date of Option
exercise, may be used to make all or part of such payment; and
8
<PAGE>
(d) In the event the Option or portion shall be exercised pursuant to
Section 4.1 by any person or persons other than the Employee, appropriate proof
of the right of such person or persons to exercise the Option.
4.4. Certain Timing Requirements
- ---- ---------------------------
Shares of the Company's Common Stock issuable to the Employee upon
exercise of the Option may be used to satisfy the Option price or the tax
withholding consequences of such exercise only (i) during the period beginning
on the third (3rd) business day following the date of release of the quarterly
or annual summary statement of sales and earnings of the Company and ending on
the twelfth (12th) business day following such date or (ii) pursuant to an
irrevocable written election by the Employee to use shares of the Company's
Common Stock issuable to the Employee upon exercise of the Option to pay all or
part of the Option price or the withholding taxes (subject to the approval of
the Administrator) made at least six (6) months prior to the payment of such
Option price or withholding taxes.
4.5. Conditions to Issuance of Stock Certificates
- ---- --------------------------------------------
The shares of stock deliverable upon the exercise of the Option, or
any portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Administrator shall, in its absolute
discretion, determine to be necessary or advisable; and
(b) The payment to the Company (or other employer corporation) of all
amounts which, under federal, state or local tax law, it is required to withhold
upon exercise of the Option; and
(c) The lapse of such reasonable period of time following the exercise
of the Option as the Administrator may from time to time establish for reasons
of administrative convenience.
4.6. Rights as Shareholder
- ---- ---------------------
The holder of the Option shall not be, nor have any of the rights or
privileges of, a shareholder of the Company in respect of any shares purchasable
upon the exercise of any part of the Option unless and until certificates
representing such shares shall have been issued by the Company to such holder.
9
<PAGE>
ARTICLE V
OTHER PROVISIONS
5.1. Administration
- ---- --------------
The Administrator shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or revoke
any such rules. All actions taken and all interpretations and determinations
made by the Administrator in good faith shall be final and binding upon the
Employee, the Company and all other interested persons. No member of the
Administrator shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Option. In
the event the Administrator is the Committee, the Board shall have no right to
exercise any of the rights or duties of the Committee under the Plan and this
Agreement.
5.2. Option Not Transferable
- ---- -----------------------
Neither the Option nor any interest or right therein or part thereof
shall be liable for the debts, contracts or engagements of the Employee or his
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 5.2
shall not prevent transfers by will or by the applicable laws of descent and
distribution.
5.3. Shares to Be Reserved
- ---- ---------------------
The Company shall at all times during the term of the Option reserve
and keep available such number of shares of stock as will be sufficient to
satisfy the requirements of this Agreement.
5.4. Notices
- ---- -------
Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Employee shall be addressed to him at the address
given beneath his signature hereto. By a notice given pursuant to this Section
5.4, either party may hereafter designate a different address for notices to be
given to him. Any notice which is required to be given to the Employee shall,
if the Employee is then deceased, be given to the Employee's personal
representative if such representative has previously informed the Company of his
status and address by written notice under this Section 5.4. Any notice shall
be deemed duly given when enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, deposited (with postage prepaid) in a post office or
branch post office regularly maintained by the United States Postal Service.
10
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5.5. Titles
- ---- ------
Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.
5.6. Shareholder Approval
- ---- --------------------
The Plan will be submitted for approval by the Company's shareholders
within twelve (12) months after the date the Plan was initially adopted by the
Board. This Option may not be exercised to any extent by anyone prior to the
time when the Plan is approved by the shareholders, and if such approval has not
been obtained by the end of said twelve-month period, this Option shall
thereupon be canceled and become null and void. The Company shall take such
actions as may be necessary to satisfy the requirements of Rule 16b-3(b).
5.7. Notification of Disposition
- ---- ---------------------------
The Employee shall give prompt notice to the Company of any
disposition or other transfer of any shares of stock acquired under this
Agreement if such disposition or transfer is made (a) within two (2) years from
the date of granting the Option with respect to such shares or (b) within one
(1) year after the transfer of such shares to him. Such notice shall specify
the date of such disposition or other transfer and the amount realized, in cash,
other property, assumption of indebtedness or other consideration, by the
Employee in such disposition or other transfer.
5.8. Construction
- ---- ------------
This Agreement shall be administered, interpreted and enforced under
the laws of the State of Delaware.
5.9. Conformity to Securities Laws
- ---- -----------------------------
The Employee acknowledges that the Plan is intended to conform to the
extent necessary with all provisions of the Securities Act and the Exchange Act
and any and all regulations and rules promulgated by the Securities and Exchange
Commission thereunder, including without limitation Rule 16b-3. Notwithstanding
anything herein to the contrary, the Plan shall be administered, and the Option
is granted and may be exercised, only in such a manner as to conform to such
laws, rules and regulations. To the extent permitted by applicable law, the
Plan and this Agreement shall be deemed amended to the extent necessary to
conform to such laws, rules and regulations.
5.10. Company's Right to Repurchase Shares
- ----- ------------------------------------
Upon Termination of Employment, the Company shall have the option to
repurchase all (but not less than all) of the shares of stock which have been
purchased by the Employee pursuant to exercise of the Option and which the
Employee then holds. The repurchase price payable by the Company if it
exercises its repurchase option shall be the greater of the purchase price of
the shares pursuant to Section 2.2 or the fair market value of the shares
11
<PAGE>
of stock on the date of repurchase, determined in accordance with Section 1.18
of the Plan, except that if at the date of such repurchase, the Company's common
stock is not publicly traded, the fair market value of the shares of stock shall
be determined for purposes of this Section 5.10 on the basis of the following
formula: eight (8) times the Company's pre-tax earnings for the Company's most
recently audited fiscal year divided by the number of outstanding shares of the
Company's common stock (including shares issuable upon the conversion of
outstanding shares of preferred stock) on the date of repurchase.
The Company's repurchase option shall be exercisable by giving written
notice to the Employee within thirty (30) calendar days after the Termination of
Employment provided, however, that in the event that the Optionee exercises the
Option after the Optionee's Termination of Employment but prior to the
expiration of the Option pursuant to the provisions of Section 3.3, the
Company's repurchase option shall be exercisable by giving written notice within
thirty (30) calendar days after the exercise of the Option by the Optionee. In
the event that the Company exercises its option to repurchase shares of stock
from the Optionee pursuant to this Section 5.10, Optionee's shares of stock
shall automatically be canceled, and Optionee shall have no further right, claim
or title to such shares, other than the right to receive the repurchase price
provided for in this Section 5.10. Upon receipt of a general release and the
stock certificates representing the shares, the Company shall forward payment
for such shares.
5.11. Restrictions on Transfer of Shares
- ----- ----------------------------------
(a) There can be no valid transfer (as hereinafter defined) of any
shares of stock purchased on exercise of the Option, or any interest in such
shares, by any holder of such shares or interests unless such transfer is solely
for cash consideration and is made in compliance with the following provisions:
(i) Before there can be a valid transfer of any shares or -any
interest therein, the record holder of the shares to be transferred (the
"Offered Shares") shall give written notice (by registered or certified
mail) to the Company. Such notice shall specify the identity of the
proposed transferee, the cash price offered for the Offered Shares by the
proposed transferee and the other terms and conditions of the proposed
transfer. The date such notice is mailed shall be hereinafter referred to
as the "notice date" and the record holder of the Offered Shares shall be
hereinafter referred to as the "Offeror."
(ii) For a period of thirty (30) calendar days after the notice
date, the Company shall have the option to purchase all (but not less than
all) of the Offered Shares at the purchase price and on the terms set forth
in subsection (a)(iii) of this Section 5.11. This option shall be
exercisable by the Company by mailing (by registered or certified mail)
written notice of exercise to the Offeror prior to the end of said thirty
(30) days.
(iii) The price at which the Company may purchase the Offered
Shares pursuant to the exercise of such option shall be the lower of (a)
the cash price offered for the Offered Shares by the proposed transferee
(as set forth in the notice required under subsection (a)(i) of this
Section 5.11) or (b) the greater of the purchase price of the shares
12
<PAGE>
pursuant to Section 2.2 or the fair market value of the shares of stock on
the notice date, determined in accordance with Section 1.18 of the Plan.
The Company's notice of exercise of such option shall be accompanied by
full payment for the Offered Shares and, upon such payment by the Company,
the Company shall acquire full right, title and interest to all of the
Offered Shares.
(iv) If, and only if, the option given pursuant to subsection
(a)(ii) of this Section 5.11 is not exercised, the transfer proposed in the
notice given pursuant to subsection (a)(i) of this Section 5.11 may take
place; provided, however, that such transfer must, in all respects, be
exactly as proposed in said notice except that such transfer may not take
place either before the tenth (10th) calendar day after the expiration of
said thirty-day option exercise period or after the ninetieth (90th)
calendar day after the expiration of said thirty-day option to exercise
period, and if such transfer has not taken place prior to said ninetieth
(90th) day, such transfer may not take place without once again complying
with subsection (a) of this Section 5.11.
(b) As used in this Section 5.11, the term "transfer" means any sale,
encumbrance, pledge, gift or other form of disposition or transfer of shares of
the Company's stock or any legal or equitable interest therein; provided,
however, that the term "transfer" does not include a transfer of such shares or
interests by will or by the applicable laws of descent and distribution or a
gift of such shares if the transferee or donee agrees to be bound by the
provisions of this Section 5.11.
(c) None of the shares of the Company's stock purchased on exercise of
the Option shall be transferred on the Company's books nor shall the Company
recognize any such transfer of any such shares or any interest therein unless
and until all applicable provisions of this Section 5.11 have been complied with
in all respects. The certificates of stock evidencing shares of stock purchased
on exercise of the Option shall bear an appropriate legend referring to the
transfer restrictions imposed by this Section 5.11 and to the repurchase option
provided for in Section 5.10.
5.12. Company's Right to Non-Disclosure of Financial Information
- ----- ----------------------------------------------------------
The Company shall have the right not to disclose the Company's
financial information as long as the Company's common stock is not publicly
traded. Whether an optionee or shareholder, the Employee agrees that Employee's
access to the Company's financial information and financial records will be
strictly prohibited as long as the Company's common stock is not publicly
traded. Access to such financial information may only be granted by the
Company's President or Chairman, in his or her sole discretion.
5.13. Lock-up in Event of Initial Public Offering
- ----- -------------------------------------------
The Optionee agrees that, during a period of 180 days from the date of
the Initial Public Offering, Optionee will not, without the prior written
consent of the underwriter(s) of the Initial Public Offering, directly or
indirectly, sell, offer to sell, grant any option for the sale of, or
13
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otherwise dispose of or transfer, any shares of Common Stock issuable upon
exercise of the Option.
5.14. Dispute Resolution
- ----- ------------------
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 resolved by binding arbitration before a single neutral
arbitrator. The arbitrator shall be selected from the American Arbitration
Association through its procedures. All rules governing the arbitration shall
be the rules as set forth by the American Arbitration Association. The
arbitrator is bound to rule only on whether or not there has been a violation of
the terms of this Agreement and to render an award, if any, that is consistent
with the terms of this Agreement. Neither party to this Agreement is entitled
to any legal recourse or rights or remedies other than those provided within
this Agreement. The arbitrator may apportion the costs of the arbitration,
including arbitrator's fees, among the parties, but shall have no power to award
attorneys' fees. Each party shall be responsible for its own attorneys' fees.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto.
By: ______________________________
President
By: ______________________________
Secretary
_________________________
Employee
_________________________
_________________________
Address
_________________________
Employee's Taxpayer
Identification Number:
_________________________
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<PAGE>
EXHIBIT 10.32
1998 EQUITY PARTICIPATION PLAN FORM OF
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, dated ___________, 199_ is made by and between COMPS
InfoSystems, Inc., a Delaware corporation hereinafter referred to as "Company,"
and _____________, hereinafter referred to as "Optionee":
WHEREAS, the Company wishes to afford the Optionee the opportunity to
purchase shares of its $.0l par value non-voting Class B Common Stock; and
WHEREAS, the Company wishes to carry out the Plan (the terms of which
are hereby incorporated by reference and made a part of this Agreement); and
WHEREAS, the Administrator appointed to administer the Plan, has
determined that it would be to the advantage and best interest of the Company
and its shareholders to grant the Non-Qualified Option provided for herein to
the Optionee as an inducement to enter into or remain in a business relationship
with the Company, its Parent Corporations or its Subsidiaries and as an
incentive for increased efforts during such service, and has advised the Company
thereof and instructed the undersigned officers to issue said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall
have the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.
1.1. Administrator
- ---- -------------
"Administrator" shall mean: (a) prior to the Initial Public Offering,
the Board, or, in the sole and absolute discretion of the Board, the Committee;
and (b) after the Initial Public Offering, the Committee.
1.2. Board
- ---- -----
"Board" shall mean the Board of Directors of the Company.
1.3. Code
- ---- ----
"Code" shall mean the Internal Revenue Code of 1986, as amended.
<PAGE>
1.4. Committee
- ---- ---------
"Committee" shall mean the Stock Option Committee of the Board,
appointed as provided in the Plan.
1.5. Common Stock
- ---- ------------
"Common Stock" shall mean the Company's non-voting Class B Common
Stock, par value $.0l per share.
1.6. Company
- ---- -------
"Company" shall mean COMPS InfoSystems, Inc.
1.7. Director
- ---- --------
"Director" shall mean a member of the Board.
1.8. Exchange Act
- ---- ------------
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
1.9. Initial Public Offering
- ---- -----------------------
"Initial Public Offering" shall mean the closing of the sale of the
Company's securities pursuant to an underwritten public offering.
1.10. Officer
- ----- -------
"Officer" shall mean an officer of the Company, as defined in Rule
16a-1(f) under the Exchange Act, as such Rule may be amended in the future.
1.11. Option
- ----- ------
"Option" shall mean the non-qualified option to purchase Common Stock
of the Company granted under this Agreement.
1.12. Parent Corporation
- ----- ------------------
"Parent Corporation" shall mean any corporation in an unbroken chain
of corporations ending with the Company if each of the corporations other than
the Company then owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one (1) of the other
corporations in such chain.
1.13. Plan
- ----- ----
"Plan" shall mean the 1998 Equity Participation Plan of COMPS
InfoSystems, Inc.
2
<PAGE>
1.14. Rule 16b-3
- ----- ----------
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange
Act, as such Rule may be amended in the future.
1.15. Secretary
- ----- ---------
"Secretary" shall mean the Secretary of the Company.
1.16. Securities Act
- ----- --------------
"Securities Act" shall mean the Securities Act of 1933, as amended.
1.17. Subsidiary
- ----- ----------
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one (1) of the other corporations in such chain.
1.18. Termination of Business Relationship
- ----- ------------------------------------
"Termination of Business Relationship" shall mean the time when the
business relationship between the Optionee and the Company, a Parent Corporation
or a Subsidiary is terminated for any reason, with or without cause, including,
but not by way of limitation, a termination by cessation of business,
bankruptcy, contract termination, resignation, discharge or death. The
Administrator, in its absolute discretion, shall determine the effect of all
other matters and questions relating to Termination of Business Relationship,
including, but not by way of limitation, the question of whether a Termination
of Business Relationship resulted from a discharge for good cause.
ARTICLE II.
GRANT OF OPTION
2.1. Grant of Option
- ---- ---------------
In consideration of the Optionee's agreement to remain in the business
relationship with the Company, its Parent Corporations or its Subsidiaries and
for other good and valuable consideration, on the date hereof the Company
irrevocably grants to the Optionee the option to purchase any part or all of an
aggregate of __________ shares of its $.0l par value non-voting Class B Common
Stock upon the terms and conditions set forth in this Agreement.
2.2. Purchase Price
- ---- --------------
The purchase price of the shares of stock covered by the Option shall
be $.__ per share without commission or other charge.
3
<PAGE>
2.3. Consideration to Company
- ---- ------------------------
In consideration of the granting of this Option by the Company, the
Optionee agrees to remain in the business relationship with the Company, a
Parent Corporation or a Subsidiary, with such duties and responsibilities as the
Company shall from time to time prescribe, for a period of at least one (1) year
from the date this Option is granted. Nothing in this Agreement or in the Plan
shall confer upon the Optionee any right to continue in a business relationship
with the Company, any Parent Corporation or any Subsidiary or shall interfere
with of restrict in any way the rights of the Company, its Parent Corporations
and its Subsidiaries, which are hereby expressly reserved, to terminate such
business relationship at any time for any reason whatsoever, with or without
cause.
2.4. Adjustments in Option
- ---- ---------------------
In the event that the outstanding shares of the stock subject to the
Option are changed into or exchanged for a different number or kind of shares of
the Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split up, stock
dividend or combination of shares, the Administrator shall make an appropriate
and equitable adjustment in the number and kind of shares as to which the
Option, or portions thereof then unexercised, shall be exercisable, to the end
that after such event the Optionee's proportionate interest shall be maintained
as before the occurrence of such event. Such adjustment in the Option shall be
made without change in the total price applicable to the unexercised portion of
the Option (except for any change in the aggregate price resulting from
rounding-off of share quantities or prices) and with any necessary corresponding
adjustment in the Option price per share. Any such adjustment made by the
Administrator shall be final and binding upon the Optionee, the Company and all
other interested persons.
ARTICLE III.
PERIOD OF EXERCISABILITY
3.1. Commencement of Exercisability
- ---- ------------------------------
(a) Subject to Section 5.6, the Option shall become exercisable in
five (5) cumulative installments as follows:
(i) The first installment shall consist of twenty percent
(20%) of the shares covered by the Option and shall become exercisable upon
the first anniversary of the date the Option is granted.
(ii) The second installment shall consist of twenty percent
(20%) of the shares covered by the Option and shall become exercisable upon
the second anniversary of the date the Option is granted.
(iii) The third installment shall consist of twenty percent
(20%) of the shares covered by the Option and shall become exercisable
upon the third anniversary of the date the Option is granted.
4
<PAGE>
(iv) The fourth installment shall consist of twenty percent
(20%) of the shares covered by the Option and shall become exercisable
upon the fourth anniversary of the date the Option is granted.
(v) The fifth installment shall consist of twenty percent
(20%) of the shares covered by the Option and shall become exercisable upon
the fifth anniversary of the date the Option is granted.
(b) No portion of the Option which is unexercisable at Termination of
Business Relationship shall thereafter become exercisable.
3.2. Duration of Exercisability
- ---- --------------------------
The installments provided for in Section 3.1 are cumulative. Each
such installment which becomes exercisable pursuant to Section 3.1 shall remain
exercisable until it becomes unexercisable under Section 3.3.
3.3. Expiration of Option
- ---- --------------------
The Option may not be exercised to any extent by anyone after the
first to occur of the following events:
(a) The expiration of ten (10) years from the date the Option was
granted; or
(b) The time of the Optionee's Termination of Business Relationship
unless such Termination of Business Relationship results from his death, his
retirement, his disability or his being discharged not for good cause; or
(c) The expiration of three (3) months from the date of the Optionee's
Termination of Business Relationship by reason of his retirement or his being
discharged not for good cause, unless the Optionee dies within said three-month
period; or
(d) The expiration of one (1) year from the date of the Optionee's
Termination of Business Relationship by reason of his disability; or
(e) The expiration of one (1) year from the date of the Optionee's
death; or
(f) The effective date of either the merger or consolidation of the
Company with or into another corporation, or the acquisition by another
corporation or person of all or substantially all of the Company's assets or
eighty percent (80%) or more of the Company's then outstanding voting stock, or
the liquidation or dissolution of the Company, unless the Administrator waives
this provision in connection with such transaction. At least ten (10) days
prior to the effective date of such merger, consolidation, acquisition,
liquidation or dissolution, the Administrator shall give the Optionee notice of
such event if the Option has then neither been fully exercised nor become
unexercisable under this Section 3.3.
5
<PAGE>
3.4. Acceleration of Exercisability
- ---- ------------------------------
In the event of the merger or consolidation of the Company with or
into another corporation, or the acquisition by another corporation or person of
all or substantially all of the Company's assets or eighty percent (80%) or more
of the Company's then outstanding voting stock, or the liquidation or
dissolution of the Company, the Administrator may, in its absolute discretion
and upon such terms and conditions as it deems appropriate, provide by
resolution, adopted prior to such event and incorporated in the notice referred
to in Section 3.3(f), that at some time prior to the effective date of such
event this Option shall be exercisable as to all the shares covered hereby,
notwithstanding that this Option may not yet have become fully exercisable under
Section 3.1(a); provided, however, that this acceleration of exercisability
shall not take place if:
(a) This Option becomes unexercisable under Section 3.3 prior to said
effective date; or
(b) In connection with such an event, provision is made for an
assumption of this Option or a substitution therefor of a new option by an
employer corporation or a parent or subsidiary of such corporation; and
provided, further, that nothing in this Section 3.4 shall make this Option
exercisable if it is otherwise unexercisable by reason of Section 5.6.
The Administrator may make such determinations and adopt such rules
and conditions as it, in its absolute discretion, deems appropriate in
connection with such acceleration of exercisability, including, but not by way
of limitation, provisions to ensure that any such acceleration and resulting
exercise shall be conditioned upon the consummation of the contemplated
corporate transaction.
ARTICLE IV.
EXERCISE OF OPTION
4.1. Person Eligible to Exercise
- ---- ---------------------------
During the lifetime of the Optionee, only he may exercise the Option
or any portion thereof. After the death of the Optionee, any exercisable
portion of the Option may, prior to the time when the Option becomes
unexercisable under Section 3.3, be exercised by his personal representative or
by any person empowered to do so under the Optionee's will or under the then
applicable laws of descent and distribution.
4.2. Partial Exercise
- ---- ----------------
Any exercisable portion of the Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable under Section
3.3; provided, however, that each partial exercise shall be for not less than
One Thousand (1000) shares (or the minimum installment set forth in Section 3.1,
if a smaller number of shares) and shall be for whole shares only.
6
<PAGE>
4.3. Manner of Exercise
- ---- ------------------
The Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary or his office of all of the following prior
to the time when the Option or such portion becomes unexercisable under Section
3.3:
(a) Notice in writing signed by the Optionee or the other person then
entitled to exercise the Option or portion, stating that the Option or portion
is thereby exercised, such notice complying with all applicable rules
established by the Committee; and
(i) Full payment (by cashiers check or wire transfer) for the
shares with respect to which such Option or portion is exercised; or
(ii) With the consent of the Administrator, (A) shares of the
Company's Common Stock owned by the Optionee duly endorsed for transfer to
the Company or (B) subject to the timing requirements of Section 4.4,
shares of the Company's Common Stock issuable to the Optionee upon exercise
of the Option, with a fair market value (as determined under Section 1.18
of the Plan) on the date of Option exercise equal to the aggregate purchase
price of the shares with respect to which such Option or portion is
exercised; or
(iii) With the consent of the Administrator, a promissory note
bearing interest (at no less than such rate as shall then preclude the
imputation of interest under the Code or successor provision) and payable
upon such terms as may be prescribed by the Administrator. The
Administrator may also prescribe the form of such note and the security to
be given for such note. That Option may not be exercised, however, by
delivery of a promissory note or by a loan from the Company when or where
such loan or other extension of credit is prohibited by law; or
(iv) With the consent of the Administrator, any combination of
the consideration provided in the foregoing subparagraphs (i) - (iii); and
(b) A bona fide written representation and agreement, in a form
satisfactory to the Administrator, signed by the Optionee or other person then
entitled to exercise such Option or portion, stating that the shares of stock
are being acquired for his own account, for investment and without any present
intention of distributing or reselling said shares or any of them except as may
be permitted under the Securities Act and then applicable rules and regulations
thereunder, and that the Optionee or other person then entitled to exercise such
Option or portion will indemnify the Company against and hold it free and
harmless from any loss, damage, expense or liability resulting to the Company if
any sale or distribution of the shares by such person is contrary to the
representation and agreement referred to above. The Administrator may, in its
absolute discretion, take whatever additional actions it deems appropriate to
insure the observance and performance of such representation and agreement and
to effect compliance with the Securities Act and any other federal or state
securities laws or regulations. Without limiting the generality of the
foregoing, the Administrator may require an opinion of counsel acceptable to it
to the effect that any subsequent transfer of shares acquired on an Option
exercise does not violate the Securities Act, and may issue stop-transfer orders
covering such shares. Share
7
<PAGE>
certificates evidencing stock issued on exercise of this Option shall bear an
appropriate legend referring to the provisions of this subsection (c) and the
agreements herein. The written representation and agreement referred to in the
first sentence of this subsection (c) shall, however, not be required if the
shares to be issued pursuant to such exercise have been registered under the
Securities Act, and such registration is then effective in respect of such
shares; and
(c) Full payment to the Company (or other employer corporation) of all
amounts which, under federal, state or local tax law, it is required to withhold
upon exercise of the Option; with the consent of the Administrator, (i) shares
of the Company's Common Stock owned by the Optionee duly endorsed for transfer,
or (ii) subject to the timing requirements of Section 4.4, shares of the
Company's Common Stock issuable to the Optionee upon exercise of the Option,
valued in accordance with Section 1.18 of the Plan at the date of Option
exercise, may be used to make all or part of such payment; and
(d) In the event the Option or portion shall be exercised pursuant to
Section 4.1 by any person or persons other than the Optionee, appropriate proof
of the right of such person or persons to exercise the Option.
4.4. Certain Timing Requirements
- ---- ---------------------------
Shares of the Company's Common Stock issuable to the Optionee upon
exercise of the Option may be used to satisfy the Option price or the tax
withholding consequences of such exercise only (i) during the period beginning
on the third (3rd) business day following the date of release of the quarterly
or annual summary statement of sales and earnings of the Company and ending on
the twelfth (12th) business day following such date or (ii) pursuant to an
irrevocable written election by the Optionee to use shares of the Company's
Common Stock issuable to the Optionee upon exercise of the Option to pay all or
part of the Option price or the withholding taxes (subject to the approval of
the Administrator) made at least six (6) months prior to the payment of such
Option price or withholding taxes.
4.5. Conditions to Issuance of Stock Certificates
- ---- --------------------------------------------
The shares of stock deliverable upon the exercise of the Option, or
any portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The admission of such shares to listing on all stock exchanges on
which such class of stock is then listed; and
(b) The completion of any registration or other qualification of such
shares under any state or federal law or under rulings or regulations of the
Securities and Exchange Commission or of any other governmental regulatory body,
which the Administrator shall, in its absolute discretion, deem necessary or
advisable; and
8
<PAGE>
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Administrator shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The payment to the Company (or other employer corporation) of all
amounts which, under federal, state or local tax law, it is required to withhold
upon exercise of the Option; and
(e) The lapse of such reasonable period of time following the exercise
of the Option as the Administrator may from time to time establish for reasons
of administrative convenience.
4.6. Rights as Shareholder
- ---- ---------------------
The holder of the Option shall not be, nor have any of the rights or
privileges of, a shareholder of the Company in respect of any shares purchasable
upon the exercise of any part of the Option unless and until certificates
representing such shares shall have been issued by the Company to such holder.
ARTICLE V.
OTHER PROVISIONS
5.1. Administration
- ---- --------------
The Administrator shall have the power to interpret the Plan and this
Agreement and to adopt such rules for the administration, interpretation and
application of the Plan as are consistent therewith and to interpret or revoke
any such rules. All actions taken and all interpretations and determinations
made by the Administrator in good faith shall be final and binding upon the
Optionee, the Company and all other interested persons. No member of the
Administrator shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Option. In
the event that the Administrator is the Committee, the Board shall have no right
to exercise any of the rights or duties of the Committee under the Plan and this
Agreement.
5.2. Option Not Transferable
- ---- -----------------------
Neither the Option nor any interest or right therein or part thereof
shall be liable for the debts, contracts or engagements of the Optionee or his
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 5.2
shall not prevent transfers by will or by the applicable laws of descent and
distribution.
9
<PAGE>
5.3. Shares to Be Reserved
- ---- ---------------------
The Company shall at all times during the term of the Option reserve
and keep available such number of shares of stock as will be sufficient to
satisfy the requirements of this Agreement.
5.4. Notices
- ---- -------
Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Optionee shall be addressed to him at the address
given beneath his signature hereto. By a notice given pursuant to this Section
5.4, either party may hereafter designate a different address for notices to be
given to him. Any notice which is required to be given to the Optionee shall,
if the Optionee is then deceased, be given to the Optionee's personal
representative if such representative has previously informed the Company of his
status and address by written notice under this Section 5.4. Any notice shall
be deemed duly given when enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, deposited (with postage prepaid) in a post office or
branch post office regularly maintained by the United States Postal Service.
5.5. Titles
- ---- ------
Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.
5.6. Shareholder Approval
- ---- --------------------
The Plan will be submitted for approval by the Company's shareholders
within twelve (12) months after the date the Plan was initially adopted by the
Board. This Option may not be exercised to any extent by anyone prior to the
time when the Plan is approved by the shareholders, and if such approval has not
been obtained by the end of said twelve-month period, this Option shall
thereupon be canceled and become null and void. The Company shall take such
actions as may be necessary to satisfy the requirements of Rule 16b-3(b).
5.7. Construction
- ---- ------------
This Agreement shall be administered, interpreted and enforced under
the laws of the State of Delaware.
5.8. Conformity to Securities Laws
- ---- -----------------------------
The Optionee acknowledges that the Plan is intended to conform to the
extent necessary with all provisions of the Securities Act and the Exchange Act
and any and all regulations and rules promulgated by the Securities and Exchange
Commission thereunder, including without limitation Rule 16b-3. Notwithstanding
anything herein to the contrary, the Plan shall be administered, and the Option
is granted and may be exercised, only in such a manner as to conform to such
laws, rules and regulations. To the extent permitted by applicable law, the
Plan and this Agreement shall be deemed amended to the extent necessary to
conform to such laws, rules and regulations.
10
<PAGE>
5.9. Company's Right to Repurchase Shares
- ---- ------------------------------------
Upon Termination of Business Relationship, the Company shall have the
option to repurchase all (but not less than all) of the shares of stock which
have been purchased by the Optionee pursuant to exercise of the Option and which
the Optionee then holds. The repurchase price payable by the Company if it
exercises its repurchase option shall be the fair market value of the shares of
stock on the date of repurchase, determined in accordance with Section 1.18 of
the Plan, except that if at the date of such repurchase, the Company's common
stock is not publicly traded, the fair market value of the shares of stock shall
be determined for purposes of this Section 5.9 on the basis of the following
formula: eight (8) times the Company's pre-tax earnings for the Company's most
recently audited fiscal year divided by the number of outstanding shares of the
Company's common stock (including shares issuable upon the conversion of
outstanding shares of preferred stock) on the date of repurchase.
The Company's repurchase option shall be exercisable by giving written
notice to the Optionee within thirty (30) calendar days after the Termination of
Business Relationship provided, however, that in the event that the Optionee
exercises the Option after the Optionee's Termination of Business Relationship
but prior to the expiration of the Option pursuant to the provisions of Section
3.3, the Company's repurchase option shall be exercisable by giving written
notice within thirty (30) calendar days after the exercise of the Option by the
Optionee. In the event that the Company exercises its option to repurchase
shares of stock from the Optionee pursuant to this Section 5.9, the Optionee
shall sign a general release acknowledging that the Optionee has no further
right, claim or title to such shares. Upon receipt of such general release and
the stock certificates representing the shares, the Company shall forward
payment for such shares.
5.10. Restrictions on Transfer of Shares
- ----- ----------------------------------
(a) There can be no valid transfer (as hereinafter defined) of any
shares of stock purchased on exercise of the Option, or any interest in such
shares, by any holder of such shares or interests unless such transfer is solely
for cash consideration and is made in compliance with the following provisions:
(i) Before there can be a valid transfer of any shares or any
interest therein, the record holder of the shares to be transferred (the
"Offered Shares') shall give written notice (by registered or certified
mail) to the Company. Such notice shall specify the identity of the
proposed transferee, the cash price offered for the Offered Shares by the
proposed transferee and the other terms and conditions of the proposed
transfer. The date such notice is mailed shall be hereinafter referred to
as the "notice date" and the record holder of the Offered Shares shall be
hereinafter referred to as the "Offeror."
(ii) For a period of thirty (30) calendar days after the notice
date, the Company shall have the option to purchase all (but not less than
all) of the Offered Shares at the purchase price and on the terms set forth
in subsection (a)(3) of this Section 5.10. This option shall be exercisable
by the Company by mailing (by registered or certified mail) written notice
of exercise to the Offeror prior to the end of said thirty (30) days.
11
<PAGE>
(iii) The price at which the Company may purchase the Offered
Shares pursuant to the exercise of such option shall be the lower of (a)
the cash price offered for the Offered Shares by the proposed transferee
(as set forth in the notice required under subsection (a)(i) of this
Section 5.10) or (b) the greater of the purchase price of the shares
pursuant to Section 2.2 or the fair market value of the shares of stock on
the notice date, determined in accordance with Section 1.18 of the Plan.
The Company's notice of exercise of such option shall be accompanied by
full payment for the Offered Shares and, upon such payment by the Company,
the Company shall acquire full right, title and interest to all of the
Offered Shares.
(iv) If, and only if, the option given pursuant to subsection
(a)(ii) of this Section 5.10 is not exercised, the transfer proposed in the
notice given pursuant to subsection (a)(i) of this Section 5.10 may take
place; provided, however, that such transfer must, in all respects, be
exactly as proposed in said notice except that such transfer may not take
place either before the tenth (10th) calendar day after the expiration of
said thirty-day option exercise period or after the ninetieth (90th)
calendar day after the expiration of said thirty-day option exercise
period, and if such transfer has not taken place prior to said ninetieth
(90th) day, such transfer may not take place without once again complying
with subsection (a) of this Section 5.10.
(b) As used in this Section 5.10, the term "transfer" means any sale,
encumbrance, pledge, gift or other form of disposition or transfer of shares of
the Company's stock or any legal or equitable interest therein; provided,
however, that the term "transfer" does not include a transfer of such shares or
interests by will or by the applicable laws of descent and distribution or a
gift of such shares if the transferee or donee agrees to be bound by the
provisions of this Section 5.10.
(c) None of the shares of the Company's stock purchased on exercise of
the Option shall be transferred on the Company's books nor shall the Company
recognize any such transfer of any such shares or any interest therein unless
and until all applicable provisions of this Section 5.10 have been compiled with
in all respects. The certificates of stock evidencing shares of stock purchased
on exercise of the Option shall bear an appropriate legend referring to the
transfer restrictions imposed by this Section 5.10 and to the repurchase option
provided for in Section 5.9.
5.11. Lock-up in Event of Initial Public Offering
- ----- -------------------------------------------
The Optionee agrees that, during a period of 180 days from the date of
the Initial Public Offering, Optionee will not, without the prior written
consent of the underwriter(s) of the Initial Public Offering, directly or
indirectly, sell, offer to sell, grant any option for the sale of, or otherwise
dispose of or transfer, any shares of Common Stock issuable upon exercise of the
Option.
5.12. Dispute Resolution
- ----- ------------------
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 resolved
12
<PAGE>
by binding arbitration before a single neutral arbitrator. The arbitrator shall
be selected from the American Arbitration Association through its procedures.
All rules governing the arbitration shall be the rules as set forth by the
American Arbitration Association. The arbitrator is bound to rule only on
whether or not there has been a violation of the terms of this Agreement and to
render an award, if any, that is consistent with the terms of this Agreement.
Neither party to this Agreement is entitled to any legal recourse or rights or
remedies other than those provided within this Agreement. The arbitrator may
apportion the costs of the arbitration, including arbitrator's fees, among the
parties, but shall have no power to award attorneys' fees. Each party shall be
responsible for its own attorneys' fees.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto.
By:
--------------------------------
President
By:
--------------------------------
Secretary
- --------------------------------
Optionee
- --------------------------------
- --------------------------------
Address
Optionee's Taxpayer
Identification Number:
- --------------------------------
13
<PAGE>
EXHIBIT 10.33
THE 1998 SUPPLEMENTAL OPTION PLAN
OF
COMPS INFOSYSTEMS, INC.
COMPS InfoSystems, Inc., a Delaware corporation, has adopted The 1998
Supplemental Option Plan of COMPS InfoSystems, Inc. (the "Plan"), effective
November 6, 1998, for the benefit of its eligible employees, consultants and
directors.
The purposes of the Plan are as follows:
(1) To provide an additional incentive for directors, key Employees
and Consultants (as such terms are defined below) to further the growth,
development and financial success of the Company by personally benefiting
through the ownership of Company stock and/or rights which recognize such
growth, development and financial success.
(2) To enable the Company to obtain and retain the services of
directors, key Employees and Consultants considered essential to the long range
success of the Company by offering them an opportunity to own stock in the
Company and/or rights which will reflect the growth, development and financial
success of the Company.
ARTICLE I.
DEFINITIONS
1.1. General. Wherever the following terms are used in the Plan they
-------
shall have the meanings specified below, unless the context clearly indicates
otherwise.
1.2. Administrator. "Administrator" shall mean the entity that
-------------
conducts the general administration of the Plan as provided herein. The term
"Administrator" shall refer to the Committee unless the Board has assumed the
authority for administration of the Plan generally as provided in Section 10.1.
1.3. Award. "Award" shall mean an Option, a Restricted Stock award,
-----
a Performance Award, a Dividend Equivalents award, a Deferred Stock award, a
Stock Payment award or a Stock Appreciation Right which may be awarded or
granted under the Plan (collectively, "Awards").
1.4. Award Agreement. "Award Agreement" shall mean a written
---------------
agreement executed by an authorized officer of the Company and the Holder which
shall contain such terms and conditions with respect to an Award as the
Administrator shall determine, consistent with the Plan.
<PAGE>
1.5. Award Limit. "Award Limit" shall mean 423,537 shares of Common
-----------
Stock, as adjusted pursuant to Section 11.3 of the Plan.
1.6. Board. "Board" shall mean the Board of Directors of the
-----
Company.
1.7. Code. "Code" shall mean the Internal Revenue Code of 1986, as
----
amended.
1.8. Committee. "Committee" shall mean the Compensation Committee
---------
of the Board, or another committee or subcommittee of the Board, appointed as
provided in Section 10.1.
1.9. Common Stock. "Common Stock" shall mean the non-voting Class B
------------
common stock of the Company, par value $.01 per share, and any equity security
of the Company issued or authorized to be issued in the future, but excluding
any preferred stock and any warrants, options or other rights to purchase Common
Stock.
1.10. Company. "Company" shall mean COMPS InfoSystems, Inc., a
-------
Delaware corporation.
1.11. Consultant. "Consultant" shall mean any consultant or adviser
----------
if:
(a) the consultant or adviser renders bona fide services to the
Company;
(b) the services rendered by the consultant or adviser are not in
connection with the offer or sale of securities in a capital-raising transaction
and do not directly or indirectly promote or maintain a market for the Company's
securities; and
(c) the consultant or adviser is a natural person who has contracted
directly with the Company to render such services.
1.12. Deferred Stock. "Deferred Stock" shall mean Common Stock
--------------
awarded under Article VIII of the Plan.
1.13. Director. "Director" shall mean a member of the Board.
--------
1.14. Dividend Equivalent. "Dividend Equivalent" shall mean a right
-------------------
to receive the equivalent value (in cash or Common Stock) of dividends paid on
Common Stock, awarded under Article VIII of the Plan.
1.15. DRO. "DRO" shall mean a domestic relations order as defined by
---
the Code or Title I of the Employee Retirement Income Security Act of 1974, as
amended, or the rules thereunder.
1.16. Employee. "Employee" shall mean any officer or other employee
--------
(as defined in accordance with Section 3401(c) of the Code) of the Company, or
of any corporation which is a Subsidiary.
2
<PAGE>
1.17. Exchange Act. "Exchange Act" shall mean the Securities
------------
Exchange Act of 1934, as amended.
1.18. Fair Market Value. "Fair Market Value" of a share of Common
-----------------
Stock as of a given date shall be (a) the closing price of a share of Common
Stock on the principal exchange on which shares of Common Stock are then
trading, if any (or as reported on any composite index which includes such
principal exchange), on the trading day previous to such date, or if shares were
not traded on the trading day previous to such date, then on the next preceding
date on which a trade occurred, or (b) if Common Stock is not traded on an
exchange but is quoted on NASDAQ or a successor quotation system, the mean
between the closing representative bid and asked prices for the Common Stock on
the trading day previous to such date as reported by NASDAQ or such successor
quotation system; or (c) if Common Stock is not publicly traded on an exchange
and not quoted on NASDAQ or a successor quotation system, the Fair Market Value
of a share of Common Stock as established by the Administrator acting in good
faith.
1.19. Holder. "Holder" shall mean a person who has been granted or
------
awarded an Award.
1.20. Incentive Stock Option. "Incentive Stock Option" shall mean an
----------------------
option which conforms to the applicable provisions of Section 422 of the Code
and which is designated as an Incentive Stock Option by the Administrator.
1.21. Independent Director. "Independent Director" shall mean a
--------------------
member of the Board who is not an Employee of the Company.
1.22. Non-Qualified Stock Option. "Non-Qualified Stock Option" shall
--------------------------
mean an Option which is not designated as an Incentive Stock Option by the
Administrator.
1.23. Option. "Option" shall mean a stock option granted under
------
Article IV of the Plan. An Option granted under the Plan shall, as determined
by the Administrator, be either a Non-Qualified Stock Option or an Incentive
Stock Option; provided, however, that Options granted to Consultants shall be
-------- -------
Non-Qualified Stock Options.
1.24. Performance Award. "Performance Award" shall mean a cash
-----------------
bonus, stock bonus or other performance or incentive award that is paid in cash,
Common Stock or a combination of both, awarded under Article VIII of the Plan.
1.25. Performance Criteria. "Performance Criteria" shall mean the
--------------------
following business criteria with respect to the Company, any Subsidiary or any
division or operating unit: (a) net income, (b) pre-tax income, (c) operating
income, (d) cash flow, (e) earnings per share, (f) return on equity, (g) return
on invested capital or assets, (h) cost reductions or savings, (i) funds from
operations, (j) appreciation in the fair market value of Common Stock and (k)
earnings before any one or more of the following items: interest, taxes,
depreciation or amortization.
1.26. Plan. "Plan" shall mean The 1998 Supplemental Option Plan of
----
COMPS InfoSystems, Inc.
3
<PAGE>
1.27. Restricted Stock. "Restricted Stock" shall mean Common Stock
----------------
awarded under Article VII of the Plan.
1.28. Rule 16b-3. "Rule 16b-3" shall mean that certain Rule 16b-3
----------
under the Exchange Act, as such Rule may be amended from time to time.
1.29. Section 162(m) Participant. "Section 162(m) Participant" shall
--------------------------
mean any key Employee designated by the Administrator as a key Employee whose
compensation for the fiscal year in which the key Employee is so designated or a
future fiscal year may be subject to the limit on deductible compensation
imposed by Section 162(m) of the Code.
1.30. Securities Act. "Securities Act" shall mean the Securities Act
--------------
of 1933, as amended.
1.31. Stock Appreciation Right. "Stock Appreciation Right" shall
------------------------
mean a stock appreciation right granted under Article IX of the Plan.
1.32. Stock Payment. "Stock Payment" shall mean (a) a payment in the
-------------
form of shares of Common Stock, or (b) an option or other right to purchase
shares of Common Stock, as part of a deferred compensation arrangement, made in
lieu of all or any portion of the compensation, including without limitation,
salary, bonuses and commissions, that would otherwise become payable to a key
Employee or Consultant in cash, awarded under Article VIII of the Plan.
1.33. Subsidiary. "Subsidiary" shall mean any corporation in an
----------
unbroken chain of corporations beginning with the Company if each of the
corporations other than the last corporation in the unbroken chain then owns
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain.
1.34. Substitute Award. "Substitute Award" shall mean an Option
----------------
granted under this Plan upon the assumption of, or in substitution for,
outstanding equity awards previously granted by a company or other entity in
connection with a corporate transaction, such as a merger, combination,
consolidation or acquisition of property or stock; provided, however, that in no
-------- -------
event shall the term "Substitute Award" be construed to refer to an award made
in connection with the cancellation and repricing of an Option.
1.35. Termination of Consultancy. "Termination of Consultancy" shall
--------------------------
mean the time when the engagement of a Holder as a Consultant to the Company or
a Subsidiary is terminated for any reason, with or without cause, including, but
not by way of limitation, by resignation, discharge, death or retirement; but
excluding terminations where there is a simultaneous commencement of employment
with the Company or any Subsidiary. The Administrator, in its absolute
discretion, shall determine the effect of all matters and questions relating to
Termination of Consultancy, including but not by way of limitation, the question
of whether a Termination of Consultancy resulted from a discharge for good
cause, and all questions of whether a particular leave of absence constitutes a
Termination of Consultancy. Notwithstanding any other provision of the Plan,
the Company or any Subsidiary has an absolute and unrestricted right to
terminate a Consultant's service at any time for any reason whatsoever, with or
without cause, except to the extent expressly provided otherwise in writing.
4
<PAGE>
1.36. Termination of Employment. "Termination of Employment" shall
-------------------------
mean the time when the employee-employer relationship between a Holder and the
Company or any Subsidiary is terminated for any reason, with or without cause,
including, but not by way of limitation, a termination by resignation,
discharge, death, disability or retirement; but excluding (a) terminations where
there is a simultaneous reemployment or continuing employment of a Holder by the
Company or any Subsidiary, (b) at the discretion of the Administrator,
terminations which result in a temporary severance of the employee-employer
relationship, and (c) at the discretion of the Administrator, terminations which
are followed by the simultaneous establishment of a consulting relationship by
the Company or a Subsidiary with the former employee. The Administrator, in its
absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Employment, including, but not by way of limitation,
the question of whether a Termination of Employment resulted from a discharge
for good cause, and all questions of whether a particular leave of absence
constitutes a Termination of Employment; provided, however, that, with respect
-------- -------
to Incentive Stock Options, unless otherwise determined by the Administrator in
its discretion, a leave of absence, change in status from an employee to an
independent contractor or other change in the employee-employer relationship
shall constitute a Termination of Employment if, and to the extent that, such
leave of absence, change in status or other change interrupts employment for the
purposes of Section 422(a)(2) of the Code and the then applicable regulations
and revenue rulings under said Section.
ARTICLE II.
SHARES SUBJECT TO PLAN
2.1. Shares Subject to Plan.
----------------------
(a) The shares of stock subject to Awards shall be Common Stock,
initially shares of the Company's Common Stock, par value $.01 per share. The
aggregate number of such shares which may be issued upon exercise of such
Options or rights or upon any such awards under the Plan shall not exceed
847,174. The shares of Common Stock issuable upon exercise of such Options or
rights or upon any such awards may be either previously authorized but unissued
shares or treasury shares.
(b) The maximum number of shares which may be subject to Awards,
granted under the Plan to any individual in any fiscal year shall not exceed the
Award Limit. To the extent required by Section 162(m) of the Code, shares
subject to Options which are canceled continue to be counted against the Award
Limit.
2.2. Add-back of Options and Other Rights. If any Option, or other
------------------------------------
right to acquire shares of Common Stock under any other Award under the Plan,
expires or is canceled without having been fully exercised, or is exercised in
whole or in part for cash as permitted by the Plan, the number of shares subject
to such Option or other right but as to which such Option or other right was not
exercised prior to its expiration, cancellation or exercise may again be
optioned, granted or awarded hereunder, subject to the limitations of Section
2.1. Furthermore, any shares subject to Awards which are adjusted pursuant to
Section 11.3 and become exercisable with respect to shares of stock of another
corporation shall be considered canceled and may again be optioned, granted or
awarded hereunder, subject to the limitations of
5
<PAGE>
Section 2.1. Shares of Common Stock which are delivered by the Holder or
withheld by the Company upon the exercise of any Award under the Plan, in
payment of the exercise price thereof or tax withholding thereon, may again be
optioned, granted or awarded hereunder, subject to the limitations of Section
2.1. If any shares of Restricted Stock are surrendered by the Holder or
repurchased by the Company pursuant to Section 7.4 or 7.5 hereof, such shares
may again be optioned, granted or awarded hereunder, subject to the limitations
of Section 2.1. Notwithstanding the provisions of this Section 2.2, no shares of
Common Stock may again be optioned, granted or awarded if such action would
cause an Incentive Stock Option to fail to qualify as an incentive stock option
under Section 422 of the Code.
ARTICLE III.
GRANTING OF AWARDS
3.1. Award Agreement. Each Award shall be evidenced by an Award
---------------
Agreement. Award Agreements evidencing Awards intended to qualify as
performance-based compensation as described in Section 162(m)(4)(C) of the Code
shall contain such terms and conditions as may be necessary to meet the
applicable provisions of Section 162(m) of the Code. Award Agreements
evidencing Incentive Stock Options shall contain such terms and conditions as
may be necessary to meet the applicable provisions of Section 422 of the Code.
3.2. Provisions Applicable to Section 162(m) Participants.
----------------------------------------------------
(a) The Committee, in its discretion, may determine whether an Award
is to qualify as performance-based compensation as described in Section
162(m)(4)(C) of the Code.
(b) Notwithstanding anything in the Plan to the contrary, the
Committee may grant any Award to a Section 162(m) Participant, including
Restricted Stock, the restrictions with respect to which lapse upon the
attainment of performance goals which are related to one or more of the
Performance Criteria and any performance or incentive award described in Article
VIII that vests or becomes exercisable or payable upon the attainment of
performance goals which are related to one or more of the Performance Criteria.
(c) To the extent necessary to comply with the performance-based
compensation requirements of Section 162(m)(4)(C) of the Code, with respect to
any Award granted under Articles VII and VIII which may be granted to one or
more Section 162(m) Participants, no later than ninety (90) days following the
commencement of any fiscal year in question or any other designated fiscal
period or period of service (or such other time as may be required or permitted
by Section 162(m) of the Code), the Committee shall, in writing, (i) designate
one or more Section 162(m) Participants, (ii) select the Performance Criteria
applicable to the fiscal year or other designated fiscal period or period of
service, (iii) establish the various performance targets, in terms of an
objective formula or standard, and amounts of such Awards, as applicable, which
may be earned for such fiscal year or other designated fiscal period or period
of service and (iv) specify the relationship between Performance Criteria and
the performance targets and the amounts of such Awards, as applicable, to be
earned by each Section 162(m) Participant for such fiscal year or other
designated fiscal period or period of service. Following the completion of each
fiscal year or other designated fiscal period or period of
6
<PAGE>
service, the Committee shall certify in writing whether the applicable
performance targets have been achieved for such fiscal year or other designated
fiscal period or period of service. In determining the amount earned by a
Section 162(m) Participant, the Committee shall have the right to reduce (but
not to increase) the amount payable at a given level of performance to take into
account additional factors that the Committee may deem relevant to the
assessment of individual or corporate performance for the fiscal year or other
designated fiscal period or period of service.
(d) Furthermore, notwithstanding any other provision of the Plan or
any Award which is granted to a Section 162(m) Participant and is intended to
qualify as performance-based compensation as described in Section 162(m)(4)(C)
of the Code shall be subject to any additional limitations set forth in Section
162(m) of the Code (including any amendment to Section 162(m) of the Code) or
any regulations or rulings issued thereunder that are requirements for
qualification as performance-based compensation as described in Section
162(m)(4)(C) of the Code, and the Plan shall be deemed amended to the extent
necessary to conform to such requirements.
3.3. Limitations Applicable to Section 16 Persons. Notwithstanding
--------------------------------------------
any other provision of the Plan, the Plan, and any Award granted or awarded to
any individual who is then subject to Section 16 of the Exchange Act, shall be
subject to any additional limitations set forth in any applicable exemptive rule
under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of
the Exchange Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, the Plan and Awards granted or
awarded hereunder shall be deemed amended to the extent necessary to conform to
such applicable exemptive rule.
3.4. Consideration. In consideration of the granting of an Award
-------------
under the Plan, the Holder shall agree, in the Award Agreement, to remain in the
employ of (or to consult for, as applicable) the Company or any Subsidiary for a
period of at least one year (or such shorter period as may be fixed in the Award
Agreement or by action of the Administrator following grant of the Award) after
the Award is granted.
3.5. At-Will Employment. Nothing in the Plan or in any Award
------------------
Agreement hereunder shall confer upon any Holder any right to continue in the
employ of, or as a Consultant for, the Company or any Subsidiary, or as a
director of the Company, or shall interfere with or restrict in any way the
rights of the Company and any Subsidiary, which are hereby expressly reserved,
to discharge any Holder at any time for any reason whatsoever, with or without
cause, except to the extent expressly provided otherwise in a written employment
agreement between the Holder and the Company and any Subsidiary.
ARTICLE IV.
GRANTING OF OPTIONS TO EMPLOYEES AND CONSULTANTS
4.1. Eligibility. Any Employee or Consultant selected by the
-----------
Committee pursuant to Section 4.4(a)(i) shall be eligible to be granted an
Option.
7
<PAGE>
4.2. Disqualification for Stock Ownership. No person may be granted
------------------------------------
an Incentive Stock Option under the Plan if such person, at the time the
Incentive Stock Option is granted, owns stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or any then existing Subsidiary or parent corporation (within the meaning of
Section 422 of the Code) unless such Incentive Stock Option conforms to the
applicable provisions of Section 422 of the Code.
4.3. Qualification of Incentive Stock Options. No Incentive Stock
----------------------------------------
Option shall be granted to any person who is not an Employee.
4.4. Granting of Options to Employees and Consultants.
------------------------------------------------
(a) The Committee shall from time to time, in its absolute discretion,
and subject to applicable limitations of the Plan:
(i) Determine which Employees are key Employees and select from
among the key Employees or Consultants (including Employees or Consultants
who have previously received Awards under the Plan) such of them as in its
opinion should be granted Options;
(ii) Subject to the Award Limit, determine the number of shares
to be subject to such Options granted to the selected key Employees or
Consultants;
(iii) Subject to Section 4.3, determine whether such Options are
to be Incentive Stock Options or Non-Qualified Stock Options and whether
such Options are to qualify as performance-based compensation as described
in Section 162(m)(4)(C) of the Code; and
(iv) Determine the terms and conditions of such Options,
consistent with the Plan; provided, however, that the terms and conditions
-------- -------
of Options intended to qualify as performance-based compensation as
described in Section 162(m)(4)(C) of the Code shall include, but not be
limited to, such terms and conditions as may be necessary to meet the
applicable provisions of Section 162(m) of the Code.
(b) Upon the selection of a key Employee or Consultant to be granted
an Option, the Committee shall instruct the Secretary of the Company to issue
the Option and may impose such conditions on the grant of the Option as it deems
appropriate.
(c) Any Incentive Stock Option granted under the Plan may be modified
by the Committee, with the consent of the Holder, to disqualify such Option from
treatment as an "incentive stock option" under Section 422 of the Code.
ARTICLE V.
TERMS OF OPTIONS
5.1. Option Price. The price per share of the shares subject to
------------
each Option granted to Employees and Consultants shall be set by the Committee;
provided, however, that
- -------- -------
8
<PAGE>
such price shall be no less than 85% of the Fair Market Value of a share of
Common Stock on the date the Option is granted and;
(a) in the case of Incentive Stock Options, such price shall not
be less than 100% of the Fair Market Value of a share of Common Stock on
the date the Option is granted (or the date the Option is modified,
extended or renewed for purposes of Section 424(h) of the Code); and
(b) in the case of Options granted to an individual then owning
(within the meanings of Section 424(d) of the Code) more than 10% of the
total combined voting power of all classes of stock of the Company or any
Subsidiary or parent corporation thereof (within the meaning of Section 422
of the Code), such price shall not be less than 110% of the Fair Market
Value of a share of Common Stock on the date the Option is granted (or the
date the Option is modified, extended or renewed for purposes of Section
424(h) of the Code).
5.2. Option Term. The term of an Option granted to an Employee or
-----------
consultant shall be set by the Committee in its discretion; provided, however,
-------- -------
that the term of any Option shall not be more than ten (10) years from the date
the Option is granted or, in the case of any Incentive Stock Option, five (5)
years from the date the Incentive Stock Option is granted if the Incentive Stock
Option is granted to an individual then owning (within the meaning of Section
424(d) of the Code) more than 10% of the total combined voting power of all
classes of stock of the Company or any Subsidiary or parent corporation thereof
(within the meaning of Section 422 of the Code). Except as limited by
applicable state law or the requirements of Section 422 of the Code and
regulations and rulings thereunder applicable to Incentive Stock Options, the
Committee may extend the term of any outstanding Option in connection with any
Termination of Employment or Termination of Consultancy of the Holder, or amend
any other term or condition of such Option relating to such a termination.
5.3. Option Vesting
--------------
(a) The period during which the right to exercise, in whole or in
part, an Option granted to an Employee or a Consultant vests in the Holder shall
be set by the Committee and the Committee may determine that an Option may not
be exercised in whole or in part for a specified period after it is granted;
provided, however, that, unless the Committee otherwise provides in the terms of
- -------- -------
the Award Agreement or otherwise, no Option shall be exercisable by any Holder
who is then subject to Section 16 of the Exchange Act within the period ending
six months and one day after the date the Option is granted. At any time after
grant of an Option, the Committee may, in its sole and absolute discretion and
subject to whatever terms and conditions it selects, accelerate the period
during which an Option granted to an Employee or Consultant vests.
(b) No portion of an Option granted to an Employee or Consultant which
is unexercisable at Termination of Employment or Termination of Consultancy, as
applicable, shall thereafter become exercisable, except as may be otherwise
provided by the Committee either in the Award Agreement or by action of the
Committee following the grant of the Option.
9
<PAGE>
(c) To the extent that the aggregate Fair Market Value of stock with
respect to which "incentive stock options" (within the meaning of Section 422 of
the Code, but without regard to Section 422(d) of the Code) are exercisable for
the first time by a Holder during any calendar year (under the Plan and all
other incentive stock option plans of the Company and any parent or subsidiary
corporation, within the meaning of Section 422 of the Code) of the Company
exceeds $ 100,000, such Options shall be treated as Non-Qualified Options to the
extent required by Section 422 of the Code. The rule set forth in the preceding
sentence shall be applied by taking Options into account in the order in which
they were granted. For purposes of this Section 5.3(c), the Fair Market Value
of stock shall be determined as of the time the Option with respect to such
stock is granted.
5.5. Substitute Awards.
-----------------
Notwithstanding the foregoing provisions of this Article V to the
contrary, in the case of an Option that is a Substitute Award, the price per
share of the shares subject to such Option may be less than the Fair Market
Value per share on the date of grant, provided, that the excess of:
--------
(a) the aggregate Fair Market Value (as of the date such
Substitute Award is granted) of the shares subject to the Substitute Award;
over
(b) the aggregate exercise price thereof; does not exceed the
excess of;
(c) the aggregate fair market value (as of the time immediately
preceding the transaction giving rise to the Substitute Award, such fair
market value to be determined by the Committee) of the shares of the
predecessor entity that were subject to the grant assumed or substituted
for by the Company; over
(d) the aggregate exercise price of such shares.
ARTICLE VI.
EXERCISE OF OPTIONS
6.1. Partial Exercise. An exercisable Option may be exercised in
----------------
whole or in part. However, an Option shall not be exercisable with respect to
fractional shares and the Administrator may require that, by the terms of the
Option, a partial exercise be with respect to a minimum number of shares.
6.2. Manner of Exercise. All or a portion of an exercisable Option
------------------
shall be deemed exercised upon delivery of all of the following to the Secretary
of the Company or his Office:
(a) A written notice complying with the applicable rules
established by the Administrator stating that the Option, or a portion
thereof, is exercised. The notice shall be signed by the Holder or other
person then entitled to exercise the Option or such portion of the Option;
10
<PAGE>
(b) Such representations and documents as the Administrator, in
its absolute discretion, deems necessary or advisable to effect compliance
with all applicable provisions of the Securities Act and any other federal
or state securities laws or relations. The Administrator may, in its
absolute discretion, also take whatever additional actions it deems
appropriate to effect such compliance including, without limitation,
placing legends on share certificates and issuing stop-transfer notices to
agents and registrars;
(c) In the event that the Option shall be exercised pursuant to
Section 11.1 by any person or persons other than the Holder, appropriate
proof of the right of such person or persons to exercise the Option; and
(d) Full cash payment to the Secretary of the Company for the
shares with respect to which the Option, or portion thereof, is exercised.
However, the Administrator, may in its discretion (i) allow a delay in
payment up to thirty (30) days from the date the Option, or portion
thereof, is exercised; (ii) allow payment, in whole or in part, through the
delivery of shares of Common Stock which have been owned by the Holder for
at least six months, duly endorsed for transfer to the Company with a Fair
Market Value on the date of delivery equal to the aggregate exercise price
of the Option or exercised portion thereof; (iii) allow payment, in whole
or in part, through the surrender of shares of Common Stock then issuable
upon exercise of the Option having a Fair Market Value on the date of
Option exercise equal to the aggregate exercise price of the Option or
exercised portion thereof; (iv) allow payment, in whole or in part, through
the delivery of property of any kind which constitutes good and valuable
consideration; (v) allow payment, in whole or in part, through the delivery
of a full recourse promissory note bearing interest (at no less than such
rate as shall then preclude the imputation of interest under the Code) and
payable upon such terms as may be prescribed by the Administrator; (vi)
allow payment, in whole or in part, through the delivery of a notice that
the Holder has placed a market sell order with a broker with respect to
shares of Common Stock then issuable upon exercise of the Option, and that
the broker has been directed to pay a sufficient portion of the net
proceeds of the sale to the Company in satisfaction of the Option exercise
price, provided that payment of such proceeds is then made to the Company
--------
upon settlement of such sale; or (vii) allow payment through any
combination of the consideration provided in the foregoing subparagraphs
(ii), (iii), (iv), (v) and (vi). In the case of a promissory note, the
Administrator may also prescribe the form of such note and the security to
be given for such note. The Option may not be exercised, however, by
delivery of a promissory note or by a loan from the Company when or where
such loan or other extension of credit is prohibited by law.
6.3. Conditions to Issuance of Stock Certificates. The Company
--------------------------------------------
shall not be required to issue or deliver any certificate or certificates for
shares of stock purchased upon the exercise of any Option or portion thereof
prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed;
(b) The completion of any registration or other qualification
of such shares under any state or federal law, or under the rulings or
regulations of the Securities
11
<PAGE>
and Exchange Commission or any other governmental regulatory body which the
Administrator shall, in its absolute discretion, deem necessary or
advisable;
(c) The obtaining of any approval or other clearance from any
state or federal governmental agency which the Administrator shall, in its
absolute discretion, determine to be necessary or advisable;
(d) The lapse of such reasonable period of time following the
exercise of the Option as the Administrator may establish from time to time
for reasons of administrative convenience; and
(e) The receipt by the Company of full payment for such shares,
including payment of any applicable withholding tax, which in the
discretion of the Administrator may be in the form of consideration used by
the Holder to pay for such shares under Section 6.2(d).
6.4. Rights as Stockholders. Holders shall not be, nor have any of
----------------------
the rights or privileges of, stockholders of the Company in respect of any
shares purchasable upon the exercise of any part of an Option unless and until
certificates representing such shares have been issued by the Company to such
Holders.
6.5. Ownership and Transfer Restrictions. The Administrator, in its
-----------------------------------
absolute discretion, may impose such restrictions on the ownership and
transferability of the shares purchasable upon the exercise of an Option as it
deems appropriate. Any such restriction shall be set forth in the respective
Award Agreement and may be referred to on the certificates evidencing such
shares. The Holder shall give the Company prompt notice of any disposition of
shares of Common Stock acquired by exercise of an Incentive Stock Option within
(a) two years from the date of granting (including the date the Option is
modified, extended or renewed for purposes of Section 424(h) of the Code) such
Option to such Holder or (b) one year after the transfer of such shares to such
Holder.
6.6. Limitations on Exercise of Options Granted to Employees or
----------------------------------------------------------
Consultants. Notwithstanding anything herein to the contrary, except in the
- -----------
case of Termination of Employment for cause or Termination of Consultancy for
cause (as determined by the Administrator), to the extent that any portion of an
Option granted to an Employee or Consultant is exercisable at Termination of
Employment or Termination of Consultancy, as applicable, such portion shall be
exercisable following Termination of Employment or Termination of Consultancy
for a period which shall be determined by the Administrator in its sole
discretion; provided, however, that such period shall end no sooner than
-------- -------
(a) The earlier of (x) the expiration of the Option's term or
(y) the expiration of six (6) months from the date of Termination of
Employment or Termination of Consultancy, as applicable, if the Holder's
termination is caused by the Holder's death or Disability; or
(b) The earlier of (x) the expiration of the Option's term, or
(y) the expiration of at least thirty (30) days from the date of
Termination of Employment or
12
<PAGE>
Termination of Consultancy, as applicable, if the Holder's termination is
caused by other than the Holder's death or Disability.
In the case of Termination of Employment or Termination of Consultancy for cause
(as determined by the Administrator), the period within which any portion of an
Option which is exercisable at the date of the Holder's termination may be
exercised following such termination shall be determined by the Administrator in
its sole discretion, but in no event shall extend beyond the expiration of the
Option's term.
6.7. Additional Limitations on Exercise of Options. Holders may be
---------------------------------------------
required to comply with any timing or other restrictions with respect to the
settlement or exercise of an Option, including a window-period limitation, as
may be imposed in the discretion of the Administrator.
ARTICLE VII.
AWARD OF RESTRICTED STOCK
7.1. Eligibility. Subject to the Award Limit, Restricted Stock may
-----------
be awarded to any Employee who the Committee determines is a key Employee or any
Consultant who the Committee determines should receive such an Award.
7.2. Award of Restricted Stock
-------------------------
(a) The Committee may from time to time, in its absolute
discretion:
(i) Determine which Employees are key Employees and
select from among the key Employees or Consultants (including
Employees or Consultants who have previously received other awards
under the Plan) such of them as in its opinion should be awarded
Restricted Stock; and
(ii) Determine the purchase price, if any, and other terms
and conditions applicable to such Restricted Stock, consistent with
the Plan.
(b) The Committee shall establish the purchase price, if any,
and form of payment for Restricted Stock; provided, however, that such
-------- -------
purchase price shall be no less than 85% of the Fair Market Value of a
share of Common Stock on the date the award of Restricted Stock is made or
at the time the purchase of Restricted Stock is consummated, unless
otherwise permitted by applicable state law, and provided, further, that,
-------- -------
in the case of the award of Restricted Stock to an individual then owning
more than 10% of the total combined voting power of all classes of stock of
the Company or any Subsidiary or parent corporation thereof, such purchase
price shall be no less than 100% of the Fair Market Value of a share of
Common Stock on the date the award of Restricted Stock is made or at the
time the purchase of Restricted Stock is consummated, unless otherwise
permitted by applicable state law. In all cases, legal consideration shall
be required for each issuance of Restricted Stock.
13
<PAGE>
(c) Upon the selection of a key Employee or Consultant to be
awarded Restricted Stock, the Committee shall instruct the Secretary of the
Company to issue such Restricted Stock and may impose such conditions on
the issuance of such Restricted Stock as it deems appropriate.
7.3. Rights as Stockholders. Subject to Section 7.4, upon delivery
----------------------
of the shares of Restricted Stock to the escrow holder pursuant to Section 7.6,
the Holder shall have, unless otherwise provided by the Committee, all the
rights of a stockholder with respect to said shares, subject to the restrictions
in his Award Agreement, including the right to receive all dividends and other
distributions paid or made with respect to the shares; provided, however, that
-------- -------
in the discretion of the Committee, any extraordinary distributions with respect
to the Common Stock shall be subject to the restrictions set forth in Section
7.4.
7.4. Restriction. All shares of Restricted Stock issued under the
-----------
Plan (including any shares received by holders thereof with respect to shares of
Restricted Stock as a result of stock dividends, stock splits or any other form
of recapitalization) shall, in the terms of each individual Award Agreement, be
subject to such restrictions as the Committee shall provide, which restrictions
may include, without limitation, restrictions concerning voting rights and
transferability and restrictions based on duration of employment with the
Company, Company performance and individual performance; provided, however,
-------- -------
that, unless the Committee otherwise provides in the terms of the Award
Agreement or otherwise, no share of Restricted Stock granted to a person subject
to Section 16 of the Exchange Act shall be sold, assigned or otherwise
transferred until at least six months and one day have elapsed from the date on
which the Restricted Stock was issued, and provided, further, that, except with
-------- -------
respect to shares of Restricted Stock granted to Section 162(m) Participants, by
action taken after the Restricted Stock is issued, the Committee may, on such
terms and conditions as it may determine to be appropriate, remove any or all of
the restrictions imposed by the terms of the Award Agreement. Restricted Stock
may not be sold or encumbered until all restrictions are terminated or expire.
If no consideration was paid by the Holder upon issuance, a Holder's rights in
unvested Restricted Stock shall lapse, and such Restricted Stock shall be
surrendered to the Company without consideration, upon Termination of Employment
or, if applicable, upon Termination of Consultancy with the Company; provided,
--------
however, that the Committee in its sole and absolute discretion may provide that
- -------
such rights shall not lapse in the event of a Termination of Employment
following a "change of ownership or control" (within the meaning of Treasury
Regulation Section 1.162-27(e)(2)(v) or any successor regulation thereto) of the
Company or because of the Holder's death or disability; provided, further,
-------- -------
except with respect to shares of Restricted Stock granted to Section 162(m)
Participants, the Committee in its sole and absolute discretion may provide that
no such lapse or surrender shall occur in the event of a Termination of
Employment, or a Termination of Consultancy, without cause or following any
change in control of the Company or because of the Holder's retirement, or
otherwise.
7.5. Repurchase of Restricted Stock. The Committee shall provide in
------------------------------
the terms of each individual Award Agreement that the Company shall have the
right to repurchase from the Holder the Restricted Stock then subject to
restrictions under the Award Agreement within ninety (90) days after a
Termination of Employment or, if applicable, after a Termination of Consultancy
between the Holder and the Company, at a cash price per share equal to the price
paid by the Holder for such Restricted Stock; provided, however, that such right
-------- -------
of repurchase
14
<PAGE>
shall lapse at a rate of at least 20% of the shares of Restricted Stock per year
over five (5) years from the date the Restricted Stock is awarded, and provided,
--------
further, that the Committee in its sole and absolute discretion may provide that
- -------
no such right of repurchase shall exist in the event of a Termination of
Employment following a "change of ownership or control" (within the meaning of
Treasury Regulation Section 1.162-27(e)(2)(v) or any successor regulation
thereto) of the Company or because of the Holder's death or disability;
provided, further, that, except with respect to shares of Restricted Stock
- -------- -------
granted to Section 162(m) Participants, the Committee in its sole and absolute
discretion may provide that no such right of repurchase shall exist in the event
of a Termination of Employment or a Termination of Consultancy without cause or
following any change in control of the Company or because of the Holder's
retirement, or otherwise.
7.6. Escrow. The Secretary of the Company or such other escrow
------
holder as the Committee may appoint shall retain physical custody of each
certificate representing Restricted Stock until all of the restrictions imposed
under the Award Agreement with respect to the shares evidenced by such
certificate expire or shall have been removed.
7.7. Legend. In order to enforce the restrictions imposed upon
------
shares of Restricted Stock hereunder, the Committee shall cause a legend or
legends to be placed on certificates representing all shares of Restricted Stock
that are still subject to restrictions under Award Agreements, which legend or
legends shall make appropriate reference to the conditions imposed thereby.
7.8. Section 83(b) Election. If a Holder makes an election under
----------------------
Section 83(b) of the Code, or any successor section thereto, to be taxed with
respect to the Restricted Stock as of the date of transfer of the Restricted
Stock rather than as of the date or dates upon which the Holder would otherwise
be taxable under Section 83(a) of the Code, the Holder shall deliver a copy of
such election to the Company immediately after filing such election with the
Internal Revenue Service.
ARTICLE VIII.
PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, DEFERRED STOCK AND STOCK PAYMENTS
8.1. Eligibility. Subject to the Award Limit, one or more
-----------
Performance Awards, Dividend Equivalents, awards of Deferred Stock, and/or Stock
Pavements may be granted to any Employee whom the Committee determines is a key
Employee or any Consultant whom the Committee determines should receive such an
Award.
8.2. Performance Awards. Any key Employee or Consultant selected by
------------------
the Committee may be granted one or more Performance Awards. The value of such
Performance Awards may be linked to any one or more of the Performance Criteria
or other specific performance criteria determined appropriate by the Committee,
in each case on a specified date or dates or over any period or periods
determined by the Committee. In making such determinations, the Committee shall
consider (among such other factors as it deems relevant in
15
<PAGE>
light of the specific type of award) the contributions, responsibilities and
other compensation of the particular key Employee or Consultant.
8.3. Dividend Equivalents.
--------------------
(a) Any key Employee or Consultant selected by the Committee
may be granted Dividend Equivalents based on the dividends declared on
Common Stock, to be credited as of dividend payment dates, during the
period between the date a Stock Appreciation Right, Deferred Stock or
Performance Award is granted, and the date such Stock Appreciation Right,
Deferred Stock or Performance Award is exercised, vests or expires, as
determined by the Committee. Such Dividend Equivalents shall be converted
to cash or additional shares of Common Stock by such formula and at such
time and subject to such limitations as may be determined by the Committee.
(b) Any Holder of an Option who is an Employee or Consultant
selected by the Committee may be granted Dividend Equivalents based on the
dividends declared on Common Stock, to be credited as of dividend payment
dates, during the period between the date an Option is granted, and the
date such Option is exercised, vests or expires, as determined by the
Committee. Such Dividend Equivalents shall be converted to cash or
additional shares of Common Stock by such formula and at such time and
subject to such limitations as may be determined by the Committee.
(d) Dividend Equivalents granted with respect to Options
intended to be qualified performance-based compensation for purposes of
Section 162(m) of the Code shall be payable, with respect to pre-exercise
periods, regardless of whether such Option is subsequently exercised.
8.4. Stock Payments. Any key Employee or Consultant selected by the
--------------
Committee may receive Stock Payments in the manner determined from time to time
by the Committee. The number of shares shall be determined by the Committee and
may be based upon the Performance Criteria or other specific performance
criteria determined appropriate by the Committee, determined on the date such
Stock Payment is made or on any date thereafter.
8.5. Deferred Stock. Any key Employee or Consultant selected by the
--------------
Committee may be granted an award of Deferred Stock in the manner determined
from time to time by the Committee. The number of shares of Deferred Stock
shall be determined by the Committee and may be linked to the Performance
Criteria or other specific performance criteria determined to be appropriate by
the Committee, in each case on a specified date or dates or over any period or
periods determined by the Committee. Common Stock underlying a Deferred Stock
award will not be issued until the Deferred Stock award has vested, pursuant to
a vesting schedule or performance criteria set by the Committee. Unless
otherwise provided by the Committee, a Holder of Deferred Stock shall have no
rights as a Company stockholder with respect to such Deferred Stock until such
time as the Award has vested and the Common Stock underlying the Award has been
issued.
8.6. Term. The term of a Performance Award, Dividend Equivalent,
----
award of Deferred Stock and/or Stock Payment shall be set by the Committee in
its discretion.
16
<PAGE>
8.7. Exercise or Purchase Price. The Committee may establish the
--------------------------
exercise or purchase price of a Performance Award, shares of Deferred Stock, or
shares received as a Stock Payment; provided, however, that such price shall not
-------- -------
be less than the par value for a share of Common Stock, unless otherwise
permitted by applicable state law.
8.8. Exercise Upon Termination of Employment or Termination of
---------------------------------------------------------
Consultancy. A Performance Award, Dividend Equivalent, award of Deferred Stock
- -----------
and/or Stock Payment is exercisable or payable only while the Holder is an
Employee or Consultant, as applicable; provided, however, that the Administrator
-------- -------
in its sole and absolute discretion may provide that the Performance Award,
Dividend Equivalent, award of Deferred Stock and/or Stock Payment may be
exercised or paid subsequent to a Termination of Employment following a "change
of control or ownership" (within the meaning of Section 1.162-27(e)(2)(v) or any
successor regulation thereto) of the Company; provided, further, that except
-------- -------
with respect to Performance Awards granted to Section 162(m) Participants, the
Administrator in its sole and absolute discretion may provide that Performance
Awards may be exercised or paid following a Termination of Employment or a
Termination of Consultancy without cause, or following a change in control of
the Company, or because of the Holder's retirement, death or disability, or
otherwise.
8.9. Form of Payment. Payment of the amount determined under
---------------
Section 8.2 or 8.3 above shall be in cash, in Common Stock or a combination of
both, as determined by the Committee. To the extent any payment under this
Article VIII is effected in Common Stock, it shall be made subject to
satisfaction of all provisions of Section 6.3.
ARTICLE IX.
STOCK APPRECIATION RIGHTS
9.1. Grant of Stock Appreciation Rights. A Stock Appreciation Right
----------------------------------
may be granted to any key Employee or Consultant selected by the Committee. A
Stock Appreciation Right may be granted (a) in connection and simultaneously
with the grant of an Option, (b) with respect to a previously granted Option, or
(c) independent of an Option. A Stock Appreciation Right shall be subject to
such terms and conditions not inconsistent with the Plan as the Committee shall
impose and shall be evidenced by an Award Agreement.
9.2. Coupled Stock Appreciation Rights.
---------------------------------
(a) A Coupled Stock Appreciation Right ("CSAR") shall be
related to a particular Option and shall be exercisable only when and to
the extent the related Option is exercisable.
(b) A CSAR may be granted to the Holder for no more than the
number of shares subject to the simultaneously or previously granted Option
to which it is coupled.
(c) A CSAR shall entitle the Holder (or other person entitled
to exercise the Option pursuant to the Plan) to surrender to the Company
unexercised a portion of the Option to which the CSAR relates (to the extent
then exercisable pursuant to its terms) and to receive from the Company in
exchange therefor an amount determined by
17
<PAGE>
multiplying the difference obtained by subtracting the Option exercise price
from the Fair Market Value of a share of Common Stock on the date of exercise of
the CSAR by the number of shares of Common Stock with respect to which the CSAR
shall have been exercised, subject to any limitations the Committee may impose.
9.3. Independent Stock Appreciation Rights.
-------------------------------------
(a) An Independent Stock Appreciation Right ("ISAR') shall be
unrelated to any Option and shall have a term set by the Committee. An ISAR
shall be exercisable in such installments as the Committee may determine. An
ISAR shall cover such number of shares of Common Stock as the Committee may
determine; provided, however, that unless the Committee otherwise provides in
-------- -------
the terms of the ISAR or otherwise, no ISAR granted to a person subject to
Section 16 of the Exchange Act shall be exercisable until at least six months
have elapsed from (but excluding) the date on which the Option was granted. The
exercise price per share of Common Stock subject to each ISAR shall be set by
the Committee. An ISAR is exercisable only while the Holder is an Employee or
Consultant; provided that the Committee may determine that the ISAR may be
exercised subsequent to Termination of Employment or Termination of Consultancy
without cause, or following a Change in Control of the Company, or because of
the Holder's retirement, death or disability, or otherwise.
(b) An ISAR shall entitle the Holder (or other person entitled
to exercise the ISAR pursuant to the Plan) to exercise all or a specified
portion of the ISAR (to the extent then exercisable pursuant to its terms) and
to receive from the Company an amount determined by multiplying the difference
obtained by subtracting the exercise price per share of the ISAR from the Fair
Market Value of a share of Common Stock on the date of exercise of the ISAR by
the number of shares of Common Stock with respect to which the ISAR shall have
been exercised, subject to any limitations the Committee may impose.
9.4. Payment and Limitations on Exercise.
-----------------------------------
(a) Payment of the amounts determined under Section 9.2(c) and
9.3(b) above shall be in cash, in Common Stock (based on its Fair Market Value
as of the date the Stock Appreciation Right is exercised) or a combination of
both, as determined by the Committee. To the extent such payment is effected in
Common Stock it shall be made subject to satisfaction of all provisions of
Section 6.3 above pertaining to Options.
(b) Holders of Stock Appreciation Rights may be required to
comply with any timing or other restrictions with respect to the settlement
or exercise of a Stock Appreciation Right, including a window-period
limitation, as may be imposed in the discretion of the Committee.
18
<PAGE>
ARTICLE X.
ADMINISTRATION
10.1. Compensation Committee. Prior to the Company's initial
----------------------
registration of Common Stock under Section 12 of the Exchange Act, the
Compensation Committee shall consist of the entire Board. Following such
registration, The Compensation Committee (or another committee or a subcommittee
of the Board assigning the functions of the Committee under the Plan) shall
consist solely of two or more Independent Directors appointed by and holding
office at the pleasure of the Board, each of whom is both a "non-employee
director" as defined by Rule 16b-3 and an "outside director" for purposes of
Section 162(m) of the Code. Appointment of Committee members shall be effective
upon acceptance of appointment. Committee members may resign at any time by
delivering written notice to the Board. Vacancies in the Committee may be
filled by the Board.
10.2. Duties and Powers of Committee. It shall be the duty of the
------------------------------
Committee to conduct the general administration of the Plan in accordance with
its provisions. The Committee shall have the power to interpret the Plan and
the Award Agreements, and to adopt such rules for the administration,
interpretation, and application of the Plan as are consistent therewith, to
interpret, amend or revoke any such rules and to amend any Award Agreement
provided that the rights or obligations of the Holder of the Award that is the
subject of any such Award Agreement are not affected adversely. Any such grant
or award under the Plan need not be the same with respect to each Holder. Any
such interpretations and rules with respect to Incentive Stock Options shall be
consistent with the provisions of Section 422 of the Code. In its absolute
discretion, the Board may at any time and from time to time exercise any and all
rights and duties of the Committee under the Plan except with respect to matters
which under Rule 16b-3 or Section 162(m) of the Code, or any regulations or
rules issued thereunder, are required to be determined in the sole discretion of
the Committee.
10.3. Majority Rule; Unanimous Written Consent. The Committee shall
----------------------------------------
act by a majority of its members in attendance at a meeting at which a quorum is
present or by a memorandum or other written instrument signed by all members of
the Committee.
10.4. Compensation; Professional Assistance; Good Faith Actions.
---------------------------------------------------------
Members of the Committee shall receive such compensation, if any, for their
services as members as may be determined by the Board. All expenses and
liabilities which members of the Committee incur in connection with the
administration of the Plan shall be borne by the Company. The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants,
appraisers, brokers, or other persons. The Committee, the Company and the
Company's officers and Directors shall be entitled to rely upon the advice,
opinions or valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee or the Board in good
faith shall be final and binding upon all Holders, the Company and all other
interested persons. No members of the Committee or Board shall be personally
liable for any action, determination or interpretation made in good faith with
respect to the Plan or Awards, and all members of the Committee and the Board
shall be fully protected by the Company in respect of any such action,
determination or interpretation.
19
<PAGE>
10.5. Delegation of Authority to Grant Awards. The Committee may,
---------------------------------------
but need not, delegate from time to time some or all of its authority to grant
Awards under the Plan to a committee consisting of one or more members of the
Committee or of one or more officers of the Company; provided, however, that the
Committee may not delegate its authority to grant Awards to individuals (i) who
are subject on the date of the grant to the reporting rules under Section 16(a)
of the Exchange Act, (ii) who are Section 162(m) Participants or (iii) who are
officers of the Company who are delegated authority by the Committee hereunder.
Any delegation hereunder shall be subject to the restrictions and limits that
the Committee specifies at the time of such delegation of authority and may be
rescinded at any time by the Committee. At all times, any committee appointed
under this Section 10.5 shall serve in such capacity at the pleasure of the
Committee.
ARTICLE XI.
MISCELLANEOUS PROVISIONS
11.1. Not Transferable. No Award under the Plan may be sold,
----------------
pledged, assigned or transferred in any manner other than by will or the laws of
descent and distribution or, subject to the consent of the Administrator
pursuant to a DRO, unless and until such Award has been exercised, or the shares
underlying such Award have been issued, and all restrictions applicable to such
shares have lapsed. No Award or interest or right therein shall be liable for
the debts, contracts or engagements of the Holder or his successors in interest
or shall be subject to disposition by transfer, alienation, anticipation,
pledge, encumbrance, assignment or any other means whether such disposition be
voluntary or involuntary or by operation of law by judgment, levy, attachment,
garnishment or any other legal or equitable proceedings (including bankruptcy),
and any attempted disposition thereof shall be null and void and of no effect,
except to the extent that such disposition is permitted by the preceding
sentence.
During the lifetime of the Holder, only he may exercise an Option or
other Award (or any portion thereof) granted to him under the Plan, unless it
has been disposed of with the consent of the Administrator pursuant to a DRO.
After the death of the Holder, any exercisable portion of an Option or other
Award may, prior to the time when such portion becomes unexercisable under the
Plan or the applicable Award Agreement, be exercised by his personal
representative or by any person empowered to do so under the deceased Holder's
will or under the then applicable laws of descent and distribution.
11.2. Amendment, Suspension or Termination of the Plan. Except as
------------------------------------------------
otherwise provided in this Section 11.2, the Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any time or from time
to time by the Administrator. However, without approval of the Company's
stockholders given within twelve months before or after the action by the
Administrator, no action of the Administrator may, except as provided in Section
11.3, increase the limits imposed in Section 2.1 on the maximum number of shares
which may be issued under the Plan. No amendment, suspension or termination of
the Plan shall, without the consent of the Holder alter or impair any rights or
obligations under any Award theretofore granted or awarded, unless the Award
itself otherwise expressly so provides. No Awards may be granted or awarded
during any period of suspension or after termination of the
20
<PAGE>
Plan, and in no event may any Incentive Stock Option be granted under the Plan
after the first to occur of the following events:
(a) The expiration of ten years from the date the Plan is
adopted by the Board; or
(b) The expiration of ten years from the date the Plan is
approved by the Company's stockholders under Section 11.4.
11.3. Changes in Common Stock or Assets of the Company, Acquisition
-------------------------------------------------------------
or Liquidation of the Company and Other Corporate Events.
- --------------------------------------------------------
(a) Subject to Section 11.3 (d), in the event that the
Administrator determines that any dividend or other distribution (whether in the
form of cash, Common Stock, other securities, or other property),
recapitalization, reclassification, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, liquidation, dissolution, or sale, transfer, exchange or other
disposition of all or substantially all of the assets of the Company, or
exchange of Common Stock or other securities of the Company, issuance of
warrants or other rights to purchase Common Stock or other securities of the
Company, or other similar corporate transaction or event, in the Administrator's
sole discretion, affects the Common Stock such that an adjustment is determined
by the Administrator to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under the Plan or with respect to an Award, then the Administrator shall, in
such manner as it may deem equitable, adjust any or all of
(i) the number and kind of shares of Common Stock (or
other securities or property) with respect to which Awards may be
granted or awarded (including, but not limited to, adjustments of the
limitations in Section 2.1 on the maximum number and kind of shares
which may be issued and adjustments of the Award Limit),
(ii) the number and kind of shares of Common Stock (or
other securities or property) subject to outstanding Awards, and
(iii) the grant or exercise price with respect to any
Award.
(b) Subject to Section 11.3(d), in the event of any transaction
or event described in Section 11.3(a) or any unusual or nonrecurring
transactions or events affecting the Company, any affiliate of the Company,
or the financial statements of the Company or any affiliate, or of changes
in applicable laws, regulations, or accounting principles, the
Administrator, in its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, either by the terms of the Award or by
action taken prior to the occurrence of such transaction or event and
either automatically or upon the Holder's request, is hereby authorized to
take any one or more of the following actions whenever the Administrator
determines that such action is appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made
available
21
<PAGE>
under the Plan or with respect to any Award under the Plan, to facilitate
such transactions or events or to give effect to such changes in laws,
regulations or principles:
(i) To provide for either the purchase of any such
Award for an amount of cash equal to the amount that could have been
attained upon the exercise of such Award or realization of the
Holder's rights had such Award been currently exercisable or payable
or fully vested or the replacement of such Award with other rights or
property selected by the Administrator in its sole discretion;
(ii) To provide that the Award cannot vest, be exercised
or become payable after such event;
(iii) To provide that such Award shall be exercisable as
to all shares covered thereby, notwithstanding anything to the
contrary in Section 5.3 or the provisions of such Award;
(iv) To provide that such Award be assumed by the
successor or survivor corporation, or a parent or subsidiary thereof,
or shall be substituted for by similar options, rights or awards
covering the stock of the successor or survivor corporation, or a
parent or subsidiary thereof, with appropriate adjustments as to the
number and kind of shares and prices; and
(v) To make adjustments in the number and type of shares
of Common Stock (or other securities or property) subject to
outstanding Awards, and in the number and kind of outstanding
Restricted Stock or Deferred Stock and/or in the terms and conditions
of (including the grant or exercise price), and the criteria included
in, outstanding options, rights and awards and options, rights and
awards which may be granted in the future.
(vi) To provide that, for a specified period of time
prior to such event, the restrictions imposed under an Award Agreement
upon some or all shares of Restricted Stock or Deferred Stock may be
terminated, and, in the case of Restricted Stock, some or all shares
of such Restricted Stock may cease to be subject to repurchase under
Section 7.5 or forfeiture under Section 7.4 after such event.
(c) Subject to Sections 11.3(d), 3.2 and 3.3, the Administrator
may, in its discretion, include such further provisions and limitations in
any Award, agreement or certificate, as it may deem equitable and in the
best interests of the Company.
(d) With respect to Awards which are granted to Section 162(m)
Participants and are intended to qualify as performance-based compensation
under Section 162(m)(4)(C), no adjustment or action described in this
Section 11.3 or in any other provision of the Plan shall be authorized to
the extent that such adjustment or action would cause such Award to fail to
so qualify under Section 162(m)(4)(C), or any successor provisions thereto.
No adjustment or action described in this Section 11.3 or in any other
provision of the Plan shall be authorized to the extent that such
adjustment or action would cause the Plan to violate Section 422(b)(1) of
the Code. Furthermore, no
22
<PAGE>
such adjustment or action shall be authorized to the extent such adjustment
or action would result in short-swing profits liability under Section 16 or
violate the exemptive conditions of Rule 16b-3 unless the Administrator
determines that the Award is not to comply with such exemptive conditions.
The number of shares of Common Stock subject to any Award shall always be
rounded to the next whole number.
(e) Notwithstanding the foregoing, in the event that the
Company becomes a party to a transaction that is intended to qualify for
"pooling of interests" accounting treatment and, but for one or more of the
provisions of this Plan or any Award Agreement would so qualify, then this
Plan and any Award Agreement shall be interpreted so as to preserve such
accounting treatment, and to the extent that any provision of the Plan or
any Award Agreement would disqualify the transaction from pooling of
interests accounting treatment (including, if applicable, an entire Award
Agreement), then such provision shall be null and void. All determinations
to be made in connection with the preceding sentence shall be made by the
independent accounting firm whose opinion with respect to "pooling of
interests" treatment is required as a condition to the Company's
consummation of such transaction.
(f) The existence of the Plan, the Award Agreement and the
Awards granted hereunder shall not affect or restrict in any way the right
or power of the Company or the shareholders of the Company to make or
authorize any adjustment, recapitalization, reorganization or other change
in the Company's capital structure or its business, any merger or
consolidation of the Company, any issue of stock or of options, warrants or
rights to purchase stock or of bonds, debentures, preferred or prior
preference stocks whose rights are superior to or affect the Common Stock
or the rights thereof or which are convertible into or exchangeable for
Common Stock, or the dissolution or liquidation of the company, or any sale
or transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise.
11.4. Approval of Plan by Stockholders. The Plan will be submitted
--------------------------------
for the approval of the Company's stockholders within twelve months after the
date of the Board's initial adoption of the Plan. Awards may be granted or
awarded prior to such stockholder approval, provided that such Awards shall not
be exercisable nor shall such Awards vest prior to the time when the Plan is
approved by the stockholders, and provided further that if such approval has not
been obtained at the end of said twelve-month period, all Awards previously
granted or awarded under the Plan shall thereupon be canceled and become null
and void. In addition, if the Board determines that Awards other than Options
or Stock Appreciation Rights which may be granted to Section 162(m) Participants
should continue to be eligible to qualify as performance-based compensation
under Section 162(m)(4)(C) of the Code, the Performance Criteria must be
disclosed to and approved by the Company's stockholders no later than the first
stockholder meeting that occurs in the fifth year following the year in which
the Company's stockholders previously approved the Performance Criteria.
11.5. Tax Withholding. The Company shall be entitled to require
---------------
payment in cash or deduction from other compensation payable to each Holder of
any sums required by federal, state or local tax law to be withheld with respect
to the issuance, vesting, exercise or
23
<PAGE>
payment of any Award. The Administrator may in its discretion and in
satisfaction of the foregoing requirement allow such Holder to elect to have the
Company withhold shares of Common Stock otherwise issuable under such Award (or
allow the return of shares of Common Stock) having a Fair Market Value equal to
the sums required to be withheld.
11.6. Loans. The Committee may, in its discretion, extend one or
-----
more loans to key Employees in connection with the exercise or receipt of an
Award granted or awarded under the Plan, or the issuance of Restricted Stock or
Deferred Stock awarded under the Plan. The terms and conditions of any such
loan shall be set by the Committee.
11.7. Forfeiture Provisions. Pursuant to its general authority to
---------------------
determine the terms and conditions applicable to Awards under the Plan, the
Administrator shall have the right to provide, in the terms of Awards made under
the Plan, or to require a Holder to agree by separate written instrument, that
(a) (i) any proceeds, gains or other economic benefit actually or constructively
received by the Holder upon any receipt or exercise of the Award, or upon the
receipt or resale of any Common Stock underlying the Award, must be paid to the
Company, and (ii) the Award shall terminate and any unexercised portion of the
Award (whether or not vested) shall be forfeited, if (b)(i) a Termination of
Employment, Termination of Consultancy or Termination of Directorship occurs
prior to a specified date, or within a specified time period following receipt
or exercise of the Award, or (ii) the Holder at any time, or during a specified
time period, engages in any activity in competition with the Company, or which
is inimical, contrary or harmful to the interests of the Company, as further
defined by the Administrator or (iii) the Holder incurs a Termination of
Employment, Termination of Consultancy or Termination of Directorship for cause.
11.8. Effect of Plan Upon Options and Compensation Plans. The
--------------------------------------------------
adoption of the Plan shall not affect any other compensation or incentive plans
in effect for the Company or any Subsidiary. Nothing in the Plan shall be
construed to limit the right of the Company (a) to establish any other forms of
incentives or compensation for Employees, Directors or Consultants of the
Company or any Subsidiary or (b) to grant or assume options or other rights or
awards otherwise than under the Plan in connection with any proper corporate
purpose including but not by way of limitation, the grant or assumption of
options in connection with the acquisition by purchase, lease, merger,
consolidation or otherwise, of the business, stock or assets of any corporation,
partnership, limited liability company, firm or association.
11.9. Compliance with Laws. The Plan, the granting and vesting of
--------------------
Awards under the Plan and the issuance and delivery of shares of Common Stock
and the payment of money under the Plan or under Awards granted or awarded
hereunder are subject to compliance with all applicable federal and state laws,
rules and regulations (including but not limited to state and federal securities
law and federal margin requirements) and to such approvals by any listing,
regulatory or governmental authority as may, in the opinion of counsel for the
Company, be necessary or advisable in connection therewith. Any securities
delivered under the Plan shall be subject to such restrictions, and the person
acquiring such securities shall, if requested by the Company, provide such
assurances and representations to the Company as the Company may deem necessary
or desirable to assure compliance with all applicable legal requirements. To
the extent permitted by applicable law, the Plan and Awards granted or awarded
hereunder shall be deemed amended to the extent necessary to conform to such
laws, rules and regulations.
24
<PAGE>
11.10 Titles. Titles are provided herein for convenience only and
------
are not to serve as a basis for interpretation or construction of the Plan.
11.11 Governing Law. The Plan and any agreements hereunder shall be
-------------
administered, interpreted and enforced under the internal laws of the State of
Delaware without regard to conflicts of laws thereof.
I hereby certify that the foregoing Plan was duly adopted by the Board
of Directors of COMPS InfoSystems, Inc. on November 6, 1998.
Executed on this 6 day of November, 1998.
/s/ Robert C. Beasley
-------------------------------
Secretary
25
<PAGE>
EXHIBIT 10.34
COMPS INFOSYSTEMS, INC.
1998 SUPPLEMENTAL STOCK OPTION PLAN
FORM OF NOTICE OF GRANT OF STOCK OPTION
---------------------------------------
Notice is hereby given of the following option grant (the "Option") to
purchase shares of the Class B Common Stock of COMPS InfoSystems, Inc. (the
"Corporation"):
Optionee: _________________
- --------
Grant Date: _______________
- ----------
Vesting Commencement Date: __________________
- -------------------------
Exercise Price: $____ per share
- --------------
Number of Option Shares: _________ shares of Class B Common Stock as Incentive
- ----------------------- Stock Option Shares; and
_________ shares of Class B Common Stock as Non-
Statutory Stock Option Shares
Expiration Date: ____________
- ---------------
Type of Option:
- --------------
_____ Incentive Stock Option
_____ Non-Statutory Stock Option
Date Exercisable: ________________
- ----------------
Vesting Schedule: The shares of the Corporation's Class B Common Stock subject
- ----------------
to this option (the "Option Shares") shall initially be unvested and subject to
repurchase by the Corporation at the Exercise Price paid per share. Optionee
shall acquire a vested interest in, and the Corporation's repurchase right shall
accordingly lapse, with respect to (i) 20% of the Incentive Stock Option Shares
on the Vesting Commencement Date, (ii) 100% of the Non-Statutory Stock Option
Shares on the Vesting Commencement Date and (ii) the remaining 80% of the
Incentive Stock Option Shares shall vest in successive equal monthly
installments over a forty-eight (48) month period commencing on January 1, 1999.
Optionee understands and agrees that the Option is granted subject to
and in accordance with the terms of the Corporation's 1998 Supplemental Option
Plan (the "Plan").
Optionee understands that any Option Shares purchased under the Option
will be subject to the terms set forth in the Purchase Agreements attached
hereto as Exhibit C. Optionee hereby acknowledges receipt of a copy of the Plan
in the form attached hereto as Exhibit D.
<PAGE>
REPURCHASE RIGHTS. OPTIONEE HEREBY AGREES THAT ALL OPTION SHARES
ACQUIRED UPON THE EXERCISE OF THE OPTION SHALL BE SUBJECT TO CERTAIN RIGHTS OF
FIRST REFUSAL EXERCISABLE BY THE CORPORATION AND ITS ASSIGNS. THE TERMS OF SUCH
RIGHTS ARE SPECIFIED IN THE ATTACHED STOCK PURCHASE AGREEMENT.
No Employment or Service Contract. Nothing in this Notice or in the
---------------------------------
attached Incentive Stock Option Agreement, Non-Statutory Option Agreement or
Plan shall confer upon Optionee any right to continue in Service for any period
of specific duration or interfere with or otherwise restrict in any way the
rights of the Corporation (or any Parent or Subsidiary employing or retaining
Optionee) or of Optionee, which rights are hereby expressly reserved by each, to
terminate Optionee's Service at any time for any reason, with or without cause.
Definitions. All capitalized terms in this Notice shall have the
-----------
meaning assigned to them in this Notice or in the attached Incentive Stock
Option Agreement or Non-Statutory Option Agreement.
DATED: ___________, 1998
COMPS INFOSYSTEMS, INC.
---------------------------------------
Christopher A. Crane, President
OPTIONEE:
---------------------------------------
Attachments (Not Included):
- ---------------------------
EXHIBIT A - INCENTIVE STOCK OPTION AGREEMENT (NOT INCLUDED)
EXHIBIT B - NON-STATUTORY OPTION AGREEMENT
EXHIBIT C - STOCK PURCHASE AGREEMENT (NOT INCLUDED)
EXHIBIT D - 1998 SUPPLEMENTAL OPTION PLAN (NOT INCLUDED)
2
<PAGE>
Exhibit B
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, dated ___________, 199_ is made by and between COMPS
InfoSystems, Inc., a Delaware corporation hereinafter referred to as "Company,"
and _____________, hereinafter referred to as "Optionee":
WHEREAS, the Company wishes to afford the Optionee the opportunity to
purchase shares of its $.0l par value non-voting Class B Common Stock; and
WHEREAS, the Board of Directors of the Company has determined that it
would be to the advantage and best interest of the Company and its shareholders
to grant the Non-Qualified Option provided for herein to the Optionee, and has
advised the Company thereof and instructed the undersigned officers to issue
said Option;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Agreement, they shall
have the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.
1.1. Administrator
- ---- -------------
"Administrator" shall mean: the Board.
1.2. Board
- ---- -----
"Board" shall mean the Board of Directors of the Company.
1.3. Code
- ---- ----
"Code" shall mean the Internal Revenue Code of 1986, as amended.
1.4. Committee
- ---- ---------
"Committee" shall mean the Stock Option Committee of the Board.
1.5. Common Stock
- ---- ------------
"Common Stock" shall mean the Company's non-voting Class B Common
Stock, par value $.0l per share.
<PAGE>
1.6. Company
- ---- -------
"Company" shall mean COMPS InfoSystems, Inc.
1.7. Exchange Act
- ---- ------------
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
1.8. Initial Public Offering
- ---- -----------------------
"Initial Public Offering" shall mean the closing of the sale of the
Company's securities pursuant to an underwritten public offering.
1.9. Option
- ---- ------
"Option" shall mean the non-qualified option to purchase Common Stock
of the Company granted under this Agreement.
1.10. Rule 16b-3
- ----- ----------
"Rule 16b-3" shall mean that certain Rule 16b-3 under the Exchange
Act, as such Rule may be amended in the future.
1.11. Secretary
- ----- ---------
"Secretary" shall mean the Secretary of the Company.
1.12. Securities Act
- ----- --------------
"Securities Act" shall mean the Securities Act of 1933, as amended.
ARTICLE II.
GRANT OF OPTION
2.1. Grant of Option
- ---- ---------------
On the date hereof the Company irrevocably grants to the Optionee the
option to purchase any part or all of an aggregate of __________ shares of its
$.0l par value non-voting Class B Common Stock upon the terms and conditions set
forth in this Agreement.
2.2. Purchase Price
- ---- --------------
The purchase price of the shares of stock covered by the Option shall
be $.__ per share without commission or other charge.
<PAGE>
2.3. Adjustments in Option
- ---- ---------------------
In the event that the outstanding shares of the stock subject to the
Option are changed into or exchanged for a different number or kind of shares of
the Company or other securities of the Company by reason of merger,
consolidation, recapitalization, reclassification, stock split up, stock
dividend or combination of shares, the Administrator shall make an appropriate
and equitable adjustment in the number and kind of shares as to which the
Option, or portions thereof then unexercised, shall be exercisable, to the end
that after such event the Optionee's proportionate interest shall be maintained
as before the occurrence of such event. Such adjustment in the Option shall be
made without change in the total price applicable to the unexercised portion of
the Option (except for any change in the aggregate price resulting from
rounding-off of share quantities or prices) and with any necessary corresponding
adjustment in the Option price per share. Any such adjustment made by the
Administrator shall be final and binding upon the Optionee, the Company and all
other interested persons.
ARTICLE III.
PERIOD OF EXERCISABILITY
3.1. Commencement of Exercisability
- ---- ------------------------------
The Option shall become exercisable immediately upon execution and
delivery of this Agreement.
3.2. Duration of Exercisability
- ---- --------------------------
The Option shall remain exercisable until it becomes unexercisable
under Section 3.3.
3.3. Expiration of Option
- ---- --------------------
The Option may not be exercised to any extent by anyone after the
first to occur of the following events:
(a) The expiration of ten (10) years from the date the Option was
granted; or
(b) The expiration of one (1) year from the date of the Optionee's
death; or
(c) The effective date of either the merger or consolidation of the
Company with or into another corporation, or the acquisition by another
corporation or person of all or substantially all of the Company's assets or
eighty percent (80%) or more of the Company's then outstanding voting stock, or
the liquidation or dissolution of the Company, unless the Administrator waives
this provision in connection with such transaction. At least ten (10) days
prior to the effective date of such merger, consolidation, acquisition,
liquidation or dissolution, the Administrator shall give the Optionee notice of
such event if the Option has then neither been fully exercised nor become
unexercisable under this Section 3.3.
<PAGE>
ARTICLE IV.
EXERCISE OF OPTION
4.1. Person Eligible to Exercise
- ---- ---------------------------
During the lifetime of the Optionee, only he may exercise the Option
or any portion thereof. After the death or incapacity of the Optionee, any
exercisable portion of the Option may, prior to the time when the Option becomes
unexercisable under Section 3.3, be exercised by his personal representative or
by any person empowered to do so under the Optionee's will or under the then
applicable laws of descent and distribution.
4.2. Partial Exercise
- ---- ----------------
Any exercisable portion of the Option or the entire Option, if then
wholly exercisable, may be exercised in whole or in part at any time prior to
the time when the Option or portion thereof becomes unexercisable under Section
3.3; provided, however, that each partial exercise shall be for not less than
One Thousand (1000) shares (or the minimum installment set forth in Section 3.1,
if a smaller number of shares) and shall be for whole shares only.
4.3. Manner of Exercise
- ---- ------------------
The Option, or any exercisable portion thereof, may be exercised
solely by delivery to the Secretary or his office of all of the following prior
to the time when the Option or such portion becomes unexercisable under Section
3.3:
(a) Notice in writing signed by the Optionee or the other person then
entitled to exercise the Option or portion, stating that the Option or portion
is thereby exercised, such notice complying with all applicable rules
established by the Committee; and
(i) Full payment (by cashiers check or wire transfer) for the
shares with respect to which such Option or portion is exercised; or
(ii) With the consent of the Administrator, (A) shares of the
Company's Common Stock owned by the Optionee duly endorsed for transfer to
the Company or (B) subject to the timing requirements of Section 4.4,
shares of the Company's Common Stock issuable to the Optionee upon exercise
of the Option, with a fair market value on the date of Option exercise
equal to the aggregate purchase price of the shares with respect to which
such Option or portion is exercised; or
(iii) With the consent of the Administrator, a promissory note
bearing interest (at no less than such rate as shall then preclude the
imputation of interest under the Code or successor provision) and payable
upon such terms as may be prescribed by the Administrator. The
Administrator may also prescribe the form of such note and the security to
be given for such note. That Option may not be exercised, however, by
delivery of a promissory note or by a loan from the Company when or where
such loan or other extension of credit is prohibited by law; or
<PAGE>
(iv) With the consent of the Administrator, any combination of
the consideration provided in the foregoing subparagraphs (i) - (iii); and
(b) A bona fide written representation and agreement, in a form
satisfactory to the Administrator, signed by the Optionee or other person then
entitled to exercise such Option or portion, stating that the shares of stock
are being acquired for his own account, for investment and without any present
intention of distributing or reselling said shares or any of them except as may
be permitted under the Securities Act and then applicable rules and regulations
thereunder, and that the Optionee or other person then entitled to exercise such
Option or portion will indemnify the Company against and hold it free and
harmless from any loss, damage, expense or liability resulting to the Company if
any sale or distribution of the shares by such person is contrary to the
representation and agreement referred to above. The Administrator may, in its
absolute discretion, take whatever additional actions it deems appropriate to
insure the observance and performance of such representation and agreement and
to effect compliance with the Securities Act and any other federal or state
securities laws or regulations. Without limiting the generality of the
foregoing, the Administrator may require an opinion of counsel acceptable to it
to the effect that any subsequent transfer of shares acquired on an Option
exercise does not violate the Securities Act, and may issue stop-transfer orders
covering such shares. Share certificates evidencing stock issued on exercise of
this Option shall bear an appropriate legend referring to the provisions of this
subsection (c) and the agreements herein. The written representation and
agreement referred to in the first sentence of this subsection (c) shall,
however, not be required if the shares to be issued pursuant to such exercise
have been registered under the Securities Act, and such registration is then
effective in respect of such shares; and
(c) Full payment to the Company (or other employer corporation) of all
amounts which, under federal, state or local tax law, it is required to withhold
upon exercise of the Option; with the consent of the Administrator, (i) shares
of the Company's Common Stock owned by the Optionee duly endorsed for transfer,
or (ii) subject to the timing requirements of Section 4.4, shares of the
Company's Common Stock issuable to the Optionee upon exercise of the Option,
valued at fair market value at the date of Option exercise, may be used to make
all or part of such payment; and
(d) In the event the Option or portion shall be exercised pursuant to
Section 4.1 by any person or persons other than the Optionee, appropriate proof
of the right of such person or persons to exercise the Option.
4.4. Certain Timing Requirements
- ---- ---------------------------
Shares of the Company's Common Stock issuable to the Optionee upon
exercise of the Option may be used to satisfy the Option price or the tax
withholding consequences of such exercise only (i) during the period beginning
on the third (3rd) business day following the date of release of the quarterly
or annual summary statement of sales and earnings of the Company and ending on
the twelfth (12th) business day following such date or (ii) pursuant to an
irrevocable written election by the Optionee to use shares of the Company's
Common Stock issuable to the Optionee upon exercise of the Option to pay all or
part of the Option price or the withholding taxes (subject to the approval of
the Administrator) made at least six (6) months prior to the payment of such
Option price or withholding taxes.
<PAGE>
4.5. Conditions to Issuance of Stock Certificates
- ---- --------------------------------------------
The shares of stock deliverable upon the exercise of the Option, or
any portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of the Option or portion thereof prior to fulfillment of all of the
following conditions:
(a) The admission of such shares to listing on all stock exchanges on
which such class of stock is then listed; and
(b) The completion of any registration or other qualification of such
shares under any state or federal law or under rulings or regulations of the
Securities and Exchange Commission or of any other governmental regulatory body,
which the Administrator shall, in its absolute discretion, deem necessary or
advisable; and
(c) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Administrator shall, in its absolute
discretion, determine to be necessary or advisable; and
(d) The payment to the Company (or other employer corporation) of all
amounts which, under federal, state or local tax law, it is required to withhold
upon exercise of the Option; and
(e) The lapse of such reasonable period of time following the exercise
of the Option as the Administrator may from time to time establish for reasons
of administrative convenience.
4.6. Rights as Shareholder
- ---- ---------------------
The holder of the Option shall not be, nor have any of the rights or
privileges of, a shareholder of the Company in respect of any shares purchasable
upon the exercise of any part of the Option unless and until certificates
representing such shares shall have been issued by the Company to such holder.
ARTICLE V.
OTHER PROVISIONS
5.1. Administration
- ---- --------------
The Administrator shall have the power to interpret this Agreement and
to adopt such rules for the administration, interpretation and application of
this Agreement as are consistent therewith and to interpret or revoke any such
rules. All actions taken and all interpretations and determinations made by the
Administrator in good faith shall be final and binding upon the Optionee, the
Company and all other interested persons. No member of the Administrator shall
be personally liable for any action, determination or interpretation made in
good faith with respect to this Agreement or the Option. In the event that the
Administrator is
<PAGE>
the Committee, the Board shall have no right to exercise any of
the rights or duties of the Committee under this Agreement.
5.2. Option Not Transferable
- ---- -----------------------
Neither the Option nor any interest or right therein or part thereof
shall be liable for the debts, contracts or engagements of the Optionee or his
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that this Section 5.2
shall not prevent transfers by will or by the applicable laws of descent and
distribution.
5.3. Shares to Be Reserved
- ---- ---------------------
The Company shall at all times during the term of the Option reserve
and keep available such number of shares of stock as will be sufficient to
satisfy the requirements of this Agreement.
5.4. Notices
- ---- -------
Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of its Secretary, and any
notice to be given to the Optionee shall be addressed to him at the address
given beneath his signature hereto. By a notice given pursuant to this Section
5.4, either party may hereafter designate a different address for notices to be
given to him. Any notice which is required to be given to the Optionee shall,
if the Optionee is then deceased, be given to the Optionee's personal
representative if such representative has previously informed the Company of his
status and address by written notice under this Section 5.4. Any notice shall
be deemed duly given when enclosed in a properly sealed envelope or wrapper
addressed as aforesaid, deposited (with postage prepaid) in a post office or
branch post office regularly maintained by the United States Postal Service.
5.5. Titles
- ---- ------
Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.
5.6. Construction
- ---- ------------
This Agreement shall be administered, interpreted and enforced under
the laws of the State of Delaware.
5.7. Conformity to Securities Laws
- ---- -----------------------------
The Optionee acknowledges that this Agreement is intended to conform
to the extent necessary with all provisions of the Securities Act and the
Exchange Act and any and all regulations and rules promulgated by the Securities
and Exchange Commission thereunder,
<PAGE>
including without limitation Rule 16b-3. Notwithstanding anything herein to the
contrary, this Agreement shall be administered, and the Option is granted and
may be exercised, only in such a manner as to conform to such laws, rules and
regulations. To the extent permitted by applicable law, this Agreement shall be
deemed amended to the extent necessary to conform to such laws, rules and
regulations.
5.8. Restrictions on Transfer of Shares
- ---- ----------------------------------
(a) There can be no valid transfer (as hereinafter defined) of any
shares of stock purchased on exercise of the Option, or any interest in such
shares, by any holder of such shares or interests unless such transfer is solely
for cash consideration and is made in compliance with the following provisions:
(i) Before there can be a valid transfer of any shares or any
interest therein, the record holder of the shares to be transferred (the
"Offered Shares') shall give written notice (by registered or certified
mail) to the Company. Such notice shall specify (i) the bona fide intent
of the record holder of the Offered Shares (hereinafter referred to as the
"Offeror") to sell or otherwise transfer the Offered Shares to a bona fide
third-party transferee (ii) the identity of the proposed transferee, (iii)
the number of Offered Shares to be transferred to the proposed transferee,
(iv) the cash price offered for the Offered Shares by the proposed
transferee (the "Offered Price") and (v) the other terms and conditions of
the proposed transfer. The date such notice is mailed shall be hereinafter
referred to as the "notice date" and the record holder of the Offered
Shares shall be hereinafter referred to as the "Offeror."
(ii) For a period of thirty (30) calendar days after the notice
date, the Company shall have the option to purchase all (but not less than
all) of the Offered Shares at the purchase price and on the terms set forth
in subsection (a)(iii) of this Section 5.8. This option shall be
exercisable by the Company by mailing (by registered or certified mail)
written notice of exercise to the Offeror prior to the end of said thirty
(30) days.
(iii) The price at which the Company may purchase the Offered
Shares pursuant to the exercise of such option shall be (A) if the notice
date is prior to the date of the Initial Public Offering, the Offered Price
(as set forth in the notice required under subsection (a)(i) of this
Section 5.8), and (B) if the notice date is after the date of the Initial
Public Offering, the fair market value of the Offered Shares on the notice
date. The Company's notice of exercise of such option shall be accompanied
by full payment for the Offered Shares and, upon such payment by the
Company, the Company shall acquire full right, title and interest to all of
the Offered Shares.
(iv) If, and only if, the option given pursuant to subsection
(a)(ii) of this Section 5.8 is not exercised, the transfer proposed in the
notice given pursuant to subsection (a)(i) of this Section 5.8 may take
place; provided, however, that such transfer must, in all respects, be
exactly as proposed in said notice except that such transfer may not take
place either before the tenth (10th) calendar day after the expiration of
said thirty-day option exercise period or after the ninetieth (90th)
calendar day after the
<PAGE>
expiration of said thirty-day option exercise period, and if such transfer
has not taken place prior to said ninetieth (90th) day, such transfer may
not take place without once again complying with subsection (a) of this
Section 5.8.
(b) As used in this Section 5.8, the term "transfer" means any sale,
encumbrance, pledge, gift or other form of disposition or transfer of shares of
the Company's stock or any legal or equitable interest therein; provided,
however, that the term "transfer" does not include a transfer of such shares or
interests by will or by the applicable laws of descent and distribution or a
gift of such shares if the transferee or donee agrees to be bound by the
provisions of this Section 5.8.
(c) None of the shares of the Company's stock purchased on exercise of
the Option shall be transferred on the Company's books nor shall the Company
recognize any such transfer of any such shares or any interest therein unless
and until all applicable provisions of this Section 5.8 have been compiled with
in all respects. The certificates of stock evidencing shares of stock purchased
on exercise of the Option shall bear an appropriate legend referring to the
transfer restrictions imposed by this Section 5.8.
5.9. Lock-up in Event of Initial Public Offering
- ---- -------------------------------------------
The Optionee agrees that, during a period of 180 days from the date of
the Initial Public Offering, Optionee will not, without the prior written
consent of the underwriter(s) of the Initial Public Offering, directly or
indirectly, sell, offer to sell, grant any option for the sale of, or otherwise
dispose of or transfer, any shares of Common Stock issuable upon exercise of the
Option.
5.10 Dispute Resolution
- ---- ------------------
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 resolved by binding arbitration before a single neutral
arbitrator in San Diego, California. The arbitrator shall be selected from the
American Arbitration Association through its procedures. All rules governing
the arbitration shall be the rules as set forth by the American Arbitration
Association. The arbitrator is bound to rule only on whether or not there has
been a violation of the terms of this Agreement and to render an award, if any,
that is consistent with the terms of this Agreement. Neither party to this
Agreement is entitled to any legal recourse or rights or remedies other than
those provided within this Agreement. Each party will bear one-half of the cost
of the arbitration filing and hearing fees, and the cost of the arbitrator.
Each party shall be responsible for its own attorneys' fees, unless otherwise
decided by the arbitrator.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto.
By: ______________________________
President
By: ______________________________
Secretary
_______________________________
Optionee
_______________________________
_______________________________
Address
Optionee's Taxpayer
Identification Number:
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EXHIBIT 10.35
COMPS.COM, INC.
1999 STOCK INCENTIVE PLAN
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ARTICLE ONE
GENERAL PROVISIONS
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I. PURPOSE OF THE PLAN
This 1999 Stock Incentive Plan is intended to promote the interests of
COMPS.COM, INC., a Delaware corporation, by providing eligible persons in the
Corporation's service with the opportunity to acquire a proprietary interest, or
otherwise increase their proprietary interest, in the Corporation as an
incentive for them to remain in such service.
Capitalized terms shall have the meanings assigned to such terms in
the attached Appendix.
II. STRUCTURE OF THE PLAN
A. The Plan shall be divided into five separate equity programs:
- the Discretionary Option Grant Program under which eligible
persons may, at the discretion of the Plan Administrator, be granted options to
purchase shares of Common Stock,
- the Salary Investment Option Grant Program under which
eligible employees may elect to have a portion of their base salary invested
each year in special option grants,
- the Stock Issuance Program under which eligible persons may,
at the discretion of the Plan Administrator, be issued shares of Common Stock
directly, either through the immediate purchase of such shares or as a bonus for
services rendered the Corporation (or any Parent or Subsidiary),
- the Automatic Option Grant Program under which eligible non-
employee Board members shall automatically receive option grants at designated
intervals over their period of continued Board service, and
- the Director Fee Option Grant Program under which non-
employee Board members may elect to have all or any portion of their annual
retainer fee otherwise payable in cash applied to a special stock option grant.
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B. The provisions of Articles One and Seven shall apply to all
equity programs under the Plan and shall govern the interests of all persons
under the Plan.
III. ADMINISTRATION OF THE PLAN
A. The Primary Committee shall have sole and exclusive authority to
administer the Discretionary Option Grant and Stock Issuance Programs with
respect to Section 16 Insiders. Administration of the Discretionary Option Grant
and Stock Issuance Programs with respect to all other persons eligible to
participate in those programs may, at the Board's discretion, be vested in the
Primary Committee or a Secondary Committee, or the Board may retain the power to
administer those programs with respect to all such persons. However, any
discretionary option grants or stock issuances for members of the Primary
Committee shall be made by a disinterested majority of the Board.
B. Members of the Primary Committee or any Secondary Committee shall
serve for such period of time as the Board may determine and may be removed by
the Board at any time. The Board may also at any time terminate the functions
of any Secondary Committee and reassume all powers and authority previously
delegated to such committee.
C. Each Plan Administrator shall, within the scope of its
administrative functions under the Plan, have full power and authority (subject
to the provisions of the Plan) to establish such rules and regulations as it may
deem appropriate for proper administration of the Discretionary Option Grant and
Stock Issuance Programs and to make such determinations under, and issue such
interpretations of, the provisions of those programs and any outstanding options
or stock issuances thereunder as it may deem necessary or advisable. Decisions
of the Plan Administrator within the scope of its administrative functions under
the Plan shall be final and binding on all parties who have an interest in the
Discretionary Option Grant and Stock Issuance Programs under its jurisdiction or
any option or stock issuance thereunder.
D. The Primary Committee shall have the sole and exclusive authority
to determine which Section 16 Insiders and other highly compensated Employees
shall be eligible for participation in the Salary Investment Option Grant
Program for one or more calendar years. However, all option grants under the
Salary Investment Option Grant Program shall be made in accordance with the
express terms of that program, and the Primary Committee shall not exercise any
discretionary functions with respect to the option grants made under that
program.
E. Service on the Primary Committee or the Secondary Committee shall
constitute service as a Board member, and members of each such committee shall
accordingly be entitled to full indemnification and reimbursement as Board
members for their service on such committee. No member of the Primary Committee
or the Secondary Committee shall be liable for any act or omission made in good
faith with respect to the Plan or any option grants or stock issuances under the
Plan.
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F. Administration of the Automatic Option Grant and Director Fee
Option Grant Programs shall be self-executing in accordance with the terms of
those programs, and no Plan Administrator shall exercise any discretionary
functions with respect to any option grants or stock issuances made under those
programs.
IV. ELIGIBILITY
A. The persons eligible to participate in the Discretionary Option
Grant and Stock Issuance Programs are as follows:
(i) Employees,
(ii) non-employee members of the Board or the board of
directors of any Parent or Subsidiary, and
(iii) consultants and other independent advisors who provide
services to the Corporation (or any Parent or Subsidiary).
B. Only Employees who are Section 16 Insiders or other highly
compensated individuals shall be eligible to participate in the Salary
Investment Option Grant Program.
C. Each Plan Administrator shall, within the scope of its
administrative jurisdiction under the Plan, have full authority to determine,
(i) with respect to the option grants under the Discretionary Option Grant
Program, which eligible persons are to receive such grants, the time or times
when those grants are to be made, the number of shares to be covered by each
such grant, the status of the granted option as either an Incentive Option or a
Non-Statutory Option, the time or times when each option is to become
exercisable, the vesting schedule (if any) applicable to the option shares and
the maximum term for which the option is to remain outstanding and (ii) with
respect to stock issuances under the Stock Issuance Program, which eligible
persons are to receive such issuances, the time or times when the issuances are
to be made, the number of shares to be issued to each Participant, the vesting
schedule (if any) applicable to the issued shares and the consideration for such
shares.
D. The Plan Administrator shall have the absolute discretion either
to grant options in accordance with the Discretionary Option Grant Program or to
effect stock issuances in accordance with the Stock Issuance Program.
E. The individuals who shall be eligible to participate in the
Automatic Option Grant Program shall be limited to (i) those individuals who
first become non-employee Board members on or after the Underwriting Date,
whether through appointment by the Board or election by the Corporation's
stockholders, and (ii) those individuals who continue to serve as non-employee
Board members at one or more Annual Stockholders Meetings held after the
Underwriting Date. A non-employee Board member who has previously been in the
employ of the Corporation (or any Parent or Subsidiary) shall not be eligible to
receive an option grant under the Automatic Option Grant Program at the time he
or she first becomes a non-employee Board member, but shall be eligible to
receive periodic option grants under the Automatic Option Grant Program while he
or she continues to serve as a non-employee Board member.
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F. All non-employee Board members shall be eligible to participate
in the Director Fee Option Grant Program.
V. STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares of authorized
but unissued or reacquired Common Stock, including shares repurchased by the
Corporation on the open market. The number of shares of Common Stock initially
reserved for issuance over the term of the Plan shall not exceed two million
eight hundred thousand (2,800,000) shares. Such reserve shall consist of (i)
the number of shares estimated to remain available for issuance, as of the Plan
Effective Date, under the Predecessor Plans as last approved by the
Corporation's stockholders, including the shares subject to outstanding options
under those Predecessor Plans, (ii) plus an additional increase of approximately
fifty one thousand four hundred seventeen (51,417) shares to be approved by the
Corporation's stockholders prior to the Underwriting Date.
B. The number of shares of Common Stock available for issuance under
the Plan shall automatically increase on the first trading day in January each
calendar year during the term of the Plan, beginning with calendar year 2000, by
an amount equal to two and one half percent (2.5%) of the total number of shares
of Common Stock outstanding on the last trading day in December of the
immediately preceding calendar year, but in no event shall any such annual
increase exceed five hundred thousand (500,000) shares.
C. No one person participating in the Plan may receive options,
separately exercisable stock appreciation rights and direct stock issuances for
more than seven hundred thousand (700,000) shares of Common Stock in the
aggregate per calendar year.
D. Shares of Common Stock subject to outstanding options (including
options incorporated into this Plan from the Predecessor Plans) shall be
available for subsequent issuance under the Plan to the extent (i) those options
expire or terminate for any reason prior to exercise in full or (ii) the options
are cancelled in accordance with the cancellation-regrant provisions of Article
Two. Unvested shares issued under the Plan and subsequently cancelled or
repurchased by the Corporation at the original issue price paid per share,
pursuant to the Corporation's repurchase rights under the Plan shall be added
back to the number of shares of Common Stock reserved for issuance under the
Plan and shall accordingly be available for reissuance through one or more
subsequent option grants or direct stock issuances under the Plan. However,
should the exercise price of an option under the Plan be paid with shares of
Common Stock or should shares of Common Stock otherwise issuable under the Plan
be withheld by the Corporation in satisfaction of the withholding taxes incurred
in connection with the exercise of an option or the vesting of a stock issuance
under the Plan, then the number of shares of Common Stock available for issuance
under the Plan shall be reduced by the gross number of shares for which the
option is exercised or which vest under the stock issuance, and not by the net
number of shares of Common Stock issued to the holder of such option or stock
issuance. Shares of Common Stock underlying one or more stock appreciation
rights exercised under Section V of Article Two, Section III of Article Three,
Section II of Article Five or Section III of Article Six of the Plan shall NOT
be available for subsequent issuance under the Plan.
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E. If any change is made to the Common Stock by reason of any stock
split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without
the Corporation's receipt of consideration, appropriate adjustments shall be
made by the Plan Administrator to (i) the maximum number and/or class of
securities issuable under the Plan, (ii) the number and/or class of securities
for which any one person may be granted stock options, separately exercisable
stock appreciation rights and direct stock issuances under the Plan per calendar
year, (iii) the number and/or class of securities for which grants are
subsequently to be made under the Automatic Option Grant Program to new and
continuing non-employee Board members, (iv) the number and/or class of
securities and the exercise price per share in effect under each outstanding
option under the Plan, (v) the number and/or class of securities and price per
share in effect under each outstanding option incorporated into this Plan from
the Predecessor Plans and (vi) the maximum number and/or class of securities by
which the share reserve is to increase automatically each calendar year pursuant
to the provisions of Section V.B of this Article One. Such adjustments to the
outstanding options are to be effected in a manner which shall preclude the
enlargement or dilution of rights and benefits under such options. The
adjustments determined by the Plan Administrator shall be final, binding and
conclusive.
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ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
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I. OPTION TERMS
Each option shall be evidenced by one or more documents in the form
approved by the Plan Administrator; provided, however, that each such document
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shall comply with the terms specified below. Each document evidencing an
Incentive Option shall, in addition, be subject to the provisions of the Plan
applicable to such options.
A. EXERCISE PRICE.
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1. The exercise price per share shall be fixed by the Plan
Administrator but shall not be less than one hundred percent (100%) of the Fair
Market Value per share of Common Stock on the option grant date.
(i) The exercise price shall become immediately due upon
exercise of the option and shall, subject to the provisions of Section I of
Article Seven and the documents evidencing the option, be payable in one or
more of the forms specified below:
(ii) cash or check made payable to the Corporation,
(iii) shares of Common Stock held for the requisite period
necessary to avoid a charge to the Corporation's earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date, or
(iv) to the extent the option is exercised for vested
shares, through a special sale and remittance procedure pursuant to which
the Optionee shall concurrently provide irrevocable instructions to (a) a
Corporation-designated brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes required to be
withheld by the Corporation by reason of such exercise and (b) the
Corporation to deliver the certificates for the purchased shares directly
to such brokerage firm in order to complete the sale.
Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.
B. EXERCISE AND TERM OF OPTIONS. Each option shall be exercisable
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at such time or times, during such period and for such number of shares as shall
be determined by the Plan Administrator and set forth in the documents
evidencing the option. However, no option shall have a term in excess of ten
(10) years measured from the option grant date.
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C. EFFECT OF TERMINATION OF SERVICE.
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1. The following provisions shall govern the exercise of any
options held by the Optionee at the time of cessation of Service or death:
(i) Any option outstanding at the time of the Optionee's
cessation of Service for any reason shall remain exercisable for such
period of time thereafter as shall be determined by the Plan Administrator
and set forth in the documents evidencing the option, but no such option
shall be exercisable after the expiration of the option term.
(ii) Any option held by the Optionee at the time of death
and exercisable in whole or in part at that time may be subsequently
exercised by the personal representative of the Optionee's estate or by the
person or persons to whom the option is transferred pursuant to the
Optionee's will or in accordance with the laws of descent and distribution
or by the Optionee's designated beneficiary or beneficiaries of that
option.
(iii) Should the Optionee's Service be terminated for
Misconduct, then all outstanding options held by the Optionee shall
terminate immediately and cease to be outstanding.
(iv) During the applicable post-Service exercise period,
the option may not be exercised in the aggregate for more than the number
of vested shares for which the option is exercisable on the date of the
Optionee's cessation of Service. Upon the expiration of the applicable
exercise period or (if earlier) upon the expiration of the option term, the
option shall terminate and cease to be outstanding for any vested shares
for which the option has not been exercised. However, the option shall,
immediately upon the Optionee's cessation of Service, terminate and cease
to be outstanding to the extent the option is not otherwise at that time
exercisable for vested shares.
2. The Plan Administrator shall have complete discretion,
exercisable either at the time an option is granted or at any time while the
option remains outstanding, to:
(i) extend the period of time for which the option is to
remain exercisable following the Optionee's cessation of Service from the
limited exercise period otherwise in effect for that option to such greater
period of time as the Plan Administrator shall deem appropriate, but in no
event beyond the expiration of the option term, and/or
(ii) permit the option to be exercised, during the
applicable post-Service exercise period, no only with respect to the number
of vested shares of Common Stock for which such option is exercisable at
the time of the Optionee's cessation of Service but also with respect to
one or more additional installments in which the Optionee would have vested
had the Optionee continued in Service.
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D. STOCKHOLDER RIGHTS. The holder of an option shall have no
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stockholder rights with respect to the shares subject to the option until such
person shall have exercised the option, paid the exercise price and become a
holder of record of the purchased shares.
E. REPURCHASE RIGHTS. The Plan Administrator shall have the
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discretion to grant options which are exercisable for unvested shares of Common
Stock. Should the Optionee cease Service while holding such unvested shares,
the Corporation shall have the right to repurchase, at the exercise price paid
per share, any or all of those unvested shares. The terms upon which such
repurchase right shall be exercisable (including the period and procedure for
exercise and the appropriate vesting schedule for the purchased shares) shall be
established by the Plan Administrator and set forth in the document evidencing
such repurchase right.
F. LIMITED TRANSFERABILITY OF OPTIONS. During the lifetime of the
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Optionee, Incentive Options shall be exercisable only by the Optionee and shall
not be assignable or transferable other than by will or by the laws of descent
and distribution following the Optionee's death. However, a Non-Statutory
Option may, in connection with the Optionee's estate plan, be assigned in whole
or in part during the Optionee's lifetime to one or more members of the
Optionee's immediate family or to a trust established exclusively for one or
more such family members. The assigned portion may only be exercised by the
person or persons who acquire a proprietary interest in the option pursuant to
the assignment. The terms applicable to the assigned portion shall be the same
as those in effect for the option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Plan Administrator
may deem appropriate. Notwithstanding the foregoing, the Optionee may also
designate one or more persons as the beneficiary or beneficiaries of his or her
outstanding options under this Article Two, and those options shall, in
accordance with such designation, automatically be transferred to such
beneficiary or beneficiaries upon the Optionee's death while holding those
options. Such beneficiary or beneficiaries shall take the transferred options
subject to all the terms and conditions of the applicable agreement evidencing
each such transferred option, including (without limitation) the limited time
period during which the option may be exercised following the Optionee's death.
II. INCENTIVE OPTIONS
The terms specified below shall be applicable to all Incentive
Options. Except as modified by the provisions of this Section II, all the
provisions of Articles One, Two and Seven shall be applicable to Incentive
Options. Options which are specifically designated as Non-Statutory Options
when issued under the Plan shall not be subject to the terms of this Section II.
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A. ELIGIBILITY. Incentive Options may only be granted to Employees.
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B. DOLLAR LIMITATION. The aggregate Fair Market Value of the shares
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of Common Stock (determined as of the respective date or dates of grant) for
which one or more options granted to any Employee under the Plan (or any other
option plan of the Corporation or any Parent or Subsidiary) may for the first
time become exercisable as Incentive Options during any one calendar year shall
not exceed the sum of One Hundred Thousand Dollars ($100,000).
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To the extent the Employee holds two (2) or more such options which become
exercisable for the first time in the same calendar year, the foregoing
limitation on the exercisability of such options as Incentive Options shall be
applied on the basis of the order in which such options are granted.
C. 10% STOCKHOLDER. If any Employee to whom an Incentive Option is
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granted is a 10% Stockholder, then the exercise price per share shall not be
less than one hundred ten percent (110%) of the Fair Market Value per share of
Common Stock on the option grant date, and the option term shall not exceed five
(5) years measured from the option grant date.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. In the event of any Corporate Transaction, each outstanding
option shall automatically accelerate so that each such option shall,
immediately prior to the effective date of the Corporate Transaction, become
fully exercisable for the total number of shares of Common Stock at the time
subject to such option and may be exercised for any or all of those shares as
fully vested shares of Common Stock. However, an outstanding option shall NOT
become exercisable on such an accelerated basis if and to the extent: (i) such
option is, in connection with the Corporate Transaction, to be assumed by the
successor corporation (or parent thereof) or (ii) such option is to be replaced
with a cash incentive program of the successor corporation which preserves the
spread existing at the time of the Corporate Transaction on any shares for which
the option is not otherwise at that time exercisable and provides for subsequent
payout in accordance with the same exercise/vesting schedule applicable to those
option shares or (iii) the acceleration of such option is subject to other
limitations imposed by the Plan Administrator at the time of the option grant.
B. All outstanding repurchase rights shall automatically terminate,
and the shares of Common Stock subject to those terminated rights shall
immediately vest in full, in the event of any Corporate Transaction, except to
the extent: (i) those repurchase rights are to be assigned to the successor
corporation (or parent thereof) in connection with such Corporate Transaction or
(ii) such accelerated vesting is precluded by other limitations imposed by the
Plan Administrator at the time the repurchase right is issued.
C. Immediately following the consummation of the Corporate
Transaction, all outstanding options shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation (or
parent thereof).
D. Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in consummation of such Corporate Transaction had
the option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments to reflect such Corporate Transaction shall also be made
to (i) the exercise price payable per share under each outstanding option,
provided the
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aggregate exercise price payable for such securities shall remain the same, (ii)
the maximum number and/or class of securities available for issuance over the
remaining term of the Plan and (iii) the maximum number and/or class of
securities for which any one person may be granted stock options, separately
exercisable stock appreciation rights and direct stock issuances under the Plan
per calendar year and (iv) the maximum number and/or class of securities by
which the share reserve is to increase automatically each calendar year.
E. The Plan Administrator shall have the discretionary authority to
structure one or more outstanding options under the Discretionary Option Grant
Program so that those options shall, immediately prior to the effect date of
such Corporate Transaction, become fully exercisable for the total number of
shares of Common Stock at the time subject to those options and may be exercised
for any or all of those shares as fully vested shares of Common Stock, whether
or not those options are to be assumed in the Corporate Transaction. In
addition, the Plan Administrator shall have the discretionary authority to
structure one or more of the Corporation's repurchase rights under the
Discretionary Option Grant Program so that those rights shall not be assignable
in connection with such Corporate Transaction and shall accordingly terminate
upon the consummation of such Corporate Transaction, and the shares subject to
those terminated rights shall thereupon vest in full.
F. The Plan Administrator shall have full power and authority to
structure one or more outstanding options under the Discretionary Option Grant
Program so that those options shall become fully exercisable for the total
number of shares of Common Stock at the time subject to those options in the
event the Optionee's Service is subsequently terminated by reason of an
Involuntary Termination within a designated period (not to exceed eighteen (18)
months) following the effective date of any Corporate Transaction in which those
options are assumed and do not otherwise accelerate. Any options so accelerated
shall remain exercisable for fully vested shares until the earlier of (i) the
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expiration of the option term or (ii) the expiration of the one (1) year period
measured from the effective date of the Involuntary Termination. In addition,
the Plan Administrator may structure one or more of the Corporation's repurchase
rights so that those rights shall immediately terminate with respect to any
shares held by the Optionee at the time of his or her Involuntary Termination,
and the shares subject to those terminated repurchase rights shall accordingly
vest in full at that time.
G. The Plan Administrator shall have the discretionary authority to
structure one or more outstanding options under the Discretionary Option Grant
Program so that those options shall, immediately prior to the effect date of a
Change in Control, become fully exercisable for the total number of shares of
Common Stock at the time subject to those options and may be exercised for any
or all of those shares as fully vested shares of Common Stock. In addition, the
Plan Administrator shall have the discretionary authority to structure one or
more of the Corporation's repurchase rights under the Discretionary Option Grant
Program so that those rights shall terminate automatically upon the consummation
of such Change in Control, and the shares subject to those terminated rights
shall thereupon vest in full. Alternatively, the Plan Administrator may
condition the automatic acceleration of one or more outstanding options under
the Discretionary Option Grant Program and the termination of one or more of the
Corporation's outstanding repurchase rights under such program upon the
subsequent
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termination of the Optionee's Service by reason of an Involuntary Termination
within a designated period (not to exceed eighteen (18) months) following the
effective date of such Change in Control. Each option so accelerated shall
remain exercisable for fully vested shares until the earlier of (i) the
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expiration of the option term or (ii) the expiration of the one (1) year period
measured from the effective date of Optionee's cessation of Service.
H. The portion of any Incentive Option accelerated in connection
with a Corporate Transaction or Change in Control shall remain exercisable as an
Incentive Option only to the extent the applicable One Hundred Thousand Dollar
($100,000) limitation is not exceeded. To the extent such dollar limitation is
exceeded, the accelerated portion of such option shall be exercisable as a
Nonstatutory Option under the Federal tax laws.
I. The outstanding options shall in no way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
IV. CANCELLATION AND REGRANT OF OPTIONS
The Plan Administrator shall have the authority to effect, at any time
and from time to time, with the consent of the affected option holders, the
cancellation of any or all outstanding options under the Discretionary Option
Grant Program (including outstanding options incorporated from the Predecessor
Plans) and to grant in substitution new options covering the same or different
number of shares of Common Stock but with an exercise price per share based on
the Fair Market Value per share of Common Stock on the new grant date.
V. STOCK APPRECIATION RIGHTS
A. The Plan Administrator shall have full power and authority to
grant to selected Optionees tandem stock appreciation rights and/or limited
stock appreciation rights.
B. The following terms shall govern the grant and exercise of tandem
stock appreciation rights:
(i) One or more Optionees may be granted the right, exercisable
upon such terms as the Plan Administrator may establish, to elect between
the exercise of the underlying option for shares of Common Stock and the
surrender of that option in exchange for a distribution from the
Corporation in an amount equal to the excess of (a) the Fair Market Value
(on the option surrender date) of the number of shares in which the
Optionee is at the time vested under the surrendered option (or surrendered
portion thereof) over (b) the aggregate exercise price payable for such
shares.
(ii) No such option surrender shall be effective unless it is
approved by the Plan Administrator, either at the time of the actual option
surrender or at any earlier time. If the surrender is so approved, then
the distribution to which the Optionee shall be entitled may be made in
shares of Common Stock valued at Fair Market Value on the option surrender
date, in cash, or partly in shares and partly in cash, as the Plan
Administrator shall in its sole discretion deem appropriate.
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(iii) If the surrender of an option is not approved by the Plan
Administrator, then the Optionee shall retain whatever rights the Optionee
had under the surrendered option (or surrendered portion thereof) on the
option surrender date and may exercise such rights at any time prior to the
later of (a) five (5) business days after the receipt of the rejection
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notice or (b) the last day on which the option is otherwise exercisable in
accordance with the terms of the documents evidencing such option, but in
no event may such rights be exercised more than ten (10) years after the
option grant date.
C. The following terms shall govern the grant and exercise of
limited stock appreciation rights:
(i) One or more Section 16 Insiders may be granted limited
stock appreciation rights with respect to their outstanding options.
(ii) Upon the occurrence of a Hostile Take-Over, each
individual holding one or more options with such a limited stock
appreciation right shall have the unconditional right (exercisable for a
thirty (30)-day period following such Hostile Take-Over) to surrender each
such option to the Corporation. In return for the surrendered option, the
Optionee shall receive a cash distribution from the Corporation in an
amount equal to the excess of (A) the Take-Over Price of the shares of
Common Stock at the time subject to such option (whether or not the
Optionee is otherwise vested in those shares) over (B) the aggregate
exercise price payable for those shares. Such cash distribution shall be
paid within five (5) days following the option surrender date.
(iii) At the time such limited stock appreciation right is
granted, the Plan Administrator shall pre-approve any subsequent exercise
of that right in accordance with the terms of this Paragraph C.
Accordingly, no further approval of the Plan Administrator or the Board
shall be required at the time of the actual option surrender and cash
distribution.
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ARTICLE THREE
SALARY INVESTMENT OPTION GRANT PROGRAM
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I. OPTION GRANTS
The Primary Committee shall have the sole and exclusive authority to
determine the calendar year or years (if any) for which the Salary Investment
Option Grant Program is to be in effect and to select the Section 16 Insiders
and other highly compensated Employees eligible to participate in the Salary
Investment Option Grant Program for such calendar year or years. Each selected
individual who elects to participate in the Salary Investment Option Grant
Program must, prior to the start of each calendar year of participation, file
with the Plan Administrator (or its designate) an irrevocable authorization
directing the Corporation to reduce his or her base salary for that calendar
year by an amount not less than Ten Thousand Dollars ($10,000.00) nor more than
Fifty Thousand Dollars ($50,000.00). Each individual who files such a timely
authorization shall automatically be granted an option under the Salary
Investment Grant Program on the first trading day in January of the calendar
year for which the salary reduction is to be in effect.
II. OPTION TERMS
Each option shall be a Non-Statutory Option evidenced by one or more
documents in the form approved by the Plan Administrator; provided, however,
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that each such document shall comply with the terms specified below.
A. EXERCISE PRICE.
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1. The exercise price per share shall be thirty-three and one-
third percent (33-1/3%) of the Fair Market Value per share of Common Stock on
the option grant date.
2. The exercise price shall become immediately due upon
exercise of the option and shall be payable in one or more of the alternative
forms authorized under the Discretionary Option Grant Program. Except to the
extent the sale and remittance procedure specified thereunder is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.
B. NUMBER OF OPTION SHARES. The number of shares of Common Stock
-----------------------
subject to the option shall be determined pursuant to the following formula
(rounded down to the nearest whole number):
X = A / (B x 66-2/3%), where
X is the number of option shares,
13
<PAGE>
A is the dollar amount of the reduction in the Optionee's base
salary for the calendar year to be in effect pursuant to this program,
and
B is the Fair Market Value per share of Common Stock on the
option grant date.
C. EXERCISE AND TERM OF OPTIONS. The option shall become
----------------------------
exercisable in a series of twelve (12) successive equal monthly installments
upon the Optionee's completion of each calendar month of Service in the calendar
year for which the salary reduction is in effect. Each option shall have a
maximum term of ten (10) years measured from the option grant date.
D. EFFECT OF TERMINATION OF SERVICE. Should the Optionee cease
--------------------------------
Service for any reason while holding one or more options under this Article
Three, then each such option shall remain exercisable, for any or all of the
shares for which the option is exercisable at the time of such cessation of
Service, until the earlier of (i) the expiration of the ten (10)-year option
-------
term or (ii) the expiration of the three (3)-year period measured from the date
of such cessation of Service. Should the Optionee die while holding one or more
options under this Article Three, then each such option may be exercised, for
any or all of the shares for which the option is exercisable at the time of the
Optionee's cessation of Service (less any shares subsequently purchased by
Optionee prior to death), by the personal representative of the Optionee's
estate or by the person or persons to whom the option is transferred pursuant to
the Optionee's will or in accordance with the laws of descent and distribution
or by the designated beneficiary or beneficiaries of such option. Such right of
exercise shall lapse, and the option shall terminate, upon the earlier of (i)
-------
the expiration of the ten (10)-year option term or (ii) the three (3)-year
period measured from the date of the Optionee's cessation of Service. However,
the option shall, immediately upon the Optionee's cessation of Service for any
reason, terminate and cease to remain outstanding with respect to any and all
shares of Common Stock for which the option is not otherwise at that time
exercisable.
III. CORPORATE TRANSACTION/ CHANGE IN CONTROL/ HOSTILE TAKE-OVER
A. In the event of any Corporate Transaction while the Optionee
remains in Service, each outstanding option held by such Optionee under this
Salary Investment Option Grant Program shall automatically accelerate so that
each such option shall, immediately prior to the effective date of the Corporate
Transaction, become fully exercisable for the total number of shares of Common
Stock at the time subject to such option and may be exercised for any or all of
those shares as fully-vested shares of Common Stock. Each such outstanding
option shall terminate immediately following the Corporate Transaction, except
to the extent assumed by the successor corporation (or parent thereof) in such
Corporate Transaction. Any option so assumed and shall remain exercisable for
the fully-vested shares until the earlier of (i) the expiration of the ten (10)-
-------
year option term or (ii) the expiration of the three (3)-year period measured
from the date of the Optionee's cessation of Service.
14
<PAGE>
B. In the event of a Change in Control while the Optionee remains in
Service, each outstanding option held by such Optionee under this Salary
Investment Option Grant Program shall automatically accelerate so that each such
option shall immediately become fully exercisable for the total number of shares
of Common Stock at the time subject to such option and may be exercised for any
or all of those shares as fully-vested shares of Common Stock. The option shall
remain so exercisable until the earliest to occur of (i) the expiration of the
--------
ten (10)-year option term, (ii) the expiration of the three (3)-year period
measured from the date of the Optionee's cessation of Service, (iii) the
termination of the option in connection with a Corporate Transaction or (iv)
the surrender of the option in connection with a Hostile Take-Over.
C. Upon the occurrence of a Hostile Take-Over, the Optionee shall
have a thirty (30)-day period in which to surrender to the Corporation each
outstanding option granted him or her under the Salary Investment Option Grant
Program. The Optionee shall in return be entitled to a cash distribution from
the Corporation in an amount equal to the excess of (i) the Take-Over Price of
the shares of Common Stock at the time subject to the surrendered option
(whether or not the Optionee is otherwise at the time vested in those shares)
over (ii) the aggregate exercise price payable for such shares. Such cash
distribution shall be paid within five (5) days following the surrender of the
option to the Corporation. The Primary Committee shall, at the time the option
with such limited stock appreciation right is granted under the Salary
Investment Option Grant Program, pre-approve any subsequent exercise of that
right in accordance with the terms of this Paragraph C. Accordingly, no further
approval of the Primary Committee or the Board shall be required at the time of
the actual option surrender and cash distribution.
D. Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in consummation of such Corporate Transaction had
the option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments shall also be made to the exercise price payable per
share under each outstanding option, provided the aggregate exercise price
--------
payable for such securities shall remain the same.
E. The grant of options under the Salary Investment Option Grant
Program shall in no way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.
IV. REMAINING TERMS
The remaining terms of each option granted under the Salary Investment
Option Grant Program shall be the same as the terms in effect for option grants
made under the Discretionary Option Grant Program.
15
<PAGE>
ARTICLE FOUR
STOCK ISSUANCE PROGRAM
----------------------
I. STOCK ISSUANCE TERMS
Shares of Common Stock may be issued under the Stock Issuance Program
through direct and immediate issuances without any intervening option grants.
Each such stock issuance shall be evidenced by a Stock Issuance Agreement which
complies with the terms specified below. Shares of Common Stock may also be
issued under the Stock Issuance Program pursuant to share right awards which
entitle the recipients to receive those shares upon the attainment of designated
performance goals.
A. PURCHASE PRICE.
---------------
1. The purchase price per share shall be fixed by the Plan
Administrator, but shall not be less than one hundred percent (100%) of the Fair
Market Value per share of Common Stock on the issuance date.
2. Subject to the provisions of Section I of Article Seven,
shares of Common Stock may be issued under the Stock Issuance Program for any of
the following items of consideration which the Plan Administrator may deem
appropriate in each individual instance:
(i) cash or check made payable to the Corporation, or
(ii) past services rendered to the Corporation (or any
Parent or Subsidiary).
B. VESTING PROVISIONS.
-------------------
1. Shares of Common Stock issued under the Stock Issuance
Program may, in the discretion of the Plan Administrator, be fully and
immediately vested upon issuance or may vest in one or more installments over
the Participant's period of Service or upon attainment of specified performance
objectives. The elements of the vesting schedule applicable to any unvested
shares of Common Stock issued under the Stock Issuance Program shall be
determined by the Plan Administrator and incorporated into the Stock Issuance
Agreement. Shares of Common Stock may also be issued under the Stock Issuance
Program pursuant to share right awards which entitle the recipients to receive
those shares upon the attainment of designated performance goals.
2. Any new, substituted or additional securities or other
property (including money paid other than as a regular cash dividend) which the
Participant may have the right to receive with respect to the Participant's
unvested shares of Common Stock by reason of any stock dividend, stock split,
recapitalization, combination of shares, exchange of shares or
16
<PAGE>
other change affecting the outstanding Common Stock as a class without the
Corporation's receipt of consideration shall be issued subject to (i) the same
vesting requirements applicable to the Participant's unvested shares of Common
Stock and (ii) such escrow arrangements as the Plan Administrator shall deem
appropriate.
3. The Participant shall have full stockholder rights with
respect to any shares of Common Stock issued to the Participant under the Stock
Issuance Program, whether or not the Participant's interest in those shares is
vested. Accordingly, the Participant shall have the right to vote such shares
and to receive any regular cash dividends paid on such shares.
4. Should the Participant cease to remain in Service while
holding one or more unvested shares of Common Stock issued under the Stock
Issuance Program or should the performance objectives not be attained with
respect to one or more such unvested shares of Common Stock, then those shares
shall be immediately surrendered to the Corporation for cancellation, and the
Participant shall have no further stockholder rights with respect to those
shares. To the extent the surrendered shares were previously issued to the
Participant for consideration paid in cash or cash equivalent (including the
Participant's purchase-money indebtedness), the Corporation shall repay to the
Participant the cash consideration paid for the surrendered shares and shall
cancel the unpaid principal balance of any outstanding purchase-money note of
the Participant attributable to the surrendered shares.
5. The Plan Administrator may in its discretion waive the
surrender and cancellation of one or more unvested shares of Common Stock which
would otherwise occur upon the cessation of the Participant's Service or the
non-attainment of the performance objectives applicable to those shares. Such
waiver shall result in the immediate vesting of the Participant's interest in
the shares of Common Stock as to which the waiver applies. Such waiver may be
effected at any time, whether before or after the Participant's cessation of
Service or the attainment or non-attainment of the applicable performance
objectives.
6. Outstanding share right awards under the Stock Issuance
Program shall automatically terminate, and no shares of Common Stock shall
actually be issued in satisfaction of those awards, if the performance goals
established for such awards are not attained. The Plan Administrator, however,
shall have the discretionary authority to issue shares of Common Stock under one
or more outstanding share right awards as to which the designated performance
goals have not been attained.
II. CORPORATE TRANSACTION/CHANGE IN CONTROL
A. All of the Corporation's outstanding repurchase rights under the
Stock Issuance Program shall terminate automatically, and all the shares of
Common Stock subject to those terminated rights shall immediately vest in full,
in the event of any Corporate Transaction, except to the extent (i) those
repurchase rights are to be assigned to the successor corporation (or parent
thereof) in connection with such Corporate Transaction or (ii) such accelerated
vesting is precluded by other limitations imposed in the Stock Issuance
Agreement.
17
<PAGE>
B. The Plan Administrator shall have the discretionary authority to
structure one or more of the Corporation's repurchase rights under the Stock
Issuance Program so that those rights shall automatically terminate in whole or
in part, and the shares of Common Stock subject to those terminated rights shall
immediately vest, in the event the Participant's Service should subsequently
terminate by reason of an Involuntary Termination within a designated period
(not to exceed eighteen (18) months) following the effective date of any
Corporate Transaction in which those repurchase rights are assigned to the
successor corporation (or parent thereof).
C. The Plan Administrator shall also have the discretionary
authority to structure one or more of the Corporation's repurchase rights under
the Stock Issuance Program so that those rights shall automatically terminate in
whole or in part, and the shares of Common Stock subject to those terminated
rights shall immediately vest, in the event the Participant's Service should
subsequently terminate by reason of an Involuntary Termination within a
designated period (not to exceed eighteen (18) months) following the effective
date of any Change in Control.
III. SHARE ESCROW/LEGENDS
Unvested shares may, in the Plan Administrator's discretion, be held
in escrow by the Corporation until the Participant's interest in such shares
vests or may be issued directly to the Participant with restrictive legends on
the certificates evidencing those unvested shares.
18
<PAGE>
ARTICLE FIVE
AUTOMATIC OPTION GRANT PROGRAM
------------------------------
I. OPTION TERMS
A. GRANT DATES. Option grants shall be made on the dates specified
-----------
below:
1. Each individual who is first elected or appointed as a non-
employee Board member at any time on or after the Underwriting Date shall
automatically be granted, on the date of such initial election or appointment, a
Non-Statutory Option to purchase twelve thousand (12,000) shares of Common
Stock, provided that individual has not previously been in the employ of the
Corporation or any Parent or Subsidiary.
2. On the date of each Annual Stockholders Meeting held after
the Underwriting Date, each individual who is to continue to serve as an
Eligible Director, whether or not that individual is standing for re-election to
the Board at that particular Annual Meeting, shall automatically be granted a
Non-Statutory Option to purchase two thousand (2,000) shares of Common Stock,
provided such individual has served as a non-employee Board member for at least
six (6) months. There shall be no limit on the number of such two thousand
(2,000) share option grants any one Eligible Director may receive over his or
her period of Board service, and non-employee Board members who have previously
been in the employ of the Corporation (or any Parent or Subsidiary) or who have
otherwise received one or more stock option grants from the Corporation prior to
the Underwriting Date shall be eligible to receive one or more such annual
option grants over their period of continued Board service.
B. EXERCISE PRICE.
---------------
1. The exercise price per share shall be equal to one hundred
percent (100%) of the Fair Market Value per share of Common Stock on the option
grant date.
2. The exercise price shall be payable in one or more of the
alternative forms authorized under the Discretionary Option Grant Program.
Except to the extent the sale and remittance procedure specified thereunder is
utilized, payment of the exercise price for the purchased shares must be made on
the Exercise Date.
C. OPTION TERM. Each option shall have a term of ten (10) years
-----------
measured from the option grant date.
D. EXERCISE AND VESTING OF OPTIONS. Each option shall be
-------------------------------
immediately exercisable for any or all of the option shares. However, any
shares purchased under the option shall be subject to repurchase by the
Corporation, at the exercise price paid per share, upon the Optionee's cessation
of Board service prior to vesting in those shares. Each initial twelve thousand
(12,000) share grant shall vest, and the Corporation's repurchase right shall
lapse, in a series of eight (8) successive equal semi-annual installments upon
the Optionee's completion of each six (6)-month period of service as a Board
member over the forty-eight (48)-month period
19
<PAGE>
measured from the option grant date. Each annual two thousand (2,000) share
automatic option shall vest, and the Corporation's repurchase right shall lapse,
in two (2) successive equal semi-annual installments upon the Optionee's
completion of each six (6)-month period of Board service measured from the
option grant date.
E. LIMITED TRANSFERABILITY OF OPTIONS. Each option under this
----------------------------------
Article Five may, in connection with the Optionee's estate plan, be assigned in
whole or in part during the Optionee's lifetime to one or more members of the
Optionee's immediate family or to a trust established exclusively for one or
more such family members. The assigned portion may only be exercised by the
person or persons who acquire a proprietary interest in the option pursuant to
the assignment. The terms applicable to the assigned portion shall be the same
as those in effect for the option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Plan Administrator
may deem appropriate. The Optionee may also designate one or more persons as
the beneficiary or beneficiaries of his or her outstanding options under this
Article Three, and those options shall, in accordance with such designation,
automatically be transferred to such beneficiary or beneficiaries upon the
Optionee's death while holding those options. Such beneficiary or beneficiaries
shall take the transferred options subject to all the terms and conditions of
the applicable agreement evidencing each such transferred option, including
(without limitation) the limited time period during which the option may be
exercised following the Optionee's death.
F. TERMINATION OF BOARD SERVICE. The following provisions shall
----------------------------
govern the exercise of any options held by the Optionee at the time the Optionee
ceases to serve as a Board member:
(i) The Optionee (or, in the event of Optionee's death,
the personal representative of the Optionee's estate or the person or
persons to whom the option is transferred pursuant to the Optionee's will
or in accordance with the laws of descent and distribution or by the
designated beneficiary or beneficiaries of such option) shall have a twelve
(12)-month period following the date of such cessation of Board service in
which to exercise each such option.
(ii) During the twelve (12)-month exercise period, the
option may not be exercised in the aggregate for more than the number of
vested shares of Common Stock for which the option is exercisable at the
time of the Optionee's cessation of Board service.
(iii) Should the Optionee cease to serve as a Board member
by reason of death or Permanent Disability, then all shares at the time
subject to the option shall immediately vest so that such option may,
during the twelve (12)-month exercise period following such cessation of
Board service, be exercised for all or any portion of those shares as
fully-vested shares of Common Stock.
20
<PAGE>
(iv) In no event shall the option remain exercisable after
the expiration of the option term. Upon the expiration of the twelve (12)-
month exercise period or (if earlier) upon the expiration of the option
term, the option shall terminate and cease to be outstanding for any vested
shares for which the option has not been exercised. However, the option
shall, immediately upon the Optionee's cessation of Board service for any
reason other than death or Permanent Disability, terminate and cease to be
outstanding to the extent the option is not otherwise at that time
exercisable for vested shares.
II. CORPORATE TRANSACTION/ CHANGE IN CONTROL/ HOSTILE TAKE-OVER
A. In the event of any Corporate Transaction, the shares of Common
Stock at the time subject to each outstanding option but not otherwise vested
shall automatically vest in full so that each such option shall, immediately
prior to the effective date of the Corporate Transaction, become fully
exercisable for all of the shares of Common Stock at the time subject to such
option and may be exercised for all or any portion of those shares as fully-
vested shares of Common Stock. Immediately following the consummation of the
Corporate Transaction, each automatic option grant shall terminate and cease to
be outstanding, except to the extent assumed by the successor corporation (or
parent thereof).
B. In connection with any Change in Control, the shares of Common
Stock at the time subject to each outstanding option but not otherwise vested
shall automatically vest in full so that each such option shall, immediately
prior to the effective date of the Change in Control, become fully exercisable
for all of the shares of Common Stock at the time subject to such option and may
be exercised for all or any portion of those shares as fully-vested shares of
Common Stock. Each such option shall remain exercisable for such fully-vested
option shares until the expiration or sooner termination of the option term or
the surrender of the option in connection with a Hostile Take-Over.
C. All outstanding repurchase rights shall automatically terminate,
and the shares of Common Stock subject to those terminated rights shall
immediately vest in full, in the event of any Corporate Transaction or Change in
Control.
D. Upon the occurrence of a Hostile Take-Over, the Optionee shall
have a thirty (30)-day period in which to surrender to the Corporation each of
his or her outstanding automatic option grants. The Optionee shall in return be
entitled to a cash distribution from the Corporation in an amount equal to the
excess of (i) the Take-Over Price of the shares of Common Stock at the time
subject to each surrendered option (whether or not the Optionee is otherwise at
the time vested in those shares) over (ii) the aggregate exercise price payable
for such shares. Such cash distribution shall be paid within five (5) days
following the surrender of the option to the Corporation. Stockholder approval
of the Plan shall constitute pre-approval of the grant of each such limited
cash-out right and the subsequent exercise of that right in accordance with the
terms of this Paragraph D. Accordingly, no approval or consent of the Board or
any Plan Administrator shall be required at the time of the actual option
surrender and cash distribution.
21
<PAGE>
E. Each option which is assumed in connection with a Corporate
Transaction shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to the Optionee in consummation of such Corporate Transaction had
the option been exercised immediately prior to such Corporate Transaction.
Appropriate adjustments shall also be made to the exercise price payable per
share under each outstanding option, provided the aggregate exercise price
--------
payable for such securities shall remain the same.
F. The grant of options under the Automatic Option Grant Program
shall in no way affect the right of the Corporation to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
III. REMAINING TERMS
The remaining terms of each option granted under the Automatic Option
Grant Program shall be the same as the terms in effect for option grants made
under the Discretionary Option Grant Program.
22
<PAGE>
ARTICLE SIX
DIRECTOR FEE OPTION GRANT PROGRAM
---------------------------------
I. OPTION GRANTS
The Primary Committee shall have the sole and exclusive authority to
determine the calendar year or years for which the Director Fee Option Grant
Program is to be in effect. For each such calendar year the program is in
effect, each non-employee Board member may elect to apply all or any portion of
the annual retainer fee otherwise payable in cash for his or her service on the
Board for that year to the acquisition of a special option grant under this
Director Fee Option Grant Program. Such election must be filed with the
Corporation's Chief Financial Officer prior to first day of the calendar year
for which the annual retainer fee which is the subject of that election is
otherwise payable. Each non-employee Board member who files such a timely
election shall automatically be granted an option under this Director Fee Option
Grant Program on the first trading day in January in the calendar year for which
the annual retainer fee which is the subject of that election would otherwise be
payable in cash.
II. OPTION TERMS
Each option shall be a Non-Statutory Option governed by the terms and
conditions specified below.
A. EXERCISE PRICE.
---------------
1. The exercise price per share shall be thirty-three and one-
third percent (33-1/3%) of the Fair Market Value per share of Common Stock on
the option grant date.
2. The exercise price shall become immediately due upon
exercise of the option and shall be payable in one or more of the alternative
forms authorized under the Discretionary Option Grant Program. Except to the
extent the sale and remittance procedure specified thereunder is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.
B. NUMBER OF OPTION SHARES. The number of shares of Common Stock
-----------------------
subject to the option shall be determined pursuant to the following formula
(rounded down to the nearest whole number):
X = A / (B x 66-2/3%), where
X is the number of option shares,
23
<PAGE>
A is the portion of the annual retainer fee subject to the non-
employee Board member's election, and
B is the Fair Market Value per share of Common Stock on the
option grant date.
C. EXERCISE AND TERM OF OPTIONS. The option shall become
----------------------------
exercisable in a series of twelve (12) equal monthly installments upon the
Optionee's completion of each month of Board service over the twelve (12)-month
period measured from the grant date. Each option shall have a maximum term of
ten (10) years measured from the option grant date.
D. LIMITED TRANSFERABILITY OF OPTIONS. Each option under this
----------------------------------
Article Six may, in connection with the Optionee's estate plan, be assigned in
whole or in part during the Optionee's lifetime to one or more members of the
Optionee's immediate family or to a trust established exclusively for one or
more such family members. The assigned portion may only be exercised by the
person or persons who acquire a proprietary interest in the option pursuant to
the assignment. The terms applicable to the assigned portion shall be the same
as those in effect for the option immediately prior to such assignment and shall
be set forth in such documents issued to the assignee as the Plan Administrator
may deem appropriate. The Optionee may also designate one or more persons as
the beneficiary or beneficiaries of his or her outstanding options under this
Article Three, and those options shall, in accordance with such designation,
automatically be transferred to such beneficiary or beneficiaries upon the
Optionee's death while holding those options. Such beneficiary or beneficiaries
shall take the transferred options subject to all the terms and conditions of
the applicable agreement evidencing each such transferred option, including
(without limitation) the limited time period during which the option may be
exercised following the Optionee's death.
E. TERMINATION OF BOARD SERVICE. Should the Optionee cease Board
----------------------------
service for any reason (other than death or Permanent Disability) while holding
one or more options under this Director Fee Option Grant Program, then each such
option shall remain exercisable, for any or all of the shares for which the
option is exercisable at the time of such cessation of Board service, until the
earlier of (i) the expiration of the ten (10)-year option term or (ii) the
- -------
expiration of the three (3)-year period measured from the date of such cessation
of Board service. However, each option held by the Optionee under this Director
Fee Option Grant Program at the time of his or her cessation of Board service
shall immediately terminate and cease to remain outstanding with respect to any
and all shares of Common Stock for which the option is not otherwise at that
time exercisable.
F. DEATH OR PERMANENT DISABILITY. Should the Optionee's service as
-----------------------------
a Board member cease by reason of death or Permanent Disability, then each
option held by such Optionee under this Director Fee Option Grant Program shall
immediately become exercisable for all the shares of Common Stock at the time
subject to that option, and the option may be exercised for any or all of those
shares as fully-vested shares until the earlier of (i) the expiration of the ten
-------
(10)-year option term or (ii) the expiration of the three (3)-year period
measured from the date of such cessation of Board service.
24
<PAGE>
Should the Optionee die after cessation of Board service but while
holding one or more options under this Director Fee Option Grant Program, then
each such option may be exercised, for any or all of the shares for which the
option is exercisable at the time of the Optionee's cessation of Board service
(less any shares subsequently purchased by Optionee prior to death), by the
personal representative of the Optionee's estate or by the person or persons to
whom the option is transferred pursuant to the Optionee's will or in accordance
with the laws of descent and distribution or by the designated beneficiary or
beneficiaries of such option. Such right of exercise shall lapse, and the
option shall terminate, upon the earlier of (i) the expiration of the ten (10)-
-------
year option term or (ii) the three (3)-year period measured from the date of the
Optionee's cessation of Board service.
III. CORPORATE TRANSACTION/CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. In the event of any Corporate Transaction while the Optionee
remains a Board member, each outstanding option held by such Optionee under this
Director Fee Option Grant Program shall automatically accelerate so that each
such option shall, immediately prior to the effective date of the Corporate
Transaction, become fully exercisable for the total number of shares of Common
Stock at the time subject to such option and may be exercised for any or all of
those shares as fully-vested shares of Common Stock. Each such outstanding
option shall terminate immediately following the Corporate Transaction, except
to the extent assumed by the successor corporation (or parent thereof) in such
Corporate Transaction. Any option so assumed and shall remain exercisable for
the fully-vested shares until the earlier of (i) the expiration of the ten (10)-
-------
year option term or (ii) the expiration of the three (3)-year period measured
from the date of the Optionee's cessation of Board service.
B. In the event of a Change in Control while the Optionee remains in
Service, each outstanding option held by such Optionee under this Director Fee
Option Grant Program shall automatically accelerate so that each such option
shall immediately become fully exercisable for the total number of shares of
Common Stock at the time subject to such option and may be exercised for any or
all of those shares as fully-vested shares of Common Stock. The option shall
remain so exercisable until the earliest to occur of (i) the expiration of the
--------
ten (10)-year option term, (ii) the expiration of the three (3)-year period
measured from the date of the Optionee's cessation of Board service, (iii) the
termination of the option in connection with a Corporate Transaction or (iv)
the surrender of the option in connection with a Hostile Take-Over.
C. Upon the occurrence of a Hostile Take-Over, the Optionee shall
have a thirty (30)-day period in which to surrender to the Corporation each
outstanding option granted him or her under the Director Fee Option Grant
Program. The Optionee shall in return be entitled to a cash distribution from
the Corporation in an amount equal to the excess of (i) the Take-Over Price of
the shares of Common Stock at the time subject to each surrendered option
(whether or not the Optionee is otherwise at the time vested in those shares)
over (ii) the aggregate exercise price payable for such shares. Such cash
distribution shall be paid within five
25
<PAGE>
(5) days following the surrender of the option to the Corporation. Stockholder
approval of the Plan shall constitute pre-approval of the grant of each such
limited cash-out right and the subsequent exercise of that right in accordance
with the terms of this Paragraph C. Accordingly, no approval or consent of the
Board or any Plan Administrator shall be required at the time of the actual
option surrender and cash distribution.
D. The grant of options under the Director Fee Option Grant Program
shall in no way affect the right of the Corporation to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
IV. REMAINING TERMS
The remaining terms of each option granted under this Director Fee
Option Grant Program shall be the same as the terms in effect for option grants
made under the Discretionary Option Grant Program.
26
<PAGE>
ARTICLE SEVEN
MISCELLANEOUS
-------------
I. FINANCING
The Plan Administrator may permit any Optionee or Participant to pay
the option exercise price under the Discretionary Option Grant Program or the
purchase price of shares issued under the Stock Issuance Program by delivering a
full-recourse, interest bearing promissory note payable in one or more
installments. The terms of any such promissory note (including the interest
rate and the terms of repayment) shall be established by the Plan Administrator
in its sole discretion. In no event may the maximum credit available to the
Optionee or Participant exceed the sum of (i) the aggregate option exercise
price or purchase price payable for the purchased shares plus (ii) any Federal,
state and local income and employment tax liability incurred by the Optionee or
the Participant in connection with the option exercise or share purchase.
II. TAX WITHHOLDING
A. The Corporation's obligation to deliver shares of Common Stock
upon the exercise of options or the issuance or vesting of such shares under the
Plan shall be subject to the satisfaction of all applicable Federal, state and
local income and employment tax withholding requirements.
B. The Plan Administrator may, in its discretion, provide any or all
holders of Non-Statutory Options or unvested shares of Common Stock under the
Plan (other than the options granted or the shares issued under the Automatic
Option Grant or Director Fee Option Grant Program) with the right to use shares
of Common Stock in satisfaction of all or part of the Taxes incurred by such
holders in connection with the exercise of their options or the vesting of their
shares. Such right may be provided to any such holder in either or both of the
following formats:
Stock Withholding: The election to have the Corporation
-----------------
withhold, from the shares of Common Stock otherwise issuable upon the exercise
of such Non-Statutory Option or the vesting of such shares, a portion of those
shares with an aggregate Fair Market Value equal to the percentage of the Taxes
(not to exceed one hundred percent (100%)) designated by the holder.
Stock Delivery: The election to deliver to the Corporation, at
--------------
the time the Non-Statutory Option is exercised or the shares vest, one or more
shares of Common Stock previously acquired by such holder (other than in
connection with the option exercise or share vesting triggering the Taxes) with
an aggregate Fair Market Value equal to the percentage of the Taxes (not to
exceed one hundred percent (100%)) designated by the holder.
27
<PAGE>
III. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan shall become effective immediately on the Plan Effective
Date. However, the Salary Investment Option Grant Program and the Director Fee
Option Grant Program shall not be implemented until such time as the Primary
Committee may deem appropriate. Options may be granted under the Discretionary
Option Grant at any time on or after the Plan Effective Date. However, no
options granted under the Plan may be exercised, and no shares shall be issued
under the Plan, until the Plan is approved by the Corporation's stockholders.
If such stockholder approval is not obtained within twelve (12) months after the
Plan Effective Date, then all options previously granted under this Plan shall
terminate and cease to be outstanding, and no further options shall be granted
and no shares shall be issued under the Plan.
B. The Plan shall serve as the successor to the Predecessor Plans,
and no further option grants or direct stock issuances shall be made under the
Predecessor Plans after the Plan Effective Date. All options outstanding under
the Predecessor Plans on the Plan Effective Date shall be incorporated into the
Plan at that time and shall be treated as outstanding options under the Plan.
However, each outstanding option so incorporated shall continue to be governed
solely by the terms of the documents evidencing such option, and no provision of
the Plan shall be deemed to affect or otherwise modify the rights or obligations
of the holders of such incorporated options with respect to their acquisition of
shares of Common Stock.
C. One or more provisions of the Plan, including (without
limitation) the option/vesting acceleration provisions of Article Two relating
to Corporate Transactions and Changes in Control, may, in the Plan
Administrator's discretion, be extended to one or more options incorporated from
the Predecessor Plans which do not otherwise contain such provisions.
D. The Plan shall terminate upon the earliest to occur of (i)
--------
February 18, 2009, (ii) the date on which all shares available for issuance
under the Plan shall have been issued as fully-vested shares or (iii) the
termination of all outstanding options in connection with a Corporate
Transaction. Should the Plan terminate on February 18, 2009, then all option
grants and unvested stock issuances outstanding at that time shall continue to
have force and effect in accordance with the provisions of the documents
evidencing such grants or issuances.
IV. AMENDMENT OF THE PLAN
A. The Board shall have complete and exclusive power and authority
to amend or modify the Plan in any or all respects. However, no such amendment
or modification shall adversely affect the rights and obligations with respect
to stock options or unvested stock issuances at the time outstanding under the
Plan unless the Optionee or the Participant consents to such amendment or
modification. In addition, certain amendments may require stockholder approval
pursuant to applicable laws or regulations.
B. Options to purchase shares of Common Stock may be granted under
the Discretionary Option Grant and Salary Investment Option Grant Programs and
shares of Common Stock may be issued under the Stock Issuance Program that are
in each instance in excess of the number of shares then available for issuance
under the Plan, provided any excess
28
<PAGE>
shares actually issued under those programs shall be held in escrow until there
is obtained stockholder approval of an amendment sufficiently increasing the
number of shares of Common Stock available for issuance under the Plan. If such
stockholder approval is not obtained within twelve (12) months after the date
the first such excess issuances are made, then (i) any unexercised options
granted on the basis of such excess shares shall terminate and cease to be
outstanding and (ii) the Corporation shall promptly refund to the Optionees and
the Participants the exercise or purchase price paid for any excess shares
issued under the Plan and held in escrow, together with interest (at the
applicable Short Term Federal Rate) for the period the shares were held in
escrow, and such shares shall thereupon be automatically cancelled and cease to
be outstanding.
V. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares
of Common Stock under the Plan shall be used for general corporate purposes.
VI. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any stock option
under the Plan and the issuance of any shares of Common Stock (i) upon the
exercise of any granted option or (ii) under the Stock Issuance Program shall be
subject to the Corporation's procurement of all approvals and permits required
by regulatory authorities having jurisdiction over the Plan, the stock options
granted under it and the shares of Common Stock issued pursuant to it.
B. No shares of Common Stock or other assets shall be issued or
delivered under the Plan unless and until there shall have been compliance with
all applicable requirements of Federal and state securities laws, including the
filing and effectiveness of the Form S-8 registration statement for the shares
of Common Stock issuable under the Plan, and all applicable listing requirements
of any stock exchange (or the Nasdaq National Market, if applicable) on which
Common Stock is then listed for trading.
VII. NO EMPLOYMENT/SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee or the Participant
any right to continue in Service for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Corporation
(or any Parent or Subsidiary employing or retaining such person) or of the
Optionee or the Participant, which rights are hereby expressly reserved by each,
to terminate such person's Service at any time for any reason, with or without
cause.
29
<PAGE>
APPENDIX
--------
The following definitions shall be in effect under the Plan:
A. AUTOMATIC OPTION GRANT PROGRAM shall mean the automatic option
------------------------------
grant program in effect under the Plan.
B. BOARD shall mean the Corporation's Board of Directors.
-----
C. CHANGE IN CONTROL shall mean a change in ownership or control of
-----------------
the Corporation effected through either of the following transactions:
(i) the acquisition, directly or indirectly by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation), of beneficial ownership (within the meaning
of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly
to the Corporation's stockholders, or
(ii) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the
Board members ceases, by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (A) have been
Board members continuously since the beginning of such period or (B) have
been elected or nominated for election as Board members during such period
by at least a majority of the Board members described in clause (A) who
were still in office at the time the Board approved such election or
nomination.
D. CODE shall mean the Internal Revenue Code of 1986, as amended.
----
E. COMMON STOCK shall mean the Corporation's common stock.
------------
F. CORPORATE TRANSACTION shall mean either of the following
---------------------
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing
more than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to
such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation or
dissolution of the Corporation.
G. CORPORATION shall mean COMPS.COM, INC., a Delaware corporation,
-----------
and any corporate successor to all or substantially all of the assets or voting
stock of COMPS.COM, INC. which shall by appropriate action adopt the Plan.
A-1
<PAGE>
H. DIRECTOR FEE OPTION GRANT PROGRAM shall mean the special stock
---------------------------------
option grant in effect for non-employee Board members under Article Six of the
Plan.
I. DISCRETIONARY OPTION GRANT PROGRAM shall mean the discretionary
----------------------------------
option grant program in effect under the Plan.
J. ELIGIBLE DIRECTOR shall mean a non-employee Board member eligible
-----------------
to participate in the Automatic Option Grant Program in accordance with the
eligibility provisions of Articles One and Five.
K. EMPLOYEE shall mean an individual who is in the employ of the
--------
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
L. EXERCISE DATE shall mean the date on which the Corporation shall
-------------
have received written notice of the option exercise.
M. FAIR MARKET VALUE per share of Common Stock on any relevant date
-----------------
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the
Nasdaq National Market, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question, as such
price is reported by the National Association of Securities Dealers on the
Nasdaq National Market. If there is no closing selling price for the Common
Stock on the date in question, then the Fair Market Value shall be the
closing selling price on the last preceding date for which such quotation
exists.
(ii) If the Common Stock is at the time listed on any
Stock Exchange, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question on the Stock
Exchange determined by the Plan Administrator to be the primary market for
the Common Stock, as such price is officially quoted in the composite tape
of transactions on such exchange. If there is no closing selling price for
the Common Stock on the date in question, then the Fair Market Value shall
be the closing selling price on the last preceding date for which such
quotation exists.
(iii) For purposes of any option grants made on the
Underwriting Date, the Fair Market Value shall be deemed to be equal to the
price per share at which the Common Stock is to be sold in the initial
public offering pursuant to the Underwriting Agreement.
A-2.
<PAGE>
N. HOSTILE TAKE-OVER shall mean the acquisition, directly or
-----------------
indirectly, by any person or related group of persons (other than the
Corporation or a person that directly or indirectly controls, is controlled by,
or is under common control with, the Corporation) of beneficial ownership
(within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing more
than fifty percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly to
the Corporation's stockholders which the Board does not recommend such
stockholders to accept.
O. INCENTIVE OPTION shall mean an option which satisfies the
----------------
requirements of Code Section 422.
P. INVOLUNTARY TERMINATION shall mean the termination of the Service
-----------------------
of any individual which occurs by reason of:
(i) such individual's involuntary dismissal or discharge
by the Corporation for reasons other than Misconduct, or
(ii) such individual's voluntary resignation following (A)
a material reduction in his or her duties and responsibilities, (B) a
reduction in his or her level of compensation (including base salary,
fringe benefits and target bonus under any corporate-performance based
bonus or incentive programs) by more than ten percent (10%) or (C) a
relocation of such individual's place of employment by more than twenty-
five (25) miles, provided and only if such reduction or relocation is
effected by the Corporation without the individual's consent. However, in
no event shall any change to the individual's title or reporting
responsibilities which occurs by reason of the Corporation's conversion
from a public company to a subsidiary or a division of the acquiring
corporation in a Corporate Transaction or Change in Control be deemed
grounds for a clause (A) resignation if the individual's day-to-day
functions remain substantially the same as immediately prior to such
Corporate Transaction or Change in Control.
Q. MISCONDUCT shall mean the commission of any act of fraud,
----------
embezzlement or dishonesty by the Optionee or Participant, any unauthorized use
or disclosure by such person of confidential information or trade secrets of the
Corporation (or any Parent or Subsidiary), or any other intentional misconduct
by such person adversely affecting the business or affairs of the Corporation
(or any Parent or Subsidiary) in a material manner. The foregoing definition
shall not be deemed to be inclusive of all the acts or omissions which the
Corporation (or any Parent or Subsidiary) may consider as grounds for the
dismissal or discharge of any Optionee, Participant or other person in the
Service of the Corporation (or any Parent or Subsidiary).
R. 1934 ACT shall mean the Securities Exchange Act of 1934, as
--------
amended.
S. NON-STATUTORY OPTION shall mean an option not intended to satisfy
--------------------
the requirements of Code Section 422.
A-3.
<PAGE>
T. OPTIONEE shall mean any person to whom an option is granted under
--------
the Discretionary Option Grant, Salary Investment Option Grant, Automatic Option
Grant or Director Fee Option Grant Program.
U. PARENT shall mean any corporation (other than the Corporation) in
------
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
V. PARTICIPANT shall mean any person who is issued shares of Common
-----------
Stock under the Stock Issuance Program.
W. PERMANENT DISABILITY OR PERMANENTLY DISABLED shall mean the
--------------------------------------------
inability of the Optionee or the Participant to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment expected to result in death or to be of continuous duration of twelve
(12) months or more. However, solely for purposes of the Automatic Option Grant
and Director Fee Option Grant Programs, Permanent Disability or Permanently
Disabled shall mean the inability of the non-employee Board member to perform
his or her usual duties as a Board member by reason of any medically
determinable physical or mental impairment expected to result in death or to be
of continuous duration of twelve (12) months or more.
X. PLAN shall mean the Corporation's 1999 Stock Incentive Plan, as
----
set forth in this document.
Y. PLAN ADMINISTRATOR shall mean the particular entity, whether the
------------------
Primary Committee, the Board or the Secondary Committee, which is authorized to
administer the Discretionary Option Grant and Stock Issuance Programs with
respect to one or more classes of eligible persons, to the extent such entity is
carrying out its administrative functions under those programs with respect to
the persons under its jurisdiction.
Z. PLAN EFFECTIVE DATE shall mean the date the Plan shall become
-------------------
effective and shall be coincident with the Underwriting Date.
AA. PREDECESSOR PLANS shall mean the Corporation's Amended and
-----------------
Restated Stock Option Plan, the 1998 Supplemental Option Plan and the 1998
Equity Participation Plan, as in effect immediately prior to the Plan Effective
Date hereunder.
BB. PRIMARY COMMITTEE shall mean the committee of two (2) or more
-----------------
non-employee Board members appointed by the Board to administer the
Discretionary Option Grant and Stock Issuance Programs with respect to Section
16 Insiders and to administer the Salary Investment Option Grant Program solely
with respect to the selection of the eligible individuals who may participate in
such program.
CC. SALARY INVESTMENT OPTION GRANT PROGRAM shall mean the salary
--------------------------------------
investment option grant program in effect under the Plan.
A-4.
<PAGE>
DD. SECONDARY COMMITTEE shall mean a committee of one or more Board
-------------------
members appointed by the Board to administer the Discretionary Option Grant and
Stock Issuance Programs with respect to eligible persons other than Section 16
Insiders.
EE. SECTION 16 INSIDER shall mean an officer or director of the
------------------
Corporation subject to the short-swing profit liabilities of Section 16 of the
1934 Act.
FF. SERVICE shall mean the performance of services for the
-------
Corporation (or any Parent or Subsidiary) by a person in the capacity of an
Employee, a non-employee member of the board of directors or a consultant or
independent advisor, except to the extent otherwise specifically provided in the
documents evidencing the option grant or stock issuance.
GG. STOCK EXCHANGE shall mean either the American Stock Exchange or
--------------
the New York Stock Exchange.
HH. STOCK ISSUANCE AGREEMENT shall mean the agreement entered into by
------------------------
the Corporation and the Participant at the time of issuance of shares of Common
Stock under the Stock Issuance Program.
II. STOCK ISSUANCE PROGRAM shall mean the stock issuance program in
----------------------
effect under the Plan.
JJ. SUBSIDIARY shall mean any corporation (other than the
----------
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in the
unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
KK. TAKE-OVER PRICE shall mean the greater of (i) the Fair Market
--------------- -------
Value per share of Common Stock on the date the option is surrendered to the
Corporation in connection with a Hostile Take-Over or (ii) the highest reported
price per share of Common Stock paid by the tender offeror in effecting such
Hostile Take-Over. However, if the surrendered option is an Incentive Option,
the Take-Over Price shall not exceed the clause (i) price per share.
LL. TAXES shall mean the Federal, state and local income and
-----
employment tax liabilities incurred by the holder of Non-Statutory Options or
unvested shares of Common Stock in connection with the exercise of those options
or the vesting of those shares.
MM. 10% STOCKHOLDER shall mean the owner of stock (as determined
---------------
under Code Section 424(d)) possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Corporation (or any Parent
or Subsidiary).
NN. UNDERWRITING AGREEMENT shall mean the agreement between the
----------------------
Corporation and the underwriter or underwriters managing the initial public
offering of the Common Stock.
A-5.
<PAGE>
OO. UNDERWRITING DATE shall mean the date on which the Underwriting
-----------------
Agreement is executed and priced in connection with an initial public offering
of the Common Stock.
A-6.
<PAGE>
EXHIBIT 10.38
COMPS.COM, INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
---------------------------------
I. PURPOSE OF THE PLAN
This Employee Stock Purchase Plan is intended to promote the interests
of COMPS.COM, INC., a Delaware Corporation, by providing eligible employees
with the opportunity to acquire a proprietary interest in the Corporation
through participation in a payroll-deduction based employee stock purchase plan
designed to qualify under Section 423 of the Code.
Capitalized terms herein shall have the meanings assigned to such
terms in the attached Appendix.
II. ADMINISTRATION OF THE PLAN
The Plan Administrator shall have full authority to interpret and
construe any provision of the Plan and to adopt such rules and regulations for
administering the Plan as it may deem necessary in order to comply with the
requirements of Code Section 423. Decisions of the Plan Administrator shall be
final and binding on all parties having an interest in the Plan.
III. STOCK SUBJECT TO PLAN
A. The stock purchasable under the Plan shall be shares of
authorized but unissued or reacquired Common Stock, including shares of Common
Stock purchased on the open market. The number of shares of Common Stock
initially reserved for issuance over the term of the Plan shall be limited to
three hundred thousand (300,000) shares.
B. The number of shares of Common Stock available for issuance under
the Plan shall automatically increase on the first trading day in January each
calendar year during the term of the Plan, beginning with calendar year 2000, by
an amount equal to two percent (2%) of the total number of shares of Common
Stock outstanding on the last trading day in December of the immediately
preceding calendar year, but in no event shall any such annual increase exceed
three hundred thousand (300,000) shares.
C. Should any change be made to the Common Stock by reason of any
stock split, stock dividend, recapitalization, combination of shares, exchange
of shares or other change affecting the outstanding Common Stock as a class
without the Corporation's receipt of consideration, appropriate adjustments
shall be made to (i) the maximum number and class of securities issuable under
the Plan, (ii) the maximum number and class of securities purchasable per
Participant on any one Purchase Date, (iii) the maximum number and class of
securities purchasable by all Participants in the aggregate on any one Purchase
Date, (iv) the maximum
<PAGE>
number and/or class of securities by which the share reserve is to increase
automatically each calendar year pursuant to the provisions of Section III.B of
this Article One and (v) the number and class of securities and the price per
share in effect under each outstanding purchase right in order to prevent the
dilution or enlargement of benefits thereunder.
IV. OFFERING PERIODS
A. Shares of Common Stock shall be offered for purchase under the
Plan through a series of successive offering periods until such time as (i) the
maximum number of shares of Common Stock available for issuance under the Plan
shall have been purchased or (ii) the Plan shall have been sooner terminated.
B. Each offering period shall be of such duration (not to exceed
twenty-four (24) months) as determined by the Plan Administrator prior to the
start date of such offering period. However, the initial offering period shall
commence at the Effective Time and terminate on the last business day in July
2001. The next offering period shall commence on the first business day in
August 2001, and subsequent offering periods shall commence as designated by the
Plan Administrator.
C. Each offering period shall be comprised of a series of one or
more successive Purchase Intervals. Purchase Intervals shall run from the first
business day in February each year to the last business day in July of the same
year and from the first business day in August each year to the last business
day in January of the following year. However, the first Purchase Interval in
effect under the initial offering period shall commence at the Effective Time
and terminate on the last business day in July 1999.
D. Should the Fair Market Value per share of Common Stock on any
Purchase Date within an offering period be less than the Fair Market Value per
share of Common Stock on the start date of that offering period, then that
offering period shall automatically terminate immediately after the purchase of
shares of Common Stock on such Purchase Date, and a new offering period shall
commence on the next business day following such Purchase Date. The new
offering period shall have a duration of twenty (24) months, unless a shorter
duration is established by the Plan Administrator within five (5) business days
following the start date of that offering period.
V. ELIGIBILITY
A. Each individual who is an Eligible Employee on the start date of
any offering period under the Plan may enter that offering period on such start
date or on any subsequent Semi-Annual Entry Date within that offering period,
provided he or she remains an Eligible Employee.
B. Each individual who first becomes an Eligible Employee after the
start date of an offering period may enter that offering period on any
subsequent Semi-Annual Entry Date within that offering period on which he or she
is an Eligible Employee.
C. The date an individual enters an offering period shall be
designated his or her Entry Date for purposes of that offering period.
2.
<PAGE>
D. To participate in the Plan for a particular offering period, the
Eligible Employee must complete the enrollment forms prescribed by the Plan
Administrator (including a stock purchase agreement and a payroll deduction
authorization) and file such forms with the Plan Administrator (or its
designate) on or before his or her scheduled Entry Date.
VI. PAYROLL DEDUCTIONS
A. The payroll deduction authorized by the Participant for purposes
of acquiring shares of Common Stock during an offering period may be any
multiple of one percent (1%) of the Cash Earnings paid to the Participant during
each Purchase Interval within that offering period, up to a maximum of ten
percent (10%). The deduction rate so authorized shall continue in effect
throughout the offering period, except to the extent such rate is changed in
accordance with the following guidelines:
(i) The Participant may, at any time during the offering period,
reduce his or her rate of payroll deduction to become effective as soon as
possible after filing the appropriate form with the Plan Administrator. The
Participant may not, however, effect more than one (1) such reduction per
Purchase Interval.
(ii) The Participant may, prior to the commencement of any new
Purchase Interval within the offering period, increase the rate of his or her
payroll deduction by filing the appropriate form with the Plan Administrator.
The new rate (which may not exceed the ten percent (10%) maximum) shall become
effective on the start date of the first Purchase Interval following the filing
of such form.
B. Payroll deductions shall begin on the first pay day
administratively feasible following the Participant's Entry Date into the
offering period and shall (unless sooner terminated by the Participant) continue
through the pay day ending with or immediately prior to the last day of that
offering period. The amounts so collected shall be credited to the Participant's
book account under the Plan, but no interest shall be paid on the balance from
time to time outstanding in such account. The amounts collected from the
Participant shall not be required to be held in any segregated account or trust
fund and may be commingled with the general assets of the Corporation and used
for general corporate purposes.
C. Payroll deductions shall automatically cease upon the termination
of the Participant's purchase right in accordance with the provisions of the
Plan.
D. The Participant's acquisition of Common Stock under the Plan on
any Purchase Date shall neither limit nor require the Participant's acquisition
of Common Stock on any subsequent Purchase Date, whether within the same or a
different offering period.
3.
<PAGE>
VII. PURCHASE RIGHTS
A. GRANT OF PURCHASE RIGHT. A Participant shall be granted a
-----------------------
separate purchase right for each offering period in which he or she
participates. The purchase right shall be granted on the Participant's Entry
Date into the offering period and shall provide the Participant with the right
to purchase shares of Common Stock, in a series of successive installments over
the remainder of such offering period, upon the terms set forth below. The
Participant shall execute a stock purchase agreement embodying such terms and
such other provisions (not inconsistent with the Plan) as the Plan Administrator
may deem advisable.
Under no circumstances shall purchase rights be granted under the Plan
to any Eligible Employee if such individual would, immediately after the grant,
own (within the meaning of Code Section 424(d)) or hold outstanding options or
other rights to purchase, stock possessing five percent (5%) or more of the
total combined voting power or value of all classes of stock of the Corporation
or any Corporate Affiliate.
B. EXERCISE OF THE PURCHASE RIGHT. Each purchase right shall be
------------------------------
automatically exercised in installments on each successive Purchase Date within
the offering period, and shares of Common Stock shall accordingly be purchased
on behalf of each Participant on each such Purchase Date. The purchase shall be
effected by applying the Participant's payroll deductions for the Purchase
Interval ending on such Purchase Date to the purchase of whole shares of Common
Stock at the purchase price in effect for the Participant for that Purchase
Date.
C. PURCHASE PRICE. The purchase price per share at which Common
--------------
Stock will be purchased on the Participant's behalf on each Purchase Date within
the offering period shall be equal to eighty-five percent (85%) of the lower of
-----
(i) the Fair Market Value per share of Common Stock on the Participant's Entry
Date into that offering period or (ii) the Fair Market Value per share of Common
Stock on that Purchase Date.
D. NUMBER OF PURCHASABLE SHARES. The number of shares of Common
----------------------------
Stock purchasable by a Participant on each Purchase Date during the offering
period shall be the number of whole shares obtained by dividing the amount
collected from the Participant through payroll deductions during the Purchase
Interval ending with that Purchase Date by the purchase price in effect for the
Participant for that Purchase Date. However, the maximum number of shares of
Common Stock purchasable per Participant on any one Purchase Date shall not
exceed one thousand five hundred (1,500) shares, subject to periodic adjustments
in the event of certain changes in the Corporation's capitalization. In
addition, the maximum aggregate number of shares of Common Stock purchasable by
all Participants on any one Purchase Date shall not exceed seventy five thousand
(75,000) shares, subject to periodic adjustments in the event of certain changes
in the Corporation's capitalization.
E. EXCESS PAYROLL DEDUCTIONS. Any payroll deductions not applied to
-------------------------
the purchase of shares of Common Stock on any Purchase Date because they are
not sufficient to purchase a whole share of Common Stock shall be held for the
purchase of Common Stock on
4.
<PAGE>
the next Purchase Date. However, any payroll deductions not applied to the
purchase of Common Stock by reason of the limitation on the maximum number of
shares purchasable per Participant or in the aggregate on the Purchase Date
shall be promptly refunded.
(i) TERMINATION OF PURCHASE RIGHT. The following provisions
-----------------------------
shall govern the termination of outstanding purchase rights:
(ii) A Participant may, at any time prior to the next scheduled
Purchase Date in the offering period, terminate his or her outstanding purchase
right by filing the appropriate form with the Plan Administrator (or its
designate), and no further payroll deductions shall be collected from the
Participant with respect to the terminated purchase right. Any payroll
deductions collected during the Purchase Interval in which such termination
occurs shall, at the Participant's election, be immediately refunded or held for
the purchase of shares on the next Purchase Date. If no such election is made at
the time such purchase right is terminated, then the payroll deductions
collected with respect to the terminated right shall be refunded as soon as
possible.
(iii) The termination of such purchase right shall be
irrevocable, and the Participant may not subsequently rejoin the offering period
for which the terminated purchase right was granted. In order to resume
participation in any subsequent offering period, such individual must re-enroll
in the Plan (by making a timely filing of the prescribed enrollment forms) on or
before his or her scheduled Entry Date into that offering period.
(iv) Should the Participant cease to remain an Eligible Employee
for any reason (including death, disability or change in status) while his or
her purchase right remains outstanding, then that purchase right shall
immediately terminate, and all of the Participant's payroll deductions for the
Purchase Interval in which the purchase right so terminates shall be immediately
refunded. However, should the Participant cease to remain in active service by
reason of an approved unpaid leave of absence, then the Participant shall have
the right, exercisable up until the last business day of the Purchase Interval
in which such leave commences, to (a) withdraw all the payroll deductions
collected to date on his or her behalf for that Purchase Interval or (b) have
such funds held for the purchase of shares on his or her behalf on the next
scheduled Purchase Date. In no event, however, shall any further payroll
deductions be collected on the Participant's behalf during such leave. Upon the
Participant's return to active service (x) within ninety (90) days following the
commencement of such leave or (y) the expiration of any longer period for which
such Participant's right to reemployment with the Corporation is guaranteed by
either statute or contract, his or her payroll deductions under the Plan shall
automatically resume at the rate in effect at the time the leave began, unless
the Participant withdraws from the Plan prior to his or her return. An
individual who returns to active employment following a leave of absence which
exceeds in duration the applicable (x) or (y) time period will be treated as a
new Employee for purposes of subsequent participation in the Plan and must
accordingly re-enroll in the Plan (by making a timely filing of the prescribed
enrollment forms) on or before his or her scheduled Entry Date into the offering
period.
5.
<PAGE>
F. CHANGE IN CONTROL. Each outstanding purchase right shall
-----------------
automatically be exercised, immediately prior to the effective date of any
Change in Control, by applying the payroll deductions of each Participant for
the Purchase Interval in which such Change in Control occurs to the purchase of
whole shares of Common Stock at a purchase price per share equal to eighty-five
percent (85%) of the lower of (i) the Fair Market Value per share of Common
-----
Stock on the Participant's Entry Date into the offering period in which such
Change in Control occurs or (ii) the Fair Market Value per share of Common Stock
immediately prior to the effective date of such Change in Control. However, the
applicable limitation on the number of shares of Common Stock purchasable per
Participant shall continue to apply to any such purchase, but not the limitation
applicable to the maximum number of shares of Common Stock purchasable in the
aggregate.
The Corporation shall use its best efforts to provide at least ten
(10)-days prior written notice of the occurrence of any Change in Control, and
Participants shall, following the receipt of such notice, have the right to
terminate their outstanding purchase rights prior to the effective date of the
Change in Control.
G. PRORATION OF PURCHASE RIGHTS. Should the total number of shares
----------------------------
of Common Stock to be purchased pursuant to outstanding purchase rights on any
particular date exceed the number of shares then available for issuance under
the Plan, the Plan Administrator shall make a pro-rata allocation of the
available shares on a uniform and nondiscriminatory basis, and the payroll
deductions of each Participant, to the extent in excess of the aggregate
purchase price payable for the Common Stock pro-rated to such individual, shall
be refunded.
H. ASSIGNABILITY. The purchase right shall be exercisable only by
-------------
the Participant and shall not be assignable or transferable by the Participant.
I. STOCKHOLDER RIGHTS. A Participant shall have no stockholder
------------------
rights with respect to the shares subject to his or her outstanding purchase
right until the shares are purchased on the Participant's behalf in accordance
with the provisions of the Plan and the Participant has become a holder of
record of the purchased shares.
VIII. ACCRUAL LIMITATIONS
A. No Participant shall be entitled to accrue rights to acquire
Common Stock pursuant to any purchase right outstanding under this Plan if and
to the extent such accrual, when aggregated with (i) rights to purchase Common
Stock accrued under any other purchase right granted under this Plan and (ii)
similar rights accrued under other employee stock purchase plans (within the
meaning of Code Section 423) of the Corporation or any Corporate Affiliate,
would otherwise permit such Participant to purchase more than Twenty-Five
Thousand Dollars ($25,000.00) worth of stock of the Corporation or any Corporate
Affiliate (determined on the basis of the Fair Market Value per share on the
date or dates such rights are granted) for each calendar year such rights are at
any time outstanding.
6.
<PAGE>
B. For purposes of applying such accrual limitations to the purchase
rights granted under the Plan, the following provisions shall be in effect:
(i) The right to acquire Common Stock under each outstanding
purchase right shall accrue in a series of installments on each successive
Purchase Date during the offering period on which such right remains
outstanding.
(ii) No right to acquire Common Stock under any outstanding
purchase right shall accrue to the extent the Participant has already accrued in
the same calendar year the right to acquire Common Stock under one or more other
purchase rights at a rate equal to Twenty-Five Thousand Dollars ($25,000.00)
worth of Common Stock (determined on the basis of the Fair Market Value per
share on the date or dates of grant) for each calendar year such rights were at
any time outstanding.
C. If by reason of such accrual limitations, any purchase right of a
Participant does not accrue for a particular Purchase Interval, then the payroll
deductions which the Participant made during that Purchase Interval with respect
to such purchase right shall be promptly refunded.
D. In the event there is any conflict between the provisions of this
Article and one or more provisions of the Plan or any instrument issued
thereunder, the provisions of this Article shall be controlling.
IX. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan was adopted by the Board on February 19, 1999, and shall
become effective at the Effective Time, provided no purchase rights granted
--------
under the Plan shall be exercised, and no shares of Common Stock shall be issued
hereunder, until (i) the Plan shall have been approved by the stockholders of
the Corporation and (ii) the Corporation shall have complied with all applicable
requirements of the 1933 Act (including the registration of the shares of Common
Stock issuable under the Plan on a Form S-8 registration statement filed with
the Securities and Exchange Commission), all applicable listing requirements of
any stock exchange (or the Nasdaq National Market, if applicable) on which the
Common Stock is listed for trading and all other applicable requirements
established by law or regulation. In the event such stockholder approval is not
obtained, or such compliance is not effected, within twelve (12) months after
the date on which the Plan is adopted by the Board, the Plan shall terminate and
have no further force or effect, and all sums collected from Participants during
the initial offering period hereunder shall be refunded.
B. Unless sooner terminated by the Board, the Plan shall terminate
upon the earliest of (i) the last business day in July, 2009, (ii) the date on
--------
which all shares available for issuance under the Plan shall have been sold
pursuant to purchase rights exercised under the Plan or (iii) the date on which
all purchase rights are exercised in connection with a Corporate Transaction. No
further purchase rights shall be granted or exercised, and no further payroll
deductions shall be collected, under the Plan following such termination.
7.
<PAGE>
X. AMENDMENT OF THE PLAN
A. The Board may alter, amend, suspend or terminate the Plan at any
time to become effective immediately following the close of any Purchase
Interval. However, the Plan may be amended or terminated immediately upon Board
action, if and to the extent necessary to assure that the Corporation will not
recognize, for financial reporting purposes, any compensation expense in
connection with the shares of Common Stock offered for purchase under the Plan,
should the financial accounting rules applicable to the Plan at the Effective
Time be subsequently revised so as to require the recognition of compensation
expense in the absence of such amendment or termination.
B. In no event may the Board effect any of the following amendments
or revisions to the Plan without the approval of the Corporation's stockholders:
(i) increase the number of shares of Common Stock issuable under the Plan or the
maximum number of shares purchasable per Participant or in the aggregate on any
one Purchase Date, except for permissible adjustments in the event of certain
changes in the Corporation's capitalization, (ii) alter the purchase price
formula so as to reduce the purchase price payable for the shares of Common
Stock purchasable under the Plan or (iii) modify eligibility requirements for
participation in the Plan.
XI. GENERAL PROVISIONS
A. All costs and expenses incurred in the administration of the Plan
shall be paid by the Corporation; however, each Plan Participant shall bear all
costs and expenses incurred by such individual in the sale or other disposition
of any shares purchased under the Plan.
B. Nothing in the Plan shall confer upon the Participant any right
to continue in the employ of the Corporation or any Corporate Affiliate for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Corporation (or any Corporate Affiliate employing such person)
or of the Participant, which rights are hereby expressly reserved by each, to
terminate such person's employment at any time for any reason, with or without
cause.
C. The provisions of the Plan shall be governed by the laws of the
State of California without resort to that State's conflict-of-laws rules.
8.
<PAGE>
SCHEDULE A
----------
CORPORATIONS PARTICIPATING IN
EMPLOYEE STOCK PURCHASE PLAN
AS OF THE EFFECTIVE TIME
------------------------
COMPS.COM, INC.
<PAGE>
APPENDIX
--------
The following definitions shall be in effect under the Plan:
A. BOARD shall mean the Corporation's Board of Directors.
-----
B. CASH EARNINGS shall mean the (i) regular base salary paid to a
-------------
Participant by one or more Participating Companies during such individual's
period of participation in one or more offering periods under the Plan plus (ii)
all overtime payments, bonuses, commissions, profit-sharing distributions and
other incentive-type payments. Such Cash Earnings shall be calculated before
deduction of (A) any income or employment tax withholdings or (B) any and all
contributions made by the Participant to any Code Section 401(k) salary deferral
plan or Code Section 125 cafeteria benefit program now or hereafter established
by the Corporation or any Corporate Affiliate. However, Cash Earnings shall
NOT include any contributions made on the Participant's behalf by the
Corporation or any Corporate Affiliate to any employee benefit or welfare plan
now or hereafter established.
C. CHANGE IN CONTROL shall mean a change in ownership of the
-----------------
Corporation pursuant to any of the following transactions:
(i) a merger or consolidation in which securities possessing
more than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to
such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete liquidation
or dissolution of the Corporation, or
(iii) the acquisition, directly or indirectly by an person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by or is under common
control with the Corporation) of beneficial ownership (within the meaning
of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly
to the Corporation's stockholders.
C. CODE shall mean the Internal Revenue Code of 1986, as amended.
----
D. COMMON STOCK shall mean the Corporation's common stock.
------------
E. CORPORATE AFFILIATE shall mean any parent or subsidiary
-------------------
corporation of the Corporation (as determined in accordance with Code Section
424), whether now existing or subsequently established.
A-1.
<PAGE>
G. CORPORATION shall mean COMPS.COM, INC., a Delaware corporation,
-----------
and any corporate successor to all or substantially all of the assets or voting
stock of COMPS.COM, INC., which shall by appropriate action adopt the Plan.
H. EFFECTIVE TIME shall mean the time at which the Underwriting
--------------
Agreement is executed and the Common Stock priced for the initial public
offering. Any Corporate Affiliate which becomes a Participating Corporation
after such Effective Time shall designate a subsequent Effective Time with
respect to its employee-Participants.
I. ELIGIBLE EMPLOYEE shall mean any person who is employed by a
-----------------
Participating Corporation on a basis under which he or she is regularly expected
to render more than twenty (20) hours of service per week for more than five (5)
months per calendar year for earnings considered wages under Code Section
3401(a).
J. ENTRY DATE shall mean the date an Eligible Employee first
----------
commences participation in the offering period in effect under the Plan. The
earliest Entry Date under the Plan shall be the Effective Time.
K. FAIR MARKET VALUE per share of Common Stock on any relevant date
-----------------
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing selling price
per share of Common Stock on the date in question, as such price is reported by
the National Association of Securities Dealers on the Nasdaq National Market. If
there is no closing selling price for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question on the Stock Exchange determined
by the Plan Administrator to be the primary market for the Common Stock, as such
price is officially quoted in the composite tape of transactions on such
exchange. If there is no closing selling price for the Common Stock on the date
in question, then the Fair Market Value shall be the closing selling price on
the last preceding date for which such quotation exists.
(iii) For purposes of the initial offering period which begins at
the Effective Time, the Fair Market Value shall be deemed to be equal to the
price per share at which the Common Stock is sold in the initial public offering
pursuant to the Underwriting Agreement.
L. 1933 ACT shall mean the Securities Act of 1933, as amended.
--------
A-2.
<PAGE>
M. PARTICIPANT shall mean any Eligible Employee of a Participating
-----------
Corporation who is actively participating in the Plan.
N. PARTICIPATING CORPORATION shall mean the Corporation and such
-------------------------
Corporate Affiliate or Affiliates as may be authorized from time to time by the
Board to extend the benefits of the Plan to their Eligible Employees. The
Participating Corporations in the Plan are listed in attached Schedule A.
O. PLAN shall mean the Corporation's 1999 Employee Stock Purchase
----
Plan, as set forth in this document.
P. PLAN ADMINISTRATOR shall mean the committee of two (2) or more
------------------
Board members appointed by the Board to administer the Plan.
Q. PURCHASE DATE shall mean the last business day of each Purchase
-------------
Interval. The initial Purchase Date shall be July 30, 1999.
R. PURCHASE INTERVAL shall mean each successive six (6)-month period
-----------------
within the offering period at the end of which there shall be purchased shares
of Common Stock on behalf of each Participant.
S. SEMI-ANNUAL ENTRY DATE shall mean the first business day in
----------------------
February and August each year on which an Eligible Employee may first enter an
offering period.
T. STOCK EXCHANGE shall mean either the American Stock Exchange or
--------------
the New York Stock Exchange.
U. UNDERWRITING AGREEMENT shall mean the agreement between the
----------------------
Corporation and the underwriter or underwriters managing the initial public
offering of the Common Stock.
A-3.
<PAGE>
EXHIBIT 10.39
ASSIGNMENT AND ASSUMPTION AGREEMENT
-----------------------------------
This Assignment and Assumption Agreement ("Assignment") is entered
into this 6th day of November, 1998, by and among REALBID LLC, a California
limited liability company, Emmett DeMoss, an individual, Robert Potter, an
individual, (collectively, "Assignors"), and COMPS InfoSystems, Inc., a Delaware
corporation ("Assignee").
RECITALS
--------
WHEREAS, Assignors and Assignee have entered into that certain Asset
Purchase Agreement of even date herewith (the "Purchase Agreement") by and
among Assignors and Assignee, for the sale by Assignors of the Purchased Assets
(as defined in Section 2.1 of the Purchase Agreement) (initially capitalized
-----------
terms used herein and not otherwise defined herein shall have the meanings given
to such terms in the Purchase Agreement);
WHEREAS, the execution and delivery of this Agreement is a condition
precedent to the closing of the Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and promises
set forth herein, and for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. ASSIGNMENT AND ASSUMPTION. Assignors hereby agree that,
-------------------------
effective as of the Closing, they shall grant, sell, convey, assign, transfer
and deliver unto Assignee, and Assignee hereby agrees to accept and assume, free
and clear of any Encumbrance or adverse claim of any kind whatsoever, except
Permitted Encumbrances, all of Assignor's right, title and interest in and to
all the Purchased Assets (as such assets are defined and described in the
Purchase Agreement and the schedules relating thereto). Assignors hereby
assigns, and Assignee hereby assumes and agrees to satisfy and perform when due
those liabilities and obligations arising from the Assumed Liabilities on and
after the Closing Date.
2. ASSIGNORS COVENANT. Assignors hereby covenant that they will,
------------------
any time and from time to time, upon written request therefor, execute and
deliver to Assignee, its successors and assigns, any new or confirmatory
instruments which may be reasonably necessary in order to protect or fully
assign and transfer to and vest in Assignee, or its successors and assigns, all
of Assignors' right, title and interest in and to the Purchased Assets.
3. RETAINED LIABILITIES. The parties acknowledge and agree that,
--------------------
except for the Assumed Liabilities, Assignors shall retain and be responsible
for all obligations, liabilities, and claims of any nature, accruing, arising
out of, or relating to Assignors and REALBID LLC's business (including without
limitation (i) any liability or obligation arising out of or relating to any of
the Excluded Assets (ii) the BAP Loan, the ERD Loan and the LLC Managers Accrued
Fee (as each is described in the Financial Statements) and (iii) any and all
payables, costs and expenses of REALBID incurred before or after the Closing
Date including those payables, costs and expenses set forth in the Financial
Statements), whether actual or contingent, matured or
<PAGE>
unmatured, liquidated or unliquidated, or know or unknown (the "Retained
Liabilities"). Pursuant to the terms of the Purchase Agreement, Assignors shall
indemnify and hold Assignee harmless from, against and in respect to (and shall
reimburse Assignee for) any loss, liability, cost or expenses, including,
without limitation, reasonable attorneys' fees, suffered or incurred by Assignee
by reason of or resulting from the Retained Liabilities.
4. ENTIRE AGREEMENT. This Assignment, together with the Purchase
----------------
Agreement and all documents executed in connection with the Purchase Agreement,
constitutes the entire agreement and understanding between and among the parties
hereto with respect to the matters set forth herein, and supersedes and replaces
any prior agreements and understandings, whether oral or written, between and
among them with respect to such matters. Notwithstanding any other provisions
of this Assignment to the contrary, nothing contained in this Assignment shall
in any way superseded, modify, replace, amend, change, rescind, waive, exceed,
expand, enlarge or in any way affect the provisions, including warranties,
covenants, agreements, conditions, representations, or in general any of the
rights and remedies, and any of the obligations and indemnifications of
Assignors or Assignee set forth in the Purchase Agreement nor shall this
Assignment expand or enlarge any remedies under the Purchase Agreement including
without limitation any limits on indemnification specified therein. This
Assignment is intended only to effect the transfer of certain property
transferred pursuant to the Purchase Agreement and shall be governed entirely in
accordance with the terms and conditions of the Purchase Agreement.
5. GOVERNING LAW. This Assignment shall in all respects be
-------------
construed in accordance with and governed by the laws of the State of California
without giving effect to its conflicts-of-laws principles (other than any
provisions thereof validating the choice of the laws of the State of California
in the governing law).
6. COUNTERPARTS. This Agreement may be executed in any number of
------------
counter parts and by facsimile and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute but one and the same agreement.
[SIGNATURE PAGE TO FOLLOW]
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Assignment as of
the day and year first written above.
COMPS InfoSystems, Inc., REALBID LLC,
a Delaware corporation a California limited liability company
By: /s/ CHRISTOPHER A. CRANE By: /s/ ROBERT A. POTTER
------------------------------ ---------------------------------
Christopher A. Crane Robert A. Potter, Manager
President and Chief Executive Officer
By: /s/ Emmett DeMoss
----------------------------------
Emmett DeMoss, Manager
/s/ Robert Potter
----------------------------------
Robert Potter
/s/ Emmett DeMoss
----------------------------------
Emmett DeMoss
[SIGNATURE PAGE TO THE ASSIGNMENT AND ASSUMPTION AGREEMENT]
<PAGE>
EXHIBIT 10.40
INTELLECTUAL PROPERTY ASSIGNMENT
This Intellectual Property Assignment is entered into this 6th day of
November, 1998, by and between REALBID LLC, a California limited liability
company, ("Assignor"), and COMPS InfoSystems, Inc., a Delaware corporation
("Assignee").
WHEREAS, Assignee and Assignor are parties to that certain Asset
Purchase Agreement dated as of even date herewith (the "Purchase Agreement")
(initially capitalized terms used herein and not otherwise defined herein shall
have the meanings given to such terms in the Purchase Agreement);
WHEREAS, the execution and delivery of this Intellectual Property
Assignment is a condition precedent to Assignee's obligations under the Purchase
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Assignor assigns to Assignee, and Assignee hereby accepts such
assignment of, Assignor's entire right, title and interest in and to all of the
REALBID Intellectual Property (as such intellectual property is defined and
described in the Purchase Agreement and the schedules relating thereto),
including, without limitation, the service mark "REALBID," and all variations
thereof, the domain name on the World Wide Web known as "realbid.com" and any
successor name thereto, and all rights to damages and payments for past, present
or future infringements or misappropriations thereof in all countries and the
goodwill of the business and operations of REALBID associated with the
Intellectual Property.
2. The rights, title and interest assigned under Section 1 above shall be
---------
for Assignee's own use and enjoyment, and for the use and enjoyment of
Assignee's successors, assigns or other legal representatives, as fully and
entirely as the same would have been held and enjoyed by the Assignor if this
assignment and sale had not been made.
3. Assignor authorizes and requests the Commissioner of Patents and
Trademarks of the United States, and an official of any country or countries
foreign to the United States, whose duty it is to register patents, trademarks
or copyrights, to record Assignee as the assignee and owner of the Intellectual
Property.
4. Concurrently with the execution of this Intellectual Property
Assignment, Assignor shall deliver the original papers, applications, and other
official documents relating to all patents and trademarks, and other
Intellectual Property, assigned under Section 1 above.
---------
5. Assignor hereby represents and warrants that all rights, title, and
interest assigned under Section 1 above are free and clear of Encumbrances and
---------
that Assignor has not executed and will not execute any agreement or other
instrument in conflict herewith.
6. Assignor hereby covenants and agrees that it shall cease and refrain
from all use of all rights, title, and interests assigned under Section 1 above
---------
in all countries of the world as of the date hereof.
<PAGE>
7. With respect to the REALBID Intellectual Property, Assignor will, from
and after the Closing (i) use its best efforts to keep such REALBID Intellectual
Property confidential, including continuing to protect the confidential nature
of such REALBID Intellectual Property as if the sale provided for in the
Purchase Agreement had not occurred, (ii) not disclose the REALBID Intellectual
Property to any third party and (iii) not use the REALBID Intellectual Property.
8. From time to time after the date hereof, Assignor will execute and
deliver, or cause its affiliates to execute and deliver, to Assignee such
instruments of sale, transfer, conveyance, assignment and delivery, and such
consents, assurances, powers of attorney and other instruments as may be
reasonably requested by Assignee or its counsel in order to vest in Assignee all
right, title and interest of Assignors in and to the Purchased Assets and
otherwise in order to carry out the purpose and intent of this Intellectual
Property Assignment.
9. This Intellectual Property Assignment, together with the Purchase
Agreement and all documents executed in connection with the Purchase Agreement,
constitutes the entire agreement and understanding between and among the parties
hereto with respect to the matters set forth herein, and supersedes and replaces
any prior agreements and understandings, whether oral or written, between and
among them with respect to such matters. Notwithstanding any other provisions of
this Intellectual Property Assignment to the contrary, nothing contained in this
Intellectual Property Assignment shall in any way superseded, modify, replace,
amend, change, rescind, waive, exceed, expand, enlarge or in any way affect the
provisions, including warranties, covenants, agreements, conditions,
representations, or in general any of the rights and remedies, and any of the
obligations and indemnifications of Assignors or Assignee set forth in the
Purchase Agreement nor shall this Intellectual Property Assignment expand or
enlarge any remedies under the Purchase Agreement including without limitation
any limits on indemnification specified therein. This Intellectual Property
Assignment is intended only to effect the transfer of certain property
transferred pursuant to the Purchase Agreement and shall be governed entirely in
accordance with the terms and conditions of the Purchase Agreement.
10. This Intellectual Property Assignment shall in all respects be
construed in accordance with and governed by the laws of the State of California
without giving effect to its conflicts-of-laws principles (other than any
provisions thereof validating the choice of the laws of the State of California
in the governing law).
11. This Intellectual Property Assignment may be executed by the parties
herein in separate counterparts and by facsimile, each of which when so executed
and delivered shall be an original, but all such counterparts and facsimile
shall together shall constitute one and the same instrument.
[SIGNATURE PAGE TO FOLLOW]
-2-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
COMPS InfoSystems, Inc., REALBID LLC,
a Delaware corporation a California limited liability company
By: /s/ CHRISTOPHER A. CRANE By: /s/ ROBERT A. POTTER
---------------------------------- --------------------------------
Christopher A. Crane Robert A. Potter, Manager
President and Chief Executive Officer
By: /s/ EMMETT DeMOSS
--------------------------------
Emmett DeMoss, Manager
[SIGNATURE PAGE TO THE INTELLECTUAL PROPERTY ASSIGNMENT]
--------------------------------------------------------
<PAGE>
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) ss.
COUNTY OF Marin )
On this 5th day of November, in the year 1998, before me, the
undersigned Notary Public, duly commissioned and sworn, personally appeared
Emmett DeMoss and Robert Potter, personally known to me (or proved to me on the
----------------------
basis of satisfactory evidence) to be the persons whose names are subscribed to
the within instrument and acknowledged to me that they respectively executed the
same in their authorized capacities, and that by their signature on the
instrument the persons executed the instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate above written.
[SEAL]
/s/ TROY L. SWANN
--------------------
Notary Public in and for the
aforesaid County and State
<PAGE>
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) ss.
COUNTY OF SAN DIEGO )
On this 13th day of November, in the year 1998, before me, the
undersigned Notary Public, duly commissioned and sworn, personally appeared
Christopher A. Crane, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in his authorized
capacity, and that by his signature on the instrument the person executed the
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate above written.
[SEAL]
/s/ CANDICE L. JENKINS
-------------------------------------
Notary Public in and for the
aforesaid County and State
<PAGE>
EXHIBIT 10.41
SERVICE MARK ASSIGNMENT
-----------------------
This Service Mark Assignment (hereinafter referred to as "Assignment")
is effective as of the 5th day of November, 1998, by and between REALBID LLC, a
California limited liability company, having its principal place of business at
700 Larkspur Landing Circle, Suite 199, Larkspur, California 94939 (hereinafter
referred to as "Assignor") and COMPS INFOSYSTEMS, INC., a Delaware corporation,
having its principal place of business at 9888 Carroll Centre Road, Suite 100,
San Diego, CA 92126 (hereinafter referred to as "Assignee").
WHEREAS, the parties have entered into a certain Asset Purchase
Agreement dated as of November 6, 1998, pursuant to which the parties are
entering into this Assignment;
WHEREAS, Assignor is willing to assign to Assignee all rights, title,
and interest that Assignor may possess throughout the world in an to the service
mark set forth on Schedule A (which is attached hereto and incorporated herewith
by reference), and all other rights appurtenant thereto, including, but not
limited to, all common law rights, title, and interest, trademark, trade name,
trade dress or similar rights, and the right to recover for past infringement of
any of the foregoing in the United States of America and in all other countries
and jurisdictions of the world in and to said service mark and all applications
and eventual registrations thereof (hereinafter collectively referred to as the
"Service Mark") and any goodwill associated with and symbolized by the Service
mark which Assignor has acquired and not abandoned;
WHEREAS, in order to avoid any doubt as to Assignor's assignment of
any and all rights that Assignor may have in and to the Service Mark, Assignor
further wishes to quitclaim to Assignee all rights, title, and interest which
Assignor may possess throughout the world in and to the Service Mark; and
WHEREAS, Assignee is desirous of acquiring all such rights, title and
interest in and to the Service Mark throughout the world
NOW, THEREFORE, for good and adequate consideration, the receipt and
sufficiency of which is hereby acknowledged, Assignor hereby assigns, and
further hereby quitclaims to Assignee, all rights, title and interest and
Assignor may possess in and to the Service Mark throughout the world, together
with the goodwill symbolized by said Service Mark, concurrent with the transfer
of certain tangible assets as indicia of said goodwill pursuant to the
transactions contemplated by the Asset Purchase Agreement.
Executed at San Diego, California this 5th day of November, 1998.
On behalf of REALBID LLC,
a California limited liability company
By: /s/ ROBERT A. POTTER
----------------------------------------
Robert A. Potter, Manager
By: /s/ EMMETT DeMOSS
----------------------------------------
Emmett DeMoss, Manager
<PAGE>
SCHEDULE A
----------
Service Mark Application Number
- ------------ ------------------
REALBID 75/277,110
<PAGE>
ACKNOWLEDGEMENT
STATE OF CALIFORNIA )
) ss.
COUNTY OF MARIN )
On this 5th day of November, in the year 1998, before me, the
undersigned Notary Public, duly commissioned and sworn, personally appeared
Robert A. Potter and Emmett DeMoss personally known to me (or proved to me on
----------------------
the basis of satisfactory evidence) to be the person whose names are subscribed
to the within instrument and acknowledged to me that they respectively execute
the same in their authorized capacities, and that by their signatures on the
instrument the persons executed the instrument.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed my
official seal the day and year in this certificate above written.
[SEAL]
/s/ TROY L. SWANN
--------------------------------------
Notary Public in and for the
aforesaid County and State
<PAGE>
EXHIBIT 10.42
ASSET PURCHASE AGREEMENT
BETWEEN
COMPS INFOSYSTEMS,
THE LAND SALES RESOURCE AND
KITTY LAYNE
JULY 17, 1995
<PAGE>
TABLE OF CONTENTS
1. PURCHASE AND SALE OF ASSETS....................................... 2
----------------------------
1.1 Transfer of Assets........................................... 2
------------------
1.2 Assumption of Liabilities.................................... 3
-------------------------
1.3 Purchase Price............................................... 3
--------------
1.4 Allocation of Asset Price.................................... 3
-------------------------
1.5 Prorations................................................... 3
----------
1.6 Sales Taxes.................................................. 4
-----------
2. CLOSING............................................................ 4
-------
2.1 Closing...................................................... 4
-------
2.2 Conveyances at Closing....................................... 4
----------------------
2.3 Form of Instruments.......................................... 5
-------------------
2.4 Additional Documents and Information......................... 5
------------------------------------
3. REPRESENTATIONS AND WARRANTIES OF LSR AND LAYNE.................... 5
-----------------------------------------------
3.1 Organization of LSR.......................................... 5
-------------------
3.2 Authorization................................................ 6
-------------
3.3 No Conflict or Violation..................................... 6
------------------------
3.4 Consent and Approvals........................................ 6
---------------------
3.5 Absence of Certain Changes or Events......................... 6
------------------------------------
3.6 Purchased Assets............................................. 7
----------------
3.7 Real Property................................................ 7
-------------
3.8 Equipment Lease.............................................. 9
---------------
3.9 Financial Statements......................................... 9
--------------------
3.10 Litigation................................................... 9
----------
3.11 Liabilities.................................................. 10
-----------
3.12 Compliance with Law.......................................... 10
-------------------
3.13 No Brokers................................................... 10
----------
3.14 No Other Agreements to Sell the Assets....................... 10
--------------------------------------
3.15 Tax Matters.................................................. 11
-----------
3.16 Employment Matters and Benefit Plans......................... 11
------------------------------------
3.17 Insurance.................................................... 12
---------
3.18 Purchase Commitments and Outstanding Bids.................... 13
-----------------------------------------
3.19 Transactions with Certain Persons............................ 13
---------------------------------
3.20 Environmental Quality........................................ 14
---------------------
3.21 Hazardous Conditions......................................... 14
--------------------
3.22 Adequacy of Purchased Assets................................. 14
----------------------------
3.23 Material Misstatements or Omissions.......................... 14
-----------------------------------
4. REPRESENTATIONS AND WARRANTIES OF COMPS
---------------------------------------
4.1 Organization of COMPS........................................ 14
---------------------
4.2 Authorization................................................ 14
-------------
4.3 No Conflict or Violation..................................... 15
------------------------
<PAGE>
4.4 Consent and Approvals........................................ 15
---------------------
5. COVENANTS OF LSR AND COMPS......................................... 16
--------------------------
5.1 Maintenance of Business Prior to Closing..................... 16
----------------------------------------
5.2 Key Employees................................................ 16
-------------
5.3 Investigation by COMPS; Audits............................... 17
------------------------------
5.4 Notification of Certain Matters.............................. 18
-------------------------------
5.5 No Mergers, Consolidations, Sale of Stock, Etc............... 18
----------------------------------------------
6. CONDITIONS TO LSR'S AND LAYNE's OBLIGATIONS........................ 19
-------------------------------------------
6.1 Representations, Warranties and Covenants.................... 19
-----------------------------------------
6.2 No Governmental Proceedings or Litigation.................... 19
-----------------------------------------
6.3 Certificates................................................. 19
------------
7. CONDITIONS TO COMP's OBLIGATIONS................................... 20
--------------------------------
7.1 Representation, Warranties and Covenants..................... 20
----------------------------------------
7.2 No Governmental Proceedings or Litigation.................... 20
-----------------------------------------
7.3 Opinion of Counsel........................................... 20
------------------
7.4 Certificates................................................. 20
------------
7.5 Conveyancing Documents....................................... 20
----------------------
8. COVENANT NOT TO COMPETE............................................ 20
-----------------------
9. ACTIONS BY LSR AND COMPS AFTER THE CLOSING
------------------------------------------
9.1 Books and Records............................................ 20
-----------------
9.2 Survival of Representations.................................. 20
---------------------------
9.3 Indemnification.............................................. 21
---------------
9.3.1 By LSR and Layne..................................... 21
----------------
9.3.2 By COMPS............................................. 21
--------
9.3.3 Assistance........................................... 21
----------
9.3.4 Defense of Claims.................................... 22
-----------------
9.3.5 COMPS's Right of Offset.............................. 23
-----------------------
9.3.6 Damages.............................................. 23
-------
10. MISCELLANEOUS
-------------
10.1 Termination.................................................. 24
-----------
10.2 Risk of Loss................................................. 24
------------
10.2.1 Personal Property.................................... 25
-----------------
10.2.2 Leased or Owned Real Property........................ 25
-----------------------------
10.3 Notices...................................................... 26
-------
10.4 Choice of Law................................................ 26
-------------
10.5 Entire Agreement; Amendments and Waivers..................... 27
----------------------------------------
10.6 Counterparts................................................. 27
------------
10.7 Expenses..................................................... 27
--------
10.8 Invalidity................................................... 27
----------
<PAGE>
10.9 Arbitration and Venue........................................ 27
---------------------
10.10 Public Announcements......................................... 28
--------------------
10.11 Construction................................................. 28
------------
10.12 Section and Other Headings................................... 25
--------------------------
10.13 Schedules and Exhibits Not Attached.......................... 28
-----------------------------------
<PAGE>
ASSET PURCHASE AGREEMENT
------------------------
This Asset Purchase Agreement, dated July 17, 1995, is by and between COMPS
InfoSystems, Inc., a Delaware corporation ("COMPS"), The Land Sales Resource, an
Illinois corporation ("LSR"), and Kitty Layne ("Layne").
RECITALS
--------
A. LSR is engaged in the business of gathering information on the real
estate industry in the Chicago area and compiling and selling that information
in various forms. LSR owns certain assets (the "Assets") which it uses in the
conduct of its business (the "Business").
B. COMPS also is engaged in the information systems business and operates
in many locations throughout the United States. It is the intention of COMPS to
enter the Chicago market and COMPS desires to purchase the Business.
C. The shareholders of LSR and their percentage ownership are:
Kitty Lane 65%
Mark Fogarty 20%
Joe Lyng 15%
D. In order to induce COMPS to enter into this Agreement, LSR and Layne
desire to grant COMPS a covenant not to compete and provide certain other
assurances.
E. Terms used herein which are not otherwise defined in context and the
initial letters of which are capitalized shall have the definitions set forth in
Appendix I.
AGREEMENT
---------
NOW THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration. the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
1. PURCHASE AND SALE OF ASSETS
---------------------------
1.1 Transfer of Assets. On the Closing Date, LSR will sell, convey,
------------------
transfer, assign, and deliver to COMPS, and COMPS will acquire from LSR,
effective as of 12:01 a.m. local time on the Closing Date (the "Closing Time"),
all of LSR's assets of every nature and kind, except as provided in
Schedule 1.1, (the "Purchased Assets"), both real and personal, including,
without limitation:
1.1.1 customer lists, real estate information database, formats,
customer data, and customer subscription agreements all as
more particularly described on Schedule 1.1.
1
<PAGE>
1.1.2 a lease for space located at 622 Executive Dr. Willowbrook,
IL., true and correct copy of which is attached as Exhibit
1.1.2 (the "Real Property Lease");
1.1.3 A personal property lease for an office copier described in
Exhibit 1.1.3 (the "Equipment Lease").
1.1.4 all patents, trade names, trademarks, logos, copyrights and
applications therefor used or held for use in connection with
the Business, as described on Schedule 1.1.4 hereto (the
"Intellectual Property Rights");
1.1.5 all leasehold improvements;
1.1.6 all machinery, equipment, furniture, fixtures, vehicles,
office equipment, supplies, tools, inventory, and parts used
or held for use in the Business, all of which are listed on
Schedule 1.1.6;
1.1.7 all rights under contracts and agreements related to the
Business;
1.1.8 accounts receivable, cash on hand, all prepaid items,
deposits, advance payments, rights to offset and credits of
all kinds of LSR;
1.1.9 Copies of all of the Books and Records of the Business;
1.1.10 all goodwill of the Business;
1.1.11 all manufacturer, supplier or contractor warranties or
guaranties respecting any Purchased Assets; and
1.1.12 all other assets, tangible or intangible, used currently in
the Business or necessary for the operation of the Business in
the ordinary course and consistent with past practice;
1.2 Assumption of Liabilities. COMPS shall assume no liabilities of LSR
-------------------------
of any sort whatsoever except for those obligations and liabilities set forth on
Schedule 1.2.
1.13 Purchase Price. The purchase price for the assets (the "Asset
--------------
Price") shall be $275,000 to be paid at Closing, in cash, by certified check or
other immediately available funds.
1.4 Allocation of Asset Price. The Asset Price shall be allocated among
-------------------------
the Purchased Assets as set forth on Schedule 1.4. COMPS and LSR agree that
each shall report the transfers contemplated by this Agreement in a manner
consistent with such
2
<PAGE>
allocation including without limitation, compliance with the requirements of
Section 1060 of the Code and the regulations thereunder.
1.5 Prorations. On the Closing Date, or as promptly as practicable
----------
following the Closing Date, the rents, real property taxes, water, gas,
electricity and other utilities, common area maintenance reimbursements to
lessors and other similar periodic charges payable with respect to the Real
Property shall be prorated between COMPS and LSR effective as of the Closing
Date. To the extent practicable, utility meter readings for LSR's facilities
shall be determined as of the Closing Date. If the real property tax rate for
the current tax year is not established by the Closing Date, the prorations
shall be made on the basis of the rate in effect for the preceding tax year and
shall be adjusted when the exact amounts are determined. All such prorations
shall be based upon the most recent available assessed value of any facility
prior to the Closing Date.
1.6 Sales Taxes. COMPS shall pay any sales taxes imposed by reason of the
-----------
purchase by COMPS of the Purchased Assets pursuant to this Agreement.
2. CLOSING
-------
2.1 Closing. The Closing of the purchase and sale of assets contemplated
-------
herein (the "Closing") shall be held at 10:00 A.M. local time on July 31, 1995
(the "Closing Date") at the offices of The Land Sales Resources, 622 Executive
Drive, Willowbrook, Illinois, unless extended by either party for a period not
to exceed 60 days unless the parties hereto otherwise agree.
2.2 Conveyances at Closing. To effect the transaction contemplated by
----------------------
this Agreement, on the Closing Date
2.2.1 LSR will execute and deliver to COMPS:
(a) an Assignment and Assumption Agreement in the form attached
hereto as Exhibit 2.2.1(1) conveying in the aggregate all of LSR's owned
personal property included in the Purchased Assets to COMPS;
(b) an assignment of Real Property Lease together with the consent of
the landlord in the form attached hereto as Exhibit 2.2.1(2);
(c) an assignment of the Equipment Lease together with the consent of
the lessor in the form attached hereto as Exhibit 2.2.1(3);
(d) such other instruments as shall be reasonably requested by COMPS
to vest in COMPS good and marketable title in and to all of the Purchased Assets
in accordance with the provisions hereof.
2.2.2 COMPS shall deliver to LSR and/or Layne
(a) the Asset Price;
3
<PAGE>
(b) the Assignment and Assumption Agreement attached as Exhibit
2.2.1(1);
(c) the employment agreements referred to in Section 5.2.1.;
(d) the option agreements referred to in Section 5.2.1
2.3 Form of Instruments. To the extent that a form of any document to be
-------------------
delivered hereunder is not attached as an Exhibit hereto, all the foregoing
instruments shall be in form and substance, and shall be executed and delivered
in a manner reasonably satisfactory to counsel for the parties.
2.4 Additional Documents and Information. COMPS and LSR shall, on
------------------------------------
request, on or after the Closing Date, cooperate with one another by furnishing
any additional information, executing and delivering any additional documents
and/or instruments, and by doing any and all such other things as may be
reasonably required by the parties or their counsel to consummate or otherwise
implement the transactions contemplated by this Agreement.
3. REPRESENTATIONS AND WARRANTIES OF LSR AND LAYNE. LSR and Layne hereby
-----------------------------------------------
represent and warrant to COMPS as of the date hereof, and as of Closing, as
follows:
3.1 Organization of LSR. LSR is a corporation duly organized, validly
-------------------
existing and in good standing under the laws of the State of Illinois, has full
corporate power and authority to conduct its business as it is presently being
conducted and to own and lease its properties and assets. LSR is duly qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction in which such qualification is necessary under the applicable law
as a result of the conduct of its business or the ownership of its properties
and where the failure to be so qualified, singly or in the aggregate, would have
a material adverse effect on the business or financial condition of LSR. Each
jurisdiction, if any, in which LSR is qualified to do business as a foreign
corporation is listed on the Disclosure Schedule.
3.2 Authorization. LSR has all necessary corporate power and authority
-------------
and has taken all corporate action necessary, and Layne has all necessary power
and authority, to enter into this Agreement, to consummate the transactions
contemplated hereby and to perform their respective obligations hereunder. This
Agreement has been duly executed and delivered by each of LSR and Layne, and is
a legal, valid and binding obligation enforceable against LSR and Layne in
accordance with the terms except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium or other similar jaws, or by
equitable principles, relating to or limiting the rights of creditors generally
and (b) limitations imposed by law or equitable principles upon the availability
of specific performance, injunctive relief or other equitable remedies.
3.3 No Conflict or Violation. Except as described in the Disclosure
------------------------
Statement, neither the execution and delivery of this Agreement nor the
consummation of
4
<PAGE>
the transactions contemplated hereby will result in (a) a violation of or a
conflict with any provision of any of LSR's charter documents; (b) a breach of,
or a default under, or constitute a basis for terminating any term or provision
of any contract, agreement, indebtedness, lease to which LSR is a party or by
which the Purchased Assets are bound; (c) a violation by LSR of any law, order
or judgment; or (d) an imposition of any Encumbrance, restriction or charge on
the Business or on any of the Purchased Assets.
3.4 Consents and Approvals. Except as set forth on the Disclosure
----------------------
Schedule, no consent, approval or authorization of, or declaration, filing or
registration with, any governmental or regulatory authority, or any other person
or entity, is required to be had or obtained by LSR or Layne in connection with
the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby.
3.5 Absence of Certain Changes or Events. Since the Balance Sheet Date,
------------------------------------
there has not been any:
3.5.1 change in LSR's condition (financial or otherwise), assets,
liabilities, working capital, reserves, earnings, business or prospects, except
for changes which have not, individually or in the aggregate, been materially
adverse, and neither LSR nor Layne knows of any developments in the Business
which could reasonably be expected to have a material adverse affect on the
condition (financial or otherwise), earnings, business or prospects of the
Business;
3.5.2 failure to operate the Business in the ordinary course so as
to use LSR's best efforts to preserve the business intact and to preserve for
COMPS the goodwill of LSR's suppliers, customers and others having business
relations with LSR;
3.5.3 change in accounting methods or practices by LSR affecting its
assets, liabilities or business;
3.5.4 sale, assignment or transfer of any of the assets or
properties of LSR, other than in the ordinary course of business, consistent
with past practice; or
3.5.5 any other event or condition which in any one case or in the
aggregate has or might reasonably be expected to have a material adverse effect
on the condition (financial or otherwise), earnings, business or prospects of
the Business.
3.6 Purchased Assets. LSR has good and marketable title to the Purchased
----------------
Assets and, upon the consummation of the transactions contemplated hereby, COMPS
will acquire good title to the Purchased Assets, free and clear of any
Encumbrance of any sort whatsoever.
3.7 Real Property. LSR owns no Real Property.
-------------
3.7.1 Real Property Lease. The Real Property Lease is the only
-------------------
lease, sublease or other occupancy agreement pursuant to which LSR occupies or
uses real property in connection with the Business; with respect to the Real
Property Lease:
5
<PAGE>
3.7.2 LSR has in all material respects performed all the obligations
required to be performed by it through the date hereof with respect thereto.
The Real Property Lease is not in default, is in full force and effect and LSR
enjoys peaceful and undisturbed possession of all the property covered by the
Real Property Lease;
3.7.3 LSR has and will transfer to COMPS at the Closing an
unencumbered interest in the Real Property Lease, which lease is freely
assignable by LSR to COMPS pursuant to this Agreement without any further action
except for the consent of the landlord including, without limitation, the
consent of, or payment of money or giving of notice to, any party;
3.7.4 To the best of LSR and Layne's knowledge, all facilities
leased thereunder have received all material approvals of governmental
authorities (including licenses and permits and a certificate of occupancy or
other evidence of lawful occupancy of the leased property) required in
connection with the operation thereof, and have been operated and maintained in
all material respects in accordance with applicable laws, rules and regulations;
3.7.5 The facilities leased thereunder are supplied with utilities
(including water, sewage, disposal, electricity, gas and telephone) and other
services necessary for the operation of such facilities as currently operated;
3.7.6 To the best of LSR and Layne's knowledge, there are no pending
or threatened condemnation proceedings with respect to the property leased
pursuant to the Real Property Lease, or pending or threatened litigation or
administrative actions relating thereto;
3.7.7 There are no subleases, licenses, options, rights, concessions
or other agreements or arrangements, written or oral, granting to any person the
right to use or occupy such property leased pursuant to any Real Property Lease,
or any portion thereof or interest therein;
3.7.8 The improvements constructed on the leased property are in
good operating condition and repair and, to the best of LSR and Layne's
knowledge, they are without any material structural or mechanical defects of any
kind; and
3.7.9 LSR has not received notice of any special assessment relating
to the leased property and has no knowledge of any pending or threatened special
assessment.
3.8 Equipment Lease. The Equipment Lease is the only lease or other
---------------
agreement pursuant to which LSR utilizes personal property in connection with
the Business. With respect to the Equipment Lease:
3.8.1 LSR has in all material respects performed all the obligations
required to be performed by it through the date hereof with respect thereto.
The Equipment Lease is not in default, is in full force and effect and LSR
enjoys peaceful and undistributed possession of all the property covered by the
Equipment Lease;
6
<PAGE>
3.8.2 LSR has and will transfer to COMPS at the Closing an
unencumbered interest in the Equipment Lease, which lease is freely assignable
by LSR to COMPS pursuant to this Agreement without any further action except for
the consent of the Lessor including, without limitation, the consent of, or
payment of money or giving of notice to, any party;
3.8.3 There are no subleases, licenses, options, rights concessions
or other agreements or arrangements, written or oral, granting to any person the
right to use property leased pursuant to any Equipment Lease, or any portion
thereof or interest therein.
3.9 Financial Statements. LSR has heretofore delivered to COMPS the
--------------------
Financial Statements. The Financial Statements (i) are true, correct and
complete, (ii) are in accordance with the books and records of LSR, (iii) have
been examined by Roche, Scholz, Roche, Walsh, LTD, independent certified public
(iv) have been prepared in conformity with generally accepted accounting
principles consistently applied throughout the periods covered thereby and (v)
fairly and accurately present the consolidated assets, liabilities and financial
position of LSR as of the date thereof and the consolidated results of
operations and changes in cash flows for the periods then ended.
3.10 Litigation. There is no action, order, writ, injunction, judgment,
----------
decree, claim, suit, litigation, proceeding, labor dispute, arbitral action,
investigation or similar dispute of any sort whatsoever (collectively,
"Actions") outstanding or pending or, to the best knowledge of LSR and Layne,
threatened or anticipated against, relating to or affecting (i) LSR, (ii) any
benefit plan for employees of LSR or any fiduciary or administrator thereof,
(iii) Layne, or (iv) the transactions contemplated by this Agreement. LSR is
not in default with respect to any judgment, order, writ, injunction or decree
of any court or governmental agency, and there are no unsatisfied judgments
against LSR or its business or activities.
3.11 Liabilities. LSR has no liabilities or obligations (absolute,
-----------
accrued, contingent or otherwise), which may have an effect on this transaction,
except (i) liabilities which are reflected and reserved against on the Balance
Sheet or (ii) Liabilities incurred in the ordinary course of business and
consistent with past practice since the Balance Sheet Date.
3.12 Compliance with Law. LSR and the Business are in compliance with all
-------------------
applicable laws, statutes, ordinances and regulations, whether federal, state or
local, except where the failure to comply would not have a material adverse
effect on the business, condition (financial or otherwise) or prospects of LSR.
LSR has not received any written notice to the effect that, or otherwise been
advised that, it is not in compliance with any of such statutes, regulations,
orders, ordinances or other laws where the failure to comply would have a
material adverse effect on the business, condition (financial or otherwise) or
prospects of LSR, and LSR has no reason to anticipate that any presently
existing circumstances are likely to result in violations of any such
regulations which would, in any one case or in the aggregate, have a material
adverse effect on the business, condition (financial or otherwise) or prospects
of LSR.
7
<PAGE>
3.13 No Brokers. Neither LSR, Layne nor any other affiliate of LSR has
----------
paid, nor incurred any obligation to pay, any finder's fee, brokerage commission
or similar payment of any sort whatsoever in connection with the transactions
contemplated by this Agreement.
3.14 No Other Agreements to Sell the Assets. Neither LSR, Layne nor any
--------------------------------------
other affiliate or Representative of LSR has any obligation, absolute or
contingent, to any other person or firm to sell or encumber the Purchased
Assets, to sell capital stock of LSR or to effect any merger, consolidation or
other reorganization of LSR or to enter into any agreement with respect thereto,
nor has any such party had any discussion with any third party regarding any of
the foregoing.
3.15 Tax Matters.
-----------
3.15.1 LSR is an S Corporation. LSR, any predecessor of LSR and all
members for income tax purposes of any affiliated group of corporations of which
LSR or any such predecessor corporation is or has been a member (collectively,
the "Taxpayers") have duly filed all tax reports and returns required to be
filed by them, including all federal, state, local and foreign tax returns and
reports. The Taxpayers have paid in full all taxes required to be paid by such
Taxpayers before such payment became delinquent. LSR has made adequate
provision, in conformity with generally accepted accounting principles
consistently applied, for the payment of all taxes which may subsequently become
due. All taxes which any Taxpayer has been required to collect or withhold have
been duly collected or withheld and, to the extent required when due, have been
or will be duly paid to the proper taxing authority.
3.15.2 The consolidated federal income tax returns of LSR and the
federal income tax returns of each subsidiary of LSR whose results of operations
are not consolidated in the federal income tax returns of LSR, have never been
examined by the Internal Revenue Service. There are no audits known by LSR to
be pending of LSR's tax returns, and there are no claims which have been or may
be assorted relating to any of LSR's tax returns filed for any year which if
determined adversely would result in the assertion by any governmental agency of
any deficiency. There have been no waivers of statutes of limitations by LSR.
3.15.3 For the purpose of this Agreement, any federal, state local
or foreign income, sales, use, transfer, payroll, personal property, occupancy
or other tax, levy, impost, fee, imposition, assessment or similar charge,
together with any related addition to tax, interest or penalty thereon, is
referred to as a "Tax."
3.16 Employment Matters and Benefit Pans
------------------------------------
3.16.1 Except as disclosed on the Disclosure Schedule, LSR has no
obligation of any sort whatsoever pursuant to or in connection with any
Employment Agreement or Employee Plan. All obligations to employees in respect
of vacation, sick leave and other benefits are described in detail in Exhibit
1.2
8
<PAGE>
3.16.2 Since the Balance Sheet Date there has not been any (i)
increase in the compensation payable or to become payable by LSR to any of its
officers, employees or agents (collectively, "Personnel") whose total
compensation for services rendered to LSR is currently at an annual rate of more
than $20,000, except for normal periodic increases in the ordinary course of
business consistent with past practice, (ii) any bonus, incentive compensation,
service award or other like benefit granted, made or accrued, contingently or
otherwise, for or to the credit of any of the Personnel, (iii) any employee
welfare, pension, retirement, profit-sharing or similar payment or arrangement
made or agreed to by LSR for any Personnel except pursuant to the existing
plans and arrangements described in the Disclosure Schedule, (iv) any new
Employment Agreement to which LSR is a party; or (vi) addition to or
modification of the employee benefit plans, arrangements or practices described
in the Disclosure Schedule affecting Personnel.
3.16.3 At the option of COMPS, certain employee of LSR shall become
employees of LSR-COMPS division. Immediately prior to the Closing, LSR shall
terminate all of those employees who are to transfer to LSR-COMPS division and
shall retain all liabilities in respect of such employees. At the Closing COMPS
shall immediately hire so many of those employees as it shall, in its sole
discretion, determine without the assumption of any prior obligation to such
employees. COMPS makes no representation that any specific benefit will be
maintained upon its hiring LSR employees and expressly reserves the right to
alter the nature and/or amount of any or all of such benefits as a condition to
hiring such employees.
3.17 Insurance. The Disclosure Schedule contains a complete and accurate
---------
list of all policies or binders of fire, liability, title, worker's compensation
and other forms of insurance (showing as to each policy or binder the carrier,
policy number, coverage limits, expiration dates, annual premiums and a general
description of the type of coverage provided) maintained by LSR on its business,
property or Personnel. Such insurance provides coverage to the extent and in the
manner (a) customary for the industry in which LSR is engaged and (b) as may be
required by law and by any and all contracts to which LSR is a party. LSR is
not in default under any of such policies or binders, and LSR has not failed to
give any notice or to present any claim under any such policy or binder in a due
and timely fashion. There are no outstanding unpaid claims under any such
policies or binders. All policies and binders provide sufficient coverage for
the risks insured against, are in full force and effect on the data hereof and
shall be kept in full force and effect by LSR with respect to all insured events
occurring on or prior to the Closing Date.
3.18 Purchase Commitments and Outstanding Bids. Except as set forth on
-----------------------------------------
the Disclosure Schedule, LSR has no pending or outstanding commitments, bids or
proposals to purchase any goods or services.
3.19 Transactions with Certain Persons. Except as set forth on the
---------------------------------
Disclosure Schedule, no officer, director or employee of LSR or any member of
any such person's immediate family is presently a party to any transaction with
LSR relating to LSR's business, including without limitation, any contract,
agreement or other arrangement (i)
9
<PAGE>
providing for the furnishing of services by, (ii) providing for the rental of
real or personal property from, or (iii) otherwise requiring payments to (other
than for services as officers, directors or employees of LSR) any such person or
corporation, partnership, trust or other entity in which any such person has a
substantial interest as a shareholder, officer, director, trustee or partner.
3.20 Environmental Quality. LSR has complied in all material respects with
---------------------
all federal, state, and local environmental protection laws and regulations and
have not been cited for any violation of any such law or regulation. No material
capital expenditures will be required for compliance with any applicable
federal, state, or local laws or regulations now in force relating to the
protection of the environment. There is no pending audit known to LSR or Layne
or any of their officers by any federal, state, or local governmental authority
with respect to groundwater, soil, or air monitoring; the storage, burial,
release, transportation, or disposal of hazardous substances; or the use of
underground storage tanks by LSR or relating to the Facilities. Neither LSR nor
Layne has any agreement with any third party or federal, state, or local
governmental authority relating to any such environmental matter or any
environmental cleanup.
3.21 Hazardous Conditions. There are no defective, unsafe or hazardous
--------------------
conditions pertaining to the Purchased Assets or the locations in which any such
Purchased Assets are installed or stored.
3.22 Adequacy of Purchased Assets. The Purchased Assets are in good
----------------------------
operating condition and repair (ordinary wear and tear excepted), are all of the
assets used currently in the Business or necessary for the operation of the
Business in the ordinary course and consistent with past practice, and are in
conformity in all material respects with all applicable laws, ordinances,
orders, relations and other requirements (including applicable zoning,
environmental, motor vehicle safety or standards, occupational safety and health
laws and regulations) relating thereto currently in effect, except where the
failure to conform would not have a material adverse effect on the business,
condition (financial or otherwise) or prospects of LSR.
3.23 Material Misstatements Or Omissions. No representations or
-----------------------------------
warranties by LSR or Layne in this Agreement, nor any document, exhibit,
statement, certificate or schedule furnished to COMPS pursuant hereto, or in
connection with the transactions contemplated hereby, contain or will contain
any untrue statement of a material fact, or omit or will omit to state any
material fact necessary to make the statements or facts contained therein not
misleading. LSR has disclosed all events, conditions and facts materially
affecting the business, condition (financial or otherwise) or prospects of such
LSR.
4. REPRESENTATION AND WARRANTIES OF COMPS. COMPS hereby represents and
--------------------------------------
warrants to LSR as follows:
4.1 Organization of COMPS. COMPS is a corporation duly organized, validly
---------------------
existing and in good standing under the laws of the State of Delaware, has full
10
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corporate power and authority to conduct its business as it is presently being
conducted and to own and lease its properties and assets.
4.2 Authorization. COMPS has all necessary corporate power and authority
-------------
and has taken all corporate action necessary to enter into this Agreement, to
consummate the transactions contemplated hereby and to perform its obligations
hereunder. This Agreement has been duly executed and delivered by COMPS and is
a legal, valid and binding obligation enforceable against COMPS in accordance
with its terms except as such enforceability may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or other similar laws, or by equitable
principles, relating to or limiting the rights of creditors generally, and (b)
limitations imposed by law or equitable principles upon the availability of
specific performance, injunctive relief or other equitable remedies.
4.3 No Conflict or Violation. Neither the execution and delivery of this
------------------------
Agreement nor the consummation of the transactions contemplated hereby will
result in (a) a violation of or a conflict with any provision of any of COMPS's
charter documents; (b) a breach of, or a default under, or constitute a basis
for terminating any term or provision of any contract, agreement, indebtedness
or lease to which COMPS is a party or by which its assets are bound which breach
or default would have a material adverse effect on the ability of COMPS to
consummate the transactions contemplated hereby or (c) a violation by COMPS of
any law, order or judgment.
4.4 Consent and Approvals. Except as set forth on Schedule 4.4 hereto, no
---------------------
consent, approval or authorization of, or declaration, filing or registration
with, any governmental or regulatory authority, or any other person or entity,
is required to be made or obtained by COMPS in connection with the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby.
4.5 Capitalization and Rights. The authorized and outstanding capital
-------------------------
stock of COMPS is as follows:
Class Authorized Outstanding
----- ----------- -----------
A common 22,500,000 4,773,860
B common 2,500,000 0
Preferred 5,000,000 4,270,336
The preferred stock and the class B common stock are both convertible into class
A common on a one to one basis.
4.6 No Brokers. Neither COMPS nor any affiliate of COMPS has paid nor
----------
incurred any obligation to pay, any finder's fee, brokerage commission or
similar payment of any sort whatsoever in connection with the transactions
contemplated by this Agreement.
4.7 Litigation. There is no action, order, writ, injunction, judgment,
----------
decree, claim, suit, litigation, proceeding, labor dispute, arbitral action,
investigation or
11
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similar dispute of any sort whatsoever outstanding or pending or, to the best
knowledge of COMPS, threatened or anticipated against, relating to, affecting or
which would have reasonable potential to obstruct or prevent the consummation of
the transaction contemplated by this Agreement.
5. COVENANTS OF LSR AND COMPS. LSR and COMPS each covenant with the other as
--------------------------
follows:
5.1 Maintenance of Business Prior to Closing. LSR shall continue to carry
----------------------------------------
on its business in ordinary course and in accordance with past practice to
reserve the business intact and to preserve for COMPS the goodwill of LSR's
suppliers, customers and others having business relations with it and will not
take any action inconsistent therewith or with the consummation of the Closing.
Without in any way limiting the generality of the foregoing, LSR agrees that
from the date hereof through the Closing Date, (a) it shall conduct and schedule
its cash collected on operations consistent with past practice, (b) maintain the
Purchased Assets in their current state of repair, ordinary wear and tear
excepted, (c) maintain the insurance coverages and (d) it shall not sell, assign
or transfer any of its assets or properties other than in the ordinary course of
business, consistent with past practice.
5.2 Key Employees.
-------------
5.2.1 Layne and Mark Fogarty ("Fogarty") shall agree to become
employees of COMPS operating out of the Chicago office. Layne shall be the
President of LSR-COMPS division and Regional Vice President of COMPS. Mr.
Fogarty shall be the Systems Manager of LSR-COMPS division. Both Layne and
Fogarty shall serve pursuant to the executive employment agreement of COMPS and
each shall receive incentive stock options pursuant to COMPS" Incentive Stock
Option Plan (the "Options") of the same type as those which are currently issued
to other executives of COMPS. The form of employment agreement for Layne and
Fogarty referred to above and the form of stock option agreement in respect of
the Options for Layne and Fogarty referred to above are attached hereto as
Exhibits 5.2.1A and 5.2.1B, respectively.
5.2.2 The Options shall be in respect of 75,000 shares to Layne and
15,000 shares to Fogarty and shall be exercisable at $.30 per share for a period
of 5 years. The Options shall vest at the end of the first year following the
closing and as to 15,000 shares for Layne and 3,000 shares for Fogarty and a
similar number of shares each year thereafter for the next four years.
5.2.3 All options shall vest upon
(a) the closing of any transaction in which all or substantially
all of the assets of COMPS are sold to or COMPS is merged with an entity not
owned or controlled by or under common control with COMPS; or
(b) the effective date of a registration statement filed
pursuant to the Securities Act of 1933, as amended, in respect of an
underwritten public offering of the common shares of COMPS.
12
<PAGE>
5.2.4 The parties acknowledge that the issuance of the Options and
the underlying shares is subject to the requirements of state and federal
securities laws. As a condition precedent to their issuance, Layne and Fogarty
shall agree to such restrictions and other requirements as shall be necessary in
order for COMPS to meet the requirements for exemption from registration or
other qualification under the federal securities laws and under any applicable
state securities laws.
5.3 Investigation by COMPS; Audits;
------------------------------
5.3.1 LSR shall allow COMPS at its own expense during regular
business hours to make such inspection of the Purchased Assets and to inspect
and make copies of other contracts, Books and Records or information requested
by COMPS and necessary for or reasonably related to the operation of the
Business including historical financial information concerning the business and
operations of LSR; provided, however, that any information obtained from LSR is
-------- -------
subject to the confidentially agreement entered into and dated April 28, 1995.
5.3.2 COMPS intends to enter the real estate information market in
the Chicago area in the very near future. It recognizes that despite the best
efforts of the parties to consummate the transaction contemplated by this
agreement, it may not be possible to complete the sale. This being the case and
since COMPS wishes to avoid any possible question concerning its use of the
proprietary information of LSR, COMPS does not intend to review LSR customer
list nor LSR real estate information database in connection with its due
diligence investigation nor will it review any of the proprietary techniques of
LSR unless believes that a Closing is a certainty. However, COMPS reserves the
right to make such an investigation and LSR agrees that if COMPS should make a
specific written request to do so, it will assist COMPS to undertake the
investigation in such a way that there can be no significant potential that
COMPS could realistically be placed in a position to use LSR proprietary
information in connection with its independent entry into the Chicago market.
5.4 Notification of Certain Matters. LSR shall give prompt notice to
-------------------------------
COMPS, and COMPS shall give prompt notice to LSR, of (i) the occurrence, or
failure to occur, of any event the occurrence or failure of which would be
likely to cause any representation or warranty contained in this Agreement to be
untrue or inaccurate any time from the date hereof to the Closing Date and (ii)
any failure of LSR or COMPS, as the case may be, to comply or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder. Each party shall use all reasonable efforts to remedy any failure on
its part to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder.
5.5 No Mergers, Consolidations, Sale of Stock, Etc. Except for
----------------------------------------------
negotiations between Layne and Joe Lyng for the acquisition by Layne of the
shares of LSR owned by Joe Lyng, neither LSR, Layne nor any other affiliate or
Representative of LSR will, directly or indirectly, solicit any inquiries or
proposals or enter into or continue any discussions, negotiations or agreements
relating to the sale or exchange of its capital stock or the merger of LSR with,
or any direct or indirect disposition of any amount of
13
<PAGE>
LSR's assets or business to, any person other than COMPS or provide any
assistance or any information to or otherwise cooperate with any person in
connection with any such inquiry, proposal or transaction. In the event that LSR
receives an unsolicited offer for such a transaction or obtains information that
such an offer is likely to made, LSR will provide COMPS with notice thereof as
soon as practical after receipt, including the identity of the prospective
purchaser or soliciting party.
6. CONDITIONS TO LSR'S AND LAYNE's OBLIGATIONS. The obligations of LSR and
-------------------------------------------
Layne to consummate the transactions provided for hereby are subject, in the
reasonable discretion of LSR, to the satisfaction, on or prior to the Closing
Date, of each of the following conditions:
6.1 Representations, Warranties and Covenants. All representations and
-----------------------------------------
warranties of COMPS contained in this Agreement shall be true and correct at and
as of the Closing Date and COMPS shall have performed all agreements and
covenants required to be performed by it prior to or at the Closing Date.
6.2 No Governmental Proceedings or Litigation. No action by any
-----------------------------------------
governmental authority shall have been instituted or threatened which questions
the validity or legality of the transactions contemplated hereby and which could
reasonably be expected materially to damage LSR if the transactions contemplated
hereunder are consummated.
6.3 Certificates. COMPS will furnish LSR with such certificates of its
------------
officers and others to evidence compliance with the conditions set forth in this
Section 6 as may be reasonably requested by LSR.
6.4 Delivery at the Closing. COMPS shall deliver to LSR the Asset Price
-----------------------
comprised of the cash, certified check or other immediately available funds and
the Note referred to in section ? and shall deliver to Layne and Fogarty the
employment agreements and stock option agreements referred to in section 5.2.1
6.5 Opinion of Counsel. COMPS shall have delivered to LSR an opinion of
------------------
Monroe & Dostart counsel to COMPS, dated as of the Closing Date, in form and
substance satisfactory to LSR, to the effect that: [To Come].
7. CONDITIONS TO COMPS's OBLIGATIONS. The obligations of COMPS to consummate
---------------------------------
the transactions provided for hereby are subject, in the reasonable discretion
of COMPS, to the satisfaction, on or prior to the Closing Date, of each of the
following conditions:
7.1 Representations, Warranties and Covenants. All representations and
-----------------------------------------
warranties of LSR and Layne contained in this Agreement shall be true and
correct at and as of the Closing Date and LSR shall have performed all
agreements and covenants required to be performed by it prior to or at the
Closing Date.
7.2 No Governmental Proceedings or Litigation. No action by any
-----------------------------------------
governmental authority shall have been instituted or threatened which questions
the
14
<PAGE>
validity or legality of the transactions contemplated hereby and which could
reasonably be expected materially to damage COMPS if the transactions
contemplated hereunder are consummated.
7.3 Opinion of Counsel. LSR shall have delivered to COMPS an opinion of
------------------
Burke, Warren and MacKay, counsel to LSR, dated as of the Closing Date, in form
and substance satisfactory to COMPS, to the effect that: [To Come].
7.4 Certificates. LSR will furnish COMPS with such certificates of its
------------
officers and others to evidence compliance with the conditions set forth in this
Section 7 as may be reasonably requested by COMPS.
7.5 Conveyancing Documents. LSR shall have executed and delivered each of
----------------------
the documents described in Section 2.2 so as to effect the transfer and
assignment to COMPS of all right, title and interest in and to the Purchased
Assets.
8. COVENANT NOT TO COMPETE. As an inducement for COMPS to enter into this
-----------------------
Agreement, each of LSR and Layne shall execute and deliver to COMPS a three-year
covenant not to compete in the form attached as Exhibit 8.
9. ACTION BY LSR AND COMPS AFTER THE CLOSING
------------------------------------------
9.1 Books and Records. Each party agrees that it will cooperate with and
-----------------
make available to the other party, during normal business hours, all Books and
Records, information and employees retained and remaining in existence after the
Closing Date which are necessary or useful in connection with any tax inquiry,
audit, investigation or dispute, any litigation or investigation or any other
matter requiring any such Books and Records, information or employees for any
reasonable business purpose. The party requesting any such Books and Records,
information or employees shall bear all of the out-of-pocket costs and expenses
reasonably incurred in connection with providing such Books and Records,
information or employees.
9.2 Survival of Representations. The representations and warranties of
---------------------------
COMPS, LSR and Layne contained herein shall survive the Closing Date until the
date that is 18 months following the Closing Date, without regard to any
investigation made by any of the parties hereto.
9.3 Indemnification.
---------------
9.3.1 By LSR and Layne. LSR and Layne shall, jointly and severally,
----------------
indemnify, save and hold harmless COMPS, its affiliates and its and their
respective Representatives, from and against any and all Damages, incurred in
connection with, arising out of, resulting from or incident to (i) any breach of
any covenant, representation, warranty or agreement or the inaccuracy of any
representation, made by LSR and Layne in or pursuant to this Agreement; or (ii)
any liability, obligation or commitment of any nature (absolute, accrued,
contingent or otherwise) of LSR and Layne and relating to the Business and
arising out of transactions entered into or events occurring prior to the
Closing.
15
<PAGE>
9.3.2 By COMPS. COMPS shall indemnify and save and hold harmless LSR
--------
and Layne, its affiliates and subsidiaries, and its and their respective
Representatives from and against any and all Damages incurred in connection with
or arising out of or resulting from any (i) breach of any covenant or warranty,
or the inaccuracy of any representation, made by COMPS in or pursuant to this
Agreement or (ii) any liability, obligation or commitment of any nature
(absolute, accrued, contingent or otherwise) relating to the Business and
arising out of transactions entered into or events occurring subsequent to the
Closing.
9.3.3 Assistance. The parties shall cooperate with one another in
----------
all reasonable respects, at their own cost, risk and expense, in the
investigation, prosecution, trial, and defense of any lawsuit, claim,
proceeding, arbitration or action that is subject to indemnification hereunder.
9.3.4 Defense of Claims. If any lawsuit or enforcement action is
-----------------
filed against any party entitled to the benefit of indemnity hereunder, written
notice thereof shall be given to the indemnifying party as promptly as
practicable (and in any event within fifteen (15) days after the service of the
citation or summons); that the failure of any indemnified party to give timely
notice shall not affect rights to indemnification hereunder except to the extent
that the indemnifying party demonstrates actual damage caused by such failure.
After such notice, if the indemnifying party shall acknowledge in writing to the
indemnified party that the indemnifying party shall be obligated under the terms
of its indemnity hereunder in connection with such lawsuit or action, then the
indemnifying party shall be entitled, if it so elects, to take control of the
defense and investigation of such lawsuit or action and to employ and engage
attorneys of its own choice to handle and defend the same, at the indemnifying
party's cost, risk and expense unless (i) the indemnifying party has failed to
assume the defense of such action or proceeding or (ii) the named parties to
such action or proceeding include both of the indemnifying party and the
indemnified party and the indemnified party has been advised in writing by
counsel that there may be one or more legal defenses available to such
indemnified party that are different from or additional to those available to
the indemnifying party, and to compromise or settle such claim, which compromise
or settlement shall be made only with the written consent of the indemnifying
party, such consent not to be unreasonably withheld. If the indemnifying party
fails to assume the defense of such claim within 15 days after receipt of notice
of the claim pursuant to this Section 9.3, the indemnified party against which
such claim has been asserted will (upon delivering notice to such effect to the
indemnifying party) have the right to undertake, at the indemnifying party's
cost and expense, the defense, compromise or settlement of such claim on behalf
of and for the account and risk of the indemnifying party; that such claim shall
not be compromised or settled without the written consent of the indemnifying
party, which consent shall not be unreasonably withheld. In the event the
indemnified party assumes defense of the claim, the indemnified party will keep
the indemnifying party reasonably informed of the progress of any such defense,
compromise or settlement. The indemnifying party shall be liable for any
settlement of any action effected pursuant to and in accordance with this
Section 9.3 and for any final judgment (subject to any right of appeal), and the
indemnifying party agrees to indemnify and hold
16
<PAGE>
harmless an indemnified party from and against any Damages by reason of such
settlement of judgment.
9.3.5 COMPS Right of Offset.
---------------------
(a) Anything in this Agreement to the Contrary notwithstanding,
COMPS may withhold from any amount which COMPS is obligated to indemnify LSR
and/or pursuant to any provision of this Section 9.3, an amount equal to any
Damages which it deems to be due to it from LSR and/or Layne (but may not
exercise a right of offset except as provided in subsection (b), below).
(b) COMPS shall have the right to exercise an offset against any
amount which it has with held as provided above if
(l) there is no dispute as to the amount due;
(2) LSR and Layne agree to the offset; or
(3) any controversy concerning the amount due is arbitrated in
accordance with Section 10.9 and resolved in favor of
COMPS.
9.3.6 Damages. The term "Damages" as used in this Section 9.3 shall
-------
mean all costs, losses (including, without limitation, diminution in value),
Taxes, diminutions in value, liabilities, damages, lawsuits, deficiencies,
claims and expenses (whether or not arising out of third-party claims),
including without limitation, interest, penalties, costs of mitigation, clean-up
or remedial action, lost profits and other losses resulting from any shutdown or
curtailment of operations, damages to the environment, attorneys" fees and all
amounts paid in investigation, defense or settlement of any of the foregoing.
Damages are not limited to matters asserted by third parties against LSR and
Layne or COMPS, but include Damages incurred or sustained by LSR and Layne or
COMPS in the absence of third party claims. Payments by LSR and Layne or COMPS
of amounts for which they are indemnified hereunder shall not be a condition
precedent to recovery. The parties" obligation to indemnify one another shall
not limit any other rights, including without limitation, rights of contribution
they may have with respect to each other under statute or common law.
9.4 Single Family Residence Data. After the Closing, COMPS proposes to
----------------------------
sell that portion of the Business which currently provides single family
residence data to Market Data Center, Inc. If it can be sold as a unit/system
to Market Data Center, Inc. or REIC or some other person or entity, the net
proceeds of the sale will be shared 50% with LSR.
10. MISCELLANEOUS.
-------------
10.1 Termination. This Agreement may be terminated at any time prior to
-----------
Closing:
(a) by LSR, if any condition precedent to LSR's obligations
hereunder is not satisfied and such condition is not waived by LSR at or prior
to the Closing Date;
17
<PAGE>
(b) by COMPS, if any condition precedent to COMPS's obligations
hereunder is not satisfied and such condition is not waived by COMPS at or prior
to the Closing Date;
(c) by either party, in the event the Closing has not taken
place by sixty days from the date specified in Section 2.1 as the Closing Date;
in which case, COMPS or LSR, as the case may be, may terminate this Agreement at
its option by notice to the other party. In the event of the termination of
this Agreement by either party as above provided, neither party shall have any
liability hereunder of any nature whatsoever to the other party, including any
liability for damages, unless either party is in default under its obligations
hereunder, in which event the party in default shall be liable to the other
party for such default. In the event that a condition precedent to its
obligations is not satisfied, nothing contained herein shall be deemed to
require any party to terminate this Agreement, rather than to waive such
condition precedent and proceed with the Closing.
10.2 Risk of Loss.
------------
10.2.1 Personal Property. Until the Settlement Time, all risk of
-----------------
loss or damage to the personal property included in the Purchased Assets shall
be borne by LSR, and thereafter shall be borne by COMPS. If any material
portion of such personal property is destroyed or damaged by fire or any other
cause prior to the Settlement Time, LSR shall promptly give notice to COMPS of
such damage or destruction and the amount of insurance, if any, covering said
personal property. Prior to the Settlement Time, COMPS may exclude said
property from this Agreement by providing notice as soon as possible, but not
less than 24 hours prior to the Closing Date, in which event the Asset Price
shall be reduced by the amount allocated to such damaged or destroyed property,
as mutually agreed between the parties. After the Settlement Time, any such
insurance proceeds shall belong, and to the extent necessary shall be assigned,
to COMPS without any reduction in the Asset Price.
10.2.2 Leased or Owned Real Property. If after the Settlement Time,
-----------------------------
there is any fire, other casualty loss or condemnation (a "Destruction")
affecting any of the facilities covered by the Real Property Lease, the risk of
loss of such property shall be borne by COMPS, and any insurance proceeds with
respect to such property shall belong to COMPS, without any reduction in the
Asset Price. If between the date hereto and the Settlement Time there is any
Destruction affecting any of the facilities covered by the Real Property Lease,
then:
(a) COMPS may refuse to accept any such property, and this
Agreement shall be terminated as to said property, unless LSR agrees to restore
------
or repair such destroyed or damaged property in which latter event any insurance
proceeds shall be retained by LSR and LSR shall complete said repairs and
restoration within a reasonable time not to exceed nine (9) months after the
date upon which LSR notified COMPS of its election to repair or restore said
property pursuant to this Section.
18
<PAGE>
(b) If, pursuant to this Section, this Agreement is terminated
with respect to any of the facilities covered by the Real Property Lease, the
parties hereto shall be relieved of any further obligations or liabilities under
this Agreement with respect to such property and any related leasehold
improvements, fixtures and equipment and inventory, and the Asset Price shall be
reduced by the amount allocated to such Purchased Assets.
10.3 Notices. Any notice of any sort to be given hereunder by either
-------
party to the other shall be in writing and delivered as follows:
If to LSR, addressed to:
Land Sales Resource
622 Executive Drive
Willowbrook, IL 60521
Attention: Ms. Kitty Layne, President & CEO
cc: Chris Manning, Esq.
Burke, Warren and MacKay, P.C.
22 W. Washington, 24th floor
Chicago, IL 60606
If to Layne, addressed to:
Ms. Kitty Layne
President & CEO
Land Sales Resource
622 Executive Drive
Willowbrook, IL 60521
If to COMPS, addressed to:
COMPS InfoSystems, Inc.
9888 Carroll Center Road, Suite 100
San Diego, CA 92126
Attention: Mr. Chris Crane
cc: Jerry W. Monroe, Esq.
Monroe & Dostart
9191 Towne Centre Drive, Suite 270
San Diego, CA 92122
or to such other place and with such other copies as either party may designate
as to itself by written notice to the other.
19
<PAGE>
10.4 Choice of Law. This Agreement shall be construed, interpreted and
-------------
the rights of the parties determined in accordance with the laws of the State of
California, without reference to the choice of law provisions thereof.
10.5 Entire Agreement; Amendments and Waivers. This Agreement, together
----------------------------------------
with all exhibits and schedules hereto, constitutes the complete, final and
exclusive statement of the terms of the agreement among the parties pertaining
to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions of the parties. No modification or
rescission of this Agreement shall be binding unless executed in writing by the
party to be bound thereby. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar), nor shall such waiver constitute a continuing waiver
unless otherwise expressly provided.
10.6 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.7 Expenses. Except as expressly provided herein with respect to sales
--------
taxes, each party hereto shall pay its own legal, accounting, out-of-pocket and
other expenses incident to this Agreement and to any action taken by such party
in preparation for carrying this Agreement into effect.
10.8 Invalidity. In the event that any one or more of the provisions
----------
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
10.9 Arbitration and Venue. Any controversy or claim arising out of or
---------------------
relating to this Agreement or the making, performance or interpretation thereof
shall be submitted to arbitration in San Diego, California, pursuant to the
rules and procedures of the American Arbitration Association before a panel of
three arbitrators. The ruling of the arbitrator shall be final, and judgment
thereon may be entered in any court having jurisdiction. If any question is
submitted to a court of law for resolution, then the Superior Court of the
County of San Diego, California, or the United States District Court having
jurisdiction in the County of San Diego, shall be the exclusive court of
competent jurisdiction for the resolution of such question. The costs of an
arbitration or any litigation whether the same shall arise either in connection
with or apart from the arbitration shall be borne by the party against whom he
award is granted. Each party shall be entitled to pre-hearing discovery as
provided in California Code of Civil Procedure Section 1283.05.
10.10 Public Announcements. Neither COMPS, LSR, Layne nor any of their
--------------------
respective affiliates shall issue any press release or make any public statement
regarding the transactions contemplated hereby, without the prior written
approval of the other parties hereto.
20
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10.11 Construction. No provision of this Agreement shall be construed in
------------
favor of or against any party on the ground that such party or its counsel
drafted the provision. Any remedies provided for herein are not exclusive of any
other lawful remedies which may be available to either party. This Agreement
shall at all times be construed so as to carry out the purposes stated herein.
10.12 Section and Other Headings. The section and other headings
--------------------------
contained in this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.
10.13 Schedules and Exhibits Not Attached. The Schedules and Exhibits
-----------------------------------
hereto are sometimes referenced as being "attached" to his Agreement. In fact,
such Exhibits are compiled separately in a document entitled " SCHEDULES AND
EXHIBITS TO THE ASSET PURCHASE AGREEMENT BETWEEN COMPS INFOSYSTEMS, THE LAND
SALES RESOURCE AND KITTY LAYNE." In some instances, because of the exigencies
of time, Schedules or Exhibits may not have been provided at the time of
execution of this Agreement. All Schedules and Exhibits will be provided to
COMPS not later than the midpoint in the time between the execution of this
Agreement and the Closing Date. At any time within 15 business days after any
Schedule or Exhibit is provided to COMPS, COMPS may object to its form or
content and shall have the right to terminate this Agreement without liability
unless amended to its satisfaction within 5 business days from the time of such
objection.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
COMPS InfoSystems, Inc. Land Sales Resource
By: /s/ CHRIS CRANE By: /s/ KITTY LAYNE
------------------------------ ----------------------------
Chris Crane Kitty Layne
President President & CEO
By: /s/ Kitty Layne
----------------------------
Kitty Layne
21
<PAGE>
APPENDIX I
Definitions
-----------
As used herein, the terms below shall have the following meanings. Any of
these terms, unless the context otherwise requires may be used in the singular
or plural, depending upon the reference.
"Balance Sheet" shall mean the audited balance sheets of LSR as of April
-------------
30, 1995 and May 31, 1995, together with the notes thereon and the related
report of Roche, Scholz, Roche, Walsh, LTD, LSR's certified public accountants.
"Balance Sheet Data" shall mean May 31, 1995.
------------------
"Benefit Arrangement" shall mean any employment, consulting, severance or
-------------------
other similar contract, arrangement or policy and each plan, arrangement
(written or oral), program, agreement, or commitment providing for insurance
coverage (including any self-insured arrangements), workers" compensation,
disability benefits, supplemental unemployment benefits, vacation benefits,
retirement benefits, life, health, disability or accident benefits (including,
without limitation, any "voluntary employees' beneficiary association" as
defined in Section 501(c) (9) of the Code providing for the same or other
benefits) or for deferred compensation, profit-sharing bonuses, stock options,
stock appreciation rights, stock purchases or other forms of incentive
compensation or post-retirement insurance, compensation or benefits which (A) is
not a Welfare Plan, Pension Plan or Multi-employer Plan, (B) is entered into,
maintained, contributed to or required to be contributed to, as the case may be,
by the Company or an ERISA Affiliate or under which the Company or any ERISA
Affiliate may incur any liability, and (C) covers any employee or former
employee of the Company or any ERISA Affiliate (with respect to their
relationship with such entities).
"Books and Records" shall mean (i) all records and lists pertaining to the
-----------------
Purchased Assets, (ii) all records and lists pertaining to the business,
customers, suppliers or personnel of LSR, (iii) all product, business and
marketing plans of LSR, and (iv) all books, ledgers, files, reports, plans,
drawings and operating records of every kind maintained by LSR.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
----
"Disclosure Schedule" shall mean the disclosure schedule attached hereto.
---------------------
"Employee Plans" shall mean all Benefit Arrangements, Multi-employer Plans,
--------------
Pension Plans and Welfare Plans.
"Encumbrances" shall mean any claim, lien, pledge, option, charge,
------------
easement, security interest, deed of trust, mortgage, right-of-way,
encroachment, building or use restriction, conditional sales agreement,
encumbrance or other right of a third party, whether voluntarily incurred or
arising by operation of law, and includes, without
<PAGE>
limitation, any agreement to give any of the foregoing in the future, and any
contingent sale or other title retention agreement or lease in the nature
thereof.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
-----
amended.
"ERISA Affiliate" shall mean any entity which is (or at any relevant time
---------------
was) a member of a "controlled group of corporations" with or under "common
control" with the Company as defined in Section 414(b) or (c) of the Code.
"Facilities" shall mean the Real Property and any facilities covered by any
----------
Real Property Lease.
"Financial Statements" Unaudited financial statements at April 30, 1995
--------------------
and May 31, 1995.
"Leased Property" shall mean all property leased pursuant to the Real
---------------
Property Leases.
"Multi-employer Plan" shall mean any "multi-employer plan, as defined in
-------------------
Section 4001(a) (3) of ERISA, (A) which the Company or any ERISA Affiliate
maintains, administers, contributes to or is required to contribute to, or,
after September 25, 1980, maintained, administered, contributed to or was
required to contribute to, or under which the Company or any ERISA Affiliate may
incur any liability and (B) which covers any employee or former employee of the
Company or any ERISA Affiliate (with respect to their relationship with such
entities).
"Pension Plan" shall mean any "employee pension benefit plan" as defined in
------------
section 3(2) of ERISA (other than a Multi-employer Plan) (A) which the Company
or any ERISA Affiliate maintains, administers, contributes to or is required to
contribute to, or, within the five years prior to the Closing Date, maintained,
administered, contributed to or was required to contribute to, or under which
the Company or any ERISA Affiliate may Incur any liability and (B) which covers
any employee or former employee of the Company or any ERISA Affiliate (with
respect to their relationship with such entities).
"Representative" of a party shall mean any officer, director, principal,
--------------
attorney, agent, employee or other representative of such party.
"Settlement Time" shall mean 5:00 p.m. Pacific Daylight time on the Closing
---------------
Date.
"Welfare Plan" shall mean any "employee welfare benefit Plan" as defined in
------------
Section 3(1) of ERISA, (A) which the Company or any ERISA Affiliate maintains,
administers, contributes to or is required to contribute to, or under which the
Company or any ERISA Affiliate may incur any liability and (B) which covers any
employee or former employee of the Company or any ERISA Affiliate (with respect
to their relationship with such entities).
<PAGE>
SCHEDULES AND EXHIBITS TO THE
ASSET PURCHASE AGREEMENT BETWEEN
COMPS INFOSYSTEMS, INC., THE LAND SALES RESOURCE AND KITTY LAYNE
Exhibits:
1.1.2 Real Property Leases
1.1.3 Equipment Leases
2.2.1 (1) Assignment and Assumption Agreement
2.2.1 (2) Assignment of Real Property Lease
2.2.1 (3) Assignment of Equipment Lease
8 Covenant Not To Compete
Schedules:
1.1 Purchased Assets
1.1.1 Detail of Assets Described in Paragraph 1.1.1
1.1.6 Machinery, Equipment, Furniture, Fixtures, Vehicles, Office
Equipment, Supplies, Tools, Inventory and Parts
1.2 Liabilities
1.4 Allocation of Asset Purchase Price
<PAGE>
Exhibit 1.1.2(1)
LEASE
THIS LEASE, made September 19, 1991 between Willowbrook Office an Illinois
limited partnership, sole beneficiary of American National Bank and Trust
Company of Chicago, as Trustee under Trust Agreement dated March 1, 1979 and
known as Trust No. 46058 (herein called Lessor), and THE LAND SALES RESOURCE,
INC. (herein called Lessee), whereby Lessee has leased from Lessor, and Lessor
has demised to Lessee, certain premises containing approximately 1,352 square
feet, and designated as Unit 9N (herein called Leased Premises), as outlined in
red on the attached (Exhibit A) building floor plan, in the building (herein
called Building) on Lot 1 in the Resubdivision of Lot 35 in Willowbrook
Executive Plaza, Willowbrook, Illinois situated on a parcel of ground (herein
called Site), the vacant portion of which is improved with parking areas,
driveways and landscaping.
The Lease term will be for a term of 5 years 6 months and will commence on
November 1, 1991 and terminate April 30, 1997 (herein called Lease Term).
The term rental will be $77,063.94 (herein called Term Rent) payable
monthly in advance in installments of $___*____ each (herein called Monthly
installments). "Lessee's Proportionate Share" as such term is hereinafter used
shall be 2.67%. Lessee has deposited with Lessor's beneficiary the sum of
$2,478.66 as Security Deposit. Leased Premises shall be used only for
General Office
- --------------------------------------------------------------------------------
(herein called the Specified Use). "Holdover Rental" as such term is
hereinafter used, shall be the amount of the Monthly Installment for the last
month of the Lease Term divided by fifteen. Until otherwise notified in writing
by Lessor, the Term Rental, Monthly Installments and all other sums to be paid
by Lessee to Lessor hereunder shall be made payable to the order of
Wiskes/Abaris Willowbrook Office Partnership, 650 Executive Drive, Willowbrook,
Illinois 60521.
IN WITNESS WHEREOF, the parties have executed this Lease the day and year
first above written, intending thereby to incorporate and include therein, all
terms, conditions and provisions contained In Sections 1 through 27 attached
hereto as though the said Sections had been hereinbefore fully set forth.
LESSOR: LESSEE:
Willowbrook Office Partnership THE LAND SALES RESOURCE, INC.
7701 S. Grant St.
Burr Ridge, Ill. 60521
By: /s/ DON J. WISKES By: /s/ KITTY LAYNE, President
------------------------------ ------------------------------
General Partner (Title)
11-1-91--4-30-92... 0 ATTEST:
5-1-92---10-31-94..$1,239.33/mo. /s/ [ILLEGIBLE] MILLER
11-1-94--10-31-95.. 1,295.67/mo. ---------------------------------
11-1-95--4-30-97... 1,352.00/mo. (Title)
ADDRESS OF LESSEE:
622 Executive Drive
Willowbrook, Illinois 60521
9/19/91 #1
INITIAL
- ----------
Landlord
Tenant
- ----------
<PAGE>
IN CONSIDERATION WHEREOF, THE PARTIES HERETO COVENANT AND AGREE AS FOLLOWS:
Section 1. RENTAL
1.1 Lessee agrees to pay the Term Rent to Lessor in Monthly
Installments payable one each in advance on or before the first day of every
calendar month of the Lease Term, in lawful money of the United States or by
good check or draft (subject to collection)
1.2 Lessee shall pay to Lessor, as additional rental, (a) Lessee's
Proportionate Share of the amount by which the general real estate taxes payable
during each year of the Lease Term, on the Building and Site of which Leased
Premises are a part exceed the amount of .80 cents per square foot of Building
and (b) Lessee's Proportionate Share of installments of special assessments, if
any, payable during each year of the Lease Term applicable to the Building and
Site of which the Leased Premises are a part. Lessee shall not be liable for
any special assessments for improvements completed prior to the commencement
date of the Lease Term, nor for any income or other taxes, of the Lessor.
1.3 Lessee shall pay to Lessor as additional rental for each year of
the Lease Term Lessee's Proportionate Share of the amount by which the cost of
common area maintenance (as hereinafter defined) incurred by Landlord during
such year exceeds .41 cents per square foot of Building. Common area maintenance
includes the operation, repair and replacement of parking areas, driveways,
sidewalks, landscaped areas, drainage facilities and exterior lighting on the
Site, and, without limiting the generality of the foregoing, snow and ice
removal from and sweeping of the parking areas, driveways and sidewalks.
1.3 A. Insurance. Lessee shall pay to Lessor as additional rental
for each year of the lease term Lessee's proportionate share of the amount by
which the premium cost of Lessor's extended coverage insurance, with all
endorsements, on all public liability and property damage insurance exceeds
$.0849 per square foot of building.
1.4 Lessor shall submit to Lessee annual statements showing the
computations of the amount of Lessee's liability, if any, under Sections 1.2 and
1.3 which amount Lessee shall pay to Lessor on or before thirty (30) days
immediately following delivery of such statement. Such amounts shall be
prorated as of the commencement date for the first year of the Lease Term and as
of the termination date for the last year of the lease Term.
1.5 The Term Rent and additional rental shall be paid by Lessee
promptly when due, without any deduction or setoff whatsoever. Any such amount
not paid when due shall bear interest at the rate of 18% per annum from the due
date until paid.
Section 2. SECURITY DEPOSIT
2.1 The Security Deposit may be applied by Lessor the purpose of curing
any default or defaults of Lessee under this Lease. If said sum or any part
thereof is used, applied or retained in curing any such default, Lessee shall,
upon demand, immediately deposit with Lessor an amount in cash equal to the
amount so used, applied or retained. Default by lessee in paying to Lessor any
amount required to restore the Security Deposit after any application thereof,
shall afford to Lessor the same remedies as in the default of the payment of the
rent. If Lessee has not defaulted hereunder, or if Lessor has not applied said
sum to said default, then the Security Deposit or any portion thereof not so
applied by Lessor shall be paid to Lessee within thirty (30) days after the
termination of this Lease, provided Lessee has surrendered possession of the
Leased Premises in accordance with the provisions of this Lease. In the event
of a bona-fide sale of the Site and the Building, Lessor shall have the
-2-
<PAGE>
right to transfer the Security Deposit to the purchaser to be held, under the
terms of this Lease and, in such event, Lessor shall be released from all
liability for the return of such Security Deposit to Lessee.
Section 3. UTILITY SERVICES
3.1 Lessee shall promptly pay for all public utilities rendered or
furnished, and metered to the Leased Premises during the term of this Lease.
Lessee shall not waste or permit the waste of water, or use the water for any
purpose other than those stated. Lessor periodically will bill Lessee for
Lessee's Proportionate share of all water bills received by Lessor for water
metered to the Building and Lessee shall pay such amount not later than the date
for the next Monthly Installment. Lessee may, at its own cost, install a
submeter to meter water delivered to the Leased Premises and in such event
Lessee shall be free of the restrictions regarding water usage and shall pay
Lessor for water used according to meter readings (at the rate charged by the
supplier of such water) in lieu of paying the aforesaid percentage of bills for
all water metered to the Building. All leases heretofore or hereafter executed
with respect to premises in the Building will contain identical restrictions
with respect to the use, misuse or wasting of water, except where the Lessee
installs a submeter at its cost (and such submetered water will be deducted
prior to computing Lessee's obligation for such water bills). Lessor shall not
be liable for damages, by abatement of rent or otherwise, for interruption of
failure of or delay in, furnishing any service or utility, whether the
responsibility of Lessor or of others, when the same is occasioned by causes
beyond the reasonable control of Lessor, and no such interruption, failure or
delay shall be deemed an eviction or disturbance of Lessee's use of the Leased
Premises.
Section 4. USE
4.1 Lessee may use the Leased Premises for the Specified Use. Lessee
shall not injure, overload, deface or otherwise harm Site, Building or Leased
Premises nor permit the same; nor commit any nuisance; nor permit the emitting
of any objectionable noise or odor; nor burn any trash or refuse thereon or
therein; nor manufacture, sell, display, distribute or give away any alcoholic
liquors or beverages; nor make or permit any use of Leased Premises which is
improper, offensive or contrary to any law or ordinance, or which will
invalidate or increase the cost of any Lessor's insurance (including the keeping
or storage of any article of dangerous, inflammable or explosive character) or
which would increase the danger of fire in Leased Premises or in the Building;
nor obstruct or permit the obstruction of driveways, walks, parking areas and
other common areas of Site.
4.2 Lessee shall not exhibit, inscribe, paint or affix any sign,
advertisement, notice or other lettering (hereinafter referred to as "signs") on
any part of the Site, exterior of the Building, or in the windows, without the
express prior written consent of Lessor, which consent will not be unreasonably
withheld. Lessor shall have, at any time and from time to time, the right to
establish rules and regulations setting forth uniform characteristics for all
signs on the Building and Site, and Lessor's refusal to consent to any sign not
meeting such characteristics shall not be deemed to be unreasonable. In the
event of the violation of the foregoing, Lessor may remove same without any
liability, and may charge the expense incurred by such removal to Lessee.
Subject to applicable laws, ordinances and regulations, Lessee may, however,
place a sign on the front door of Leased Premises which sign shall be installed
by Lessor at the expense of Lessee, and shall be (i) for identification purposes
only; (ii) uniform with all other such signs on Building; and (iii) of a size,
color and style acceptable to Lessor.
Section 5. CONDITION OF PREMISES
5.1 Lessee's taking possession of the Leased Premises shall be
conclusive evidence that Leased Premises were in good order and satisfactory
condition when Lessee took possession, with the exception of those items if any,
detailed in a written list executed by Lessor and Lessee at or prior to
acceptance of possession. No promise of Lessor to alter, remodel, complete or
improve Leased Premises or Building or Site, and no representation concerning
the condition of Leased Premises or Building or Site have been made by Lessor to
-3-
<PAGE>
Lessee unless same is contained herein or is contained in agreed plans and
specifications signed by both parties. At the termination of this Lease by
lapse of time or otherwise, Lessee shall return Leased Premises in good order
and condition, loss or damage by fire or other casualty, conditions which are
the responsibility of Lessor to repair pursuant to the terms of Section 6.1
hereof, and ordinary wear and tear excepted.
Section 6. MAINTENANCE AND ALTERATIONS
6.1 Maintenance. Lessor shall keep and maintain the roof and
structural members of the Building of which the Leased Premises are a part, and
the parking lot, sidewalks and landscaping on the Site in good order and repair,
except for loss by fire or other casualty covered by Section 9 of this Lease,
and shall remove snow accumulations from the parking lot and sidewalks. Lessee
shall keep and maintain the balance of the exterior and the entire interior of
the Leased Premises clean and sanitary and in good condition and repair
including, without limitation, any necessary replacements (and further
including, without limitation, necessary interior painting and window
replacement). Lessee shall fully comply with all health and police regulations
in force and shall conform with the rules and regulations of fire underwriters
or their fire protection engineers. Lessor will obtain the qualified Contractor
to inspect and maintain the HVAC equipment at Lessee's premises. Lessor will
bill Lessee monthly commencing November 1, 1991. The cost will be $35.00 per
month and will be billed and payable with your monthly rent. Lessee shall
promptly remove any debris left in the parking area or other exterior areas of
the Site by Lessee, its employees, agents or contractors.
6.2 Alterations. Lessee shall not create any openings in the roof or
exterior wails, nor shall Lessee make any alterations or additions to the Leased
Premises. Lessee shall make all additions, improvements, alterations and
repairs on the Leased Premises and on and to the appurtenances and equipment
thereof required by any governmental authority or which may be made necessary by
the act or neglect of any person, firm or corporation (public or private). Upon
completion of any work by or on behalf of Lessee, Lessee shall provide Lessor
with such documents as Lessor may require (including, without limitation, sworn
contractor's statements and supporting lien waivers) evidencing payment in full
for such work.
Section 7. INDEMNIFICATION AND RELEASE OF CLAIMS
7.1 Lessee will at all times hold Lessor, its beneficiaries and the
management of the Building harmless and indemnified against any loss, damage,
cost, expense or liability resulting to any person or property by reason of any
use which may be made of the Leased Premises or any part thereof, or by reason
of any act or thing done or omitted to be done in, upon or about Leased Premises
or any part thereof, unless such loss, damage, cost, expense or liability shall
be caused by the sole negligence of Lessor; and Lessee will hold Lessor and
Site, Building and Leased Premises harmless, indemnified and free and clear of
any and all claims, demands, penalties, liabilities, judgments, costs and
expenses, including reasonable attorneys' fees, arising in connection with any
use of Leased Premises by Lessee or its employees, agents or servants.
7.2 Only to the extent that such business interruption, loss or
damage to property or injury to or death of persons is covered by insurance,
neither Lessor nor Lessee shall be liable to the other for any business
interruption or any loss or damage to property or injury to or death of persons
occurring on Site, in Building or in Leased Premises or in any manner growing
out of or connected with the Lessee's use and occupation of Leased Premises,
Building and Site, or the condition thereof, whether or not caused by the
negligence or other fault of Lessor or Lessee, or of their respective agents,
employees, subtenants, licensees, or assignees. Nothing herein shall be
construed to impose any other or greater liability upon either Lessor or Lessee
than would have existed in the absence of this Section 7.2. This release shall
be in effect only so long as the applicable insurance policies contain a clause
to the effect that this release shall not affect the right of the insured to
recover under such policies. Such clauses shall be obtained by the parties
whenever possible. The release in favor of Lessor contained herein, is in
-4-
INITIAL
- ----------
Landlord
Tenant
- ----------
<PAGE>
addition to, and not in substitution for, or in diminution of the hold harmless
and indemnification provisions of Section 7.1 hereof.
Section 8. INSURANCE
8.1 At all times during the Lease Term Lessee shall, at its sole cost
and expense, maintain:
(a) Comprehensive General Public Liability Insurance against
claims for personal injury, death or property damage occurring in
connection with the use and occupancy of Leased Premises, naming Lessee and
Lessor, Lessor's beneficiaries and the management of Building as the named
insureds, such insurance to afford protection to the limit of not less than
Five Hundred Thousand ($500,000.00) Dollars in respect to injury or death
of a single person, and to the limit of not less than One Million
($1,000,000.00) Dollars in respect to any one accident, and to the limit of
not less than One Hundred Thousand ($100,000.00) Dollars in respect to
property damage.
(b) Steam Boiler Insurance an all steam boilers, pressure tanks
and other such apparatus, if any shall, from time to time, be installed on
Leased Premises, in such amount as Lessor may from time to time reasonably
require.
(c) At all times when any work is in process in connection with
any change or alteration being made by Lessee, Lessee shall maintain
Workmen's Compensation insurance covering all persons employed in
connection with the work and with respect to whom death or bodily injury
claims could be asserted against Lessor or its beneficiaries, as well as
Lessee or Leased Premises.
8.2 Lessee shall furnish Lessor with a duplicate certificate or
certificates of such insurance and not less than ten (10) days prior to the
expiration date of any policy, will furnish Lessor with a new policy or
certificate therefor or a renewal thereof, in substitution of the expiring
policy. Each such policy which Lessee is required to procure and maintain
hereunder shall be issued by insurers of recognized responsibility licensed to
do business in Illinois, and shall contain an agreement or endorsement that it
will not be cancelled by the insurer without at least ten (10) days' prior
written notice to Lessor.
8.3 Lessee will not do, suffer or permit any act or omission, whether
upon Leased Premises or otherwise, which might or would result in voiding or
impairing the obligation of any such policy of insurance.
Section 9. FIRE AND CASUALTY.
9.1 If Leased Premises or Building are substantially destroyed or
rendered untenantable by fire or other casualty, Lessor shall have the right to
terminate this Lease by notice in writing to Lessee mailed within thirty (30)
days of the fire or other casualty. In any case of fire or other casualty damage
to Leased Premises (except where this Lease is terminated by Lessor as
hereinbefore provided), Lessor shall repair and rebuild Leased Premises within
one hundred and fifty (150) days of the fire or other casualty, and, upon
failing to do so, Lessee shall have the right to terminate this Lease by notice
in writing to Lessor mailed within twenty (20) days thereafter. If any such fire
or other casualty renders Leased premises or any portion thereof untenantable,
the rent to be paid by Lessee hereunder shall abate by an amount bearing the
same ratio of the total amount of rent for the period of untenantability as the
untenantable portion of Leased Premises bears to the entire Leased Premises
during the period beginning with the date of such fire or other casualty and
ending with the date when Leased Premises are again rendered tenantable.
Section 10. CONDEMNATION
10.1 If the whole of Leased premises shall be taken for any public or
quasi-public use under statute or by right of eminent domain by private
purchase in lieu thereof, then this Lease shall automatically terminate as of
the date that title shall be taken. If any portion of Leased premises shall be
so taken as to render the remainder thereof unusable for the purpose for which
Leased Premises were leased, then Lessor and Lessee shall each have
-5-
<PAGE>
the right to terminate this Lease on thirty (30) days' notice to the other given
within sixty (60) days after the date of such taking. In the event neither party
shall exercise the aforesaid right to terminate, the rent payable under this
Lease shall be equitably apportioned according to the space so taken, and Lessor
shall, at its own cost and expense, restore the remaining portion of Leased
Premises to the extent necessary to render it reasonably suitable for the
purposes for which it was leased and shall make all repairs to Building to the
extent necessary to constitute Building a complete architectural unit, provided
the cost thereof shall not exceed the proceeds of Lessor's condemnation award.
Lessee shall not be entitled to receive any part of any award or awards based
upon taking of the fee or lease hold interest, which shall be the property of
Lessor, and Lessee hereby assigns to Lessor any of Lessee's rights, title or
interest therein, but Lessee may prosecute any claim against the condemning
authority in such condemnation proceedings for damages which it may have
sustained; provided, however, that no such claim shall diminish or otherwise
adversely affect Lessor's award or the award of any fee mortgagee.
Section 11. ASSIGNMENT AND SUBLETTING
11.1 Lessee shall not sublet any part of Leased Premises nor assign
this Lease, without in each and every case Lessor's prior written consent
thereto first had, which consent shall not be unreasonably withheld, provided,
however, that Lessee shall remain liable hereunder; nor will Lessee make or
permit any transfer of this Lease or any interest hereunder by operation of law.
Section 12. LESSOR'S PERFORMANCE OF LESSEE'S COVENANTS
12.1 Should Lessee at any time fail or omit to do any act or thing
provided under this Lease to be done by Lessee, Lessor may in its sole
discretion after ten (10) days' written notice to Lessee, itself do or cause to
be done such act or thing (including the payment of any claim or lien upon
Leased Premises made or filed by any laborer, supplier, materialman, principal
contractor, subcontractor, or other person, whether for work, labor or services
performed upon, or materials supplied to Leased Premises). All monies paid by
Lessor shall be and constitute so much additional rental due hereunder from
Lessee to Lessor to be due and payable upon notice given by Lessor of the nature
and amount thereof, on the first day of the calendar month next succeeding the
month during which Lessor shall have given notice, with interest upon any such
amount at the rate of ten percent (10%) per annum from the date of payment by
Lessor until repayment to Lessor by Lessee.
Section 13. RIGHTS RESERVED TO LESSOR
13.1 Lessor reserves the following rights:
(a) To have pass keys to Leased Premises and no locks shall be
changed without the prior written consent of Lessor;
(b) To enter the Leased premises for the purpose of making
inspections or repairs, alterations or improvements connected with any
portion of Leased premises during reasonable hours, and at any time in the
event of an emergency;
(c) To show Leased premises to prospective lessees or brokers
during the last six months of the Term of this Lease (and if vacated during
such period, to prepare Leased Premises for reoccupancy) and to prospective
purchasers at all reasonable times, provided prior notice is given to
Lessee in each case;
(d) To designate and/or approve, prior to installation, all types
of window shades, blinds, drapes, awnings, window ventilators, and other
similar equipment, and to control all internal lighting that may be visable
from the exterior of Building.
-6-
<PAGE>
Section 14. SUBORDINATION TO EXISTING AND FUTURE MORTGAGES
14.1 At the option of Lessor's mortgagee, this Lease shall be subject
and subordinate at all times to the lien of any existing mortgage or mortgages
and of mortgages which hereafter may be made a lien on Site and/or Building;
provided that so long as Lessee is not in default under this Lease, its
possession of Leased premises and its rights and privileges hereunder shall not
be interfered with by the mortgagee or any purchaser upon a foreclosure of such
mortgage. Although no instrument or act on the part of the Lessee shall be
necessary to effectuate such subordination, the Lessee shall nevertheless
execute and deliver such further instruments subordinating this Lease to the
lien of any such mortgages as may be desired by the mortgagee, provided the same
acknowledges Lessee's rights as hereinbefore specified. The Lessee hereby
appoints the Lessor its attorney-in-fact irrevocably to execute and deliver any
such instrument for the Lessee.
Section 15. RIGHTS AND REMEDIES OF LESSOR
15.1 If default shall be made in the payment of any sum required to be
paid by Lessee under this Lease, and default shall continue for five (5) days
after written notice to Lessee, or default shall be made in the performance of
any of the other covenants or conditions which Lessee is required to observe and
perform, and such default shall continue for fifteen (15) days after written
notice to Lessee, or if the interest of Lessee under this Lease shall be levied
on under execution or other legal process, or if any petition shall be filed by
or against Lessee to declare Lessee a bankrupt or to delay, reduce or modify
Lessee's debts or obligations, or if any petition shall be filed or other action
taken to reorganize or modify Lessee's capital structure if Lessee be a
corporation or other entity, or if Lessee be declared insolvent according to
law, or if any assignment of Lessee's property shall be made for the benefit of
creditors, or if a receiver or trustee is appointed for Lessee or its property,
or if Lessee shall abandon Leased premises during the term of this Lease, then
Lessor may treat the occurrence of any one or more of the foregoing events as a
breach of this Lease (provided that no such levy, execution, legal process or
petition filed against Lessee shall constitute a breach of this Lease if Lessee
shall vigorously contest the same by appropriate proceedings and shall remove or
vacate the same within thirty (30) days from the date of its creation, service
or filing) and thereupon, at its option, may without notice or demand of any
kind to Lessee or any other person, have any one or more of the following
described remedies in addition to all other rights and remedies provided at law
or in equity:
(a) Lessor may terminate this Lease and forthwith repossess Leased
Premises and be entitled to recover forthwith as damages a sum of money
equal to the balance of the Term Rent then remaining unpaid hereunder
(without commutation, in consideration of disregarding any rent adjustments
pursuant to Section 1.2 hereof) less the fair rental value of Leased
premises for said period, and any other sum of money and damages owed by
Lessee to Lessor;
(b) Lessor may terminate Lessee's right of possession and may
repossess Leased Premises by forcible entry or detainer suit or otherwise,
without demand or notice of any kind to Lessee and without terminating this
Lease, in which event Lessor may, but shall be under no obligation so to
do, relet the same for the account of Lessee for such rent and upon such
terms as shall be satisfactory to Lessor. For the purpose of such reletting
Lessor is authorized to decorate or to make any repairs, changes,
alterations or additions in or to Leased Premises that may be necessary or
convenient, and if Lessor shall fail or refuse to relet Leased Premises, or
if the same are relet and a sufficient sum shall not be realized from such
reletting after paying all of the costs and expenses of such decorations,
repairs, changes, alterations and additions and the expense of such
releting and of the collection of the rent accruing therefrom to satisfy
the rent provided for in this Lease to be paid, then Lessee shall pay to
Lessor as damages a sum equal to the amount of the rental reserved in this
Lease for such period or periods, or if the Leased premises have been relet
the Lessee shall satisfy and pay any such deficiency upon demand therefor
from time to time and Lessee agrees that Lessor may file suit to recover
any sums falling due under the terms of this Section 15.1(b) from time to
time , and that no delivery or recovery of any portion due Lessor hereunder
shall be any defense to any subsequent action brought for any amount not
theretofore reduced to judgment in favor of Lessor.
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15.2 Upon the termination of this Lease or upon the termination of
Lessee's right of possession, Lessee shall at once surrender possession of
Leased Premises to Lessor and remove all effects therefrom, and if such
possession is not immediately surrendered Lessor may forthwith re-enter Leased
Premises and repossess itself as of its former estate and remove all persons and
effects therefrom, using such force as may be necessary without being guilty of
any manner of trespass or forcible entry or detainer. Without limiting the
generality of the foregoing, Lessee agrees to remove, at the termination of this
Lease or upon the termination of Lessee's right of possession, Lessee's movable
furniture, signs, trade fixtures, machinery, equipment and other personal
property and such alterations, improvements and additions made by Lessee as may
be requested by Lessor. If Lessee shall fail or refuse to remove all such
property from Leased Premises, Lessee shall be conclusively presumed to have
abandoned the same and title thereto shall thereupon pass to Lessor without any
cost, either by setoff, credit, allowance or otherwise, and Lessor may, at its
option, accept the title to such property or at Lessee's expense may remove the
same, or any part thereof, in any manner that Lessor shall choose, and store the
same without incurring liability to Lessee or any other person.
15.3 Lessee shall pay, upon demand, all of Lessor's costs, charges, and
expenses, including the fees of counsel, agents and other retained by Lessor, at
any time incurred in enforcing Lessee's obligations hereunder (whether incurred
in litigation or otherwise) or incurred by Lessor in any litigation, negotiation
or transaction in which Lessee causes Lessor, without Lessor's fault, to become
involved or concerned.
Section 16. HOLDING OVER
16.1 Lessee shall pay to Lessor Holdover Rental for each day Lessee
shall retain possession of Leased Premises, or any part thereof, after the
termination of this Lease, whether by lapse of time or otherwise and shall also
pay all damages sustained by Lessor on account thereof; but the provisions of
this article shall not operate as a waiver by Lessor of any right of re-entry
hereinbefore provided; nor shall the receipt of said rent or any part thereof,
or any other act in apparent affirmance of tenancy, operate as a waiver of the
right to forfeit this Lease and the Lease Term hereby granted for the period
still unexpired, for a breach of any of the covenants herein.
Section 17. NOTICES
17.1 All notices to be given by one party to the other under this Lease
shall be in writing, mailed or delivered as follows: if to Lessor, at the place
where rent is payable; if to Lessee, at the address of Lessee set forth on the
first page hereof until Lessee takes possession of the Leased Premises and
thereafter at Leased Premises, provided that either party may, by notice to the
other, from time to time designate another address to which notices shall
thereafter be addressed.
Mailed notices shall be sent by United States Certified or Registered
Mail, postage prepaid. Such notices shall have been deemed to have been given by
posting in the United States Mails.
Section 18. ESTOPPEL CERTIFICATE
18.1 Lessee shall at any time and from time to time within ten (10)
days after written request from Lessor execute, acknowledge and deliver to
Lessor, in form reasonably satisfactory to Lessor and/or Lessor's mortgagee, a
written statement certifying (if true) that Lessor has accepted the Leased
Premises, that this Lease is unmodified and in full force and effect (or if
there have been modifications, that the same is in full force and effect as
modified and stating the modifications), that the Lessor is not in default
hereunder, the date to which the rental and other charges have been paid in
advance, if any, and such other accurate certifications as may reasonably be
required by Lessor or Lessor's mortgagee, and agreeing to give copies to any
mortgagee of Lessor of all notices by Lessee to Lessor. It is intended that any
such statement delivered pursuant to this subsection may be relied upon by any
prospective purchaser or mortgagee of the Leased Premises and their respective
successors and assigns.
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Section 19. COVENANT OF QUIET ENJOYMENT
19.1 Lessor further agrees that at all times when Lessee is not in
default under the terms of and during the term of this Lease, Lessee's quiet and
peaceable enjoyment of the Leased Premises shall not be disturbed or interfered
with by Lessor or by any person claiming by, through or under Lessor.
Section 20. POSSESSION
20.1 Lessor shall construct, or cause to be constructed, the Leased
Premises in accordance with the provisions of Exhibit B attached hereto,
including building standard work therein described.
20.2 Construction shall be commenced and diligently pursued in order to
have the Leased Premises substantially completed on or before the date specified
for commencement of the Lease Term, provided that if construction is delayed
because of changes, deletions or addition in construction requested by Lessee,
strikes, lockouts, casualties, acts of God, war, material or labor shortages,
governmental regulation or control or other causes beyond the control of Lessor,
the construction time period shall be extended for the amount of time Lessor is
so delayed, and Monthly Installments of rental shall abate pro rata until
substantial completion and delivery of possession.
20.3 Lessor shall notify Lessee as soon as the Leased Premises are
substantially completed. In the event that there is a dispute as to whether or
not the Leased Premises are substantially completed, the dispute shall be
resolved by the architect for the Building. Taking of possession by Lessee
shall be deemed conclusively to establish that the Leased Premises have been
completed in accordance with the said Exhibit B. If Lessor gives possession
prior to the commencement date to enable Lessee to fit the Leased Premises to
its use, such occupancy shall be subject to all the terms and conditions of this
Lease (except that Lessee shall not be required to pay rent or taxes during such
occupancy).
Section 21. ACTS SUBSEQUENT TO TERMINATION
21.1 No receipt of money by Lessor from Lessee after the termination of
this Lease, the service of any notice, the commencement of any suit or final
judgment for possession shall reinstate, continue to extend the term of this
Lease or affect any such notice, demand, suit or judgment.
Section 22. WAIVER OF DEFAULT
22.1 No waiver of default of Lessee shall be implied, and no express
waiver shall affect any default other than the default specified in such waiver
and that only for the time and to the extent therein stated. The invalidity or
unenforceability of any provision of this Lease shall not affect or impair any
other provision.
Section 23. EXAMINATION OF LEASE
23.1 Submission of this installment for examination or signature by
Lessee does not constitute a reservation of or option for lease, and it is not
effective as a lease or otherwise until execution and delivery by both Lessor
and Lessee.
Section 24. DEFAULT UNDER OTHER LEASE
24.1 If the term of any lease, other than this Lease, made by Lessee,
for the Leased Premises or any part thereof, or for any other space in the
Building shall be terminated or terminable after the making of this Lease,
because of any default by Lessee under such other lease, such fact shall empower
Lessor, at Lessor's sole option, to terminate this Lease by notice to Lessee
and/or to exercise any of the remedies set forth in Section 15.
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Section 25. REPRESENTATIVE CAPACITY
25.1 No person, partnership, corporation or other organization
executing this Lease in a representative capacity for Lessor or Lessee shall be
held individually liable hereunder in the absence of fraud provided such person,
partnership, corporation or other organization acted with due authority and the
intended principals are bound.
Section 26. MISCELLANEOUS
26.1 All rights and remedies of Lessor and Lessee under this Lease
shall be cumulative and none shall exclude any other rights and remedies allowed
by law or statute.
26.2 Each of the provisions of this Lease shall extend to and shall, as
the case may require, bind or inure to the benefit, not only of Lessor and of
Lessee, but also of their respective heirs, legal representatives, successors
and permitted assigns, provided this clause shall not permit any assignment
contrary to the provisions of Section 11 hereof.
26.3 All of the representations and obligations of Lessor and Lessee
are contained herein and no modification, waiver or amendment of this Lease, or
any of its conditions or provisions, shall be binding upon the Lessor and Lessee
unless in writing, signed by Lessor and Lessee.
26.4 The receipt by Lessor of any installment of the regular stipulated
rent hereunder or any of said additional rent, shall not be a waiver of any
other additional rent then due or of any default of Lessee hereunder.
26.5 This Lease way be executed in any number of counterparts. Each
such executed counterpart shall be deemed an original hereof and all such
executed counterparts shall together constitute but one and the same
installment, which instrument shall for all purposes be sufficiently evidenced
by such executed counterpart.
26.6 The section and paragraph headings of this Lease are for
convenience only and in no way limit or enlarge the scope or meaning of the
language contained in the body of this Lease.
27.0 Build as per plan.
Paint entire premises.
Carpet entire premises.
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INITIAL
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WILLOW LAKES OFFICE CENTER
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FLOOR PLAN
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WILLOW LAKES OFFICE CENTER
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SITE PLAN
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"EXHIBIT A"
<PAGE>
Exhibit 1.1.2(2)
LEASE
THIS LEASE, made July 20, 1993 between Willowbrook Office an Illinois
limited partnership, sole beneficiary of American National Bank and Trust
Company of Chicago, as Trustee under Trust Agreement dated March 1, 1979 and
known as Trust No. 46058 (herein called Lessor), and THE LAND SALES RESOURCE,
INC. (herein called Lessee), whereby Lessee has leased from Lessor, and Lessor
has demised to Lessee, certain premises containing approximately 364 square
feet, and designated as Unit 8NE (herein called Leased Premises), as outlined in
red on the attached (Exhibit A) building floor plan, in the building (herein
called Building) on Lot 1 in the Resubdivision of Lot 35 in Willowbrook
Executive Plaza, Willowbrook, Illinois situated on a parcel of ground (herein
called Site), the vacant portion of which is improved with parking areas,
driveways and landscaping.
The Lease term will be for a term of 3 years 9 months and will commence on
August 1, 1993 and terminate April 30, 1997 (herein called Lease Term).
The term rental will be $17,166.00 (herein called Term Rent) payable
monthly in advance in installments of $___*___ each (herein called Monthly
Installments). "Lessee's Proportionate Share" as such term is hereinafter used
shall be .0072%. Lessee has deposited with Lessor's beneficiary the sum of
___$0___ as Security Deposit. Leased Premises shall be used only for
General Office
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(herein called the Specified Use). "Holdover Rental" as such term is
hereinafter used, shall be the amount of the Monthly Installment for the last
month of the Lease Term divided by fifteen. Until otherwise notified in writing
by Lessor, the Term Rental, Monthly Installments and all other sums to be paid
by Lessee to Lessor hereunder shall be made payable to the order of Willowbrook
Office Partnership, 650 Executive Drive, Willowbrook, Illinois 60521.
IN WITNESS WHEREOF, the parties have executed this Lease the day and year
first above written, intending thereby to incorporate and include therein, all
terms, conditions and provisions contained In Sections 1 through 27 attached
hereto as though the said Sections had been hereinbefore fully set forth.
LESSOR: LESSEE:
Willowbrook Office Partnership THE LAND SALES RESOURCE, INC.
622 Executive Drive
Willowbrook, Ill. 60521
By: /s/ DON J. WISKES By: /s/ KITTY LAYNE President
----------------------------- -----------------------------
General Partner (Title)
ATTEST:
*Aug.1, `93--Oct. 31, `94..$ 364.00/mo.
Nov. 1, `94--Oct. 31, `95.. 380.00/mo. /s/ CHERYL BENTLEY
Nov. 1, `95--Apr. 30, `97.. 397.00/mo. --------------------------------
(Title)
ADDRESS OF LESSEE:
622 Executive Drive
Willowbrook, Illinois 60521
7/20/93 #2
INITIAL
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IN CONSIDERATION WHEREOF, THE PARTIES HERETO COVENANT AND AGREE AS FOLLOWS:
Section 1. RENTAL
1.1 Lessee agrees to pay the Term Rent to Lessor in Monthly
Installments payable one each in advance on or before the first day of every
calendar month of the Lease Term, in lawful money of the United States or by
good check or draft (subject to collection).
1.2 Lessee shall pay to Lessor, as additional rental, (a) Lessee's
Proportionate Share of the amount by which the general real estate taxes payable
during each year of the Lease Term on the Building and Site of which Leased
Premises are a part exceed the amount of .80 cents per square foot of Building
and (b) Lessee's Proportionate Share of installments of special assessments, if
any, payable during each year of the Lease Term applicable to the Building and
Site of which the Leased Premises are a part. Lessee shall not be liable for any
special assessments for improvements completed prior to the commencement date of
the Lease Term, nor for any income or other taxes, of the Lessor.
1.3 Lessee shall pay to Lessor as additional rental for each year of
the Lease Term Lessee's Proportionate Share of the amount by which the cost of
common area maintenance (as hereinafter defined) incurred by Landlord during
such year exceeds .41 cents per square foot of Building. Common area maintenance
includes the operation, repair and replacement of parking areas, driveways,
sidewalks, landscaped areas, drainage facilities and exterior lighting on the
Site, and, without limiting the generality of the foregoing, snow and ice
removal from and sweeping of the parking areas, driveways and sidewalks.
1.3 A. Insurance. Lessee shall pay to Lessor as additional rental for
each year of the lease term Lessee's proportionate share of the amount by which
the premium cost of Lessor's extended coverage insurance, with all endorsements,
on all public liability and property damage insurance exceeds .0849 per square
foot of building.
1.4 Lessor shall submit to Lessee annual statements showing the
computations of the amount of Lessee's liability, if any, under sections 1.2 and
1.3, which amount Lessee shall pay to Lessor on or before thirty (30) days
immediately following delivery of such statement. Such amounts shall be
prorated as of the commencement date for the first year of the Lease Term and as
of the termination date for the last year of the Lease Term.
1.5 The Term Rent and additional rental shall be paid by Lessee
promptly when due, without any deduction or setoff whatsoever. Any such amount
not paid when due shall bear interest at the rate of 18% per annum from the due
date until paid.
Section 2. SECURITY DEPOSIT
2.1 The Security Deposit may be applied by Lessor the purpose of curing
any default or defaults of Lessee under this Lease. If said sun or any part
thereof is used, applied or retained in curing any such default, Lessee shall,
upon demand, immediately deposit with Lessor an amount in cash equal to the
amount so used, applied or retained. Default by Lessee in paying to Lessor any
amount required to restore the Security Deposit after any application thereof,
shall afford to Lessor the same remedies as in the default of the payment of the
rent. If Lessee has not defaulted hereunder, or if Lessor has not applied said
sum to said default, then the Security Deposit or any portion thereof not so
applied by Lessor shall be paid to Lessee within thirty (30) days after the
termination of this Lease, provided Lessee has surrendered possession of the
Leased Premises in accordance with the provisions of this Lease. In the event
of a bona-fide sale of the Site and the Building, Lessor shall have the right to
transfer the Security Deposit to the purchaser to be held under the terms of
this Lease and, in such event, Lessor shall be released from all liability for
the return of such Security Deposit to Lessee.
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Section 3. UTILITY SERVICES
3.1 Lessee shall promptly pay for all public utilities rendered or
furnished, and metered to the Leased Premises during the term of this Lease.
Lessee shall not waste or permit the waste of water, or use the water for any
purpose other than those stated. Lessor periodically will bill Lessee for
Lessee's Proportionate Share of all water bills received by Lessor for water
metered to the Building and Lessee shall pay such amount not later than the date
for the next Monthly Installment. Lessee may, at its own cost, install a
submeter to meter water delivered to the Leased Premises and in such event
Lessee shall be free of the restrictions regarding water usage and shall pay
Lessor for water used according to meter readings (at the rate charged by the
supplier of such water) in lieu of paying the aforesaid percentage of bills for
all water metered to the Building. All leases heretofore or hereafter executed
with respect to premises in the Building will contain identical restrictions
with respect to the use, misuse or wasting of water, except where the Lessee
installs a submeter at its cost (and such submerged water will be deducted prior
to computing Lessee's obligation for such water bills). Lessor shall not be
liable for damages, by abatement of rent or otherwise, for interruption or
failure of, or delay in, furnishing any service or utility, whether the
responsibility of Lessor or of others, when the same is occasioned by causes
beyond the reasonable control of Lessor, and no such interruption, failure or
delay shall be deemed an eviction or disturbance of Lessee's use of the Leased
Premises.
Section 4. USE
4.1 Lessee may use the Leased Premises for the Specified Use. Lessee
shall not injure, overload, deface or otherwise harm Site, Building or Leased
Premises nor permit the same; nor commit any nuisance; nor permit the emitting
of any objectionable noise or odor; nor burn any trash or refuse thereon or
therein; nor manufacture, sell, display, distribute or give away any alcoholic
liquors or beverages; nor make or permit any use of Leased Premises which is
improper, offensive or contrary to any law or ordinance, or which will
invalidate or increase the cost of any Lessor's insurance (including the keeping
or storage of any article of dangerous, inflammable or explosive character) or
which would increase the danger of fire in Leased Premises or in the Building;
nor obstruct or permit the obstruction of driveways, walks, parking areas and
other common areas of Site.
4.2 Lessee shall not exhibit, inscribe, paint or affix any sign,
advertisement, notice or other lettering (hereinafter referred to as "signs") on
any part of the Site, exterior of the Building, or in the windows, without the
express prior written consent of Lessor, which consent will not be unreasonably
withheld. Lessor shall have, at any time and from time to time, the right to
establish rules and regulations setting forth uniform characteristics for all
signs on the Building and Site, and Lessor's refusal to consent to any sign not
meeting such characteristics shall not be deemed to be unreasonable. In the
event of the violation of the foregoing, Lessor may remove same without any
liability, and may charge the expense incurred by such removal to Lessee.
Subject to applicable laws, ordinances and regulations, Lessee may, however,
place a sign on the front door of Leased Premises which sign shall be installed
by Lessor at the expense of Lessee, and shall be (i) for identification purposes
only; (ii) uniform with all other such signs on Building; and (iii) of a size,
color and style acceptable to Lessor.
Section 5. CONDITION OF PREMISES
5.1 Lessee's taking possession of the Leased Premises shall be
conclusive evidence that Leased Premises were in good order and satisfactory
condition when Lessee took possession, with the exception of those items if any,
detailed in a written list executed by Lessor and Lessee at or prior to
acceptance of possession. No promise of Lessor to alter, remodel, complete or
improve Leased Premises or Building or Site, and no representation concerning
the condition of Leased Premises or Building or Site have been made by Lessor to
Lessee unless same is contained herein or is contained in agreed plans and
specifications signed by both parties. At the termination of this Lease by lapse
of time or otherwise, Lessee shall return Leased Premises in good order and
condition, loss or damage by fire or other casualty, conditions which are the
responsibility of Lessor to repair pursuant to the terms of Section 6.1 hereof,
and ordinary wear and tear excepted.
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Section 6. MAINTENANCE AND ALTERATIONS
6.1 Maintenance. Lessor shall keep and maintain the roof and
structural members of this Building of which the Leased Premises are a part, and
the parking lot, sidewalks and landscaping on the Site in good order and repair,
except for loss by fire or other casualty covered by Section 9 of this Lease,
and shall remove snow accumulations from the parking lot and sidewalks. Lessee
shall keep and maintain the balance of the exterior and the entire interior of
the Leased Premises clean and sanitary and in good condition and repair
including, without limitation, any necessary replacements (and further
including, without limitation, necessary interior painting and window
replacement). Lessee shall fully comply with all health and police regulations
in force and shall conform with the rules and regulations of fire underwriters
or their fire protection engineers. Lessor will obtain the qualified Contractor
to inspect and maintain the HVAC equipment at Lessee's premises. Lessor will
bill Lessee monthly commencing Aug. 1, 1993. The cost will be $35.00 per month
and will be billed and payable with your monthly rent. Lessee shall promptly
remove any debris left in the parking area or other exterior areas of the Site
by Lessee, its employees, agents or contractors.
6.2 Alterations. Lessee shall not create any openings in the roof or
exterior walls, nor shall Lessee make any alterations or additions to the Leased
Premises. Lessee shall make all additions, improvements, alterations and
repairs on the Leased Premises and on and to the appurtenances and equipment
thereof required by any governmental authority or which may be made necessary by
the act or neglect of any person, firm or corporation (public or private). Upon
completion of any work by or on behalf of Lessee, Lessee shall provide Lessor
with such documents as Lessor may require (including, without limitation, sworn
contractor's statements and supporting lien waivers).evidencing payment in full
for such work.
Section 7. INDEMNIFICATION AND RELEASE OF CLAIMS
7.1 Lessee will at all times hold Lessor, its beneficiaries and the
management of the Building harmless and indemnified against any loss, damage,
cost, expense or liability resulting to any person or property by reason of any
use which may be made of the Leased Premises or any part thereof , or by reason
of any act or thing done or omitted to be done in, upon or about Leased Premises
or any part thereof, unless such loss, damage, cost, expense or liability shall
be caused by the sole negligence of Lessor; and Lessee will hold Lessor and
Site, Building and Leased Premises harmless, indemnified and free and clear of
any and all claims, demands, penalties, liabilities, judgments, costs and
expenses, including reasonable attorneys' fees, arising in connection with any
use of Leased Premises by Lessee or its employees, agents or servants.
7.2 Only to the extent that such business interruption, loss or
damage to property or injury to or death of persons is covered by insurance,
neither Lessor nor Lessee shall be liable to the other for any business
interruption or any loss or damage to property or injury to or death of persons
occurring on Site, in Building or in Leased Premises or in any manner growing
out of or connected with the Lessee's use and occupation of Leased Premises,
Building and Site, or the condition thereof, whether or not caused by the
negligence or other fault of Lessor or Lessee, or of their respective agents,
employees, subtenants, licensees, or assignees. Nothing herein shall be
construed to impose any other or greater liability upon either Lessor or Lessee
than would have existed in the absence of this Section 7.2. This release shall
be in effect only so long as the applicable insurance policies contain a clause
to the effect that this release shall not affect the right of the insured to
recover under such policies. Such clauses shall be obtained by the parties
whenever possible. The release in favor of Lessor contained herein, is in
addition to, and not in substitution for, or in diminution of the hold harmless
and indemnification provisions of Section 7.1 hereof.
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Section 8. INSURANCE
8.1 At all times during the Lease Term Lessee shall, at its sole
cost and expense, maintain:
(a) Comprehensive General Public Liability Insurance against
claims for personal injury, death or property damage occurring in
connection with the use and occupancy of Leased Premises, naming Lessee and
Lessor, Lessor's beneficiaries and the management of Building as the named
insureds, such insurance to afford protection to the limit of not less than
Five Hundred Thousand ($500,000.00) Dollars in respect to injury or death
of a single person, and to the limit of not less than One Million
($1,000,000.00) Dollars in respect to any one accident, and to the limit of
not less than One Hundred Thousand ($100,000.00) Dollars in respect to
property damage.
(b) Steam Boiler Insurance on all steam boilers, pressure tanks
and other such apparatus, if any shall, from time to time, be installed an
Leased Premises, in such amount as Lessor may from time to time reasonably
require.
(c) At all times when any work is in process in connection with
any change or alteration being made by Lessee, Lessee shall maintain
Workmen's Compensation insurance covering all persons employed in
connection with the work and with respect to whom death or bodily injury
claims could be asserted against Lessor or its beneficiaries, as well as
Lessee or Leased Premises.
8.2 Lessee shall furnish Lessor with a duplicate certificate or
certificates of such insurance and not less than ten (10) days prior to the
expiration date of any policy, will furnish Lessor with a new policy or
certificate therefor or a renewal thereof, in substitution of the expiring
policy. Each such policy which Lessee is required to procure and maintain
hereunder shall be issued by insurers of recognized responsibility licensed to
do business in Illinois, and shall contain an agreement or endorsement that it
will not be cancelled by the insurer without at least ten (10) days' prior
written notice to Lessor.
8.3 Lessee will not do, suffer or permit any act or omission, whether
upon Leased Premises or otherwise, which might or would result in voiding or
impairing the obligation of any such policy of insurance.
Section 9. FIRE AND CASUALTY.
9.1 If Leased Premises or Building are substantially destroyed or
rendered untenantable by fire or other casualty, Lessor shall have the right to
terminate this Lease by notice in writing to Lessee mailed within thirty (30)
days of the fire or other casualty. In any case of fire or other casualty damage
to Leased Premises (except where this Lease is terminated by Lessor as
hereinbefore provided) , Lessor shall repair and rebuild Leased Premises within
one hundred and fifty (150) days of the fire or other casualty, and, upon
failing to do so, Lessee shall have the right to terminate this Lease by notice
in writing to Lessor mailed within twenty (20) days thereafter. If any such fire
or other casualty renders Leased premises or any portion thereof untenantable,
the rent to be paid by Lessee hereunder shall abate by an amount bearing the
same ratio of the total amount of rent for the period of untenantability as the
untenantable portion of Leased Premises bears to the entire Leased Premises
during the period beginning with the date of such fire or other casualty and
ending with the date when Leased Premises are again rendered tenantable.
Section 10. CONDEMNATION
10.1 If the whole of Leased premises shall be taken for any public or
quasi-public use under statute or by right of eminent domain or by private
purchase in lieu thereof, then this Lease shall automatically terminate as of
the date that title shall be taken. If any portion of Leased premises shall be
so taken as to render the remainder thereof unusable for the purpose for which
Leased Premises were leased, then Lessor and Lessee shall each have the right to
terminate this Lease on thirty (30) days' notice to the other given within sixty
(60) days after the date of such taking. In the event neither party shall
exercise the aforesaid right to terminate, the rent payable under this
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<PAGE>
Lease shall be equitably apportioned according to the space so taken, and Lessor
shall, at its own cost and expense, restore the remaining portion of Leased
Premises to the extent necessary to render it reasonably suitable for the
purposes for which it was leased and shall make all repairs to Building to the
extent necessary to constitute Building a complete architectural unit, provided
the cost thereof shall not exceed the proceeds of Lessor's condemnation award.
Lessee shall not be entitled to receive any part of any award or awards based
upon taking of the fee or lease hold interest, which shall be the property of
Lessor, and Lessee hereby assigns to Lessor any of Lessee's rights, title or
interest therein, but Lessee may prosecute any claim against the condemning
authority in such condemnation proceedings for damages which it may have
sustained; provided, however, that no such claim shall diminish or otherwise
adversely affect Lessor's award or the award of any fee mortgagee.
Section 11. ASSIGNMENT AND SUBLETTING
11.1 Lessee shall not sublet any part of Leased Premises nor assign
this Lease, without in each and every case Lessor's prior written consent
thereto first had, which consent shall not be unreasonably withheld, provided,
however, that Lessee shall remain liable hereunder; nor will Lessee make or
permit any transfer of this Lease or any interest hereunder by operation of law.
Section 12. LESSOR'S PERFORMANCE OF LESSEE'S COVENANTS
12.1 Should Lessee at any time fail or omit to do any act or thing
provided under this Lease to be done by Lessee, Lessor may in its sole
discretion after ten (10) days' written notice to Lessee, itself do or cause to
be done such act or thing (including the payment of any claim or lien upon
Leased Premises made or filed by any laborer, supplier, materialman, principal
contractor, subcontractor, or other person, whether for work, labor or services
performed upon, or materials supplied to Leased Premises). All monies paid by
Lessor shall be and constitute so much additional rental due hereunder from
Lessee to Lessor to be due and payable upon notice given by Lessor of the nature
and amount thereof, on the first day of the calendar month next succeeding the
month during which Lessor shall have given notice, with interest upon any such
amount at the rate of ten percent (10%) per annum from the date of payment by
Lessor until repayment to Lessor by Lessee.
Section 13. RIGHTS RESERVED TO LESSOR
13.1 Lessor reserves the following rights:
(a) To have pass keys to Leased Premises and no locks shall be
changed without the prior written consent of Lessor;
(b) To enter the Leased premises for the purpose of making
inspections or repairs, alterations or improvements connected with any
portion of Leased premises during reasonable hours, and at any time in the
event of an emergency;
(c) The show Leased premises to prospective lessees or brokers
during the last six months of the Term of this Lease (and if vacated during
such period, to prepare Leased Premises for reoccupancy) and to prospective
purchasers at all reasonable times, provided prior notice is given to
Lessee in each case;
(d) To designate and/or approve, prior to installation, all types
of window shades, blinds, drapes, awnings, window ventilators, and other
similar equipment, and to control all internal lighting that may be visible
from the exterior of Building.
Section 14. SUBORDINATION TO EXISTING AND FUTURE MORTGAGES
14.1 At the option of Lessor's mortgagee, this Lease shall be subject
and subordinate at all times to the lien of any existing mortgage or mortgages
and of mortgages which hereafter way be made a lien on Site and/or
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<PAGE>
Building; provided that so long as Lessee is not in default under this Lease,
its possession of Leased premises and its rights and privileged hereunder shall
not be interfered with by the mortgagee or any purchaser upon a foreclosure of
such mortgage. Although no instrument or act on the part of the Lessee shall be
necessary to effectuate such subordination, the Lessee shall nevertheless
execute and deliver such further instruments subordinating this Lease to the
lien of any such mortgages as may be desired by the mortgagee, provided the same
acknowledges Lessee's rights as hereinbefore specified. The Lessee hereby
appoints the Lessor its attorney-in-fact irrevocably to execute and deliver any
such instrument for the Lessee.
Section 15. RIGHTS AND REMEDIES OF LESSOR
15.1 If default shall be made in the payment of any sum required to be
paid by Lessee under this Lease, and default shall continue for five (5) days
after written notice to Lessee, or default shall be made in the performance of
any of the other covenants or conditions which Lessee is required to observe and
perform, and such default shall continue for fifteen (15) days after written
notice to Lessee, or if the interest of Lessee under this Lease shall be levied
on under execution or other legal process, or if any petition shall be filed by
or against Lessee to declare Lessee a bankrupt or to delay, reduce or modify
Lessee's debts or obligations, or if any petition shall be filed or other action
taken to reorganize or modify Lessee's capital structure if Lessee be a
corporation or other entity, or if Lessee be declared insolvent according to
law, or if any assignment of Lessee's property shall be made for the benefit of
creditors, or if a receiver or trustee is appointed for Lessee or its property,
or if Lessee shall abandon Leased premises during the term of this Lease, then
Lessor may treat the occurrence of any one or more of the foregoing events as a
breach of this Lease (provided that no such levy, execution, legal process or
petition filed against Lessee shall constitute a breach of this Lease if Lessee
shall vigorously contest the same by appropriate proceedings and shall remove or
vacate the same within thirty (30) days from the date of its creation, service
or filing.) and thereupon, at its option, may without notice or demand of any
kind to Lessee or any other person, have any one or more of the following
described remedies in addition to all other rights and properties provided at
law or in equity:
(a) Lessor may terminate this Lease and forthwith repossess Leased
Premises and be entitled to recover forthwith as damages a sum of money
equal to the balance of the Term Rent then remaining unpaid hereunder
(without commutation, in consideration of disregarding any rent adjustments
pursuant to Section 1.2 hereof) less the fair rental value of Leased
premises for said period, and any other sum of money and damages owed by
Lessee to Lessor;
(b) Lessor may terminate Lessee's right of possession and may
repossess Leased Premises by forcible entry or detainer suit or otherwise,
without demand or notice of any kind to Lessee and without terminating this
Lease, in which event Lessor may, but shall be under no obligation so to
do, relet the same for the account of Lessee for such rent and upon such
terms as still be satisfactory to Lessor. For the purpose of such
reletting Lessor is authorized to decorate or to make any repairs, changes,
alterations or additions in or to Leased Premises that may be necessary or
convenient, and if Lessor shall fail or refuse to relet Leased Premises, or
if the same are relet and a sufficient sum shall not be realized from such
reletting after paying all of the costs and expenses of such decorations,
repairs, changes, alterations and additions and the expense of such
releting and of the collection of the rent accruing therefrom to satisfy
the rent provided for in this Lease to be paid, then Lessee shall pay to
Lessor as damages a sum equal to the amount of the rental reserved in this
Lease for such period or periods, or if the Leased premises have been relet
the Lessee shall satisfy and pay any such deficiency upon demand therefor
from time to time and Lessee agrees that Lessor may file suit to recover
any sums falling due under the term of this Section 15.1(b) from time to
time, and that no delivery or recovery of any portion due Lessor hereunder
shall be any defense to any subsequent action brought for any amount not
theretofore reduced to judgment in favor of Lessor.
15.2 Upon the termination of this Lease or upon the termination of
Lessee's right of possession, Lessee shall at once surrender possession of
Leased Premises to Lessor and remove all effects therefrom, and if
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<PAGE>
such possession is not immediately surrendered Lessor may forthwith re-enter
Leased Premises and repossess itself as of its former estate and remove all
persons and effects therefrom, using such force as may be necessary without
being guilty of any manner of trespass or forcible entry or detainer. Without
limiting the generality of the foregoing, Lessee agrees to remove, at the
termination of this Lease or upon the termination of Lessee's right of
possession, Lessee's movable furniture, signs, trade fixtures, machinery,
equipment and other personal property and such alterations, improvements and
additions made by Lessee as may be requested by Lessor. If Lessee shall fail or
refuse to remove all such property from Leased Premises, Lessee shall be
conclusively presumed to have abandoned the same and title thereto shall
thereupon pass to Lessor without any cost, either by setoff, credit, allowance
or otherwise, and Lessor may, at its option, accept the title to such property
or at Lessee' s expense, may remove the same, or any part thereof, in any manner
that Lessor shall choose, and store the same without incurring liability to
Lessee or any other person.
15.3 Lessee shall pay, upon demand, all of Lessor's costs, charges, and
expenses, including the fees of counsel, agents and other retained by Lessor, at
any time incurred in enforcing Lessee's obligations hereunder (whether incurred
in litigation or otherwise) or incurred by Lessor in any litigation, negotiation
or transaction in which Lessee causes Lessor, without Lessor's fault, to become
involved or concerned.
Section 16. HOLDING OVER
16.1 Lessee shall pay to Lessor Holdover Rental for each day Lessee
shall retain possession of Leased Premises, or any part thereof, after the
termination of this Lease, whether by lapse of time or otherwise and shall also
pay all damages sustained by Lessor on account thereof; but the provisions of
this article shall not operate as a waiver by Lessor of any right of re-entry
hereinbefore provided; nor shall the receipt of said rent or any part thereof,
or any other act in apparent affirmance of tenancy, operate as a waiver of the
right to forfeit this Lease and the Lease Term hereby granted for the period
still unexpired, for a breach of any of the covenants herein.
Section 17. NOTICES
17.1 All notices to be given by one party to the other under this Lease
shall be in writing, mailed or delivered as follows: if to Lessor, at the place
where rent is payable; if to Lessee, at the address of Lessee set forth on the
first page hereof until Lessee takes possession of the Leased Premises and
thereafter at Leased Premises, provided that either party may, by notice to the
other, from time to time designate another address to which notices shall
thereafter be addressed.
Mailed notices shall be sent by United States Certified or Registered,
mail postage prepaid. Such notices shall have been deemed to have been given by
posting in the United States Mails.
Section 18. ESTOPPEL CERTIFICATE
18.1 Lessee shall at any time and from time to time within ten (10)
days after written request from Lessor execute, acknowledge and deliver to
Lessor, in form reasonably satisfactory to Lessor and/or Lessor's mortgagee, a
written statement certifying (if true) that Lessor has accepted the Leased
Premises, that this Lease is unmodified and in full force and effect (or if
there have been modifications, that the same is in full force and effect as
modified and stating the modifications,) that the Lessor is not in default
hereunder, the date to which the rental and other charges have been paid in
advance, if any, and such other accurate certifications as may reasonably be
required by Lessor or Lessor's mortgagee, and agreeing to give copies to any
mortgagee of Lessor of all notices by Lessee to Lessor. It is intended that any
such statement delivered pursuant to this subsection may be relied upon by any
prospective purchaser or mortgagee of the Leased Premises and their respective
successors and assigns.
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<PAGE>
Section 19. COVENANT OF QUIET ENJOYMENT
19.1 Lessor further agrees that at all times when Lessee is not in
default under the terms of and during the term of this Lease, Lessee's quiet and
peaceable enjoyment of the Leased Premises shall not be disturbed or interfered
with by Lessor or by any person claiming by, through or under Lessor.
Section 20. POSSESSION
20.1 Lessor shall construct, or cause to be constructed, the Leased
Premises in accordance with the provisions of Exhibit B attached hereto,
including building standard work therein described.
20.2 Construction shall be commenced and diligently pursued in order to
have the Leased Premises substantially completed on or before the date specified
for commencement of the Lease Term, provided that if construction is delayed
because of changes, deletions or addition in construction requested by Lessee,
strikes, lockouts, casualties, acts of God, war, material or labor shortages,
governmental regulation or control or other causes beyond the control of Lessor,
the construction time period shall be extended for the amount of time Lessor is
so delayed, and Monthly Installments of rental shall abate pro rata until
substantial completion and delivery of possession.
20.3 Lessor shall notify Lessee as soon as the Leased Premises are
substantially completed. In the event that there is a dispute as to whether or
not the Leased Premises are substantially completed, the dispute shall be
resolved by the architect for the Building. Taking of possession by Lessee
shall be deemed conclusively to establish that the Leased Premises have been
completed in accordance with the said Exhibit B. If Lessor gives possession
prior to the commencement date to enable Lessee to fit the Leased Premises to
its use, such occupancy shall be subject to all the terms and conditions of this
Lease (except that Lessee shall not be required to pay rent or taxes during such
occupancy).
Section 21. ACTS SUBSEQUENT TO TERMINATION
21.1 No receipt of money by Lessor from Lessee after the termination of
this Lease, the service of any notice, the commencement of any suit or final
judgment for possession shall reinstate, continue to extend the term of this
Lease or affect any such notice, demand, suit or judgment.
Section 22. WAIVER OF DEFAULT
22.1 No waiver of default of Lessee shall be implied, and no express
waiver shall affect any default other than the default specified in such waiver
and that only for the time and to the extent therein stated. The invalidity or
unenforceability of any provision of this Lease shall not affect or impair any
other provision.
Section 23. EXAMINATION OF LEASE
23.1 Submission of this instrument for examination or signature by
Lessee does not constitute a reservation of or option for lease, and it is not
effective as a lease or otherwise until execution and delivery by both Lessor
and Lessee.
Section 24. DEFAULT UNDER OTHER LEASE
24.1 If the term of any lease, other than this Lease, made by Lessee,
for the Leased Premises or any part thereof, or for any other space in the
Building shall be terminated or terminable after the making of this Lease,
because of any default by Lessee under such other lease, such fact shall empower
Lessor, at Lessor's sole option, to terminate this Lease by notice to Lessee
and/or to exercise any of the remedies set forth in Section 15.
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<PAGE>
Section 25. REPRESENTATIVE CAPACITY
25.1 No person, partnership, corporation or other organization
executing this Lease in a representative capacity for Lessor or Lessee shall be
held individually liable hereunder in the absence of fraud provided such person,
partnership, corporation or other organization acted with due authority and the
intended principals are bound.
Section 26. MISCELLANEOUS
26.1 All rights and remedies of Lessor and Lessee under this Lease
shall be cumulative and none shall exclude any other rights and remedies allowed
by law or statute.
26.2 Each of the provisions of this Lease shall extend to and shall, as
the case may require, bind or inure to the benefit, not only of Lessor and of
Lessee, but also of their respective heirs, legal representatives, successors
and permitted assigns, provided this clause shall not permit any assignment
contrary to the provisions of Section 11 hereof.
26.3 All of the representations and obligations of Lessor and Lessee
are contained herein and no modification, waiver or amendment of this Lease, or
any of its conditions or provisions, shall be binding upon the Lessor and Lessee
unless in writing, signed by Lessor and Lessee.
26.4 The receipt by Lessor of any installment of the regular stipulated
rent hereunder or any of said additional rent, shall not be a waiver of any
other additional rent then due or of any default of Lessee hereunder.
26.5 This Lease may be executed in any number of counterparts. Each
such executed counterpart shall be deemed an original hereof and all such
executed counterparts shall together constitute but one and the same instrument,
which instrument shall for all purposes be sufficiently evidenced by such
executed counterpart.
26.6 The section and paragraph headings of this Lease are for
convenience only and in no way limit or enlarge the scope or meaning of the
language contained in the body of this Lease.
27.0 Build as per plan.
Carpet.
Paint.
Install door opening between Units 8NE & 9N,
Install wall & opening in 9N.
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INITIAL
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Landlord
Tenant
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<PAGE>
WILLOW LAKE OFFICE CENTER
-------------------------
SITE PLAN
"EXHIBIT A"
<PAGE>
WILLOW LAKES OFFICE CENTER
--------------------------
FLOORPLAN
INITIAL
Landlord
Tenant
<PAGE>
Exhibit 1.1.2.(3)
LEASE
THIS LEASE, made September 16, 1994 between Willowbrook Office an Illinois
limited partnership, sole beneficiary of American National Bank and Trust
Company of Chicago, as Trustee under Trust Agreement dated March 1, 1979 and
known as Trust No. 46058 (herein called Lessor), and THE LAND SALES
------------------------
RESOURCE, INC.
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(herein called Lessee), whereby Lessee has leased from Lessor, and Lessor has
demised to Lessee, certain premises containing approximately 1,089 square feet,
and designated as Unit 20E (herein called Leased Premises), as outlined in red
on the attached (Exhibit A) building floor plan, in the building (herein called
Building) on Lot 1 in the Resubdivision of Lot 35 in Willowbrook Executive
Plaza, Willowbrook, Illinois situated on a parcel of ground (herein called
Site), the vacant portion of which is improved with parking areas, driveways and
landscaping.
The Lease term will be for a term of Two Years Seven Months and will
commence on October 1, 1994 and terminate April 30, 1997 (herein called Lease
Term).
The term rental will be $36,164.86 (herein called Term Rent) payable
monthly in advance in installments of $ * each (herein called Monthly
------
Installments). "Lessee's Proportionate Share" as such term is hereinafter used
shall be 2.15%. Lessee has deposited with Lessor's beneficiary the sum of
$1,137.10 as Security Deposit. Leased Premises shall be used only for
General Office (herein called the Specified Use). "Holdover Rental" as such
- ---------------
term is hereinafter used, shall be the amount of the Monthly Installment for the
last month of the Lease Term divided by fifteen. Until otherwise notified in
writing by Lessor, the Term Rental, Monthly Installments and all other sums to
be paid by Lessee to Lessor hereunder shall be made payable to the order of'
Willowbrook Ofc. Partnership, 650 Executive Drive, Willowbrook, Illinois 60521.
IN WITNESS WHEREOF, the parties have executed this Lease the day and year
first above written, intending thereby to incorporate and include therein, all
terms, conditions and provisions contained in Sections 1 through 27 attached
hereto as though the said Sections had been hereinbefore fully set forth.
<TABLE>
<S> <C>
LESSOR: LESSEE:
Willowbrook Office Partnership THE LAND SALES RESOURCE, INC.
622 Executive Drive
Willowbrook, Ill. 60521
By: /s/ DON J. WISKES By: /s/ KITTY M. LAYNE President
-------------------------- -----------------------------------
General Partner (Title)
ATTEST:
*10-1-94--10-31-95....$1,137.10/mo.
11-1-95--4-30-97......$1,187.92/mo. /s/ CHERYL A. BENTLEY
-------------------------------------
(Title)
ADDRESS OF LESSEE:
7660 Plaza Court
Willowbrook, Illinois 60521
9/16/94 #3
</TABLE>
INITIAL
Landlord
Tenant
<PAGE>
IN CONSIDERATION WHEREOF, THE PARTIES HERETO COVENANT AND AGREE AS FOLLOWS:
Section 1. RENTAL
1.1 Lessee agrees to pay the Term Rent to Lessor in Monthly
Installments payable one each in advance on or before the first day of every
calendar month of the Lease Term, in lawful money of the United States or by
good check or draft (subject to collection).
1.2 Lessee shall pay to Lessor, as additional rental, (a) Lessee's
Proportionate Share of the amount by which the general real estate taxes payable
during each year of the Lease Term on the Building and Site of which Leased
Premises are a part exceed the amount of .80 cents per square foot of Building
and (b) Lessee's Proportionate Share of installments of special assessments, if
any, payable during each year of the Lease Term applicable to the Building and
Site of which the Leased Premises are a part. Lessee shall not be liable for any
special assessments for improvements completed prior to the commencement date of
the Lease Term, nor for any income or other taxes, of the Lessor.
1.3 Lessee shall pay to Lessor as additional rental for each year of
the Lease Term Lessee's Proportionate Share of the amount by which the cost of
common area maintenance (as hereinafter defined) incurred by Landlord during
such year exceeds .41 cents per square foot of Building. Common area maintenance
includes the operation, repair and replacement of parking areas, driveways,
sidewalks, landscaped areas, drainage facilities and exterior lighting on the
Site, and, without limiting the generality of the foregoing, snow and ice
removal from and sweeping of the parking areas, driveways and sidewalks.
1.3A. Insurance. Lessee shall pay to Lessor as additional rental for
each year of the lease term Lessee's proportionate share of the amount by which
the premium cost of Lessor's extended coverage insurance, with all endorsements,
on all public liability and property damage insurance exceeds .0849 per square
foot of building.
1.4 lessor shall submit to Lessee annual statements showing the
computations of the amount of Lessee's liability, if any, under Sections 1.2 and
1.3, which amount Lessee shall pay to Lessor on or before thirty (30) days
immediately following delivery of such statement. Such amounts shall be
prorated as of the commencement date for the first year of the Lease Term and as
of the termination date for the last year of the Lease Tenn.
1.5 The Term Rent and additional rental shall be paid by Lessee
promptly when due, without any deduction or setoff whatsoever. Any such amount
not paid when due shall bear interest at the rate of 18% per annum from the due
date until paid.
Section 2. SECURITY DEPOSIT
2.1 The Security Deposit may be applied by Lessor the purpose of
curing any default or defaults of Lessee under this Lease. If said sum or any
part thereof is used, applied or retained in curing any such default, Lessee
shall, upon demand, immediately deposit with Lessor an amount in cash equal to
the amount so used, applied or retained. Default by lessee in paying to Lessor
any amount required to restore the Security Deposit after any application
thereof, shall afford to Lessor the same remedies as in the default of the
payment of the rent. If Lessee has not defaulted here under, or if Lessor has
not applied said sum to said default, then the Security Deposit or any portion
thereof not so applied by Lessor shall be paid to Lessee within thirty (30) days
after the termination of this Lease, provided Lessee has surrendered possession
of the Leased Premises in accordance with the provisions of this Lease. In the
event of a bona-fide sale of the Site and the Building, Lessor shall have the
right to transfer the Security Deposit to the purchaser to be held under the
term of this Lease and, in such event, Lessor shall be released from all
liability for the return of such Security Deposit to Lessee.
Section 3. UTILITY SERVICES
3.1 Lessee shall promptly pay for all public utilities rendered or
furnished, and metered to the Leased Premises during the term of this Lease.
Lessee shall not waste or permit the waste of water, or use the water for any
purpose other than those stated. Lessor periodically will bill Lessee for
Lessee's Proportionate Share of all
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<PAGE>
water bills received by Lessor for water metered to the Building and Lessee
shall pay such amount not later than the date for the next Monthly Installment.
Lessee may, at its own cost, install a submeter to meter water delivered to the
Leased Premises and in such event Lessee shall be free of the restrictions
regarding water usage and shall pay Lessor for water used according to meter
readings (at the rate charged by the supplier of such water) in lieu of paying
the aforesaid percentage of bills for all water metered to the Building. All
leases heretofore or hereafter executed with respect to premises in the Building
will contain identical restrictions with respect to the use, misuse or wasting
of water, except where the Lessee installs a submeter at its cost (and such
submetered water will be deducted prior to computing Lessee's obligation for
such water bills). Lessor shall not be liable for damages, by abatement of rent
or otherwise, for interruption or failure of, or delay in, furnishing any
service or utility, whether the responsibility of Lessor or of others, when the
same is occasioned by causes beyond the reasonable control of Lessor, and no
such interruption, failure or delay shall be deemed an eviction or disturbance
of Lessee's use of the Leased Premises.
Section 4. USE
4.1 Lessee may use the Leased Premises for the Specified Use. Lessee
shall not injure, overload, deface or otherwise harm Site, Building or Leased
Premises nor permit the same; nor commit any nuisance; nor permit the emitting
of any objectionable noise or odor; nor burn any trash or refuse thereon or
therein; nor manufacture, sell, display, distribute or give away any alcoholic
liquors or beverages; nor make or permit any use of Leased Premises which is
improper, offensive or contrary to any law or ordinance, or which will
invalidate or increase the cost of any Lessor's insurance (including the keeping
or storage of any article of dangerous, inflammable or explosive character) or
which would increase the danger of fire in Leased Premises or in the Building;
nor obstruct or permit the obstruction of driveways, walks, parking areas and
other common areas of Site.
4.2 Lessee shall not exhibit, inscribe, paint or affix any sign,
advertisement, notice or other lettering (hereinafter referred to as "signs") on
any part of the Site, exterior of the Building, or in the windows, without the
express prior written consent of Lessor, which consent will not be unreasonably
withheld. Lessor shall have, at any time and from time to time, the right to
establish rules and regulations setting forth uniform characteristics for all
signs on the Building and Site, and Lessor's refusal to consent to any sign not
meeting such characteristics shall not be deemed to be unreasonable. In the
event of the violation of the foregoing, Lessor may remove same without any
liability, and may charge the expense incurred by such removal to Lessee.
Subject to applicable laws, ordinances and regulations, Lessee may, however,
place a sign on the front door of Leased Premises which sign shall be installed
by Lessor at the expense of Lessee, and shall be (i) for identification purposes
only; (ii) uniform with all other such signs on Building; and (iii) of a size,
color and style acceptable to Lessor.
Section 5. CONDITION OF PREMISES
5.1 Lessee's taking possession of the Leased Premises shall be
conclusive evidence that Leased Premises were in good order and satisfactory
condition when Lessee took possession, with the exception of those items if any,
detailed in a written list executed by Lessor and Lessee at or prior to
acceptance of possession. No promise of Lessor to alter, remodel, complete or
improve Leased Premises or Building or Site, and no representation concerning
the condition of Leased Premises or Building or Site have been made by Lessor to
Lessee unless same is contained herein or is contained in agreed plans and
specifications signed by both parties. At the termination of this Lease by lapse
of time or otherwise, Lessee shall return Leased Premises in good order and
condition, loss or damage by fire or other casualty, conditions which are the
responsibility of Lessor to repair pursuant to the term of Section 6.1 hereof,
and ordinary wear and tear excepted.
Section 6. MAINTENANCE AND ALTERATIONS
6.1 Maintenance. Lessor shall keep and maintain the roof and
structural members of the Building of which the Leased Premises are a part, and
the parking lot, sidewalks and landscaping on the Site in good order and repair,
except for loss by fire or other casualty covered by Section 9 of this Lease,
and shall remove snow accumulations from the parking lot and sidewalks. Lessee
shall keep and maintain the balance of the exterior and the entire interior of
the Leased Premises clean and sanitary and in good condition and repair
including, without
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<PAGE>
limitation, any necessary replacements (and further including, without
limitation, necessary interior painting and window replacement). Lessee shall
fully comply with all health and police regulations in force and shall conform
with the rules and regulations of fire underwriters or their fire protection
engineers. Lessor will obtain the qualified Contractor to inspect and maintain
the HVAC equipment at Lessee's premises. Lessor will bill Lessee monthly
commencing Oct. 1, 1994. The cost will be $35.00 per month and will be billed
and payable with your monthly rent. Lessee shall promptly remove any debris left
in the working area or other exterior areas of the Site by Lessee, its
employees, agents or contractors.
6.2 Alterations. Lessee shall not create any openings in the roof or
exterior walls, nor shall Lessee make any alterations or additions to the Leased
Premises. Lessee shall make all additions, improvements, alterations and
repairs on the Leased Premises and on and to the appurtenances and equipment
thereof if required by any governmental authority or which may be made necessary
by the act or neglect of any person, firm or corporation (public or private).
Upon completion of any work by or on behalf of Lessee, Lessee shall provide
Lessor with such documents as Lessor may require (including, without limitation,
sworn contractor's statements and supporting lien waivers) evidencing payment in
full for such work.
Section 7. INDEMNIFICATION AND RELEASE OF CLAIMS
7.1 Lessee will at all times hold Lessor, its beneficiaries and the
management of the Building harmless and indemnified against any loss, damage,
cost, expense or liability resulting to any person or property by reason of any
use which may be made of the Leased Premises or any part thereof, or by reason
of any act or thing done or omitted to be done in, upon or about Leased Premises
or any part thereof, unless such loss, damage, cost, expense or liability shall
be caused by the sole negligence of Lessor; and Lessee will hold Lessor and
Site, Building and Leased Premises harmless, indemnified and free and clear of
any and all claims, demands, penalties, liabilities, judgments, costs and
expenses, including reasonable attorneys' fees, arising in connection with any
use of Leased Premises by Lessee or its employees, agents or servants.
7.2 Only to the extent that such business interruption, loss or damage
to property or injury to or death of persons is covered by insurance, neither
Lessor nor Lessee shall be liable to the other for any business interruption or
any loss or damage to property or injury to or death of persons occurring on
Site, in Building or in Leased Premises or in any manner growing out of or
connected with the Lessee's use and occupation of Leased Premises, Building and
Site, or the condition thereof, whether or not caused by the negligence or other
fault of Lessor or Lessee, or of their respective agents, employees, subtenants,
licensees, or assignees. Nothing herein shall be construed to impose any other
or greater liability upon either Lessor or Lessee than would have existed in the
absence of this Section 7.2. This release shall be in effect only so long as the
applicable insurance policies contain a clause to the effect that this release
shall not affect the right of the insured to recover under such policies. Such
clauses shall be obtained by the parties whenever possible. The release in favor
of Lessor contained herein, is in addition to, and not in substitution for, or
in diminution of the hold harmless and indemnification provisions of Section 7.I
thereof.
Section 8. INSURANCE
8.1 At all times during the Lease Term Lessee shall, at its sole cost
and expense, maintain:
(a) Comprehensive General Public Liability Insurance against
claims for personal injury, death or property damage occurring in
connection with the use and occupancy of Leased Premises, naming Lessee
and Lessor, Lessor's beneficiaries and the management of Building as the
named insureds, such insurance to afford protection to the limit of not
less than Five Hundred Thousand ($500,000.00)
INITIAL
Landlord
Tenant
-4-
<PAGE>
Dollars in respect to injury or death of a single person, and to the
limit of not less than One Million ($1,000,000.00) Dollars in respect to
any one accident, and to the limit of not less than One Hundred Thousand
($100,000.00) Dollars in respect to property damage.
(b) Steam Boiler Insurance an all steam boilers, pressure tanks
and other such apparatus, if any shall, from time to time, be installed
on Leased Premises, in such amount as Lessor may from time to time
reasonably require.
(c) At all times when any work is in process in connection with
any change or alteration being made by Lessee, Lessee shall maintain
Workmen's Compensation insurance covering all persons employed in
connection with the work and with respect to whom death or bodily injury
claims could be asserted against Lessor or its beneficiaries, as well as
Lessee or Leased Premises.
8.2 Lessee shall furnish Lessor with a duplicate certificate or
certificates of such insurance and not less than ten (10) days prior to the
expiration date of any policy, will furnish Lessor with a new policy or
certificate therefor or a renewal thereof, in substitution of the expiring
policy. Each such policy which Lessee is required to procure and maintain
hereunder shall be issued by insurers of recognized responsibility licensed to
do business in Illinois, and shall contain an agreement or endorsement that it
will not be cancelled by the insurer without at least ten (10) days' prior
written notice to Lessor.
8.3 Lessee will not do, suffer or permit any act or omission, whether
on Leased Premises or otherwise, which might or would result in voiding or
impairing the obligation of any such policy of insurance.
Section 9. FIRE AND CASUALTY.
9.1 If Leased Premises or Building are substantially destroyed or
rendered untenantable by fire or other casualty, Lessor shall have the right to
terminate this Lease by notice in writing to Lessee mailed within thirty (30)
days of the fire or other casualty. In any case of fire or other casualty damage
to Leased Premises (except where this Lease is terminated by Lessor as
hereinbefore provided), Lessor shall repair and rebuild Leased Premises within
one hundred and fifty (150) days of the fire or other casualty, and, upon
failing to do so, Lessee shall have the right to terminate this Lease by notice
in writing to Lessor failed within twenty (20) days thereafter. If any such fire
or other casualty renders Leased premises or any portion thereof untenantable,
the rent to be paid by Lessee hereunder shall abate by an amount bearing the
same ratio of the total amount of rent for the period of untenantability as the
untenantable portion of Leased Premises bears to the entire Leased Premises
during the period beginning with the date of such fire or other casualty and
ending with the date when Leased Premises are again rendered tenantable.
Section 10. CONDEMNATION
10.1 If the whole of Leased premises shall be taken for any public or
quasi-public use under statute or by right of eminent domain or by private
purchase in lieu thereof, then this Lease shall automatically terminate as of
the date that title shall be taken. If any portion of Leased premises shall be
so taken as to render the remainder thereof unusable for the purpose for which
Leased Premises were leased, then Lessor and Lessee shall each have the right to
terminate this Lease on thirty (30) days' notice to the other given within sixty
(60) days after the date of such taking. In the event neither party shall
exercise the aforesaid right to terminate, the rent payable under this Lease
shall be equitably apportioned according to the space so taken, and Lessor
shall, at its own cost and expense, restore the remaining portion of Leased
Premises to the extent necessary to render it reasonably suitable for the
purposes for which it was leased and shall make all repairs to Building to the
extent necessary to constitute Building a complete architectural unit, provided
the cost thereof shall not exceed the proceeds of Lessor's condemnation award.
Lessee shall not be entitled to receive any part of any award or awards based
upon taking of the fee or lease hold interest, which shall be the property of
Lessor, and Lessee hereby assigns to Lessor any of Lessee's rights, title or
interest therein, but Lessee may prosecute any claim against the condemning
authority in such condemnation proceedings for damages which it may have
sustained; provided, however, that no such claim shall diminish or otherwise
adversely affect Lessor's award or the award of any fee mortgagee.
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<PAGE>
Section 11. ASSIGNMENT AND SUBLETTING
11.1 Lessee shall not sublet any part of Leased Premises nor assign
this Lease, without in each and every case Lessor's prior written consent
thereto first had, which consent shall not be unreasonably withheld, provided,
however, that Lessee shall remain liable hereunder; nor will Lessee make or
permit any transfer of this Lease or any interest hereunder by operation of law.
Section 12. LESSOR'S PERFORMANCE OF LESSEE'S COVENANTS
12.1 Should Lessee at any time fail or omit to do any act or thing
provided under this Lease to be done by Lessee, Lessor may in its sole
discretion after ten (10) days' written notice to Lessee, itself do or cause to
be done such act or thing including the payment of any claim or lien upon Leased
Premises made or filed by any laborer, supplier, materialman, principal
contractor, subcontractor, or other person, whether for work, labor or services
performed upon, or materials supplied to Leased Premises). All monies paid by
Lessor shall be and constitute so much additional rental due hereunder from
Lessee to Lessor to be due and payable upon notice given by Lessor of the nature
and amount thereof, on the first day of the calendar month next succeeding the
month during which Lessor shall have given notice, with interest upon any such
amount at the rate of ten percent (10%) per annum from the date of payment by
Lessor until repayment to Lessor by Lessee.
Section 13. RIGHTS RESERVED TO LESSOR
13.1 Lessor reserves the following rights:
(a) To have pass keys to Leased Premises and no locks shall be
changed without the prior written consent of Lessor;
(b) To enter the Leased premises for the purpose of making
inspections or repairs, alterations or improvements connected with any
portion or Leased premises during reasonable hours, and at any time in
the event of an emergency;
(c) To show Leased premises to prospective lessees or brokers
during the last six months of the Term of this Lease (and if vacated
during such period, to prepare Leased Premises for reoccupancy) and to
prospective purchasers at all reasonable times, provided prior notice is
given to Lessee in each case;
(d) To designate and/or approve, prior to installation, all types
of window shades, blinds, drapes, awnings, window ventilators, and other
similar equipment, and to control all internal lighting that may be
visible from the exterior of Building.
Section 14. SUBORDINATION TO EXISTING AND FUTURE MORTGAGES
14.1 At the option of Lessor's mortgagee, this Lease shall be subject
and subordinate at all times to the lien of any existing mortgage or mortgages
and of mortgages which hereafter may be made a lien on Site and/or Building;
provided that so long as Lessee is not in default under this Lease, its
possession of Leased premises and its rights and privileges hereunder shall not
be interfered with by the mortgagee or any purchaser upon a foreclosure of such
mortgage. Although no instrument or act on the part of the Lessee shall be
necessary to effectuate such subordination, the Lessee shall nevertheless
execute and deliver such further instruments subordinating this Lease to the
lien of any such mortgages as may be desired by the mortgagee, provided the same
acknowledges Lessee's rights as hereinbefore specified. The Lessee hereby
appoints the Lessor its attorney-in-fact irrevocably to execute and deliver any
such instrument for the Lessee.
Section 15. RIGHTS AND REMEDIES OF LESSOR
15.1 If default shall be made in the payment of any sum required to be
paid by Lessee under this Lease, and default shall continue for five (5) days
after written notice to Lessee, or default shall be made in the
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<PAGE>
performance of any of the other covenants or conditions which Lessee is required
to observe and perform, and such default shall continue for fifteen (15) days
after written notice to Lessee, or if the interest of Lessee under this Lease
shall be levied on under execution or other legal process, or if any petition
shall be filed by or against Lessee to declare Lessee a bankrupt or to delay,
reduce or modify Lessee's debts or obligations, or if any petition shall be
filed or other action taken to reorganize or modify Lessee's capital structure
if Lessee be a corporation or other entity, or if Lessee be declared insolvent
according to law, or if any assignment of Lessee's property shall be made for
the benefit of creditors, or if a receiver or trustee is appointed for Lessee or
its property, or if Lessee shall abandon Leased premises during the term of this
Lease, then Lessor may treat the occurrence of any one or more of the foregoing
events as a breach of this Lease (provided that no such levy, execution, legal
process or petition filed against Lessee shall constitute a breach of this Lease
if Lessee shall vigorously contest the same by appropriate proceedings and shall
remove or vacate the same within thirty (30) days from the date of its creation,
service or filing) and thereupon, at its option, may without notice or demand of
any kind to Lessee or any other Person, have any one or more of the following
described remedies in addition to all other rights and remedies provided at law
or in equity:
(a) Lessor may terminate this Lease and forthwith repossess
Leased Premises and be entitled to recover forthwith as damages a sum of
money equal to the balance of the Term Rent then remaining unpaid
hereunder (without commutation, in consideration of disregarding any
rent adjustments pursuant to Section 1.2 hereof) less the fair rental
value of Leased premises for said period, and any other sum of money and
damages owed by Lessee to Lessor;
(b) Lessor may terminate Lessee's right of possession and may
repossess Leased Premises by forcible entry or detainer suit or
otherwise, without demand or notice of any kind to Lessee and without
terminating this Lease, in which event Lessor may, but shall be under no
obligation so to do, relet the same for the account of Lessee for such
rent and upon such terms as shall be satisfactory to Lessor. For the
purpose of such reletting Lessor is authorized to decorate or to make
any repairs, changes, alterations or additions in or to Leased Premises
that may be necessary or convenient, and if Lessor shall fail or refuse
to relet Leased Premises, or if the same are relet and a sufficient sum
shall not be realized from such reletting after paying all of the costs
and expenses of such decorations, repairs, changes, alterations and
additions and the expense of such releting and of the collection of the
rent accruing therefrom to satisfy the rent provided for in this Lease
to be paid, then Lessee shall pay to Lessor as damages a sum equal to
the amount of the rental reserved in this Lease for such period or
periods, or if the Leased premises have been relet the Lessee shall
satisfy and pay any such deficiency upon demand therefor from time to
time and Lessee agrees that Lessor may file suit to recover any sums
falling due under the terms of this Section 15.1 (b) from time to time,
and that no delivery or recovery of any portion due Lessor hereunder
shall be any defense to any subsequent action brought for any amount not
theretofore reduced to judgment in favor of Lessor.
15.2 Upon the termination of this Lease or upon the termination of
Lessee's right of possession, Lessee shall at once surrender possession of
Leased Premises to Lessor and remove all effects therefrom, and if such
possession is not immediately surrendered Lessor may forthwith re-enter Leased
Premises and repossess itself as of its former estate and remove all persons and
effects therefrom, using such force as may be necessary without being guilty of
any manner of trespass or forcible entry or detainer. Without limiting the
generality of the foregoing, Lessee agrees to remove, at the termination of this
Lease or upon the termination of Lessee's right of possession, Lessee's movable
furniture, signs, trade fixtures, machinery, equipment and other personal
property and such alterations, similar improvements and additions made by Lessee
as may be requested by Lessor. If Lessee shall fail or refuse to remove all such
property from Leased Premises, Lessee shall be conclusively presumed to have
abandoned the same and title thereto shall thereupon pass to Lessor without any
cost, either by setoff, credit, allowance or otherwise, and Lessor may, at its
option, accept the title to such property or at Lessee's expense may remove the
same, or any part thereof, in any manner that Lessor shall choose, and store the
same without incurring liability to Lessee or any other person.
15.3 Lessee shall pay, upon demand, all of Lessor's costs, charges, and
expenses, including the fees of counsel, agents and other retained by Lessor, at
any time incurred in enforcing Lessee's obligations hereunder
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<PAGE>
(whether incurred in litigation or otherwise) or incurred by Lessor in any
litigation, negotiation or transaction in which Lessee causes Lessor, without
Lessor's fault, to become involved or concerned.
Section 16. HOLDING OVER
16.1 Lessee shall pay to Lessor Holdover Rental for each day Lessee
shall retain possession of Leased Premises, or any part thereof, after the
termination of this Lease, whether by lapse of time or otherwise and shall also
pay all damages sustained by Lessor on account thereof; but the provisions of
this article shall not operate as a waiver by Lessor of any right of re-entry
hereinbefore provided; nor shall the receipt of said rent or any part thereof,
or any other act in apparent affirmance of tenancy, operate as a waiver of the
right to forfeit this Lease and the Lease Term hereby granted for the period
still unexpired, for a breach of any of the covenants herein.
Section 17. NOTICES
17.1 All notices to be given by one party to the other under this Lease
shall be in writing, mailed or delivered as follows: if to Lessor, at the place
where rent is payable; if to Lessee, at the address of Lessee set forth on the
first page hereof until Lessee takes possession of the Leased Premises and
thereafter at Leased Premises, provided that either party may, by notice to the
other, from time to time designate another address to which notices shall
thereafter be addressed.
Mailed notices shall be sent by United States Certified or Registered
Mail, postage prepaid. Such notices shall have been deemed to have been given by
posting in the United States Mails.
Section 18. ESTOPPEL CERTIFICATE
18.1 Lessee shall at any time and from time to time within ten (10)
days after written request from Lessor execute, acknowledge and deliver to
Lessor, in form reasonably satisfactory to Lessor and/or Lessor's mortgagee, a
written statement certifying (if true) that Lessor has accepted the Leased
Premises, that this Lease is unmodified and in full force and effect (or if
there have been modifications, that the same is in full force and effect as
modified and stating the modifications), that the Lessor is not in default
hereunder, the date to which the rental and other charges have been paid in
advance, or any, and such other accurate certifications as may reasonably be
required by Lessor or Lessor's mortgagee, and agreeing to give copies to any
mortgage of Lessor of all notices by Lessee to Lessor. It is intended that any
such statement delivered pursuant to this subsection may be relied upon by any
prospective purchaser or mortgage of the Leased Premises and their respective
successors and assigns.
Section 19. COVENANT OF QUIET ENJOYMENT
19.1 Lessor further agrees that at all times when Lessee is not in
default under the terms of and during the terms of this Lease, Lessee's quiet
and peaceable enjoyment of the Leased Premises shall not be disturbed or
interfered with by Lessor or by any person claiming by, through or under Lessor.
Section 20. POSSESSION
20.1 Lessor shall construct, or cause to be constructed, the Leased
Premises in accordance with the provisions of Exhibit B attached hereto,
including building standard work therein described.
20.2 Construction shall be commenced and diligently pursued in order to
have the Leased Premises substantially completed on or before the date specified
for commencement of the Lease Term, provided that if construction is delayed
because of changes, deletions or addition in construction requested by Lessee,
strikes, lockouts, casualties, acts of God, war, material or labor shortages,
governmental regulation or control or other causes beyond the control of Lessor,
the construction time period shall be extended for the amount of time Lessor is
so delayed, and Monthly Installments of rental shall abate pro rata until
substantial collection and delivery of possession.
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<PAGE>
20.3 Lessor shall notify Lessee as soon as the Leased Premises are
substantially completed. In the event that there is a dispute as to whether or
not the Leased Premises are substantially completed, the dispute shall be
resolved by the architect for the Building. Taking of possession by Lessee
shall be deemed conclusively to establish that the Leased Premises have been
completed in accordance with the said Exhibit B. If Lessor gives possession
prior to the commencement date to enable Lessee to fit the Leased Premises to
its use, such occupancy shall be subject to all the terms and conditions of this
Lease (except that Lessee shall not be required to pay rent or taxes during such
occupancy).
Section 21. ACTS SUBSEQUENT TO TERMINATION
21.1 No receipt of money by Lessor from Lessee after the termination of
this Lease, the service of any notice, the commencement of any suit or final
judgment for possession shall reinstate, continue to extend the term of this
Lease or affect any such notice, demand, suit or judgment.
Section 22. WAIVER OF DEFAULT
22.1 No waiver of default of Lessee shall be implied, and no express
waiver shall affect any default other than the default specified in such waiver
and that only for the time and to the extent therein stated. The invalidity or
unenforceability of any provision of this Lease shall not affect or impair any
other provision.
Section 23. EXAMINATION OF LEASE
23.1 Submission of this instrument for examination or signature by
Lessee does not constitute a reservation of or option for lease, and it is not
effective as a lease or otherwise until execution and delivery by both Lessor
and Lessee.
Section 24. DEFAULT UNDER OTHER LEASE
24.1 If the term of any lease, other than this Lease, made by Lessee,
for the Leased Premises or any part thereof, or for any other space in the
Building and shall be terminated or terminable after the making of this Lease,
because of any default by Lessee under such other lease, such fact shall embower
Lessor, at Lessor's sole option, to terminate this Lease by notice to Lessee
and/or to exercise any of the remedies set forth in Section 15.
Section 25. REPRESENTATIVE CAPACITY
25.1 No person, partnership, corporation or other organization
executing this Lease in a representative capacity for Lessor or Lessee shall be
held individually liable hereunder in the absence of fraud provided such person,
partnership, corporation or other organization acted with due authority and the
intended principals are bound.
Section 26. MISCELLANEOUS
26.1 All rights and remedies of Lessor and Lessee under this Lease
shall be cumulative and none shall exclude any other rights and remedies allowed
by law or statute.
26.2 Each of the provisions of this Lease shall extend to and shall, as
the case may require, bind or inure to the benefit, not only of Lessor and of
Lessee, but also of their respective heirs, legal representatives, successors
and permitted assigns, provided this clause shall not permit any assignment
contrary to the provisions of Section 11 hereof.
26.3 All of the representations and obligations of Lessor and Lessee
are contained herein and no modification, waiver or amendment of this Lease, or
any of its conditions or provisions, shall be binding upon the Lessor and Lessee
unless in writing, signed by Lessor and Lessee.
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<PAGE>
26.4 The receipt by Lessor of any installment of regular stipulated
rent hereunder or any of said additional rent, shall not be a waiver of any
other additional rent then due or of any default of Lessee hereunder.
26.5 This Lease may be executed in any number of counterparts. Each
such executed counterpart shall be deemed an original hereof and all such
executed counterparts shall together constitute but one and the same instrument,
which instrument shall for all purposes be sufficiently evidenced by such
executed counterpart.
26.6 The section and paragraph headings of this Lease are for
convenience only and in no way limit or enlarge the scope or meaning of the
language contained in the body of this Lease.
27.0 Lessor will build as per plan.
Lessor will carpet entire premises.
Lessor will paint entire premises.
INITIAL
Landlord
Tenant
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<PAGE>
WILLOW LAKE OFFICE CENTER
-------------------------
SITE PLAN
EXHIBIT A
<PAGE>
WILLOW LAKES OFFICE CENTER
--------------------------
FLOOR PLAN
INITIAL
Landlord
Tenant
EXHIBIT "B"
<PAGE>
CLC Plan Agreement
Exhibit 1.1.3
===============================================================================
CAMADON(TM)
CORPORATE OFFICE: Pewaukee, WI 414/544-9200 . fax: 414/544-4488
REGIONAL OFFICE: Vernon Hills, IL . 708/362-5100 . fax 708/362-5114
REGIONAL OFFICE: Madison, WI . 608/233-3880 . 608/223-3890
<TABLE>
<CAPTION>
Agreement No._____ Date______ Customer No.____
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C>
BILL TO: SHIP TO:
- --------------------------------------------------------------------------------------------------------------------------------
Name (Full Legal Name) Name
The Land Sales Resource Same
- --------------------------------------------------------------------------------------------------------------------------------
Address Address
622 Executive Dr.
- --------------------------------------------------------------------------------------------------------------------------------
City/State City/State Zip Code
Willow Brook, IL 60521
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
INITIAL PERIOD: CHARGES AND COPIES PER COPY PERIOD:
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Term/Payment Frequency Agreed Minimum Monthly Volume X Base Copy Rate = Minimum [_] plus tax Advance
Monthly Copy Payments
Charges: [X] incl tax
60 month 29,000 .024 696.00 1392.00
- --------------------------------------------------------------------------------------------------------------------------------
Meter Reading Frequency Excess Copy Charge .0135 Please check one:
(Circle One) M Q S A ----- [_] Aggregate Minimum
[_] Per Machine Minimum
- --------------------------------------------------------------------------------------------------------------------------------
PLEASE FURNISH THE FOLLOWING INFORMATION
- --------------------------------------------------------------------------------------------------------------------------------
Make/Model Serial # Per Machine Make/Model SeriaL # Per Machine
Allowance Allowance
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FT-6655
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Sorter/Stapler
- --------------------------------------------------------------------------------------------------------------------------------
DOC Feeder
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Power Cond.
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</TABLE>
Dear User: We have written this Agreement in plain language because we want you
to fully understand its terms. Please read your copy of this Agreement carefully
and feel free to ask us any questions you may have about it. We use the words
"you" and "your" to mean the user named below. The words "we", "us" and "our"
refer to the Owner named below.
IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT (INCLUDING THOSE ON
THE REVERSE SIDE) SHOULD BE READ CAREFULLY, BECAUSE ONLY THOSE TERMS IN WRITING
ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN
AGREEMENT MAY BE LEGALLY ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT
ONLY BY ANOTHER WRITTEN AGREEMENT. YOU AGREE TO COMPLY WITH THE TERMS AND
CONDITIONS OF THIS AGREEMENT. THIS AGREEMENT IS NOT CANCELLABLE. YOU PROMISE
THAT THE EQUIPMENT WILL BE USED ONLY FOR BUSINESS PURPOSES
TERMS AND CONDITIONS
(CONTINUED ON REVERSE SIDE)
1. AGREEMENT. You agree to rent from us and we agree to rent to you the
Equipment listed above. You promise to pay not less than the Minimum Monthly
Copy Charge every month during the Initial Term. WE WILL PROVIDE THE EQUIPMENT
AND FULL SERVICE MAINTENANCE DURING NORMAL BUSINESS HOURS, INCLUDING ALL
SUPPLIES AND PARTS NECESSARY TO PRODUCE COPIES, EXCEPT PAPER WHICH YOU MUST
PURCHASE SEPARATELY. YOU AGREE THAT WE CAN INCREASE THE MINIMUM MONTHLY COPY
CHARGE ANNUALLY AFTER TWELVE MONTHS HAVE ELAPSED UNDER THIS AGREEMENT BY AN
AMOUNT NOT GREATER THAN THE PREVIOUS YEAR'S INFLATION RATE AS MEASURED BY THE
CONSUMER PRICE INDEX. You agree to pay for service outside of normal business
hours or service required by your negligence or misuse of the Equipment at our
customary rates.
- ------------------------------------------------------------------------------
YOU AGREE WITH US TO USE THE EQUIPMENT FOR THE INITIAL PERIOD IN ACCORDANCE WITH
THE TERMS AND CONDITIONS OF THIS AGREEMENT (INCLUDING THOSE ON THE REVERSE SIDE)
AND NOT TO PAY LESS THAN THE MINIMUM MONTHLY COPY CHARGE PAYMENT EACH MONTH. YOU
PROMISE THAT ALL THE INFORMATION GIVEN IN THIS AGREEMENT AND YOUR APPLICATION
WAS CORRECT AND COMPLETE WHEN THIS AGREEMENT WAS SIGNED. THIS AGREEMENT IS NOT
BINDING UPON US OR EFFECTIVE UNTIL AND UNLESS WE EXECUTE THIS AGREEMENT. THE
AGREEMENT WILL BE GOVERNED BY THE LAWS OF THE STATE OF WISCONSIN. YOU AGREE TO
THE JURISDICTION AND VENUE OF FEDERAL AND STATE COURTS IN WAUKESHA COUNTY,
WISCONSIN.
ACCEPTED BY: PROPOSED BY:
OWNER: CAMADON, INC. USER: THE LAND SALES RESOURCE
BY: /s/ ILLEGIBLE BY: /s/ ILLEGIBLE
-------------------------------- --------------------------------
TITLE: LEASE Coordinator TITLE:
------------------------------ ------------------------------
DATE: 6-20-94 DATE:
------------------------------ ------------------------------
- ------------------------------------------------------------------------------
UNCONDITIONAL PERSONAL GUARANTY: TO CAMADON, INC.
In consideration of your entering into the above Agreement in reliance upon this
guaranty, the undersigned, together and separately, unconditionally and
irrevocably guaranteed to you, your successors and assigns, the prompt payment
and performance of all obligations under the Agreement. We agree that (a) this
is a guaranty of payment and not of collection, and that you can proceed
directly against us without disposing of any security or seeking to collect from
the above named User, (b) we waive all defenses and notices, including those of
protest, presentment and demand, (c) you may extend or otherwise change the
terms of the Agreement without notice to us, and (d) we will pay all of your
costs of enforcement and collection. This guaranty survives the bankruptcy of
the above named User and binds our administrators, successors and assigns. My
obligations under this guaranty continues even if the User becomes insolvent or
bankrupt or is discharged from bankruptcy and I agree not to seek to be repaid
by the User in the event I must pay you. THIS GUARANTY WILL BE GOVERNED BY THE
SAME STATE LAW AS THE AGREEMENT. WE AGREE TO JURISDICTION AND VENUE IN THE STATE
AND FEDERAL COURTS IN THE SAME STATE AND COUNTY.
By___________________ , individually By___________________ , individually
Address_____________________________ Address_____________________________
Soc. Security #_____________________ Soc. Security #_____________________
Witness:____________________________ Witness:____________________________
================================================================================
<PAGE>
2. ORDERING EQUIPMENT. You request us to arrange delivery of the equipment to
you at your expense. If the Equipment has not been delivered, implied, and
accepted by you, within forty-five (45) days from the date that ordered the
equipment, we may terminate the Agreement and our obligations to you on ten (10)
days written notice to you. If we have issued a purchase contract or order for
the Equipment, you agree that the purchase order or contract is acceptable to
you. If you have entered into a purchase contract for the Equipment, by signing
this Agreement you have assigned it to us, effective when we pay for the
Equipment.
3. COPY CHARGES. The first monthly payment is due upon receipt of invoice.
Thereafter, monthly payments will be due on the same date each month during the
Initial Term, which will start on the date you accept the Equipment (as
confirmed by a properly executed Certificate of Acceptance received by us or as
otherwise confirmed by us to our satisfaction) and will continue until the end
of the Term, whether or not you receive an invoice, payments will be made to us
at our address below, or at another address which we designate in writing. Your
obligation to pay Minimum Monthly Copy Charges is unconditional and is not
subject to any reduction, set-off, defense, or counterclaim for any reason
whatsoever. If we accepted an advance payment form you, it will be held by us
to secure your faithful performance of this Agreement, and it will be returned
or applied as stated in Paragraph 12. You agree that we may at our option
charge and collect a one-time reasonable administrative fee for credit
investigation and documentation expenses.
4. NO WARRANTIES. The Equipment is being supplied to you "AS IS". YOU AGREE
THAT YOU HAVE SELECTED THE SIZE, MODEL, DESIGN AND BRAND OF THE EQUIPMENT USING
YOUR OWN JUDGMENT WITHOUT ANY RELIANCE ON US. WE MAKE NO WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE OR ORDINARY
USE IN CONNECTION WITH THIS AGREEMENT OR THE EQUIPMENT. As long as you are not
in default under any of the terms of this Agreement, we transfer to you any
warranties made to us by the manufacturer or supplier. YOU AGREE THAT
REGARDLESS OF CAUSE, YOU WILL NOT MAKE ANY CLAIM WHATSOEVER AGAINST US OR ANYONE
TO WHOM WE MAY ASSIGN THIS AGREEMENT FOR LOSS OF EXPECTED PROFITS OR ANY OTHER
DIRECT, SPECIAL OR INDIRECT DAMAGES. You acknowledge that anyone to whom we
assign this Agreement will not be responsible for any service, repairs or
maintenance of the Equipment, that such assignee is not a party to any service
or maintenance agreement, and even if you have a dispute regarding the
Equipment, you will continue to pay such assignee all rental and maintenance
payments due under this Agreement and all schedules to this Agreement without
deducting or withholding any amounts.
5. METER. (A) In return for Minimum Monthly Copy Charge, you are entitled to
use the Agreed Minimum Number of Copies each month. If you use more than the
Agreed Minimum Number of Copies in any month, you will additionally pay us a
charge equal to the number of additional metered copies times the Excess Copy
Charge. We may audit the automatic meter reading device periodically. If we
determine that you have used fifteen percent (15%) more supplies than normal for
copies, you agree to pay customary charges for all excess supplies. (B) The
Meter Reading Frequency is the period of time (monthly, quarterly, semi annually
or annually) for which the number of copies used will be reconciled. The Meter
Reading Frequency and corresponding excess charge, if any, may be different than
the Minimum Payment Frequency. (C) You agree to provide adequate space without
charge at the Equipment Location for the Equipment, adequate electricity
(including if necessary a dedicated 220 volt line), a telephone line and hookup
for any automatic meter reading device and reasonable storage for supplies to be
used with the Equipment. Most Equipment will be connected to an automatic meter
reading device which will report the number of copies made on the Equipment each
month and upon which monthly invoices will be based. If an automatic meter
reading device is not installed and otherwise upon request, you shall provide us
by telephone with the actual meter reading on the first business day of each
calendar month, provided that we may estimate a number of copies used if such
meter reading is not received by us within seven (7) days. We will adjust the
estimated charge for excess copies upon receipt of actual meter readings.
Notwithstanding any adjustment you will never pay less than the Minimum Monthly
Copy Charge.
6. ASSIGNMENT. YOU MAY NOT SELL, TRANSFER, ASSIGN OR SUBLEASE THE EQUIPMENT.
We may, without notifying you, sell, assign, or transfer this Agreement and
ownership of the Equipment. You agree that if we do so, the new owner will have
the same rights and benefits that we now have, and the assignee will not have to
perform any of our obligations. You agree that the rights of the assignee will
not be subject to any claims, defenses, or set-offs that you may have against
us. However, any such assignment, sale or transfer of this Agreement or the
Equipment will not relieve us of our obligations to you under this Agreement.
7. OWNERSHIP AND QUIET ENJOYMENT. We are the owner of the Equipment and have
title to the Equipment. If any other person attempts to claim ownership of the
Equipment against or through you, you agree, at your expense, to protect and
defend our title to the Equipment. You agree that you will at all times keep
the Equipment free from any legal process or lien whatsoever, and you will give
us immediate notice if any legal process or lien is asserted or made against the
Equipment. So long as you are not in default under any of the terms in this
Agreement, we agree that you shall quietly use and enjoy the Equipment. YOU
AGREE THAT YOU WILL NOT BE ABLE TO PURCHASE THE EQUIPMENT AT ANY TIME.
8. CARE, USE AND LOCATION; LOSS. (A) You will not move the Equipment form the
Equipment Location without our written consent in advance. You will give us
reasonable access to the Equipment Location to confirm the Equipment's
existence, condition and proper maintenance. You are responsible for installing
and keeping the Equipment in good working order and repair and for using it in
compliance with all applicable laws. You will not make any alterations to the
Equipment without our prior written consent nor will you permanently attach the
Equipment to your real estate. At the end of the Initial Term of the Agreement,
you will return the Equipment to us, at your expense. (B) You are responsible
for protecting the Equipment from damage, except for ordinary wear and tear and
from any other kind of loss while you have the Equipment or while it is being
delivered to you. Even if the Equipment is damaged or lost, you agree to pay
all Minimum Monthly Copy Charges for the entire Initial Term.
9. TAXES. You agree to pay when due either directly or to reimburse us all
taxes, fines and penalties relating to this Agreement or the Equipment.
10. INDEMNITY. We are not responsible for any injuries, damages, penalties,
claims or losses including legal expenses incurred by you or any other person
caused by the installation, selection, ownership, possession, maintenance,
condition or use of the Equipment. You agree to reimburse us for and to defend
us against any claims for such losses, damages, penalties, claims, injuries or
expenses. This indemnity shall continue even after this Agreement has expired.
11. INSURANCE. You agree to keep the Equipment fully insured against loss
until you have met all your obligations under this Agreement. You agree to
obtain a general public liability insurance policy, covering both personal
injury and property damage, from anyone who is acceptable to us and include us
as an insured on the policy. You agree to provide us with certificates or other
evidence of insurance acceptable to us. If any insurance proceeds are paid as a
result of any loss or damage to the Equipment, you agree that such insurance
proceeds shall be paid first to us to satisfy your obligations under this
Agreement. If the Equipment is either lost or totally destroyed, and you are
not in default under the terms of this Agreement, instead of continuing to pay
us the Minimum Monthly Copy Charge, you have the option of paying us the then
present value of both the unpaid balance of all remaining Minimum Monthly Copy
Charges under this Agreement and the value of our residual interest in the
Equipment, each computed with a discount rate of six percent (6%) per year; or
the lowest legal rate. If you do not provide evidence of proper insurance
within ten (10) days of our request, we will have the right but not the duty to
obtain such insurance at your expense on our own interest in the Equipment. You
shall pay all premiums and related charges, including interest at up to one and
one-half percent (1.5%) per month, or the highest legal rate, if less.
12. DEFAULTS AND REMEDIES. If you do not pay the Minimum Monthly Copy Charges
when due or if you or your guarantor break any of your promises under this
Agreement, or you or your guarantor become insolvent, assign your assets for the
benefit of your creditors, or enter (voluntarily or involuntarily) into a
bankruptcy proceeding, or all or a material portion of your assets or stock is
sold, or (if an individual) you or your guarantor dies, or you are in default in
any other agreement between you and us, you will be in default. If you are in
default, we can require that you return the Equipment to us and pay to us the
then present value of the unpaid balance of all remaining Minimum Monthly Copy
Charges under this Agreement computed with a discount rate of six percent (6%)
per year, or the lowest legal rate. If you fail to return the Equipment to us,
in addition we can also require that you pay to us the current estimated fair
market value of similar equipment of like age. You also agree to pay us
interest on all sums due us from the date of default until paid at the rate of
one and one-half percent (1.5%) per month, but only to the extent permitted by
law. In addition, we shall be entitled to recover from you all damages caused
by any such default to the extent permitted by law. We can also use any of the
remedies available to us under the Uniform Commercial Code ("UCC") or any other
law. If we refer this Agreement to an attorney for enforcement or collection,
you agree to pay our reasonable attorney's fees, which may be twenty percent
(20%) of the total discounted unpaid Minimum Monthly Copy Charges for the
remaining term of this Agreement. If we have to take possession of the
Equipment, you agree to pay the cost of the repossession, storing, shipping,
repairing and selling the Equipment. Although you agree that we are not
obligated to do so, if we decide to sell the Equipment, and we are able to sell
the Equipment for a price that exceeds the sum of (a) our cost of repossession
and sale of the Equipment and (b) our estimated residual value of the Equipment,
present value as calculated above, then we shall give you credit for the amount
of such excess. You agree that we do not have to notify you that we are selling
the Equipment or of the time, place or advertising of any sale, You also agree
that we may telephone you at any reasonable time to enforce our rights.
13. OTHER RIGHTS. You Agree that any delay or failure to enforce our rights
under this Agreement will not prevent us from enforcing any rights at a later
time. The parties intend this document to be a rental agreement. However, you
grant us a security interest in your interest in the Equipment in case it is
found otherwise: You also give us the right to file immediately, at your
expense, any UCC financing statements or related filings, as well as the right
to sign your name to any such filings that we make.
14. RETURN OF EQUIPMENT. When this agreement expires or is otherwise
terminated, you shall disconnect, properly package for transportation, and
return the Equipment, freight prepaid to us, in good repair, condition and
working order, normal wear and tear excepted, to the location we designate. If
upon expiration or termination, you do not immediately return the Equipment, at
our option (a) we will peacefully remove the Equipment and you agree to pay us
an amount equal to two (2) Minimum Monthly Copy Charges or (b) the Equipment
will continue to be held and rented by you for successive periods at the same
Minimum Monthly Copy Charge, subject to your or our right to terminate this
Agreement upon one (1) month written notice, provided that we retain the right,
in our sole discretion, to limit the total number of such successive renewals to
protect our rights as owner of the Equipment. If we agree at your request to
allow you to terminate this Agreement before the end of the Initial Term, you
agree to pay us a reasonable fee for such privilege.
15. LATE CHARGES. If any part of a payment is not made by you when due, you
agree to pay us a late charge of the higher of $25 or ten percent (10%) of each
such late payment, but not more than permitted by law. You agree to pay us the
late charge not later than one (1) month following the date that the original
Minimum Monthly Copy Charge was due.
16. MISCELLANEOUS. This is the entire Agreement between us regarding the
Equipment. In the event you fail to comply with any part of this Agreement, we
can, but we do not have to, take any action necessary to effect your compliance
and you will pay the amount it costs us plus all of our expenses in causing your
compliance at the time of the next due Minimum Monthly Copy Charge. If any
notices are required under this Agreement, they may be given personally or
mailed to the addresses in this Agreement by certified or registered mail,
postage prepaid or by recognized overnight delivery service. This Agreement is
for the benefit of and is binding upon you and your personal representatives,
successors and assigns. You agree and consent that we may serve you by
registered or certified mail, which shall be sufficient to obtain jurisdiction.
YOU WAIVE TRIAL BY JURY IN ANY ACTION BETWEEN US. Both you and we intend this
Agreement to be a valid and legal document, and agree that if any part is
determined to be unenforceable, all other parts remain in full force and effect.
You agree that we both intent that this Agreement comply with all applicable
laws. If it is determined that any payment due under this Agreement results in
an interest payment, and that interest is higher than allowed by law, then any
excess interest will be applied to principal and interest will be at the highest
legal rate. In no event will you pay or will we charge or receive any more
interest than allowed by law.
17. UCC-ARTICLE 2A PROVISIONS. You acknowledge that Article 2A of the UCC may
be applicable to this Agreement. Therefore, you agree to the following: (a)
you acknowledge that we have given you the name of the supplier of the Equipment
you are renting from us in this Agreement or on the attached schedule or in your
purchase agreement. We hereby notify you that you may have rights under the
supply contracts and that you may contact the supplier for a description of
those rights or any warranties; and (b) you hereby waive any rights and remedies
you are given by Sections 2A-508 through 2A-522 of the UCC, including the right
to reject the Agreement and the Equipment; to cancel the Agreement; to revoke
acceptance of the Equipment; to grant a security interest in the Equipment in
your possession or control for any reason; to recover damages under such UCC 2A
Sections for any breach of warranty. You will start any action against us
within one year. We will not be liable to you for any failure to deliver or
delay in delivering the Equipment or other loss or damage suffered by you in
connection with this Agreement or the Equipment.
<PAGE>
Exhibit 2.2.1(1)
BILL OF SALE
The Land Sales Resource, an Illinois corporation ("Assignor"), for good and
valuable consideration to it in hand paid, receipt of which is hereby
acknowledged, hereby sells, assigns, transfers and conveys unto COMPS
InfoSystems, Inc., a Delaware corporation ("Assignee"), its Successors and
assigns, the following described property:
1. All property of every kind and description and wherever situated,
tangible and intangible, owned by Assignor or to which Assignor has any right,
title or interest on the date hereof as described in Section 1.1 and the
exhibits referenced therein of the Asset Purchase Agreement dated July __, 1995.
2. Assignor hereby authorizes and grants its power of attorney to Assignee
and appoints Assignee and the officers thereof as Assignor's attorney-in-fact to
take any appropriate action in connection with any of said rights, claims,
causes or action and property, in the name of Assignor or in its own or any
other name but at its own expense, it being understood that this authorization
and power of attorney are coupled with an interest and irrevocable.
3. Assignee shall have the right to have and to hold all of the rights,
claims, causes of action, property, assets, business and goodwill transferred
hereby as a going concern.
4. Assignor does hereby warrant, covenant and agree that it:
(i) has good and marketable title to the properties and assets hereby
sold, assigned, transferred, conveyed and delivered, subject to such liens and
other encumbrances as are disclosed in the Asset Purchase Agreement or any
schedules or exhibits thereto and except as otherwise provided in the Asset
Purchase Agreement; and
(ii) will warrant and defend the sale of said properties and assets
against all and every person or persons whomsoever claiming or to claim against
any or all of the same, subject to the terms and provisions of the Asset
Purchase Agreement.
1
<PAGE>
IN WITNESS WHEREOF, this Bill of Sale has been executed this _____ day of
July, 1995.
ASSIGNOR
The Land Sales Resource
By
-----------------------------------------------
Kitty Layne, President
ASSIGNEE
COMPS InfoSystems, Inc.
By
-----------------------------------------------
Chris Crane, President
5487.1
2
<PAGE>
Exhibit 2.2.1(2)
ASSIGNMENT OF REAL PROPERTY LEASE
FOR VALUABLE CONSIDERATION receipt of which is hereby acknowledged, the
undersigned The Land Sales Resource, an Illinois corporation ("Assignor") hereby
assigns all of its right, title and interest under that certain Lease dated
____________________, 199_, by and between Assignor, as Lessee, and
________________________________________, as Lessor, for the office space
located at 622 Executive Drive, Willowbrook, Illinois 60521 (the "Lease")
including all of the undersigned's right, title and interest in and to any
prepaid rent or security deposit with respect to the Lease, and delegates all of
its duties under the Lease, to COMPS InfoSystems, Inc., a Delaware corporation
("Assignee").
Dated this _____ day of ____________________, 1995.
The Land Sales Resource
By
-----------------------------------------------
Kitty Layne, President
ACCEPTANCE OF ASSIGNMENT
Assignee hereby accepts the assignment, transfer and conveyance of
Assignor's interest under the Lease and further assumes and agrees to make all
payments which become due from, and to perform all covenants, conditions,
responsibilities, duties, liabilities and obligations which are to be performed
by Assignor pursuant to the Lease effective as of the Closing of the Asset
Purchase Agreement.
Dated this _____ day of ____________________, 1995.
COMPS InfoSystems, Inc.
By
-----------------------------------------------
Chris Crane, President
1
<PAGE>
Exhibit 2.2.1(2)
CONSENT TO ASSIGNMENT
The undersigned, _______________________________________, hereby consents
to the assignment of Assignor's interest under the Lease to COMPS InfoSystems,
Inc., a Delaware corporation. The undersigned does not hereby waive any of its
rights under the Lease, and all of the terms, conditions, provisions and
covenants of the Lease shall remain and continue in full force and effect.
Dated this _____ day of ____________________, 1995.
--------------------------------------------
5485.1
2
<PAGE>
Exhibit 2.2.1(3)
ASSIGNMENT OF EQUIPMENT LEASE
FOR VALUE CONSIDERATION receipt of which is hereby acknowledged, the
undersigned The Land Sales Resource, an Illinois corporation ("Assignor")
hereby assigns all of its rights, title and interest under that certain
Equipment Lease dated ____________________, 199_, by and between Assignor, as
Lessee, and ________________________ as Lessor, for the equipment described on
Exhibit A thereto (the "Lease"), including all of Assignor's rights, title and
interest in and to any prepaid rent or security deposit with respect to the
Equipment Lease, and delegate all of its duties under the Equipment Lease, to
COMPS InfoSystems, Inc., a Delaware corporation ("Assignee").
Dated this _____ day of ____________________, 1995.
The Land Sales Resource
By
-----------------------------------------------
Kitty Layne, President
ACCEPTANCE OF ASSIGNMENT
Assignee hereby accepts the assignment, transfer and conveyance of
Assignor's interest under the Equipment Lease and further assumes and agrees to
make all payments which become due from, and to perform all covenants,
conditions, responsibilities, duties, liabilities and obligations which are to
be performed by assignor pursuant to the Equipment Lease effective as of the
Closing of the Asset Purchase Agreement.
Dated this _____ day of ____________________, 1995.
COMPS InfoSystems, Inc.
By
-----------------------------------------------
Chris Crane, President
1
<PAGE>
Exhibit 2.2.1(3)
CONSENT TO ASSIGNMENT
The undersigned, ________________________________________ hereby consents
to the assignment of Assignor's interest under the Equipment Lease to COMPS
InfoSystems, Inc. The undersigned does not hereby waive any of its rights under
the Equipment Lease, and all of the terms conditions, provisions and covenants
of the Equipment Lease shall remain and continue in full force and effect.
Dated this _____ day of ____________________, 1995.
----------------------------------------
5484.1
2
<PAGE>
Exhibit 8
COVENANT NOT TO COMPETE
This COVENANT NOT TO COMPETE ("Covenant") is made and effective on July 31,
1995 by and between COMPS InfoSystems, Inc., a Delaware corporation ("COMPS"),
The Land Sales Resource, an Illinois corporation ("LSR"), and Kitty Layne
("Layne"). LSR and Layne are sometimes collectively referred to as
"Covenantors. This Covenant is made with reference to the following facts:
A. COMPS, Layne and LSR have entered into an Asset Purchase Agreement
dated July 17, 1995 ("Agreement") providing for COMPS to acquire the
assets of LSR.
B. Layne is a shareholder of LSR.
C. COMPS is unwilling to purchase the assets unless Covenantors agree to
provide this Covenant.
NOW, THEREFORE, in consideration of the premises and mutual covenants,
representations and warranties contained herein, the parties agree as follows:
1. NON-COMPETITION. Except as an employee or consultant of COMPS,
Covenantors agree that they will not at any time within the three (3) year
period immediately following the date of this Covenant, directly or indirectly,
in the counties in which LSR is presently doing business, whether or not for
compensation, engage in, or have any interest in any person, firm, corporation,
or business (whether as an employee, officer, director, agent, shareholder,
security holder, creditor, partner, consultant, holder of any beneficial
interest or otherwise) that engages in any activity which is the same as,
similar to, or competitive with any activity now engaged in by COMPS as long as
COMPS, or any transferee of all or substantially all of the assets of COMPS
("Transferee") shall engage in this or similar activity.
2. EMPLOYEES. Covenantors shall not, during the term of this Covenant,
induce any employee of LSR to leave the employ of the LSR.
3. CONSIDERATION. This Covenant is made in consideration of and in
connection with the sale of the assets and good will of LSR as described in the
Agreement.
4. TERM. The term of this Covenant is to be three (3) years from the
date hereof.
5. ASSIGNMENT. No rights under this Covenant shall be assignable nor
duties delegable by either party, except that COMPS may assign and delegate any
of its rights and duties hereunder to a Transferee. Nothing contained in this
Covenant is intended to confer upon any person or entity, other than the parties
hereto, their successors in interest and Transferees, any rights or remedies
under or by reason of this Covenant unless expressly so stated to the contrary.
<PAGE>
6. SUCCESSORS AND ASSIGNEES. All covenants, representations, warranties
and agreements of the parties contained herein shall be binding upon and inure
to the benefit of their respective heirs, executors, administrators, personal
representatives, successors and Transferees.
7. UNENFORCEABILITY. It is the intention of the parties hereto that the
provisions of this Covenant shall be enforced to the fullest extent permissible
under all applicable laws and public policies, but that the unenforceability or
the modification to conform with such laws or public policies of any provision
hereof shall not render unenforceable or impair the remainder of the Covenant.
Accordingly, if any provision shall be determined to be invalid or unenforceable
either in whole or in part, this Covenant shall be deemed amended to delete or
modify, as necessary, the invalid or unenforceable provisions to alter the
balance of this Covenant in order to render the same valid and enforceable.
8. INJUNCTIVE RELIEF. Covenantors acknowledge that any breach of this
Covenant will result in irreparable damage to COMPS for which COMPS will not
have an adequate remedy of law. Shareholder further acknowledges that COMPS
shall be entitled to injunctive relief hereunder and the parties hereby consent
to an injunction in favor of COMPS enjoining any breach of any of the foregoing
by any court of competent jurisdiction without prejudice to any other right or
remedy to which COMPS may be entitled.
9. COUNTERPARTS. This Covenant may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
10. ATTORNEYS' FEES. If an action is instituted to enforce any of the
provisions of this Covenant, the prevailing party in such action shall be
entitled to recover from the losing party its or his reasonable attorneys" fees
and costs as set by the court.
11. WAIVER. The waiver by either party of a breach of any provision of
this Covenant shall not operate or be construed as a waiver of any subsequent
breach.
COVENANTORS: COMPS InfoSystems, Inc.
By: /s/ KITTY LAYNE By: /s/ CHRIS CRANE
------------------------------ --------------------------------
Kitty Layne Chris Crane, President
The Land Sales Resource
By: /s/ KITTY LAYNE
------------------------------
Kitty Layne, President
<PAGE>
AMENDMENT TO
COVENANT NOT TO COMPETE
This Amendment to Covenant Not to Compete (the "Covenant Not to Compete")
dated as of July 31, 1995 by and among COMPS InfoSystems, Inc., a Delaware
corporation ("COMPS"), Kitty Layne ("Layne") and Land Sales Resource, an
Illinois corporation ("LSR") is entered into and effective as of the 31st day of
March, 1996.
WHEREAS, the COMPS and Layne are also parties to that certain Employment
Agreement dated as of August 1, 1995 (the "Employment Agreement"); and
WHEREAS, in exchange for the amendment of even date herewith of the
Employment Agreement, and in recognition of the value of the business and assets
(including without limitation goodwill) acquired by COMPS from LSR pursuant to
that certain Asset Purchase Agreement dated July 17, 1995 by and among COMPS,
LSR and Layne, and for other good and valuable consideration receipt of which is
hereby acknowledged, COMPS and Employee desire to amend the Employment Agreement
as set forth herein;
NOW THEREFORE, the Covenant Not to Compete is hereby amended as follows:
Sections 3 and 4 of the Covenant Not to Compete is hereby amended and
restated in its entirety as follows:
3. CONSIDERATION. This Covenant is made in consideration of and in
connection with (i) the sale of substantially all the assets and good will
of LSR as described in the Agreement; and (ii) the payment to Layne by
COMPS of the amounts and at the times set forth on Exhibit A hereto.
4. TERM. The term of this Covenant is to run from July 31, 1995 through
the close of business June 30, 1999. Except as set forth herein, the
Covenant Not to Compete remains unmodified and in full force and effect.
IN WITNESS WHEREOF, the parties hereto execute this Amendment, effective as
of the date first above written.
COMPS InfoSystems, Inc.
a Delaware corporation
By: /s/ KITTY LAYNE By: /s/ DALE WALLIS
--------------------------------- ---------------------------------
Kitty Layne
Its: Chief Financial Officer
--------------------------------
<PAGE>
EXHIBIT A
Date Payment Due
---- -----------
March 31, 1996 $22,400
December 31, 1996 70,000
December 31, 1997 76,000
December 31, 1998 75,000
2
<PAGE>
Schedule 1.1
Asset Purchase Agreement
Between COMPS and LSR
LIST OF ASSETS WITH ESTIMATED VALUES
TO BE TRANSFERRED AT CLOSE
Following is the list of assets to be transferred under The Asset Purchase
Agreement and their estimated fair market values at the date of close. No other
assets are to be transferred as part of this Agreement.
Actual values of these assets will be determined by a balance sheet showing
actual value of these assets at July 31,1995 to be prepared by Roche, Scholz,
Roche, & Walsh, LTD. CPAS.
Cash (to be transferred to new LSR-COMPS bank
account) $ 3,000
Accounts receivable (to be evidenced by a detailed
aged receivable list) 65,000
Prepaid Map Subscriptions 1,000
Security deposits 3,615
Property and equipment (detail fist attached) 8,265
------
Total assets transferred $ 80,880
======
<PAGE>
SCHEDULE 1.1.1
ASSETS
------
The complete database of LSR's real estate information in print and electronic
form (database format) . Print and computer formats, including the file used in
conjunction with Q&A to provide data electronically to customers.
Customer list, customer data and customer subscription agreements, including:
. account profile - contact name at the company and payment status of each
account, including amounts currently due and through what date the customer
has paid.
. subscriber profile - name of company/individual who subscribes, the type(s)
of product delivered to customers currently and in the past, the
subscription price and term, and the format in which the subscriber
receives the print and/or electronic data.
. list of customers who have used LSR's call-in service and the level of
sales to such customers in the last 12 months. All customer information
shall include company name, address, phone number and company contact name.
<PAGE>
Schedule 1.1.6
Furnit.ofc
OFFICE FURNITURE INVENTORY
--------------------------
ITEM QTY
---- ---
Desks 17
Tables 13
Credenzas 2
Bookcases 4 (large & small)
Printer Stands 2
File Cabinets 18 (large & small)
Chairs 35
1
<PAGE>
OFFICE EQUIPMENT INVENTORY
--------------------------
ITEM QTY
---- ---
Fax machines 3
Copiers 2
Typewriters 1
Microfilm Readers 9
Merlin Telephones 13
<PAGE>
computers:
file server: DTK 486DX/50 EISA, 32Mb ram, 2.7Gb disk, 20 user NW3.11
fax server: 386SX/16, 4Mb ram, 2 Intel Satisfaxtion 400 int fax boards
print srvr: Printmate dedicated 2P/1S ethernet
MF: Midwest Micro 486DX2/66, 15" SVGA, 40OMb disk, 2x CD player, HP
IIc scanner, Mirror/Syquest 20OMb 5 1/4" removable, USR Sportster
14.4 Fax/Modem, WangDAT 2Gb tape
datafax: (2) Insight 486DX2/66 mono VGA
reception: AGI 386DX/20, 8Mb ram, 28OMb disk
KL: Xinetron 386DX/25 diskless, mono VGA, 5Mb ram, USR Sportster 14.4
JS: Xinetron 386DX/25 diskless, mono VGA, 5Mb ram
SJ: Wang 386DX/20
JL: Compudyne 386SX/16
JB: Compaq Deskpro 286/12
research1: Insight 486DX2/66, 2x CD, mono VGA, USR Sportster 14.4
research2: Krista 486DX2/66, 2x CD, mono VGA
print srvr: XT Turbo clone running IQ Server
digest: Insight 486DX2/66, 15" SVGA, 40OMb disk, 2x CD player
print srvr: AGI 286/12 running IQ Server
*GK: Midwest Micro 486DLC/33 laptop, mono, 12OMb disk, modem
*WH: Midwest Micro 486DX4/100, 15" SVGA, 54OMb disk, 2x CD, 14.4 F/M
*JS: Clone XT Turbo
* Machine is at employee's home.
<PAGE>
printers:
HP LaserJet Series II
HP LaserJet III
HP LaserJet 4 MP PS, 6Mb ram
HP DeskJet 1200c, 4Mb ram
Fargo Primera 203dpi thermal wax/dye sub
Oki ML393 24pin, wide carriage dot matrix
Epson LQ850 24pin dot matrix
(2) Panasonic KXP1180 9pin dot matrix
<PAGE>
UPS:
(5) Tripp BC250
(1) Tripp BC400
(1) Tripp BC45OLan
(1) Tripp BC75OLan
(3) APC 250VA
(1) APC 400VA
<PAGE>
SCHEDULE 1.2
ASSET PURCHASE AGREEMENT
BETWEEN COMPS AND LSR
LIST OF LIABILITIES
TO BE ASSUMED BY COMPS AT CLOSE
Following is the complete list of liabilities to be assumed by COWS under The
Asset Purchase Agreement and their estimated fair market values at the date of
close. No other liabilities are to be assumed as part of this Agreement.
Actual values of these liabilities will be determined by a balance sheet showing
actual value of these assets at July 31,1995 to be prepared by Roche, Scholz,
Roche, & Walsh, LTD. CPAS.
Accounts payable (to be evidenced by a
detailed list of payables) $ 30,370
Payable to LSR for accrued payroll from
July 22 through July 31 6,000
Line of credit to Bank 30,000
--------
Total liabilities to be paid in cash 66,370
Deferred subscription revenues 180,000
--------
Total liabilities transferred $246,370
========
<PAGE>
SCHEDULE 1.4
COMIPS INFOSYSTEMS, INC.
THE LAND SALES RESOURCE, INC.
ALLOCATION OF ASSET PURCHASE PIICE
Assets purchased:
Assets from Schedule 1.1
Cash $ 3,000
Accounts receivable 65,000
Prepaid Map Subscriptions 1,000
Security Deposits 3,615
Property and equipment 8,265
Value assigned to intangible asset purchased
Customer lists 440,490
--------
Total value of assets purchased $521,370
========
Purchase price:
Liabilities assumed from Schedule 1.2
Accounts payable $ 30,370
Payable to LSR for accrued payroll 6,000
Line of credit to bank 30,000
Deferred subscription revenues 180,000
Cash paid at purchase 275,000
--------
Total purchase price $521,370
========
NOTE: The above allocation of purchase price is based on the assumed asset
and liability values to be transferred as set forth in Schedules 1.1
and 1. 2. After closing, Land Sales Resource will provide COMPS with
a final July 31, 1995 balance sheet. The values set forth above will
be adjusted to reflect the values on that balance sheet.
After the final adjustments are made, IRS Form 8594 reflecting
allocation values under Internal Revenue Code Section 1060 will be
prepared by COMPS and provided to LSR.
<PAGE>
EXHIBIT 10.43
PURCHASE AGREEMENT
(this "Agreement")
Dated: August 31, 1995
(the "Effective Date")
Between
COMPS INFOSYSTEMS, INC. -And- TRW REDI PROPERTY DATA,
a Delaware corporation an Ohio general
("COMPS") And-partnership
("TRW REDI")
Recitals
- --------
1. TRW REDI is engaged in the creation, marketing and sale of
proprietary information products and services originating from real property
ownership and sales information generated from public record sources and, in
connection therewith, creates and maintains computerized files, residential,
commercial and industrial real estate data, and other business information that
is proprietary to TRW REDI, including without limitation original works of
authorship in the compilation of otherwise unprotectable data;
2. COMPS is a company engaged in the creation, marketing and sale of
proprietary information products and services derived from public record and
private and other sources and, in connection therewith, COMPS creates and
maintains computerized files, commercial and industrial real estate data, and
other business information that is proprietary to COMPS, including without
limitation Original works of authorship in the compilation of otherwise
unprotectable data;
3. The parties desire that TRW REDI sell to COMPS and COMPS purchase
from TRW REDI, the TRW REDI investment property publishing business described
herein;
4. The parties desire that COMPS grant to TRW REDI certain license
rights with respect to COMPS Data (as defined herein); and
5. The parties further desire to make certain agreements concerning
the provision of public record information, all as provided herein.
NOW THEREFORE, in consideration of the mutual premises and other good
and valuable consideration had and received, TRW REDI and COMPS hereby agree as
follows:
1. Definitions: The following terms will have the meanings specified below
-----------
when used in this Agreement.
1.1 Accounts Receivable. Those accounts described in Section 2.2.2.
-------------------
1.2 Assets: Defined in Section 2.2.
------
*** Certain confidential portions of this Exhibit were omitted by means of
blackout of the text (the "Mark"). This Exhibit has been filed separately
with the Secretary of the Commission without the Mark pursuant to the
Company's Application Requesting Confidential Treatment under Rule 406
under the Act.
<PAGE>
1.3 California C&I Business: TRW REDI's C&I Photo Illustrated
-----------------------
Business (as hereinafter defined) relating to Investment Property located within
the state of California
1.4 C&I Data Extract Business: TRW REDI's Investment Property (as
-------------------------
hereinafter defined) data extract publishing business as is more particularly
described on Exhibit A.
---------
1.5 C&I Data Photo Illustrated: TRW REDI's Investment Property (as
--------------------------
hereinafter defined) photo illustrated publishing business with respect to
Investment Property as is more particularly described on Exhibit A.
---------
1.6 Closing: Defined in Section 12.
-------
1.7 COMPS Data: The product currently marketed and sold by COMPS
----------
with respect only to California Investment Property under the trademark "COMPS,"
as well as any successor product with substantially similar primary purpose,
publishing substantially similar data, and addressing a substantially identical
market, and published by COMPS after July 15, 1995. For purposes of this
definition, the "primary purpose" of the COMPS Data product is the publication
of current sales transaction data concerning the most recent sales (typically
sales closing within the three-month period preceding publication of such COMPS
Product) involving Investment Property located in California. COMPS Data does
not include any product marketed or sold by COMPS which contains substantially
different data or addresses a substantially different market than the current
"COMPS" product, or the primary purpose of which is not the publication of
current sales transaction data concerning the most recent sales involving
Investment Property located in California.
1.8 COMPS Data Commission Fees: Defined in Section 3.3.
--------------------------
1.9 COMPS Mark: COMPS(R)
----------
1.10 Confidential Information: Defined in Section 8.
------------------------
1.11 Data Credit. Defined in Section 2.5.
-----------
1.12 Effective Date: Defined on page 1 of this Agreement.
--------------
1.13 Enhanced C&I Product: Property and transaction information
--------------------
concerning Investment Property which includes public records data enhanced by
additional information such as a photograph or photographs of the Investment
Property, confirmed sales information (which may include but not be limited to
income information, broker names and addresses, telephone numbers, buyer and
seller names and telephone numbers, and contact names and telephone numbers for
such parties), property condition, sale price, financing information, market
time information, parking space information, cap rate or gross rent multipliers,
and technical and non-technical property descriptions.
1.14 Florida and Georgia C&I Data Extract Business: TRW REDI's C&I
----------------------------------------------
Data Extract Business relating to Investment Property within the states of
Florida and Georgia.
2
<PAGE>
1.15 Gross Revenues: The monetary amount of all consideration
--------------
collected by or for the benefit of COMPS from the sale, license, sublicense or
other transfer, or use of COMPS Data, where such sale, license, sublicense or
other transfer is made through the on-line digital transmission of such data in
connection with the Sales Agency.
1.16 Initial Term: Defined in Section 13.2.
------------
1.17 Investment Property: Real estate property, excluding "single
-------------------
family residences," of a commercial nature which is used for investment purposes
or is commonly referred to in the commercial real estate industry as "investment
property."
1.18 Licensed Data: COMPS Data and/or TRW REDI Data, as applicable.
-------------
1.19 New York Territory: The five boroughs of New York City:
------------------
Manhattan, Brooklyn, Bronx, Queens, Staten Island.
1.20 Option Closing: Defined in Section 2.6.1.
--------------
1.21 Photo Illustrated Counties. The following counties located
--------------------------
within the State of California: Contra Costa, San Diego, Alameda, Marin, Orange,
San Francisco, Los Angeles, Riverside, San Bernardino, Santa Clara, San Mateo
and Ventura.
1.22 Public Record Data Products: Data products derived solely from
---------------------------
public record sources that are not enhanced by either additional value-added
research data or other information obtained from non-public record sources.
1.23 Purchased Businesses. The California C&I Business, the C&I Data
--------------------
Extract Business in the Territory (as defined below), and, following exercise by
COMPS of the option set forth in Section 2.6, the Florida and Georgia C&I Data
Extract Business.
1.24 Renewal Term: Defined in Section 13.2.
------------
1.25 OuickSource: A call-in service of TRW REDI whereby customers
-----------
may purchase comparable properties information.
1.26 Sales Agency: Defined in Section 3.1.
------------
1.27 Term: The Initial Term and any Renewal Term.
----
1.28 Territory: Collectively, the states of California and
---------
Washington; the District of Columbia; Cook County, Illinois; Anne Arundel,
Baltimore; Montgomery, and Price George's counties, Maryland; and Arlington,
Alexandria, Fairfax, Loudon and Prince William Counties, Virginia.
1.29 TRW REDI List Price: The TRW REDI Data list prices set forth in
-------------------
Exhibit B.
- ---------
3
<PAGE>
1.30 TRW REDI Data: The transaction information and updates,
-------------
assessor's data and maps compiled by TRW REDI from public record and other
sources and distributed through published reports, magnetic tape or other
magnetic media, microfiche products, and/or electronically via TRW REDI's on-
line property database and CD-ROM systems or other media.
2. Sale and Transfer of TRW REDI Businesses.
----------------------------------------
2.1 Business Sale and Transfer. At the Closing, and subject to the
--------------------------
terms and conditions of this Agreement, TRW REDI agrees to sell, assign,
transfer and convey to COMPS, and COMPS agrees to purchase and acquire from TRW
REDI, all of TRW REDI's right, title and interest in and to all of the Assets
(defined below). The Assets will be sold, assigned, transferred and conveyed to
COMPS upon the Closing, free and clear of all mortgages, pledges, liens,
licenses, rights of possession, security interests, restrictions, encumbrances,
charges, title retention, conditional sale or other security arrangements and
all claims or agreements of any nature whatsoever (except for licenses and other
agreements assigned to COMPS pursuant to the terms of this Agreement, all of
which are identified on Exhibit E).
2.1.1 Assignment of TRW REDI Contracts; Fulfillment of TRW REDI
---------------------------------------------------------
Obligations. TRW REDI will assign to COMPS and COMPS agrees to fulfill and
- -----------
assume, subject to Section 2.3 hereof, those agreements set forth in Exhibit E.
---------
COMPS agrees to fulfill, as an independent sub-contractor to TRW REDI and at no
additional cost to TRW REDI except as set forth in this subsection, those
agreements between TRW REDI and the customers of the Purchased Businesses whose
agreements have not been assigned to COMPS hereunder and who have not yet
entered into new contracts for similar products directly with COMPS, and who
request continued service and products from TRW REDI under contracts with TRW
REDI that exist as of the Closing. Such contracts may not be modified or
extended by TRW REDI without the express written consent of COMPS. TRW REDI
shall pass through to COMPS, on a monthly basis, all amounts collected by TRW
REDI pursuant to such contracts. COMPS agrees to defend, indemnify and hold TRW
REDI harmless against any and all loss, cost, claims, and liabilities directly
arising from COMPS's performance of its obligations under this Section 2.1.1 and
based upon facts, circumstances or events occurring following the Closing. Any
party seeking indemnification under this Section 2.1.1 shall provide prompt
notice of any claim or occurrence potentially giving rise to indemnification
obligations hereunder, and shall permit the indemnifying party to assume and
control the defense thereof. Neither party shall be responsible for any
settlement made with respect to any claim for which indemnification sought
hereunder without the other's prior written consent, which shall not
unreasonably be withheld.
2.2 Assets Defined. As used in this Agreement, the term "Assets"
--------------
means, collectively, all of the assets, rights and properties of TRW REDI
described in the following paragraphs of this Section 2.2:
2.2.1 Customer Lists, Marketing Information. All of TRW REDI's lists
-------------------------------------
of current customers of the Purchased Businesses, together with such additional
data regarding such customers and prior customers of the Purchased Businesses
(such as historical, marketing, promotional and sales information used by TRW
REDI in the Purchased Businesses) which can be assembled and provided by TRW
REDI following a reasonable effort.
4
<PAGE>
2.2.2 Accounts Receivable. Subject to the limitations in this
--------------------
section, the accounts receivable of the Purchased Businesses existing as of the
Closing, together with all rights, claims, and causes of action of TRW REDI
relating thereto. A complete schedule of Accounts Receivable as of the date of
this Agreement is attached hereto as Exhibit F. An updated schedule shall be
---------
provided by TRW REDI at the Closing and attached as Exhibit F-1 hereto and made
-----------
part hereof. TRW REDI warrants and confirms that all of the receivables
purchased by COMPS and identified on Exhibit F and Exhibit F-1 represent goods
--------- -----------
shipped by TRW REDI and received by the customer. TRW REDI shall pass through
to COMPS on a monthly basis, any and all amounts collected by TRW REDI after the
Closing pursuant to these receivables. COMPS shall be liable for all taxes on
any such amount passed through to COMPS.
2.2.3 Employee List. A complete list of the TRW REDI employees
-------------
engaged in the Purchased Businesses as of the Closing, including full name,
position, duration of employment and salary information, together with, with
respect to those TRW REDI employees who consent, all personnel records relating
to any of such consenting TRW employees.
2.2.4 Business Records. All books, records, files, and sales
----------------
literature and sales aids, pictures, product sheets and documentation, product
displays, advertising materials, and manuals relating to the Purchased
Businesses, an electronic version of the TRW REDI C&I database for the three-
year period preceding the Effective Data with respect to the Purchased
Businesses, and all copies of TRW REDI C&I Photo Illustrated Books relating to
the California C&I Business in TRW REDI's possession.
2.3 Liabilities Not Assumed. Except as specifically set forth in
-----------------------
Sections 2.1.1 and 2.3, TRW REDI does not transfer hereunder, and COMPS does not
assume hereby, any liability associated with the Purchased Businesses. TRW REDI
agrees to defend, indemnify and hold COMPS harmless against any and all loss,
cost, claims, and liabilities not expressly assumed by COMPS hereunder,
including but not limited to any liabilities arising under any contracts
relating to the Purchased Businesses, and based upon facts, circumstances or
events occurring prior to the Closing. Without limiting the generality of the
foregoing, TRW REDI shall be solely responsible for any refunds and/or
cancellation fees it becomes obligated to pay as a result of the transactions
contemplated by this Agreement.
2.4 Conversion of TRW REDI Subscribers; Referrals to COMPS. For such
------------------------------------------------------
of TRW REDI's California C&I Business and C&I Data Extract Business contracts
(if any) that may not be sold, transferred or assigned by TRW REDI without
Subscriber consent, TRW REDI agrees to reasonably cooperate with COMPS's efforts
to induce TRW REDI customers for the California C&I Business and C&I Data
Extract Business to substitute COMPS subscriber agreements for TRW REDI
subscriber agreements. In addition, TRW REDI QuickSource will refer all
inquiries it receives during the Term regarding Investment Property located
within the Territory (and, following exercise by COMPS of the option described
in Section 2.6, located within the United States except the New York Territory),
to COMPS.
2.5 Purchase Price and Payment Terms. In consideration for sale and
--------------------------------
transfer to COMPS of the Assets, and other consideration as provided herein,
COMPS agrees to pay TRW REDI, the following amounts upon the dates set forth
below:
5
<PAGE>
Date Amount
---- ------
Closing $***
12/l/96 ***
12/l/97 ***
12/l/98 ***
12/l/99 ***
12/l/00 ***
12/l/01 ***
In addition to the foregoing payments, COMPS shall pay TRW REDI for
the purchased accounts receivable as described in Section 2.2.2 and as listed in
Exhibit F-1 as follows. COMPS shall pay only for receivables balances that
represent billings for goods that have been shipped and have been received by
the customer. For all accounts having any balances greater than 120 days old,
COMPS shall pay 30% of the total receivable balance for such accounts. For
accounts with no balances over 120 days old, COMPS shall pay 80% of the total
receivable balance. At the close, COMPS shall pay TRW REDI $25,000 towards
payment for accounts receivable. Within 10 business days of COMPS being
provided information regarding the receivables in a format that allows COMPS to
bill and collect the receivables, a final accounting shall be made of the
amounts due under this section and payment shall be made by COMPS to TRW REDI
for any balance remaining due or payment shall be made by TRW REDI to COMPS for
any overpayment.
COMPS shall receive a "Data Credit" towards the purchase of TRW REDI
Data described in Section 2.8 in the amounts of $100,000 for each of the next
five (5) twelve-month periods beginning upon the Closing. Such Data Credit
shall be based upon the price for such TRW REDI Data described in subsection
2.8.2 (inclusive of the discount described therein). COMPS purchase of TRW REDI
Data shall be pursuant to a standard TRW REDI subscription agreement, a form of
which is attached hereto as Exhibit G. Notwithstanding anything in such standard
---------
TRW REDI subscription agreement however, COMPS shall be entitled to the licensed
use of TRW REDI Data described in Section 4 hereof. The payment obligations set
forth above shall be evidenced by a promissory note in the form attached hereto
as Exhibit H.
---------
In the event TRW REDI discontinues the generation of TRW REDI Data
pursuant to Section 5.3 ("Discontinuation") hereof in a number of counties
resulting in a decrease in the number of counties covered by TRW REDI to fewer
than 145, then COMPS shall be entitled to reduce the amounts payable pursuant to
this Section as follows: (i) in the event COMPS uses the entire Data Credit in a
given twelve-month period, there shall be no reduction in the amounts payable
pursuant to this section; (ii) in the event COMPS uses less than the entire Data
Credit in any given twelve-month period, COMPS may offset the amounts payable
pursuant to this Section for the following twelve-month period by an amount
equal to the difference between the Data Credit and the amount of the Data
Credit actually used by COMPS. For example, if TRW REDI reduces the number of
counties to less than 145 during the 1996 calendar year, and COMPS uses $80,000
of the Data Credit during such period, then COMPS is entitled to reduce the
amount payable on December 1, 1996 by $20,000 (note: if the number of covered
counties falls below 145 subsequent to December 1 of a given calendar year,
COMPS shall be entitled to offset the amount payable with respect to the
following year).
6
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
2.5.1 Failure to Make Payments. In the event COMPS fails to make any
------------------------
of the payments described in this Section 2.5, within 10 business days of notice
of such failure, and in addition to all other legal, equitable and contractual
remedies, TRW REDI may elect any or all of the following: (i) TRW REDI may, at
its option, elect to accelerate all remaining payments due under this Section
2.5, so that such payments become immediately due and payable; (ii) TRW REDI may
offset against all amounts due TRW REDI from COMPS pursuant to this Section 2.5
any amounts payable to COMPS pursuant to Section 3.4.1 ("Report and Payment")
until such time as COMPS's obligations under this Section 2.5 have been
satisfied; (iii) TRW REDI shall have, only during the period as to which COMPS
has not satisfied its obligations under this Section 2.5, a fully-paid royalty-
free license to re-sell in digital form the COMPS Data (such license to expire
upon payment by COMPS of all amounts currently due under this Section 2.5 or
upon receipt by TRW REDI pursuant to the exercise of such license of proceeds
equal to amounts currently due from COMPS less the COMPS Data Commission Fees
otherwise payable by TRW REDI with respect to the sale of such COMPS Data); (iv)
TRW REDI may suspend the Data Credit provided to COMPS in Section 2.5, above;
and (v) COMPS shall be subject to the late payment charge described in Section
3.5.
2.6 C&I Data Extract Business; Option. At any time during the first
---------------------------------
year of the Initial Term, COMPS may, by written notice to TRW REDI, exercise the
option granted by this Section 2.6 to acquire, to the extent described in
Section 2.1 through 2.4 hereof, the Florida and Georgia C&I Data Extract
Business. If this option is exercised by COMPS, and in consideration of such
acquisition, COMPS agrees to pay TRW REDI the additional sum of Sixteen Thousand
Six Hundred Sixty-Six Dollars and Sixty-Seven Cents ($16,666.67) each month for
the first year following exercise of the option, and the sum of Twelve Thousand
Five Hundred ($12,500) each month for each of the next succeeding four (4)
years.
2.6.1 Payment and Delivery. Exercise of the option described in this
--------------------
section shall be evidenced by written notice from COMPS to TRW REDI. COMPS
shall have sixty (60) days from the date of such notice to conduct a reasonable
due diligence inquiry into the status and condition of the Florida and Georgia
C&I Data Extract Business. Provided COMPS is satisfied in its sole discretion
with the results of such due diligence investigation, and provided TRW REDI has
transferred and delivered the material and information described in Section 2.2
with respect to the Florida and Georgia C&I Data Extract Business, COMPS shall
so notify TRW REDI and shall become obligated to begin making the monthly
payments described in this section and shall promptly transmit the first such
payment to TRW REDI (the "Option Closing"). Payments will be made by COMPS to
TRW REDI by wire transfer of immediately available funds or by certified check
on or before the end of each month following exercise of the option.
2.7 Covenant Not to Compete. TRW REDI agrees that for a period of
-----------------------
one (1) year following the Closing, neither TRW REDI nor any affiliate of TRW
REDI will, directly or indirectly through interest in an affiliate, enter into
or conduct or assist another to conduct the C&I Data Extract Business or C&I
Photo Illustrated Business in each county within the Territory. Material breach
of this covenant shall be deemed a material breach of this Agreement, and in
addition to all other available legal, equitable and contractual remedies, TRW
REDI agrees to promptly refund to COMPS all amounts paid previously by COMPS
pursuant to Section 2.5 (in which case COMPS shall pay for all Data Credits
actually used by COMPS during the Term). Following the exercise by COMPS of the
option described in Section 2.6
7
<PAGE>
hereof, and subject to the occurrence of the Option Closing, TRW REDI agrees
that for a period of one (1) year following the Option Closing neither TRW REDI
nor any affiliate of TRW REDI will, directly or indirectly through interest in
an affiliate, enter into or conduct or assist another to conduct the C&I Data
Extract Business or C&I Photo Illustrated Business in each county within North
Carolina, South Carolina, Alabama, Mississippi, Florida, and Georgia. TRW REDI
agrees to cure, within fifteen (15) days of COMPS's request therefor, all
breaches of this Section regardless of materiality.
2.8 TRW REDI Data.
--------------
2.8.1 Sale of TRW REDI Data to COMPS: During the Term of this
------------------------------
Agreement, TRW REDI agrees to sell to COMPS such TRW REDI Data for the United
States of America (except for the states of Florida, Georgia and the New York
Territory) as COMPS may order from time to time. If COMPS exercises the option
pursuant to Section 2.6 of this Agreement, TRW REDI further agrees to sell the
TRW REDI Data for Florida and Georgia to COMPS on an as-ordered basis.
2.8.2 Price and Payment. For all TRW REDI Data orders, COMPS agrees
-----------------
to pay TRW REDI the list prices set forth on Exhibit B (as modified by TRW REDI
---------
from time to time), less a ten percent (10%) discount (or such greater discount
- - including any discount resulting from reduction in TRW List Prices - made
available to TRW REDI's most favored customer during the Term).
2.9 Non-Solicitation of Former TRW REDI Employees. TRW REDI agrees
---------------------------------------------
that for the Term of this Agreement, neither TRW REDI nor any affiliate of TRW
REDI will directly or indirectly solicit any former TRW REDI employees hired by
COMPS to terminate their employment with COMPS.
3. COMPS Appointment of TRW REDI as Sales Agent.
--------------------------------------------
3.1 Sales Agency. Subject to the terms and conditions hereof, COMPS
------------
appoints TRW REDI as its non-exclusive sales agent for on-line digital
transmission of COMPS Data stored in a computer database format (the "Sales
Agency"). Such appointment shall be non-transferable by TRW REDI In connection
with such appointment, COMPS hereby provides TRW REDI a non-exclusive, non-
transferable license to digitally publish and transmit COMPS Data in the format
of an on-line computer database and to offer to end users a non-transferable
license from COMPS for the personal use of such COMPS Data by such end users for
real estate appraisal and analysis. TRW REDI agrees that all sales of COMPS
Data pursuant to the Sales Agency shall be on a "per inquiry" basis, according
to the specifications in Exhibits C-1 or C-2, as applicable, and that such
products shall not be sold, transferred or delivered in bulk. For purposes of
this section, COMPS acknowledges that TRW REDI currently bases its on-line
pricing for Commercial and Industrial Data on a per minute basis and shall
remain as such until such time as COMPS provides TRW REDI with specifications
reasonably acceptable to TRW REDI for changing this pricing method which changes
shall be made upon 75 days notice to TRW REDI. If such change is requested, it
shall not be treated as a change under Section 3.1.1. Failure by TRW REDI to
complete the requested changes to COMPS's reasonable satisfaction
8
<PAGE>
within such 75-day period shall result in a penalty of $1,000 per day to be
subtracted from next payment to be made an the Promissory Note.
3.1.1 Obligations of TRW REDI. In correction with the Sales Agency,
-----------------------
TRW REDI agrees (i) it shall publish COMPS Data as a stand-alone product and
only in the format attached hereto as Exhibit C-2; (ii) it shall make COMPS Data
-----------
available through its on-line database services to TRW REDI subscribers on a
consistent basis; (iii) it shall provide a level of customer service to
purchasers of COMPS Data consistent with the level of service provided by TRW
REDI to subscribers to other TRW REDI on-line information services; (iv) TRW
REDI will use its reasonable efforts to keep its on-line technology current with
competitive on-line services; (v) TRW REDI shall offer and provide COMPS Data
only at such prices and terms determined by COMPS and provided to TRW REDI (such
prices and terms subject to change in the unilateral discretion of COMPS upon
sixty (60) days notice to TRW REDI; such changes shall be limited to once-per-
year unless COMPS pays TRW REDI for the time and materials cost of such changes;
however, COMPS may make one other such additional change, subject to this
Section 3.1.1, during the Term); and TRW REDI shall use reasonable care to
notify its on-line subscribers that COMPS Data is owned by COMPS and subject to
copyright and other intellectual property protection. As an inducement for TRW
REDI to act as COMPS' agent and to open its system to COMPS' product, COMPS
acknowledges that TRW REDI must obtain a commission sufficient to cover its
costs of providing such product. Therefore, COMPS will not set a price for such
product less than an amount sufficient to permit TRW REDI to recover such
commission, which commission COMPS acknowledges as $0.12 per minute or $0.50 per
inquiry. For purposes of this Section 3.1.1. price changes refers to the
numerical values of such prices and not the pricing methodology.
3.1.1.1 non-exclusive Remedies. In case (A) COMPS Data is not
----------------------
available to end users through the Sales Agency for either (1) a period of
thirty (30) consecutive days, or (2) a total of sixty (60) days during the Term,
or (B) TRW REDI fails to comply with any other obligation set forth in this
Section, and in addition to other equitable, legal and contractual remedies
available, the Sales Agency shall terminate at COMPS's option. Notwithstanding
the foregoing, the termination of the Sales Agency shall not occur until the
completion of, in the case of a breach of the obligations described in this
subsection or in clauses (i), (ii), (iii) or (v) of subsection 3.11, thirty (30)
days from written notice of such failure, and, in the case of a breach of the
obligation described in clause (iv) of subsection 3.1.1, six (6) months from the
date of written notice of such failure.
3.1.2 Exclusive Agency. TRW REDI agrees that it shall not, during
----------------
the term of the Sales Agency, provide on-line services or availability with
respect to any other Enhanced C&I Product.
3.2 Nonexclusive License Grants.
----------------------------
3.2.1 COMPS Mark. Subject to Section 6, COMPS grants to TRW REDI a
----------
nonexclusive, nontransferable license to use the COMPS Mark in connection with
marketing and performing its obligations under the Sales Agency. TRW REDI shall
have no other rights to use the COMPS Mark except as expressly set forth herein.
9
<PAGE>
3.2.2 Limitations. TRW REDI may not use or reproduce the COMPS Mark
-----------
in any manner other than in the manner as set forth in Section 6 and such other
manners as COMPS may pre-approve in writing. Upon any expiration or termination
of the Sales Agency provided by this Section 3, the license grant pursuant to
Section 3.2.1 shall immediately terminate and TRW REDI shall discontinue all use
and distribution of COMPS Mark.
3.3 Fees Paid to TRW REDI. In consideration of its performance
---------------------
under the Sales Agency, COMPS agrees to pay TRW REDI the following fees ("COMPS
Data Commission Fees"):
a. For aggregate COMPS Data sales through the Sales Agency during
each succeeding twelve-month period beginning upon the Closing of up to ***
Dollars ($***), *** percent (***%) of Gross Revenues collected by TRW REDI for
the benefit of COMPS; and
b. For aggregate COMPS Data sales through the Sales Agency during
each succeeding twelve-month period beginning upon the Closing in excess of ***
Dollars ($***), *** percent (***%) of Gross Revenues collected by TRW REDI for
the benefit of COMPS.
3.4 Report and Payment of Proceeds.
------------------------------
3.4.1 Report and Payment. Within thirty (30) days after the end of
------------------
each calendar month, TRW REDI will provide COMPS with a detailed and accurate
statement, in a customary form reasonably satisfactory to COMPS, of the identity
of purchasers of COMPS Data through TRW REDI's on-line services and the
calculation of all COMPS Data Commission Fees earned by TRW REDI with respect to
the immediately preceding month, together with payment of Gross Revenues during
such month less the COMPS Data Commission Fees earned by TRW REDI during such
month. Such payment shall be made by TRW REDI check.
3.4.2 Records and Audit Rights. TRW REDI shall maintain current,
------------------------
accurate and complete books and records relating to COMPS Data sales and all
payments due hereunder in sufficient detail to enable the COMPS Data Commission
Fees payable thereon to be determined. COMPS or its designee (which shall be a
certified public accountant chosen by COMPS) may audit the records of TRW REDI
as necessary, but no more than annually, to verify such fees, during normal
business hours and following reasonable notice. If the audit discloses
overpayment of such fees by COMPS, TRW REDI shall promptly pay to COMPS an
amount equal to any such overpayment to which COMPS is entitled as disclosed by
the audit, plus late charges thereon as set forth in Section 3.5.
Alternatively, if the audit discloses underpayment of such fees, COMPS shall
promptly remit to TRW REDI any such underpayment. Such audit shall be at
COMPS's expense; provided, however, that if the audit discloses that COMPS
overpaid COMPS Data Commission Fees by at least five percent (5%) for the
audited period, then TRW REDI shall reimburse COMPS for the reasonable audit
costs related to said overpayment. COMPS may exercise its right of audit as to
each of TRW REDI and its permitted sublicensees no more frequently than once per
year with respect to COMPS Data sales for the preceding three (3) calendar years
(except that COMPS may perform one additional audit during the term if necessary
or advisable in connection with a significant transaction or financing). TRW
REDI shall preserve and maintain all such records required for audit for a
period of three (3) years after the month to which the record applies. COMPS or
its designee, may, during the course of such
10
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
examination, make such copies and/or extracts of TRW REDI's books and records
relating to COMPS Data sales as are reasonably necessary. COMPS and its designee
shall treat all such information reviewed during the audit as Confidential
Information of TRW REDI.
3.5 Late-Charges. Any late payments under this Section 3 shall
------------
incur late charges at a rate equal to the lesser of one and one-half percent
(1.5%) per month or the maximum legal rate.
4. Reservations. Except as expressly provided in this Agreement, each party
------------
reserves all proprietary rights in and to: (i) all of the underlying data,
compilations and information gathered, compiled or published by such party in
connection with the creation and preparation of the Licensed Data; (ii) all of
the other data, compilations and publications created, prepared or authorized by
each party not consisting of the Licensed Data; and (iii) all copyrights and
other proprietary rights in any of the foregoing. However, notwithstanding
anything in any TRW REDI subscription or other agreement to which COMPS may be
subject, COMPS is expressly licensed and permitted to incorporate TRW REDI Data
into its permanent enhanced Investment Property database; provided, however that
-----------------
such incorporated information may not be transferred, re-sold, licensed or sub-
licensed by COMPS "as is," and may only be transferred, re-sold, licensed or
sub-licensed by COMPS as part of COMPS Data or another COMPS enhanced
information product. Nothing herein shall be construed as a license by TRW REDI
to COMPS relating to any TRW REDI or TRW tradenames or trademarks, including
without limitation "'TRW," "TRW REDI," and "QuickSource."
5. Delivery of Licensed Data; Other Services and Taxes.
---------------------------------------------------
5.1 Delivery of COMPS Data.
-----------------------
5.1.1 Initial Fulfillment. COMPS will deliver to TRW REDI one true
-------------------
and complete copy of the COMPS Data as of January 1, 1995 and updated through
September 25, 1995, on or before September 30, 1995.
5.1.2 Updates. COMPS will deliver updates of the COMPS Data to TRW
-------
REDI weekly. COMPS will use its best efforts to provide updates which are as
current and complete as the most current of any of COMPS products available.
5.1.3 Shipping Address. COMPS will ship COMPS Data and an updates to
----------------
TRW REDI at the following address: 5601 East La Palma Avenue, Anaheim,
California 92807, Attention: Diana Serio.
5.1.4 Format and Layout. COMPS will furnish the COMPS Data (i) on
-----------------
magnetic media in IBM compatible format, and in the record layout set forth in
Exhibit C-1, and (ii) in hard-copy form as currently made available by COMPS to
- -----------
its customers.
5.1.5 During a transition period from the Closing until the time
referenced in Section 5.1.1, COMPS shall immediately give COMPS Data to TRW REDI
in hard copy. COMPS and TRW REDI shall work together to input such COMPS Data
into TRW's database. The costs of such input shall be borne equally by COMPS
and TRW REDI.
11
<PAGE>
5.2 Delivery of TRW REDI Data. TRW REDI shall deliver to COMPS
-------------------------
such TRW REDI Data as COMPS may order in accordance with the order and delivery
instructions provided in written purchase orders that COMPS may place with TRW
REDI from time to time. COMPS may request TRW REDI to deliver the TRW REDI Data
in any standard form, media and/or format currently provided by TRW REDI to any
of its customers. TRW REDI Data obtained under the Data Credit set forth in
Section 2.5 above will be provided to COMPS in a custom form, media and/or
format ONLY IF COMPS pays TRW REDI an additional fee including, without limit,
all additional costs, fees or expenses of such custom work. TRW REDI agrees to
negotiate with COMPS in good faith in the event COMPS makes a request for such
custom work.
5.3 Discontinuation. Notwithstanding anything herein to the
---------------
contrary, either party to this Agreement may discontinue compiling and providing
the Licensed Data for any geographic location which prohibits the provision of
such data in accordance with this Agreement, or for any geographic location
where a party hereto voluntarily elects to discontinue the compilation of such
data.
5.4 Services. TRW REDI agrees, for a period of three (3) months
--------
after the Closing and promptly upon the request of COMPS, to provide reasonable
training and access to TRW REDI personnel so as to enable COMPS to independently
generate a list of sales transaction leads for the Territory. Such training
shall not exceed one hundred (100) person-hours of time by TRW REDI personnel.
5.5 Taxes. Each party shall pay, respectively, all applicable taxes,
-----
fees and assessments now or hereafter imposed by any governmental authority with
respect to the Licensed Data products distributed by such party.
6. Trademarks and Quality Control.
------------------------------
6.1 Approval of Use of COMPS Mark. TRW REDI shall submit all
-----------------------------
proposed uses of COMPS Mark to COMPS for the express prior written approval of
COMPS before any distribution or use thereof. Such approval may be granted or
withheld as COMPS may reasonably determine. Failure by COMPS to disapprove in
writing any such proposed use within fourteen (14) days from the date of
submission by TRW REDI shall be deemed approval thereof. After samples have
been approved pursuant to this Section, TRW REDI shall not depart therefrom
without the prior written approval of COMPS.
7. Proprietary Rights.
------------------
7.1 Acknowledgement Each party acknowledges the other's valuable
---------------
rights in and to the Licensed Data compilations, including each party's
copyrights and other proprietary rights therein.
7.2 Restriction on Copying, Disclosure and Use. Except as set forth
------------------------------------------
in this Agreement, without the other party's prior written consent, neither
party will:
a. disclose or transfer any portion of the Licensed Data acquired
from the other party in any manner other than as expressly authorized in this
Agreement;
12
<PAGE>
b. provide or cause to be provided data including the Licensed Data
to any third party unless such third party enters into a certification
acknowledging that the third party will not use the Licensed Data except as
permitted by this Agreement.
c. make any copies of the Licensed Data owned by the other party in
any form except for two (2) authorized back-up copies; or
d. use the other's Licensed Data in connection with promotional
offerings (i.e., providing services or product without charge).
7.3 Ownership. TRW REDI may use the COMPS Mark for the purposes of
---------
this Agreement. TRW REDI acknowledges that COMPS is the sole and exclusive
owner of the COMPS Mark. TRW REDI agrees that it will not do anything
inconsistent with such ownership either during the term of the Agreement or
afterwards. Specifically, TRW REDI shall use reasonable and good faith efforts
to use the COMPS Mark in a manner that does not deviate from COMPS's rights in
the COMPS Mark, and TRW REDI will take no action that will interfere with or
diminish COMPS's rights in the COMPS Mark. TRW REDI shall use the COMPS Mark so
that such trademarks are a separate and distinct impression from any other
trademark that may be used or affixed to any TRW REDI Product. Except as
permitted in this Agreement, TRW REDI agrees that it will not adopt or use the
COMPS Mark as part or all of any corporate name, trade name, other trademark,
service mark or certification mark, either alone or in combination with other
words. TRW REDI shall not register, or cause any third party to register, the
COMPS Mark. TRW REDI hereby acknowledges that the public recognition and
positive perception of the value which is associated with the COMPS Mark
enhances and exceeds the tangible value of the COMPS Mark ("Good Will") and that
all rights in the COMPS Mark and Good Will arising therefrom belong exclusively
to, and shall inure to the benefit of, COMPS. TRW REDI shall not adopt or
register a confusingly similar mark or designation anywhere in the United States
in connection with the sale or marketing of any Enhanced C&I Product.
8. Confidentiality. Except as expressly permitted by this Agreement, each
---------------
party agrees that it will not use or disclose any "Confidential Information" of
the other party. "Confidential Information" means any information which the
other party marks "Confidential" or if not disclosed in writing, identifies as
confidential at the time of disclosure and confirms thereafter in writing within
thirty (30) days of such disclosure. Confidential Information does not include
any information which was either in the public domain or already known to the
recipient at the time of disclosure, independently developed by the recipient,
disclosed to recipient by a third party without breach of an obligation of
confidentiality or disclosed pursuant to a court order.
9. Warranties and Indemnification.
-------------------------------
9.1 Warranties. COMPS and TRW REDI each represents and warrants to
----------
the other that (i) it has the right, title and authority to enter into and
perform this Agreement (including, in the case of TRW REDI, good and marketable
title to the Assets); and (ii) its execution, delivery and performance of this
Agreement will not conflict with the terms of any other agreement to which it is
a party. COMPS and TRW REDI each further covenant not to enter into any
agreement which will conflict with the terms of this Agreement. Neither party
guarantees the accuracy or reliability of any Licensed Data. THIS WARRANTY IS
THE ONLY
13
<PAGE>
WARRANTY WITH RESPECT TO THE LICENSED DATA, AND SUCH WARRANTY IS IN LIEU OF ALL
OTHER WARRANTIES EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE.
9.2 Limitation of Liability. EXCEPT AS SET FORTH IN SECTION 9.3,
-----------------------
UNDER NO CIRCUMSTANCES WILL EITHER PARTY HAVE ANY OBLIGATION OR LIABILITY TO THE
OTHER PARTY FOR ANY CLAIM, INJURY OR DAMAGE RELATING TO, ARISING OUT OF, OR
RESULTING FROM THE INACCURACY OF ANY LICENSED DATA. NOTWITHSTANDING ANY OTHER
PROVISION OF THIS AGREEMENT, UNDER NO CIRCUMSTANCES WILL EITHER PARTY HAVE ANY
OBLIGATION OR LIABILITY TO THE OTHER FOR ANY INCIDENTAL, SPECIAL, INDIRECT OR
CONSEQUENTIAL DAMAGES INCURRED BY THE OTHER PARTY, REGARDLESS OF HOW SUCH
DAMAGES ARISE AND OF WHETHER OR NOT A PARTY WAS ADVISED SUCH DAMAGES MIGHT
ARISE.
9.3 Other Parties; Indemnification. Each party will include
------------------------------
provisions consistent with those set forth in Sections 9.1 and 9.2 above, in any
agreement pursuant to which the Licensed Data is provided to any third party.
Each party to this Agreement will indemnify, defend and hold harmless the other
party (the "Indemnified Party") hereto, its employees, agents and
representatives, from and against any losses, claims, suits, costs and/or
expenses, including attorney fees, arising out of or resulting from any claim by
any third party to whom the Indemnifying Party has provided the Licensed Data
and based exclusively on such Licensed Data, whether such data was provided
prior to or during the Term of this Agreement. The Indemnified Party shall
provide prompt notice to the Indemnifying Party of a claim potentially giving
rise to obligations under this section, and the Indemnifying Party shall be
permitted to assume and control the defense thereof. The Indemnifying Party
shall not be liable for any settlement entered into without its prior written
consent, which shall not unreasonably be withheld.
10. Conditions Precedent to TRW REDI's Performance. The obligation of TRW REDI
----------------------------------------------
to consummate the transactions contemplated by this Agreement is subject to the
satisfaction, at or before the Closing of all the conditions set out below in
this Section 10. TRW REDI may waive in writing any or all of these conditions,
in whole or in part, without prior notice; provided, however, that no such
waiver of a condition shall constitute a waiver by TRW REDI of any of its other
rights or remedies, at law or in equity, if COMPS shall be in default of any of
the representations or covenants under this Agreement.
10.1 Accuracies of COMPS' Representations. Except as otherwise
------------------------------------
permitted by this Agreement, all representations by COMPS in this Agreement
shall be true on and as of the Closing as though made at that time.
10.2 Performance by COMPS. COMPS shall have performed, satisfied,
--------------------
and complied with all covenants, agreements, and conditions required by this
Agreement to be performed or complied with by COMPS on or before the Closing.
14
<PAGE>
10.3 President's Certificate as to Financial Condition. TRW REDI
-------------------------------------------------
shall have received a certificate duly executed by the President of COMPS,
stating that the audited balance sheet of COMPS as of December 31, 1994, and the
unaudited balance sheet of COMPS as of May 31, 1995, each reflects net worth
(total assets less total liabilities) of at least $700,000. Such certificate
shall also state that each of the balance sheets referred to in this section
were prepared in accordance with generally accepted accounting principles
(subject, in the case of the May 31 balance sheet, to normal year-end
adjustments and the absence of footnotes).
11. Conditions Precedent to COMPS' Performance. The obligation of COMPS to
------------------------------------------
consummate the transactions contemplated by this Agreement is subject to the
satisfaction, at or before the Closing of all the conditions set out below in
this Section 11. COMPS may waive in writing any or all of these conditions, in
whole or in part, without prior notice; provided, however, that no such waiver
of a condition shall constitute a waiver by COMPS of any of its other rights or
remedies, at law or in equity, if TRW REDI shall be in default of any of the
representations or covenants under this Agreement.
11.1 Financial Statements. TRW REDI shall have provided COMPS with
--------------------
financial statements certified by an authorized officer of TRW REDI confirming
that TRW REDI's total 1994 channel revenues equaled or exceed the revenues set
forth on Exhibit D.
---------
11.2 Due Diligence. COMPS shall have completed due diligence and be
-------------
satisfied, in its sole discretion (i) that the transactions contemplated herein
do not conflict with any material contract or commitment to which TRW REDI is a
party, including without limitation the TRW REDI General Partnership Agreement;
(ii) that the status and condition of the California C&I Business and the C&I
Data Extract Business are substantially as has been represented by TRW REDI to
COMPS; and (iii) as to the quality and quantity of the customer base for the
California C&I Business and the C&I Data Extract Business. COMPS agrees that
TRW REDI information obtained during the due diligence described in this section
shall be subject to the Non-Disclosure Agreement attached hereto as Exhibit I.
---------
11.3 Transfer of Business. TRW REDI shall have transferred to COMPS
--------------------
all of the Assets, and TRW REDI shall have executed a Bill of Sale and
Assignment in form reasonably satisfactory to COMPS and its counsel relating to
the Assets.
11.4 Accuracies of TRW REDI's Representations and Warranties. Except
-------------------------------------------------------
as otherwise permitted by this Agreement, all representations by TRW REDI in
this Agreement or in any written statement that shall be delivered to COMPS
under this Agreement shall be true on and as of the Closing as though made at
that time.
11.5 Performance by TRW REDI. TRW REDI shall have performed,
-----------------------
satisfied, and complied with all covenants, agreements, and conditions required
by this Agreement to be performed or complied with by TRW REDI on or before the
Closing.
11.6 Officer's Certificate. Each party shall have received a
---------------------
certificate signed by an authorized officer of the other attesting to the
satisfaction of the conditions in Sections 10.1, 10.2, 11.4 and 11.3.
15
<PAGE>
12. The Closing. The closing of the foregoing transaction (the
-----------
"Closing") shall occur at 2:00 p.m. on August 31, 1995 at a site mutually
determined by the parties, unless the Agreement is terminated earlier in
accordance with Section 13.
12.1 Waiver of Conditions Precedent. COMPS, in its discretion, may
------------------------------
waive one or more of the conditions precedent to COMPS' obligation to perform as
described in Section 11 hereof as a condition to the Closing. In the event that
COMPS so waives any one or more such condition, TRW REDI agrees that such
condition is waived as a condition to Closing only and are not waived as a
covenant of TRW REDI hereunder. Without limiting the foregoing, in the event
that COMPS waives the obligation of TRW REDI to deliver all the Assets at the
Closing, TRW REDI shall, within a reasonable time period but not to exceed
thirty (30) days from the Closing, deliver to COMPS any remaining Assets not
delivered to COMPS at the Closing. In the event that TRW REDI shall fail to
deliver to COMPS any remaining Material Assets (as defined below) not delivered
to COMPS at the Closing within thirty (30) days from the Closing, then as
liquidated damages hereunder, COMPS shall be entitled to reduce the payment due
on 12/l/96 as set forth in Section 2.5 by an aggregate amount equal to $47,500
plus $1,000 per day (up to $30,000) for each day after September 30, 1995 that
TRW REDI continues to fail to deliver such remaining Material Assets. TRW REDI
acknowledges that, insofar as it would be extremely impracticable and difficult
to estimate the actual damages and harm which COMPS would suffer in the event
that TRW REDI defaults hereunder and fails to deliver the remaining Material
Assets timely hereunder, the parties agree that the sum calculated in accordance
with this Section 12.1 is a reasonable estimate of the total net detriment that
COMPS would suffer in the event of TRW REDI's failure to deliver the remaining
Material Assets by the applicable date. COMPS shall be entitled to retain such
liquidated damage sum, and COMPS shall be entitled to an offset against the
payment coming due on 12/l/96 for the amounts due COMPS hereunder. For purposes
of this Agreement, "Material Assets" shall mean the Accounts Receivable and the
books referenced in Section 2.2.4.
12.2 Payment. At the Closing, COMPS shall deliver or cause to be
-------
delivered to TRW REDI the initial payment as set forth in Section 2.5.
12.3 Further Documents. At any time before or after the Closing,
-----------------
each party shall execute, acknowledge, and deliver any further deeds,
assignments, conveyances, and other assurances, documents, and instruments of
transfer, reasonably requested by the other, and will take any other action
consistent with the terms of this Agreement that may reasonably be requested by
the other.
13. Amendments; Term and Termination.
--------------------------------
13.1 Amendments. This Agreement may be amended at any time, but only
----------
by written instrument signed by both parties which refers specifically to this
Agreement.
13.2 Term. This Agreement shall have a term of five (5) years (the
----
"Initial Term"). Unless and until terminated as set forth herein, the Renewal
Provisions shall be automatically renewed for successive one (1) year terms
("Renewal Term(s)"). Either party may terminate this agreement at the end of
the Initial Term or of any Renewal Term by giving the
16
<PAGE>
other party one (1) year advance written notice of such termination. For
purposes of this section, "Renewal Provisions" means Sections 1, 2.8, 3, 4, 5,
6, 7, 8, 9, 13, and 14 of this Agreement
13.3 Mutual Termination. This Agreement may be terminated by
------------------
mutual agreement at any time, but only by a written instrument signed by both
parties specifying the date and time as of such termination.
13.4 Termination for Cause. This Agreement may be terminated
---------------------
unilaterally by either party if and when (a) the other party has breached
material obligation under this Agreement, (b) the party desiring to terminate
has delivered to the breaching party a written demand that the breaching party
cure the breach, (c) the breaching party has failed to cure such breach within
five (5) days (in the case of the nonpayment of license fees) or sixty (60) days
(in the case of any other breach) after receipt of the demand and (d) the party
desiring to terminate delivers to the breaching party written notice of
termination. A party to this Agreement shall be deemed to have breached a
material obligation hereunder if it (a) fails to materially perform its
obligations hereunder in accordance with the terms hereof, or breaches any of
the covenants, warranties or representations, hereunder, (b) fails to provide
any required statement of account or make any payment hereunder as and when such
statement is to be provided or such payment is to be made, or (c) becomes
insolvent, makes an assignment for the benefit of creditors, suspends its
business operations, files a voluntary petition of bankruptcy under federal or
state bankruptcy statutes or has filed against it an involuntary petition in
bankruptcy which is not dismissed or withdrawn within thirty (30) days of the
filing thereof.
13.5 Unilateral Termination by COMPS. COMPS may terminate this
-------------------------------
Agreement without cause at any time during the Initial Term by giving TRW REDI
one (1) year advance written notice (the "Notice Period") of such termination.
If COMPS terminates this Agreement pursuant to this Section 13.5. COMPS agrees
to pay TRW REDI, on the final day of the Notice Period, the total amounts still
due TRW REDI pursuant to Sections 2.5, 2.5.1, 2.6 and 2.6.1, discounted to the
final day of the Initial Term at the net present value rate of Ten Percent
(10%).
13.6 Rights Upon Termination. Except as otherwise expressly set
-----------------------
forth in this Agreement, upon any expiration or termination of this Agreement,
all license grants shall immediately terminate. The obligations of the parties
pursuant to Section 2.1.1 (except that only COMPS indemnification obligations
pursuant to Section 2.1.1 shall survive termination), Section 2.3, Section 4,
Section 7, Section 8, Section 9 and Section 14 shall survive any expiration or
termination of this Agreement. In addition, the obligations of TRW REDI set
forth in Section 2.7 shall survive any termination of this Agreement for the
remainder of the Initial Term, provided COMPS has made the payments described in
Section 13.5.
13.6.1 Post-Termination License; Return of Information. In the event
-----------------------------------------------
this Agreement terminates pursuant to Sections 13.2 or 13.5, or is terminated by
TRW REDI pursuant to Section 13.4, TRW REDI shall receive a fully paid, non-
exclusive, non-transferable license to use the COMPS Data available throughout
the Term and as of the date of termination of this Agreement, only with respect
to properties located within the Photo Illustrated Counties and only for the
purpose of the reestablishment of TRW REDI's C&I Photo Illustrated Business and
on-line delivery of Investment Property information within such Photo
Illustrated Counties.
17
<PAGE>
Nothing set forth herein shall obligate COMPS to update, modify or improve such
COMPS Data, and TRW REDI shall have no right or license to COMPS Data developed
after the date of termination.
14. Miscellaneous.
-------------
14.1 Arbitration. Any controversy or claim arising out of or
-----------
relating to this Agreement, or the breach hereof, or the interpretation hereof,
that cannot be settled by good faith negotiations between the parties within
thirty (30) days, shall be settled by arbitration in accordance with the Rules
of the American Arbitration Association; and judgment upon the award rendered in
such arbitration shall be final and may be entered in any court having
jurisdiction thereof. Notice of the demand for arbitration shall be filed in
writing with the other party to this Agreement and with the American Arbitration
Association. In no event shall the demand for arbitration be made after the
date when institution of legal or equitable proceedings based on such claim,
dispute or other matter in question would be barred by the applicable statute of
limitations. This agreement to arbitrate shall be specifically enforceable
under the prevailing arbitration law. The arbitration or arbitrators in any
arbitration proceeding shall be instructed to award attorneys' fees and costs to
the prevailing party.
14.2 Waiver. Either party may at any time waive compliance by the
------
other with any covenants or conditions contained in this Agreement, but only by
written instrument executed by the party waiving such compliance. No such
waiver, however, shall be deemed to constitute the waiver of any such covenant
or condition in any other circumstances or the waiver of any other covenant or
condition.
14.3 Status. The parties will perform all services hereunder as
------
independent contractors. Nothing contained in this Agreement shall be deemed to
create any association, partnership, joint venture, or relationship of principal
and agent or master and servant between the parties.
14.4 Excusable Delay. Neither party shall be liable for any delay or
---------------
failure in its performance of any of the acts required by this Agreement when
such delay or failure arises for reasons beyond the reasonable control of such
party. The time for performance of any act delayed by such causes shall be
postponed for a period equal to the delay not to exceed sixty (60) days;
provided, however, that the party so affected, however, shall use reasonable
efforts to avoid or remove such causes of nonperformance and to complete
performance of the act delayed, as soon as possible.
14.5 Governing Law. This Agreement will be governed by and construed
-------------
in accordance with the internal substantive laws of the State of California, as
applied between residents of the State of California.
14.6 Severability. If any provision of this Agreement shall finally
------------
be determined to be unlawful, then such provision shall be deemed to be severed
from this Agreement and every other provision of this Agreement shall remain in
full force and effect.
14.7 Assignment. This Agreement shall not be assignable by either
----------
party without the prior written consent of the other except to a successor of
all, or substantially all, of
18
<PAGE>
the business of a party. Subject to the foregoing, this Agreement shall be
binding upon and inure to the benefit of permitted successors and assigns.
14.8 No Third Parties. Except as expressly provided herein, neither
----------------
this Agreement nor any provisions set forth herein is intended to or shall
create any rights in, or confer any benefits upon, any person other than the
parties hereto.
14.9 Incorporation by Reference. The Exhibits to this Agreement
--------------------------
constitute integral parts of this Agreement and are hereby incorporated into
this Agreement by this reference.
14.10 Notices. All notices, requests and other communications
-------
hereunder shall be in writing and shall be deemed to have been duly given at the
time of receipt if delivered by hand or communicated by electronic transmission,
or, if mailed, three (3) days after mailing registered or certified mail, return
receipt requested, with postage prepaid (i) if to TRW REDI, then to: TRW REDI
Property Data, 5601 East La Palma Avenue, Anaheim, California 92807, Telefax:
714-701-9231, Attention: General Manager, with a copy to the person indicated
below TRW REDI's signature; or (ii) if to COMPS, then to: COMPS Infosystems,
Inc., 9888 Carroll Centre Road, Suite 100, San Diego, California 92126, Telefax
619-684-3292, Attention: President, provided, however, that if either party
shall have designated a different address by notice to the other given as
provided above, then to the last address so designated.
14.11 Counterpart. More than one counterpart of this Agreement may
-----------
be executed by the parties hereto, and each fully executed counterpart shall be
deemed an original without production of the others.
14.12 Complete Agreement. This Agreement sets forth the entire
------------------
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior letters of intent, agreements, covenants, arrangements,
communications, representations, or warranties, whether oral or written, by any
officer, employee, or representative of either party relating thereto - except
for the letter from TRW REDI to COMPS of August 31, 1995.
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
executed by its duly authorized representatives.
TRW REDI PROPERTY DATA, COMPS INFOSYSTEMS, INC.
an Ohio general partnership a Delaware corporation
By: /s/ Edwin P. Setzer By: /s/ Christopher A. Crane
---------------------------- ----------------------------------
Title: President & GM Title: President
------------------------- -----------------------------
19
<PAGE>
A copy of each notice to TRW REDI should A copy of each notice to COMPS should
be sent to: be sent to:
TRW REDI Property Date COMPS InfoSystems, Inc.
- ---------------------------------------- -------------------------------------
5601 East La Palma Ave. 9888 Carroll Centre Road, Suite 100
- ---------------------------------------- -------------------------------------
Anaheim, CA 92807 San Diego, CA 92126
- ---------------------------------------- -------------------------------------
Telefax: 714.701.9231 Telefax: 619.684.3292
-------------------------------- -----------------------------
Attention: General Manager Attention: President
------------------------------ ---------------------------
20
<PAGE>
EXHIBIT A
TRW REDI BUSINESS
I. C&I Data Extract Business
The business of developing, marketing, publishing and selling property
and transaction information concerning Investment Property, in whatever form and
including without limitation paper, electronic, magnetic, CD-ROM forms, where
the publication of such information typically contains a subset of the
information provided in the C&I Photo Illustrated Business (described below).
Specifically, information provided in the C&I Data Extract Business is typically
characterized by the lack of a photograph concerning the investment property,
and such information principally consists of public records data enhanced in
some instances by the addition of maps and other basic information obtained
through a preliminary level of personal research. Such business does not
include the resale on a stand-alone basis of Public Record Data Products.
II. C&I Photo Illustrated Business
The business of developing, marketing, publishing and selling property
and transaction information concerning Investment Property, in whatever form and
including without limitation paper, electronic, magnetic, CD-ROM forms, where
the publication of such information typically contains, with respect to such
Investment Property, a photograph or photographs of the Investment Property,
confirmed sales information (which may include but not be limited to income
information, broker names and addresses, telephone numbers, buyer and seller
names and telephone numbers, and contact names and telephone numbers for such
parties), property condition, sale price, financing information, market time
information, parking space information, cap rate or gross rent multipliers, and
technical and non-technical property descriptions. Such business does not
include the resale on a stand-alone basis of Public Record Data Products.
21
<PAGE>
EXHIBIT B
---------
TRW REDI DATA AND LIST PRICE
[Insert complete description of TRW REDI Data and list price]
22
<PAGE>
EXHIBIT B
<TABLE>
<CAPTION>
ON LINE CD ROM MICROLICHE
CALIFORNIA RPF DB SPECIALTY DB REPORT DB DATA MAPS
- ----------
<S> <C> <C> <C> <C> <C> <C>
Los Angeles 80c - $1.92/min 80c - $2.99/min $ 2-$3.50 $2,700 $1,295 $2,095
Orange 80c - $1.92/min 80c - $2.99/min $ 2-$3.51 $1,200 $ 595 $ 982
Riverside 80c - $1.92/min 80c - $2.99/min $ 2-$3.52 $1,200 $ 525 $ 578
San Bernardino 80c - $1.92/min 80c - $2.99/min $ 2-$3.53 $1,200 $ 525 $ 415
Sam Diego 80c - $1.92/min 80c - $2.99/min $ 2-$3.54 $1,200 $ 595 $ 725
Alameda 80c - $1.92/min 80c - $2.99/min $ 2-$3.55 $1,020 $ 488 $ 495
Contra Costa 80c - $1.92/min 80c - $2.99/min $ 2-$3.56 $1,020 $ 480 $ 495
San Francisco 80c - $1.92/min 80c - $2.99/min $ 2-$3.57 $1,020 $ 488 $ 495
San Mateo 80c - $1.92/min 80c - $2.99/min $ 2-$3.58 $1,020 $ 488 $ 495
Marin 80c - $1.92/min 80c - $2.99/min $ 2-$3.59 $ 900 $ 413 $ 495
Sacramento 80c - $1.92/min 80c - $2.99/min $ 2-$3.60 $1,020 $ 488 $ 495
El Dorado 80c - $1.92/min 80c - $2.99/min $ 2-$3.61 $ 900 $ 413 $ 400
Ventura 80c - $1.92/min 80c - $2.99/min $ 2-$3.62 $1,020 $ 525 $ 625
WASHINGTON
- ----------
King 80c - $1.92/min 80c - $2.99/min $ 2-$3.65 $1,195 $ 450 $ 745
ILLINOIS
- --------
Cook 80c - $1.92/min 80c - $2.99/min $ 2-$3.68 $3,400 $2,500 $4,115
10-Regions
D.C. METRO
- ----------
Baltimore City, MD 80c - $1.92/min 80c - $2.99/min $ 2-$3.71 $ 675 N/A $1,110
Baltimore County 80c - $1.92/min 80c - $2.99/min $2-$ 3.72 $ 675 N/A $ 765
Anne Arundel, MD 80c - $1.92/min 80c - $2.99/min $2-$ 3.73 $ 675 N/A $ 660
Montgomery, MD 80c - $1.92/min 80c - $2.99/min $2-$ 3.74 $ 790 N/A $ 785
Prince Georges MD 80c - $1.92/min 80c - $2.99/min $2-$ 3.75 $ 790 N/A $ 785
Washington D.C. 80c - $1.92/min 80c - $2.99/min $2-$ 3.76 $ 900 N/A $1,110
Alexandria, VA 80c - $1.92/min 80c - $2.99/min $2-$ 3.77 $ 550 N/A $ 425
Arlington VA 80c - $1.92/min 80c - $2.99/min $2-$ 3.78 $ 550 N/A $ 425
Fairfax, VA 80c - $1.92/min 80c - $2.99/min $2-$ 3.79 $ 800 N/A $ 750
Loudon, VA 80c - $1.92/min 80c - $2.99/min $2-$ 3.80 $ 550 N/A $ 600
Prince William, VA 80c - $1.92/min 80c - $2.99/min $2-$ 3.81 $ 600 N/A $ 600
New Castle, DE 80c - $1.92/min 80c - $2.99/min $2-$ 3.82 N/A N/A $1,350
<CAPTION>
HC Aerial HC Flat HC FLAT LID HC MTHLY HC YR END HC VACANT ILLEGIGLE
CALIFORNIA Maps Library UPDATE SVC. SALES RPTS SALES RPTS LAND RPT PROT ATLAS
- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Los Angeles
Orange
Riverside
San Bernardino
Sam Diego
Alameda
Contra Costa
San Francisco
San Mateo
Marin
Sacramento
El Dorado
Ventura
WASHINGTON
- ----------
King
ILLINOIS
- --------
Cook $795
D.C. METRO
- ----------
Baltimore City, MD City product is combined with County product.
Baltimore County $895 $ 695 $466 $845 $290 $315
Anne Arundel, MD $895 $ 946 $400 $400 $290
Montgomery, MD $895 $1,080 $420 $650 $290
Prince Georges MD $895 $ 960 $426 $650 $290
Washington D.C. $400 $290 $720
Alexandria, VA $355 $185
Arlington VA $355 $185
Fairfax, VA $ 600 $165 $355 $290
Loudon, VA $355 $185
Prince William, VA $355 $185
New Castle, DE $500 $290
</TABLE>
PAGE 1
<PAGE>
EXHIBIT B
<TABLE>
<CAPTION>
GEORGIA
- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cherokee 80c - $1.92/min 80c - $2.99/min $2-$ 3.85 N/A N/A $ 715
City of Atlanta 80c - $1.92/min 80c - $2.99/min $2-$ 3.86 N/A N/A $ 725
Clayton 80c - $1.92/min 80c - $2.99/min $2-$ 3.87 $ 595 N/A $ 850
Cobb 80c - $1.92/min 80c - $2.99/min $2-$ 3.88 $ 595 N/A $ 850
Dekalb 80c - $1.92/min 80c - $2.99/min $2-$ 3.89 $ 595 N/A $ 850
Douglass 80c - $1.92/min 80c - $2.99/min $2-$ 3.90 $ 595 N/A $ 660
Fayette 80c - $1.92/min 80c - $2.99/min $2-$ 3.91 $ 595 N/A $ 660
Forsyth 80c - $1.92/min 80c - $2.99/min $2-$ 3.92 $ 595 N/A $ 660
Fulton 80c - $1.92/min 80c - $2.99/min $2-$ 3.93 $ 695 N/A $1,260
Gwinnet 80c - $1.92/min 80c - $2.99/min $2-$ 3.94 $ 595 N/A $ 805
Hall 80c - $1.92/min 80c - $2.99/min $2-$ 3.95 $ 595 N/A $ 660
Henry 80c - $1.92/min 80c - $2.99/min $2-$ 3.96 $ 595 N/A $ 660
Rockdale 80c - $1.92/min 80c - $2.99/min $2-$ 3.97 $ 595 N/A $ 660
FLORIDA
- -------
Brevard 80c - $1.92/min 80c - $2.99/min $2-$ 3.100 $ 595 N/A $1,785 included $ 695 $140
Broward 80c - $1.92/min 80c - $2.99/min $2-$ 3.101 $ 795 N/A $3,535 included
Dade 80c - $1.92/min 80c - $2.99/min $2-$ 3.102 $ 795 N/A $3,030 included
Hillsborough 80c - $1.92/min 80c - $2.99/min $2-$ 3.103 $ 695 N/A $2,245 included $ 795 $175
Orange 80c - $1.92/min 80c - $2.99/min $2-$ 3.104 $ 695 N/A $2,035 included $ 695 $135
Palm Beach 80c - $1.92/min 80c - $2.99/min $2-$ 3.105 $ 795 N/A $3,155 included $1,500 $205
Pinellas 80c - $1.92/min 80c - $2.99/min $2-$ 3.106 $ 695 N/A $2,025 included $ 895 $170
Sarasota 80c - $1.92/min 80c - $2.99/min $2-$ 3.107 $ 695 N/A $2,360 $750 $ 795 $255 $600
Seminole 80c - $1.92/min 80c - $2.99/min $2-$ 3.108 $ 695 N/A $ 790 $525 $ 795 $140 $800
Volusia 80c - $1.92/min 80c - $2.99/min $2-$ 3.109 $ 695 N/A $1,430 $865 $ 795 $185 $745
</TABLE>
PAGE 2
<PAGE>
EXHIBIT C-1
-----------
TRW REDI DATA RECORD INPUT LAYOUT
[Insert record layout]
23
<PAGE>
EXHIBIT C-2
-----------
TRW REDI ONLINE DATA FORMAT
[Insert Data Format]
24
<PAGE>
Exhibit C-2
Command/Feature: pri 2
--------------------------------------------------------
Address:325 CAJON ST, REDLANDS 92373
County :SAN BERNARDINO CA Land Use :OFFICE BUILDING
Lot Size :A.27 Bldg Area: 2,200 New Page :
Lot Area :11,920 Rent Area: Map Page :29-C3 Source :I
Zoning : Bsmt Area: APN-Acct#:0171-371-04-0000
Ofc. Area: Census Tr:82.00
Year Blt :1930/30 Assessed Land: $39,658
# Bldgs : 1 Park Type:GARAGE Improvement: $68,760
# Stories : 2 Park Spcs:2 Total Value: $108,418
Units : 1 Paving : Assessed Yr:94
CLASS D BUILDING;AVERAGE QUALITY;AVERAGE CONDITION;FRAME $/Sqft : $100.00
CONSTRUCTION;WOOD FRAME;STUCCO/WOOD SIDING;RAISED Price/Un:$220,000
FOUNDATION;GABLE ROOF;COMPOSITION SHINGLE ROOF;FLOOR
FURNACE HEAT;WALL A/C;BUILDING SQUARE FOOTAGE PER THE BUYER
Publication Reference: BEC-08/95-0069
Legal Dsc:L7 BA /ATWOOD & FORD'S SUB
Price : $220,OOOC Sale Date:06/07/95
Cash Down: $121,000 Document#:198109
1st Mtg : $99,000 Int: Yrs:
2nd Mtg : Int: Yrs:
Prev Sale: $24,750U Prev Date:07/30/80 Lease:OWNER=USER
Buyer :BARRE JUDITH Y
Address :612 N LINCOLN ST;REDLANDS,CA 923744151
Seller :UPSTON WILLIAM F
Address :325 CAJON ST.;REDLANDS,CA 92373
Lender :CHINO VLY BK
(TRW REDI) Incomnet:BDR2183
All Rights Reserved
--------------------------------------------------------
25
<PAGE>
Command/Feature: pri 4
--------------------------------------------------
Address:2280 S LILAC AV, RIALTO 92316
County :SAN BERNARDINO CA Land Use :WAREHOUSE
Lot Size :A2.92 Bldg Area: 17,264 New Page :
Lot Area :1276,195 Rent Area: Map Page :26-C2 Source :I
Zoning : Bsmt Area: APN-Acct#:0258-011-21-0000
Ofc. Area: 2,200 Census Tr:36.01
Year Blt :1989/89 Assessed Land: $134,741
# Bldgs : 1 Park Type: Improvement: $419,271
# Stories : 1 Park Spcs: Total Value: $544,012
Units : 1 Paving : Assessed Yr:94
CLASS S BUILDING;AVERAGE QUALITY;AVERAGE CONDITION;METAL $/Sqft : $ 44.89
CONSTRUCTION;STEEL FRAME;METAL SIDING;CONCRETE FOUNDATION Price/Un:$775,000
TRUCK DOORS 2;THIS SALE INCLUDED; ;XS LAND;;NO SPECIFIC
VALUE ASSIGNED TO THIS XS LAND
Publication Reference: BEC-08/95-0087
Legal Dsc:L2 /B54P20
Price : $775,000C Sale Date:06/05/95
Cash Down : $ 52,000 Document#:194427
1st Mtg : $723,000S Int: Yrs:
2nd Mtg : Int: Yrs:
Prev Sale : $115,000U Prev Date:10/02/85 Lease:OWNER=USER
Buyer :PACIFIC KILN & INSULATIONS
Address :8639 ETIWANDA AVE;RANCHO CUCAMONGA,CA 91739;909/899-1711
Seller :MUNRO CHILDRENS TRUS
Address :PO BOX 1219;S. PASADENA,CA 91031
Lender :SELLER
Broker :DAN BORIS(L)
Address :;714/361-7670
(TRW REDI) Incomnet:BDR1622
All Rights Reserved
------------------------------------------------
<PAGE>
Command/Feature: pri 2
--------------------------------------------------
Address:295 -97 ACACIA AV, CARLSBAD 92008
County :SAN DIEGO CA Land Use :APARTMENT
Lot Size :A.43 Bldg Area: 9,000 New Page :1106-E6
Lot Area :18,897 Rent Area: Map Page :13-F2 Source :
Zoning :R3 Bsmt Area: APN-Acct#:204-240-05-00
Ofc. Area: Census Tr:180.00
Year Blt :1987/87 Assessed Land: $350,000
# Bldgs : 2 Park Type:GARAGE Improvement: $400,000
# Stories : 2 Park Spcs:8 Total Value: $750,000
Units : 8 Paving : Assessed Yr:94
CLASS D BUILDING;AVERAGE QUALITY;AVERAGE CONDITION;FRAME $/Sqft : $95.44
CONSTRUCTION;WOOD FRAME;STUCCO EXTERIOR; SLAB FOUNDATION; G.I.M. : 10.34
FLAT ROOF;BUILT-UP ROOF COVER;FORCED AIR HEAT;NO A/C;NO Cap Rate: 7.05
ELEVATOR;NO FIRE SPRINKLER SYSTEM;6(3+2) $850; 1(2+2);$795 RNT/#/MO: $ 0.76
1(3+2) $900;TOWNHOME; BYR UPLEG 1031; SEVERAL BLKS FROM Price/Un:$107,375
Publication Reference: SDA-08/95-0003
Legal Dsc:PTN OF *L9 BQ/PALISADES UN 02
Price : $859,000C Sale Date:06/05/95 Gross Income : $ 83,040
Cash Down : $719,000 Document#:242492 Expenses : $ 19,132
1st Mtg : $140,000C Int: Yrs:30 Net Income : $ 60,586
2nd Mtg : Int: Yrs:
Prev Sale : $900,000C Prev Date:05/16/89
Buyer :POTTER TRUST & MARYANNE MI
Address :8775 AERO DR #135;SAN DIEGO,CA 921231779
Seller :TANNER ROB
Address :321 WILSHIRE RD;SAN LUIS REY,CA 92068
Lender :HOME SAVINGS OF AM
Broker :CREAGAN/ADAMS(L)
Address :;619/431-4200
(TRW REDI) Incomnet:BDR3597
All Rights Reserved
------------------------------------------------
<PAGE>
Command/Feature: print 2
--------------------------------------------------
Address:274 -276 28 ST, SAN FRANCISCO 94131
County :SAN FRANCISCO CA Land Use :DUPLEX
Lot Size :A.06 Bldg Area: 3,184 New Page :
Lot Area :2,850 Rent Area: Map Page :14-B1 Source :
Zoning :R-3 Bsmt Area: APN-Acct#:6601-018
Ofc. Area: Census Tr:215.00
Year Blt :1927/27 Assessed Land: $ 24,186
# Bldgs : 1 Park Type:BASEMENT Improvement: $ 40,909
# Stories : 2 Park Spcs:1 Total Value: $ 65,095
Units : 2 Paving : Assessed Yr:94
CLASS D BUILDING;GOOD QUALITY;GOOD CONDITION;FRAME $/Sqft :$ 138.19
CONSTRUCTION;WOOD FRAME;STUCCO/WOOD SIDING;CONCRETE G.I.M. : 25.18
FOUNDATION;FLAT ROOF;TAR & GRAVEL ROOF COVER;FLOOR FURNACE Cap Rate: 2.92
HEAT;NO A/C;NO ELEVATOR;NO FIRE SPRINKLER SYSTEM;2(2+1) RNT/#/MO:$ 0.45
ADJUSTABLE RATE RIDER;/UNIT HAS RENT CONTROL Price/Un:$220,000
Publication Reference: SFA-08/95-0083
Legal Dsc:/HORNER'S ADD BL 095
Price : $440,000C Sale Date:05/26/95 Gross Income : $17,472
Cash Down : $44,100 Document#:F797024 Expenses : $ 4,280
1st Mtg : $395,900H Int: 7.12 Yrs:30 Net Income : $12,843
2nd Mtg : Int: Yrs: Type :ACTUAL
Buyer :BAERG MARLENE A & ROBERT C
Address :274 28TH ST;SAN FRANCISCO,CA 94131
Seller :DREWES FAMILY 1/2 /TR
Address :1150 CANTERFORD CIR;WESTLAKE VILLAGE,CA
Lender :BANK OF AMERICA
Broker :JIM GOODWIN(L)
Address :;415/731-9350
(TRW REDI) Incomnet:BDN9444
All Rights Reserved
------------------------------------------------
<PAGE>
Command/Feature: pri 2
--------------------------------------------------
Address:ARCHBALD, ONTARIO 91761
County :SAN BARNARDINO CA Land Use :COMMERCIAL ACREAGE
Lot Size :A1.07 Bldg Area: New Page :
Lot Area :46,800 Rent Area: Map Page :23-A6 Source :
Zoning :C1 Bsmt Area: APN-Acct#:0218-021-21-0000
Ofc. Area: Census Tr:22.02
Year Blt : / Assessed Land: $374,400
# Bldgs : Park Type: Improvement:
# Stories : Park Spcs: Total Value: $374,400
Units : Paving : Assessed Yr:94
UTILITIES AVAILABLE;PRICE PER DOCUMENT;TRANSFER TAXI; $/Sqft :$11.54
ARCHIBALD STATE HWY
Publication Reference: BEC-08/95-0095
Legal Dsc: L1 /B178P30
Price : $540,000F Sale Date:06/14/95
Cash Down : $540,000 Document#:204914
1st Mtg : K Int: Yrs:
2nd Mtg : Int: Yrs:
Buyer :WOLFSON & SEGAL REALTY
Address :1250 6TH ST #400;SANTA MONICA,CA 90401
Seller :ARCHIBALD ASSOCIATES
(TRW REDI) Incomnet:BDS7003
All Rights Reserved
------------------------------------------------
<PAGE>
Command/Feature: pri 2
--------------------------------------------------
Address:12335 LLAGAS AV, SAN MARTIN 95046
County :SANTA CLARA CA Land Use :ORCHARD
Lot Size :A17.08 Bldg Area: New Page :
Lot Area :736,164 Rent Area: Map Page :81-C5 Source :I
Zoning :AW Bsmt Area: APN-Acct#:825-01-008+
Ofc. Area: Census Tr:5124.00
Year Blt : / Assessed Land: $ 57,983
# Bldgs : Park Type: Improvement: $ 54,501
# Stories : Park Spcs: Total Value: $112,484
Units : Paving : Assessed Yr:94
UTILITIES AVAILABLE;CHERRY ORCHARD;70 TREES PER ACRE;;FULLY $/Sqft :$0.51
IRRIGATED MKT TIME 3-5 YRS, ESCROW 45 DAYS, 6/95
Publication Reference: SCC-06/95-0055
Multi-APN:825-1-(8,10)
Legal Dsc: L11, L112-113 /SAN MARTIN RANCH MA
Price : $375,000C Sale Date:04/18/95
Cash Down : $100,000 Document#:12864554
1st Mtg : $275,000S Int: Yrs:
2nd Mtg : Int: Yrs:
Buyer :MARIANI MITCHELL L & MARIA
Address :1615 HALF RD;MORGAN HILL,CA 950372905;408/779-5467
Seller :ESTATE OF JENNIE MAR
Address :420 UNION AVENUE #5;CAMPBELL,CA 95008
Lender :MARFIA, JENNIE
Broker :JERRY MARTIN(L)
Address :;408/842-0505
(TRW REDI) Incomnet:BDG5037
All Rights Reserved
------------------------------------------------
<PAGE>
Command/Feature: DETAIL;pri 3
--------------------------------------------------
Address:11455 -S CLAYTON RD, SAN JOSE 95127
County :SANTA CLARA CA Land Use :PRIVATE SCHOOL
Lot Size :A10.00 Bldg Area: 39,750 New Page :
Lot Area :435,600 Rent Area: Map Page :56-D6 Source :I
Zoning :A SJ Bsmt Area: APN-Acct#:612-38-012
Ofc. Area: Census Tr:5033.12
Year Blt :1975/75 Assessed Land: $72,171
# Bldgs : 8 Park Type:PAVED Improvement: $ 931,811
# Stories: 1 Park Spcs:40 Total Value: $1,003,982
Units : 1 Paving : Assessed Yr:94
CLASS D BUILDING;AVERAGE QUALTIY;AVERAGE CONDITION;FRAME $/Sqft :$28.93
CONSTRUCTION;WOOD FRAME;STUCCO EXTERIOR;SLAB FOUNDATION;
LAT ROOF;TAR & GRAVEL ROOF COVER;BUILDING HEATED;PARTIAL
A/C;NO ELEVATOR;NO FIRE SPRINKLER SYSTEM;3/95;POOL, RUNNING
TRACK & BASKETBALL COURT
Publication Reference: SCC-07/95-0009
Legal Dsc:/B80 P39 M
Price : $1,150,000C Sale Date:03/31/95
Cash Down: $1,150,000 Document#:12847952
1st Mtg : K Int: Yrs:
2nd Mtg : Int: Yrs:
Prev Sale: Prev. Date: Lease:OWNER=USER
Buyer : DHARMA REALM BUDDHIST ASSN
Address : 11455 CLAYTON RD;SAN JOSE,CA 951275007;408/721-3702
Seller : TWELVEACRES INC
Address : 11455 CLAYTON RD;SAN JOSE,CA 95127
Broker : LISA GIIMRE(L)
Address : ;408/246-5020
(TRW REDI) Incomnet:BDD6187
All Rights Reserved
------------------------------------------------
<PAGE>
APN :279-41-031 Price: $510,000C Date:03/09/95 Bldar:5,238
County:SANTA CLARA CA $/Sq : $97.37 Doc#:12827598 Units:1
MapPg :66-B3 NewPg: AssLd: $ 24,460 Zone:R1 CAStory:1
Source:I (Inc#:BCZ0868) Total: $ 83,445 Lot :14,950 Yrblt:1950/50
Comment:ALSO USED AS A CHURCH
------------------------------------------------
5) Address:14614 MAGNOLIA ST, WESTMINSTER Use :RELIGIOUS
APN :098-391-1B Price:$1,875,000C Date:03/31/95 Bldar:13,900
County:ORANGE CA $/Sq : $134.89 Doc#:137390 Units:480
MapPg :21-E2 NewPg:828-C3 AssdLd: $156,928 Zone:R2 Story:2
Source:I (Inc#:ASN1841) Total: $749,916 Lot :91,040 Yrblt:1963/86
Comment:DBA CHINESE PRESBYTERIAN CHURCH
<PAGE>
Command/Feature: format 80;pri
----------------------------------------------------
No. Street City St Sale Price Date Bldg Area Unit Lot Area Use
1 1027 S 1 ARCADIA CA $ 600,000C 95/06 6,577 150 17,589 675
2 10844 TUXFORD SUN VALLE CA $ 230,000C 95/05 1,760 1 25,700 675
3 11455 CLAYTON SAN JOSE CA $ 1,150,000C 95/03 39,750 1 435,600 655
4 109 N 1 CAMPBELL CA $ 510,000C 95/03 5,238 1 14,950 675
5 14614 MAGNOLIA WESTMINST CA $ 1,875,000C 95/03 13,900 480 91,040 675
6 4990 BLACK MOUNT SAN DIEGO CA $ 2,100,000C 95/03 5,151 1 203,425 675
<PAGE>
EXHIBIT D
---------
TRW REDI REVENUES (1994)
<TABLE>
<S> <C>
California On-line $240,000
California Published 260,000
Washington & D.C. 80,000
Chicago 75,000
Quick Source C&I in covered areas 30,000 to 70,000
TOTAL 685,000 to $725,000
</TABLE>
25
<PAGE>
EXHIBIT E
---------
PURCHASED CONTRACTS
[To be Completed]
26
<PAGE>
EXHIBIT F
---------
ACCOUNTS RECEIVABLE
27
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
CUSTOMER LIST BY REGION Cont $
- -----------------------------------------------------------------------------------------------------------------------------
CUST NAME CUST # CONTRACT # CONT DATE BILL DATE ANN DATE CONT $ Per Hardcopy
- -----------------------------------------------------------------------------------------------------------------------------
ILLINOIS
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13266508 253795700 93-05-09 94-08-27 95-08-27 820 495 pi
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13504042 335042500 90-05-23 95-05-28 96-05-28 820 725 pi
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13171079 253163801 93-09-02 94-10-10 95-10-10 595 3,325 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13180624 253347800 86-10-28 94-11-15 95-11-15 820 495 pi
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13172593 232423800 88-08-22 95-04-07 96-04-07 824 495 pi
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13196997 253257800 86-12-19 94-12-24 95-12-24 820 645 pi
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13537909 353317400 91-01-24 95-01-10 96-01-10 820 725 pi
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13569537 355401300 91-07-09 94-05-10 95-09-10 820 795 pi
- -----------------------------------------------------------------------------------------------------------------------------
I N *** 10355391 178189201 95-06-08 95-06-10 96-06-10 612 3,200 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13181908 457069000 94-12-14 94-12-30 94-12-30 NO CHG 495 -
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 10767512 178198100 93-10-21 95-06-29 96-06-29 1,371 3,915 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13135855 344968403 95-01-15 95-01-15 96-01-15 595 1,634 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13190012 232295801 95-01-05 95-03-07 96-03-07 659 3,390 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13655049 457068000 94-12-22 94-12-30 95-12-30 NO CHG 795 -
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13430358 306796600 95-04-27 95-06-25 96-06-25 820 690 pi
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13056099 148171901 93-06-08 94-07-10 95-12-10 575 1,807 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13211380 253328800 87-02-10 95-02-19 96-02-19 820 645 pi
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13583052 8355452200 93-08-19 93-11-10 95-08-10 595 950 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 10752639 152194100 92-03-24 94-07-28 95-07-28 NO CHG NO CHG -
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 10518198 152195100 95-01-19 94-10-13 95-10-13 575 2,890 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13658206 405003201 95-04-03 95-03-26 96-03-26 744 2,678 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13186756 232287800 86-11-14 94-11-19 95-11-19 820 495 pi
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13549269 356237401 95-06-01 95-07-08 96-07-08 595 3,015 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13351813 284553600 88-06-10 94-06-25 95-12-25 820 1,800 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13188110 469100200 93-10-22 95-06-04 96-06-04 820 795 pi
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13628182 405378200 92-09-05 95-03-09 95-09-09 595 3,015 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13608953 377942300 92-04-17 95-06-01 96-09-01 595 795 Disc
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13556906 8355852300 93-07-29 94-10-01 95-10-01 744 2,890 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13547148 8355761300 91-04-02 94-06-15 95-10-15 280 2,890 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13257320 253464701 94-07-01 94-08-27 95-08-27 820 4,010 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 10375944 180711100 86-07-30 94-11-15 95-11-15 595 370 pi
- -----------------------------------------------------------------------------------------------------------------------------
I N *** 13751301 9416910000 95-05-08 01-01-01 01-01-01 982 2,975 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13629451 405259200 92-09-11 94-09-30 95-09-30 744 3,370 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13180095 180835100 86-10-24 94-10-15 95-10-15 347 575 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 10527576 158477101 94-03-22 94-10-10 95-10-10 595 3,345 mp
- -----------------------------------------------------------------------------------------------------------------------------
I N *** 13183014 253219801 95-05-31 95-07-10 96-07-10 794 2,500 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13662054 447228100 93-04-06 94-07-15 95-07-15 982 2,890 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13308208 254802701 94-12-30 94-12-30 95-12-30 910 2,975 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 10481366 8178157100 88-07-15 95-10-29 95-10-29 595 370 pi
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13106211 267876500 94-01-20 94-12-15 95-12-15 744 2,700 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13166389 249490801 94-10-12 94-11-10 95-11-10 595 1,995 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13666030 447257100 93-05-05 94-07-15 95-09-15 982 3.015 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13189140 249428800 86-11-12 94-11-15 95-11-15 1,985 1,090 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13293032 469091100 93-12-06 94-12-28 95-12-28 820 795 pi
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13498602 334516500 95-01-24 95-04-30 96-04-30 820 725 pi
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13265574 244890800 87-07-16 95-07-21 96-07-21 820 645 pi
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13189117 253276800 86-11-24 95-01-15 96-01-15 595 3,995 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13183218 249422800 93-08-19 94-11-10 95-11-10 820 495 pi
- -----------------------------------------------------------------------------------------------------------------------------
I N *** 13585489 355509301 95-05-19 95-05-10 96-05-10 842 2,678 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13170805 232413800 86-09-24 94-10-04 95-10-04 820 495 pi
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13185191 278214800 86-11-07 94-11-17 95-11-17 820 495 pi
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13436293 306746600 89-07-14 95-07-28 96-07-28 820 690 pi
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13215403 253359800 87-02-19 95-02-26 96-02-26 820 805 pi
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13524565 334912400 93-07-21 94-10-10 95-10-10 595 725 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13182314 253185800 90-10-18 94-10-29 95-10-29 744 M M
- -----------------------------------------------------------------------------------------------------------------------------
I M *** 13678363 447233100 93-07-27 94-10-16 96-02-16 491 2,890 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13099764 227701900 93-10-27 95-06-15 96-06-15 595 2,265 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 10726650 178156100 94-09-29 94-10-10 95-10-10 595 370 pi
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13180679 253288800 94-02-16 95-06-19 96-06-19 1,285 3,295 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13188235 253192800 93-08-24 94-11-10 95-11-10 820 495 pi
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13106233 249921901 95-04-11 95-04-15 96-04-15 1,071 2,678 mp
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 13218004 253624800 93-08-25 94-11-10 95-11-10 1,3375 495 mp
- -----------------------------------------------------------------------------------------------------------------------------
I N *** 13412701 306640600 89-03-31 95-04-07 96-04-07 820 690 pi
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
OUT- Cur DAYS PAST DUE TOTAL
- -----------------------------------------------------------------------------------------------------------------------------
CUST NAME STANDING Due 30 60 90 120 150+ REC UNBILLED TERMS
- -----------------------------------------------------------------------------------------------------------------------------
ILLINOIS
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 820 820 820 0 6 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 463 149 149 314 6 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 820 820 820 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 508 73 73 434 12 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 10 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------
I N *** 612 450 450 161 10 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 NET 30 DAYS
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 321 64 64 257 10 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 820 149 149 299 521 6 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 10 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 PO
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 571 82 82 489 10 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 595 0 595 10 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 6 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 820 149 149 299 521 6 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 595 0 595 12 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 595 0 595 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 744 66 66 677 12 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 12 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I N *** 982 0 982 10 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 3 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I N *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 12 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 744 66 66 66 66 66 199 531 213 12 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 982 90 99 179 802 12 PMTS
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I N *** 0 0 NET 3
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 6 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 181 149 149 31 6 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I M *** 491 123 123 368 12 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 1,285 0 1,285 12 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 1,071 0 1,071 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
I N *** 820 820 820 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
For each agreement
referred herein:
A = assignable; N = non-assignable;
M = unlocated.
Page 1
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
<TABLE>
<CAPTION>
CUSTOMER LIST BY REGION
- ------------------------------------------------------------------------------------------------------------------------
Cont $
- ------------------------------------------------------------------------------------------------------------------------
CUST NAME CUST # CONTRACT # CONT DATE BILL DATE ANN DATE CONT $ Per Hardcopy
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
A *** 13676620 447407100 93-07-21 94-09-27 95-09-27 1,589 2,890 mp
- -----------------------------------------------------------------------------------------------------------------------
I A *** 13133064 249546800 93-07-21 94-10-10 95-10-10 595 1,975 mp
- -----------------------------------------------------------------------------------------------------------------------
I A *** 13060577 334349400 90-12-11 94-12-18 95-12-18 595 425 pi
- -----------------------------------------------------------------------------------------------------------------------
I A *** 13706295 405564100 94-03-28 95-03-30 96-03-30 820 820 --
- -----------------------------------------------------------------------------------------------------------------------
I A *** 13221682 253782800 95-06-01 95-07-10 96-07-10 595 2,795 mp
- -----------------------------------------------------------------------------------------------------------------------
I A *** 13352106 284365600 90-07-30 94-07-10 95-12-10 1,060 1,485 mp
- -----------------------------------------------------------------------------------------------------------------------
I A *** 13512702 334632400 92-07-17 94-07-23 95-12-23 744 725 --
- -----------------------------------------------------------------------------------------------------------------------
I N *** 13532643 353637401 95-01-19 95-02-10 96-02-10 2,460 2,940 mp
- -----------------------------------------------------------------------------------------------------------------------
I A *** 13198807 253475800 93-09-27 94-12-31 95-12-31 744 645 pi
- -----------------------------------------------------------------------------------------------------------------------
I N *** 13537910 353619401 95-01-24 95-04-10 96-04-10 489 2,620 mp
- -----------------------------------------------------------------------------------------------------------------------
I N *** 13564026 8355823302 95-02-07 95-02-10 95-09-10 360 360 --
- -----------------------------------------------------------------------------------------------------------------------
I A *** 13187537 253411700 88-06-22 94-07-05 96-01-05 595 765 disc
- -----------------------------------------------------------------------------------------------------------------------
I A *** 13608384 405205200 92-07-02 94-07-10 95-07-10 820 820 --
- -----------------------------------------------------------------------------------------------------------------------
I A *** 13423266 306561600 89-05-17 95-06-16 96-06-16 1,952 5,110 mp
- -----------------------------------------------------------------------------------------------------------------------
I M *** 13299551 8255357600 93-08-25 94-11-10 95-11-10 744 M M
- -----------------------------------------------------------------------------------------------------------------------
I A *** 13250941 253846800 87-05-29 95-07-21 96-07-21 595 2,585 mp
- -----------------------------------------------------------------------------------------------------------------------
I A *** 13293247 255317700 87-10-20 94-11-16 95-11-16 595 645 --
- -----------------------------------------------------------------------------------------------------------------------
I A *** 13517110 334683500 91-02-28 95-05-01 96-05-01 595 3,010 mp
- -----------------------------------------------------------------------------------------------------------------------
I A *** 10388894 180713100 91-04-02 94-05-28 95-10-28 595 CR --
- -----------------------------------------------------------------------------------------------------------------------
I A *** 13300925 8254734800 92-04-22 95-05-04 96-05-04 595 2,580 mp
- -----------------------------------------------------------------------------------------------------------------------
I N *** 13527313 353540401 95-01-24 95-02-13 96-02-13 659 3,295 mp
- -----------------------------------------------------------------------------------------------------------------------
I A *** 13242423 253667700 88-02-23 94-04-26 95-09-26 655 645 --
- -----------------------------------------------------------------------------------------------------------------------
I A *** 13050938 8136511000 90-04-02 95-06-07 96-06-07 1,045 CR --
- -----------------------------------------------------------------------------------------------------------------------
I A *** 13186312 253407701 93-08-17 94-09-10 95-09-10 595 495 pi
- -----------------------------------------------------------------------------------------------------------------------
I A *** 13226982 253634800 92-03-11 95-06-01 96-06-01 851 695 pi
- -----------------------------------------------------------------------------------------------------------------------
I A *** 13149348 258326502 94-06-10 94-06-10 95-06-10 368 2,312 mp
- -----------------------------------------------------------------------------------------------------------------------
I A *** 13187427 269430800 93-08-01 94-11-20 95-11-20 820 895 --
- -----------------------------------------------------------------------------------------------------------------------
I A *** 13188213 253409800 86-11-21 95-08-15 96-08-15 820 495 pi
- -----------------------------------------------------------------------------------------------------------------------
I A *** 13155617 231658801 94-04-13 94-08-04 95-08-04 820 820 --
- -----------------------------------------------------------------------------------------------------------------------
I A *** 13477197 31965500 93-10-21 95-01-27 96-01-27 1,351 2,795 mp
- -----------------------------------------------------------------------------------------------------------------------
***
- -----------------------------------------------------------------------------------------------------------------------
***
- -----------------------------------------------------------------------------------------------------------------------
***
- -----------------------------------------------------------------------------------------------------------------------
*** 93 72,150 150,025
- -----------------------------------------------------------------------------------------------------------------------
***
- -----------------------------------------------------------------------------------------------------------------------
***
- -----------------------------------------------------------------------------------------------------------------------
***
- -----------------------------------------------------------------------------------------------------------------------
***
- -----------------------------------------------------------------------------------------------------------------------
***
- -----------------------------------------------------------------------------------------------------------------------
A *** 13090978 470977200 93-06-15 95-07-10 96-07-10 1,634 1,200 pi
- -----------------------------------------------------------------------------------------------------------------------
A *** 10092537 501775000 94-09-29 94-10-10 95-10-10 3,128 3,128 --
- -----------------------------------------------------------------------------------------------------------------------
M *** 10092537 501775001 94-11-16 94-12-27 95-12-27 1,000 M M
- -----------------------------------------------------------------------------------------------------------------------
A *** 13735079 475650000 94-12-12 95-02-01 96-02-01 725 725 --
- -----------------------------------------------------------------------------------------------------------------------
A *** 13735079 475649000 94-12-27 94-12-27 95-12-27 775 775 --
- -----------------------------------------------------------------------------------------------------------------------
A *** 13723342 417967000 94-08-16 94-08-30 95-08-30 800 708 --
- -----------------------------------------------------------------------------------------------------------------------
A *** 13505605 489062100 95-05-22 95-06-10 96-06-10 NO CHARGE NO CHARGE --
- -----------------------------------------------------------------------------------------------------------------------
A *** 13723560 492719000 94-08-24 94-10-01 95-10-01 775 775 --
- -----------------------------------------------------------------------------------------------------------------------
A *** 14809780 492401000 94-09-12 94-10-10 95-10-10 1,275 1,275 --
- -----------------------------------------------------------------------------------------------------------------------
A *** 13164321 417498101 94-12-05 94-12-01 95-12-01 2,808 3,744 disc
- -----------------------------------------------------------------------------------------------------------------------
A *** 13562785 475795002 94-12-14 95-04-10 96-04-10 536 536 --
- -----------------------------------------------------------------------------------------------------------------------
A *** 13592443 944180100 93-03-03 94-10-01 95-10-01 NO CHARGE NO CHARGE --
- -----------------------------------------------------------------------------------------------------------------------
A *** 13631969 485576100 93-08-11 94-08-17 95-08-17 0 --
- -----------------------------------------------------------------------------------------------------------------------
A *** 13654886 419604200 93-01-25 95-02-28 96-02-28 0 --
- -----------------------------------------------------------------------------------------------------------------------
A *** 10098171 497442000 94-07-15 94-08-09 95-08-09 553 553 --
- -----------------------------------------------------------------------------------------------------------------------
A *** 13675584 417750200 93-07-06 95-07-10 96-07-10 0 0 Can
- -----------------------------------------------------------------------------------------------------------------------
A *** 13739772 499907000 95-01-19 95-03-01 96-03-01 708 708 --
- -----------------------------------------------------------------------------------------------------------------------
A *** 13446049 390235300 92-01-16 95-03-06 96-03-06 708 576 pi
- -----------------------------------------------------------------------------------------------------------------------
A *** 10008631 418966100 94-06-08 94-10-10 95-10-10 6,000 5,995 --
- -----------------------------------------------------------------------------------------------------------------------
A *** 13665277 431158200 93-04-30 95-05-04 96-05-04 1,500 1,368 pi
- -----------------------------------------------------------------------------------------------------------------------
A *** 13593992 424614200 92-11-18 94-12-01 95-12-01 708 708 --
- -----------------------------------------------------------------------------------------------------------------------
A *** 10024044 499952000 94-10-03 94-10-10 95-10-10 775 775 --
- -----------------------------------------------------------------------------------------------------------------------
A *** 13684728 418867103 93-11-30 94-12-21 95-12-02 3,792 3,408 pi
- -----------------------------------------------------------------------------------------------------------------------
A *** 10308832 497330000 94-06-17 94-10-01 95-10-01 775 775 --
- -----------------------------------------------------------------------------------------------------------------------
A *** 10307163 944500200 93-07-01 95-07-01 96-07-01 708 708 --
- -----------------------------------------------------------------------------------------------------------------------
A *** 13719833 499698000 94-07-14 94-10-01 95-10-01 6,810 6,810 --
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CUSTOMER LIST BY REGION
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
OUT- Cur TOTAL
CUST NAME STANDING Due 30 60 90 120 150+ REC UNBILLED TERMS
- -----------------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------------
I A *** 595 52 52 543 12 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- ------------------------------------------------------------------------------------------------------------------------------------
I A *** - 0 0 0 NET 30
- ------------------------------------------------------------------------------------------------------------------------------------
I A *** 595 595 595 0 12 MO PMTS
- ------------------------------------------------------------------------------------------------------------------------------------
I A *** 1,060 0 1,060 6 MO PMTS
- ------------------------------------------------------------------------------------------------------------------------------------
I A *** - 0 0 0 12 MO PMTS
- ------------------------------------------------------------------------------------------------------------------------------------
I N *** 2,460 223 223 2,237 12 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------------
I A *** 744 434 434 310 12 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------------
I N *** 489 489 489 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------------
I N *** - 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 3 PMTS
- ----------------------------------------------------------------------------------------------------------------------------------
I A *** - 0 0 0 6 MO PMTS
- ----------------------------------------------------------------------------------------------------------------------------------
I A *** 1,952 208 208 417 1,535 10 MO PMTS
- ----------------------------------------------------------------------------------------------------------------------------------
I M *** 0 0 0 12 MO PMTS
- ------------------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- ------------------------------------------------------------------------------------------------------------------------------------
I A *** - 0 0 0 NET 30
- ------------------------------------------------------------------------------------------------------------------------------------
I A *** 595 595 595 0 NET 30
- ------------------------------------------------------------------------------------------------------------------------------------
I A *** - 0 0 0 NET 30
- ------------------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------------
I N *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------------
I A *** - 0 0 0 12 MO PMTS
- ------------------------------------------------------------------------------------------------------------------------------------
I A *** - 1,045 1,045 1,045 0 NET 40
- ------------------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------------
I A *** 851 76 76 152 700 12 MO PMTS
- -----------------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 NET 30
- ------------------------------------------------------------------------------------------------------------------------------------
I A *** - 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------------
I A *** 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------------
I A *** - 0 0 0 NET 30
- ------------------------------------------------------------------------------------------------------------------------------------
I A *** 1,351 118 118 1,233 12 MO PMTS
- ------------------------------------------------------------------------------------------------------------------------------------
***
- ------------------------------------------------------------------------------------------------------------------------------------
***
- ------------------------------------------------------------------------------------------------------------------------------------
***
- ------------------------------------------------------------------------------------------------------------------------------------
*** 26,574 3,318 1,814 2,030 156 186 1,839 9,044 17,531
- ------------------------------------------------------------------------------------------------------------------------------------
***
- ------------------------------------------------------------------------------------------------------------------------------------
***
- ------------------------------------------------------------------------------------------------------------------------------------
***
- ------------------------------------------------------------------------------------------------------------------------------------
***
- ------------------------------------------------------------------------------------------------------------------------------------
***
- ------------------------------------------------------------------------------------------------------------------------------------
A *** 1,634 0 1,634 NET 30
- ------------------------------------------------------------------------------------------------------------------------------------
A *** - 0 0 NET 30
- ------------------------------------------------------------------------------------------------------------------------------------
M *** 0 0 NET 30
- ------------------------------------------------------------------------------------------------------------------------------------
A *** - 391 65 65 65 65 65 325 66 12 MO. PYMTS.
- ------------------------------------------------------------------------------------------------------------------------------------
A *** - 713 418 70 70 70 70 713 0 12 MO. PYMTS.
- ------------------------------------------------------------------------------------------------------------------------------------
A *** - 0 0 10 MO. PYMTS.
- ------------------------------------------------------------------------------------------------------------------------------------
A *** - 0 0 NET 30
- ------------------------------------------------------------------------------------------------------------------------------------
A *** - 0 0 NET 30
- ------------------------------------------------------------------------------------------------------------------------------------
A *** - 138 138 138 0 10 MO. PYMTS.
- ------------------------------------------------------------------------------------------------------------------------------------
A *** 779 283 283 496 10 MO. PYMTS.
- ------------------------------------------------------------------------------------------------------------------------------------
A *** - 514 47 47 467 12 MO. PYMTS.
- ------------------------------------------------------------------------------------------------------------------------------------
A *** - 0 0 12 MO. PYMTS.
- ------------------------------------------------------------------------------------------------------------------------------------
A *** - 0 0 NET 30
- ------------------------------------------------------------------------------------------------------------------------------------
A *** - 0 0 0 NET 30
- ------------------------------------------------------------------------------------------------------------------------------------
A *** - 0 0 NET 30
- ------------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 6 MO. PYMTS.
- ------------------------------------------------------------------------------------------------------------------------------------
A *** - 0 0 0 NET 30
- ------------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------------
A *** - 0 0 12 MO. PYMTS.
- -----------------------------------------------------------------------------------------------------------------------------------
A *** 492 164 164 328 164 10 MO. PYMTS.
- -----------------------------------------------------------------------------------------------------------------------------------
A *** - 0 0 0 NET 30
- ------------------------------------------------------------------------------------------------------------------------------------
A *** - 0 0 NET 30
- ------------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 0 NET 30
- ------------------------------------------------------------------------------------------------------------------------------------
A *** - 0 0 0 NET 30
- ------------------------------------------------------------------------------------------------------------------------------------
A *** - 733 0 733 12 MO. PYMTS.
- ------------------------------------------------------------------------------------------------------------------------------------
A *** - 6,810 568 568 568 568 568 1,703 4,540 2,270 12 MO. PYMTS.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
2
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
CUSTOMER LIST BY REGION Conl $ OUT-
- -----------------------------------------------------------------------------------------------------------
CUST NAME CUST # CONTRACT # CONT DATE BILL DATE ANN DATE CONT $ Per Hardcopy STANDING
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
A *** 10038380 382027300 93-12-01 95-03-10 96-03-10 3,289 2,760 pi 3,289
- -----------------------------------------------------------------------------------------------------------
A *** 10006952 492640100 94-11-30 95-10-01 96-06-30 1,500 1,500 - 1,500
- -----------------------------------------------------------------------------------------------------------
A *** 10048459 492639100 94-11-30 95-10-01 96-06-30 750 750 - 750
- -----------------------------------------------------------------------------------------------------------
A *** 10330831 492638100 94-11-30 95-10-01 96-06-30 750 750 - 750
- -----------------------------------------------------------------------------------------------------------
A *** 13677627 485385102 94-07-01 94-07-01 94-09-30 550 550 - 550
- -----------------------------------------------------------------------------------------------------------
A *** 13677627 485386102 94-07-01 94-07-01 94-09-30 138 550 dg 138
- -----------------------------------------------------------------------------------------------------------
A *** 13677627 485388102 94-07-01 94-07-01 94-09-30 138 550 dg 138
- -----------------------------------------------------------------------------------------------------------
A *** 13713194 499901000 94-09-19 94-09-21 95-09-21 3,900 3,900 -
- -----------------------------------------------------------------------------------------------------------
A *** 13731176 464681000 94-11-01 94-11-10 95-11-10 6,197 6,197 - 0
- -----------------------------------------------------------------------------------------------------------
A *** 14292029 499429100 94-07-11 95-07-21 96-07-21 775 800 - 0
- -----------------------------------------------------------------------------------------------------------
A *** 13718955 493265100 94-11-30 95-10-01 96-06-30 2,000 2,000 - 1,000
- -----------------------------------------------------------------------------------------------------------
A *** 13529054 492629100 94-11-30 95-10-01 96-06-01 4,000 4,000 - 3,000
- -----------------------------------------------------------------------------------------------------------
A *** 13688959 944340200 93-06-23 95-06-30 96-06-30 0 0 Can 0
- -----------------------------------------------------------------------------------------------------------
A *** 13417953 499693001 94-06-13 94-07-01 95-07-01 4,992 4,992 - 0
- -----------------------------------------------------------------------------------------------------------
A *** 13688443 944170100 93-01-28 94-10-01 95-10-01 NO CHARGE NO CHARGE - 0
- -----------------------------------------------------------------------------------------------------------
A *** 10030607 433331200 92-12-04 95-01-20 96-01-20 1,368 1,368 - 0
- -----------------------------------------------------------------------------------------------------------
A *** 14113588 423322100 93-10-10 94-09-10 95-09-10 219 219 - 0
- -----------------------------------------------------------------------------------------------------------
A *** 13593619 469634100 93-07-30 94-08-13 95-08-13 900 900 - 900
- -----------------------------------------------------------------------------------------------------------
A *** 17788897 501638000 94-09-07 94-12-10 95-12-10 708 708 - 0
- -----------------------------------------------------------------------------------------------------------
A *** 10310875 501515000 94-06-01 94-06-01 95-09-01 NO CHARGE NO CHARGE - 0
- -----------------------------------------------------------------------------------------------------------
A *** 10047753 390492200 93-02-16 95-05-10 96-05-10 708 708 - 660
- -----------------------------------------------------------------------------------------------------------
A *** 14292018 448376200 93-03-25 95-04-02 96-04-02 708 708 - 0
- -----------------------------------------------------------------------------------------------------------
A *** 13670918 440268200 93-06-02 95-06-10 96-06-10 708 708 - 0
- -----------------------------------------------------------------------------------------------------------
A *** 13716937 500168100 94-06-17 95-06-30 96-06-30 1,500 1,500 - 1,500
- -----------------------------------------------------------------------------------------------------------
A *** 10062358 492950000 94-10-07 95-01-19 96-01-19 2,400 2,400 - 1,848
- -----------------------------------------------------------------------------------------------------------
A *** 10062358 499906000 94-12-01 95-01-17 96-01-17 600 600 - 375
- -----------------------------------------------------------------------------------------------------------
A *** 13714838 501569100 94-05-18 95-06-09 96-06-09 708 708 - 0
- -----------------------------------------------------------------------------------------------------------
A *** 14350961 944320100 95-02-06 95-02-21 96-02-21 708 708 - 615
- -----------------------------------------------------------------------------------------------------------
A *** 13689538 406545100 93-10-10 94-10-10 95-10-10 2,592 2,203 pi 0
- -----------------------------------------------------------------------------------------------------------
A *** 13615641 497405000 94-06-03 94-10-10 95-10-10 6,000 6,000 - 5,925
- -----------------------------------------------------------------------------------------------------------
A *** 13615641 497408000 94-06-08 94-10-10 95-10-10 500 500 - 100
- -----------------------------------------------------------------------------------------------------------
A *** 13720970 500188000 97-07-26 94-08-03 95-08-03 775 775 -
- -----------------------------------------------------------------------------------------------------------
A *** 10085506 496058000 95-05-01 95-05-10 96-05-10 1,275 1,275 - 1,275
- -----------------------------------------------------------------------------------------------------------
A *** 10085430 471102200 93-06-21 95-06-10 96-06-10 1,368 1,488 1,161
- -----------------------------------------------------------------------------------------------------------
A *** 13427530 497001000 94-10-26 95-01-10 96-01-10 5,150 5,150 - 5,150
- -----------------------------------------------------------------------------------------------------------
A *** 13420292 500176000 94-06-24 94-12-02 95-12-02 400 400 - 0
- -----------------------------------------------------------------------------------------------------------
A *** 13128707 944390201 94-06-15 95-06-15 96-06-15 708 586 pi 611
- -----------------------------------------------------------------------------------------------------------
A *** 10062688 499877000 94-10-13 94-12-31 95-12-31 3,450 3,450 - 1,448
- -----------------------------------------------------------------------------------------------------------
A *** 10062688 499877001 94-12-02 94-12-31 95-12-31 660 660 - 275
- -----------------------------------------------------------------------------------------------------------
A *** 10062677 430010200 93-09-17 94-10-10 95-10-10 708 672 pi 0
- -----------------------------------------------------------------------------------------------------------
A *** 10062688 499875000 94-10-13 94-11-15 95-11-15 690 690 - 0
- -----------------------------------------------------------------------------------------------------------
A *** 10062688 499876000 94-10-13 94-10-26 95-10-26 690 690 -
- -----------------------------------------------------------------------------------------------------------
A *** 13085088 475799000 94-12-29 95-06-10 96-06-10 775 775 - 733
- -----------------------------------------------------------------------------------------------------------
A *** 13587531 381878301 94-10-13 95-01-10 96-01-10 1,368 1,284 - 0
- -----------------------------------------------------------------------------------------------------------
A *** 13733927 475414000 94-11-29 94-12-10 95-12-10 698 775 - 0
- -----------------------------------------------------------------------------------------------------------
A *** 10084549 944470201 95-04-11 95-06-10 96-06-10 2,700 2,600 pi 2,497
- -----------------------------------------------------------------------------------------------------------
A *** 13733927 475414000 94-11-29 94-12-10 95-12-10 698 700 - 0
- -----------------------------------------------------------------------------------------------------------
A *** 10049221 430822200 94-05-20 95-07-10 96-07-10 1,368 1,368 - 0
- -----------------------------------------------------------------------------------------------------------
A *** 13688285 944090100 93-03-28 94-10-01 95-10-01 NO CHARGE NO CHARGE - 0
- -----------------------------------------------------------------------------------------------------------
A *** 10063263 487731000 95-04-25 95-09-10 96-09-10 5,949 5,924 - 5,949
- -----------------------------------------------------------------------------------------------------------
A *** 10063285 417422101 94-09-19 94-10-05 95-10-05 1,026 1,026 - 13
- -----------------------------------------------------------------------------------------------------------
M *** 10314426 431774200 93-04-02 95-04-19 96-04-19 775 944 dr 0
- -----------------------------------------------------------------------------------------------------------
A *** 10314426 491462100 94-01-14 95-01-25 96-01-25 708 M M 0
- -----------------------------------------------------------------------------------------------------------
A *** 13738672 478907000 95-03-17 95-03-01 96-03-01 620 620 - 620
- -----------------------------------------------------------------------------------------------------------
A *** 13185540 501507100 94-06-06 95-07-01 96-07-01 2,850 2,850 -
- -----------------------------------------------------------------------------------------------------------
A *** 13643064 421014201 94-11-15 94-10-10 95-10-10 3,600 3,600 - 432
- -----------------------------------------------------------------------------------------------------------
A *** 13741070 464788000 95-02-03 95-02-27 96-02-27 5,900 5,900 - 2,963
- -----------------------------------------------------------------------------------------------------------
A *** 10015963 419562201 94-05-11 95-06-01 96-06-01 1,368 1,368 - 1,368
- -----------------------------------------------------------------------------------------------------------
A *** 12318365 408158200 93-06-30 95-07-10 96-07-10 1,500 1,500 - 1,500
- -----------------------------------------------------------------------------------------------------------
A *** 13688274 94480100 94-04-29 94-10-10 95-10-10 NO CHARGE NO CHARGE - 0
- -----------------------------------------------------------------------------------------------------------
A *** 13675629 471138200 94-06-21 95-07-10 96-07-10 1,500 1,500 - 1,500
- -----------------------------------------------------------------------------------------------------------
A *** 14041003 393371300 92-09-01 94-11-10 95-11-10 1,151 0
- -----------------------------------------------------------------------------------------------------------
A *** 14041003 393371204 95-04-25 95-06-22 96-06-22 775 775 - 0
- -----------------------------------------------------------------------------------------------------------
A *** 14041003 393371400 94-03-14 95-03-21 96-03-21 2,592 2,592 - 0
- -----------------------------------------------------------------------------------------------------------
A *** 13729001 492364000 94-10-10 94-11-01 95-11-01 1,800 1,800 - 0
- -----------------------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
CUR DAYS PAST DUE TOTAL
- -------------------------------------------------------------------------------------------------------------------
CUST NAME DUE 30 60 90 120 150+ REC UNBILLED TERMS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
A *** 3,289 3,289 0 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 0 1,500 PURCH ORDER
- -------------------------------------------------------------------------------------------------------------------
A *** 0 750 PURCH ORDER
- -------------------------------------------------------------------------------------------------------------------
A *** 0 750 PURCH ORDER
- -------------------------------------------------------------------------------------------------------------------
A *** 550 550 0 PURCH ORDER
- -------------------------------------------------------------------------------------------------------------------
A *** 138 138 0 PURCH ORDER
- -------------------------------------------------------------------------------------------------------------------
A *** 138 138 0 PURCH ORDER
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 1,000 1,000 0 PURCH ORDER
- -------------------------------------------------------------------------------------------------------------------
A *** 0 3,000 PURCH ORDER
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 12 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 12 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
A *** 0 12 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 WRITE OFF
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 93 93 808 10 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 0 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 73 73 147 513 10 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 508 508 1,017 483 3 MO. PYMT.
- -------------------------------------------------------------------------------------------------------------------
A *** 243 243 243 243 970 878 10 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
A *** 63 63 63 188 188 10 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 461 77 77 615 0 10 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 600 600 600 600 600 2,925 5,925 0 10 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
A *** 50 50 100 0 10 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 12 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
A *** 106 106 1,169 12 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
A *** 106 106 1,055 12 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
A *** 5,150 5,150 0 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 61 61 550 12 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
A *** 290 290 1,158 12 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
A *** 55 55 220 12 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 67 67 667 12 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 12 MO. PYMTS
- -------------------------------------------------------------------------------------------------------------------
A *** 227 227 2,270 12 MO. PYMTS
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 12 MO. PYMTS
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 0 12 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
A *** 0 5,949 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 13 13 0 10 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
M *** 0 0 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 58 58 58 174 446 12 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 12 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
A *** 363 363 70 10 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
A *** 593 593 2,370 12 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
A *** 1,368 1,368 0 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 137 137 1,363 12 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
A *** 0 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 165 165 1,335 10 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- -------------------------------------------------------------------------------------------------------------------
A *** 0 0 12 MO. PYMTS.
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 3
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
CUSTOMER LIST BY REGION Cont $ OUT- Cur
CUST NAME CUST # CONTRACT # CONT DATE BILL DATE ANN DATE CONT $ Per Hardcopy STANDING Due
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
A *** 13297522 413677200 92-12-04 95-01-10 96-01-10 708 708 367 61
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13683802 944360200 93-05-21 95-05-30 96-05-30 2,595 2,592 2,219 218
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 10303673 49270200 94-09-16 94-09-23 95-09-23 8,000 8,000 0
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13641217 433322200 92-11-30 94-10-10 95-10-10 4,641 4,641 0
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13723814 437428000 94-08-30 94-09-10 95-09-10 1,500 1,500 386 137
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13485554 492783000 94-12-01 94-12-15 95-12-15 775 775 0
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 10051028 427500100 93-08-10 94-11-10 95-11-10 4,800 4,800 1,448 965
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 10051028 487790100 94-04-13 94-05-01 95-05-01 3,625 3,625 965 483
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13740552 49990900 95-02-10 95-02-16 96-02-16 4,800 4,800 3,217 402
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13731558 492742000 94-11-10 94-11-18 95-11-18 775 775 0
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13576078 501422000 95-03-06 95-03-27 96-03-27 730 730 593 66
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13576078 501423000 94-10-19 94-11-10 95-11-10 775 775 593 66
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13708064 492072101 95-06-02 95-07-15 96-07-15 2,500 2,500 2,500 210
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 10094984 944270100 93-10-08 94-10-01 95-10-01 NO CHARGE NO CHARGE 0
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13734924 478718000 94-12-07 95-06-30 95-12-27 2,757 2,732 2,757
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13018453 418946100 94-12-23 94-10-01 95-10-01 2,156 1,992 ug 2,156
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13359394 413376100 93-03-04 94-03-10 95-03-10 3,402 3,402 ug
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13635573 410863101 93-09-28 94-01-10 95-01-10 3,744 3,744
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13512609 418594200 94-01-05 94-02-21 95-02-21 3,048 3,048 0
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13528895 433329200 94-01-24 95-02-08 96-02-08 708 708 - 367 73
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 10328573 499696000 94-07-07 94-08-01 95-08-01 1,500 1,500 - 0
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 10304636 486449100 94-12-29 94-11-10 95-11-10 3,000 3,000 -
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13545050 418634300 92-08-27 95-04-01 96-04-01 708 708 - 0
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 10099859 497333000 94-09-09 94-09-19 95-09-19 1,500 1,500 - 0
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13545050 418634301 94-04-02 95-04-08 96-04-8 685 685 - 685 114
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13687699 492473000 94-10-28 94-12-10 95-12-10 775 775 - 0
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 10051996 432624200 94-03-09 95-02-01 96-02-01 1,368 1,080 ug 0
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13564275 433385200 93-03-17 95-06-30 96-06-30 708 708 -
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 10052252 419099200 92-12-18 95-04-10 96-04-10 1,368 1,368 -
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13715158 437436100 94-05-26 95-05-10 96-05-10 1,368 1,248 pi 1,368 116
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13714407 501109100 94-05-25 95-06-10 96-06-10 1,368 1,368 - 1,368 1,368
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13689901 327631501 94-01-13 95-01-13 96-01-13 2,882 2,640 pi 2,882 2,882
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 10089726 419936100 94-03-10 94-03-10 95-06-15 635 635 - 0
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13645457 419233200 92-12-03 94-12-17 95-12-17 708 708 - 788 79
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13689440 475834000 95-03-17 95-04-30 96-04-30 3,000 3,000 - 2,118 2,118
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13053418 464162000 95-04-10 95-10-10 96-10-10 1,425 1,425 - 1,329
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 10078735 486496000 94-09-01 94-12-31 95-12-31 2,592 2,592 - 0
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13740518 464558000 94-12-14 95-02-16 96-02-16 775 775 - 0
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 14276898 424579201 94-04-19 95-07-28 96-07-28 792 792 -
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13672725 470985200 93-12-23 95-06-24 96-06-24 0 0 Can
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13750249 463841000 95-05-04 95-05-17 96-05-17 800 795 - 800 266
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 10053790 382179301 94-12-16 95-02-24 96-06-24 1,284 1,284 - 0
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13672736 470986200 93-12-05 95-06-23 96-06-23 0 0 Can 0
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13743483 464012000 95-03-07 95-03-09 96-03-09 840 840 - 519 87
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13720712 483880000 94-07-14 94-07-10 95-11-10 776 775 - 0
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 10024167 467166000 95-05-18 95-05-10 96-05-10 695 695 - 695
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13702219 427259100 94-01-31 95-02-23 96-02-23 0 0 Can
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13683813 469832101 95-03-01 94-12-01 95-12-01 995 1,095 dg 271 109
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13716610 501595000 94-06-13 94-10-10 95-10-10 6,835 6,810 pi 7,553 570
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 10092869 492701000 94-09-06 95-01-10 96-01-10 775 775 - 0
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13748161 466603000 95-04-06 95-04-28 96-04-28 NO CHARGE NO CHARGE - 0
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13714755 501584100 94-05-27 95-06-15 96-06-15 708 775 - 791 132
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13753020 475456000 95-05-23 95-05-10 96-05-10 300 300 - 300 35
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13753020 475456001 95-05-23 95-05-10 96-11-10 300 300 - 300 32
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13687600 431112100 95-05-22 95-06-02 96-06-02 708 708 -
- ----------------------------------------------------------------------------------------------------------------------------------
M *** 13687600 475628000 93-10-13 94-10-10 95-10-10 708 708 - 648 59
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13038035 448917100 93-08-19 94-08-27 95-08-27 2,203 2,203 - 1,162 222
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13715181 458201100 94-05-26 95-05-10 96-05-10 1,368 1,248 pi 1,161 1,161
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13720169 469399000 94-07-11 94-08-02 95-08-02 708 708 - 603 60
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13614376 427253100 93-09-23 94-10-10 95-10-10 8,400 8,400 - 843 843
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13672747 470988200 93-06-21 95-06-23 96-06-23 NO CHARGE NO CHARGE - 0
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13737077 475401000 95-01-01 95-01-13 96-01-13 5,490 5,490 - 3,203 458
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13748950 500544000 95-04-14 95-04-28 96-04-28 200 200 - 0
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 10087605 491700101 94-12-22 94-12-29 95-12-29 1,296 1,296 -
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 13486304 421117101 93-12-16 94-12-30 95-12-30 600 600 -
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
DAYS PAST DUE TOTAL
CUST NAME 30 60 90 120 150+ REC UNBILLED TERMS
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
A *** 61 305 12 MO.PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 218 2 ,001 12 MO.PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 137 249 12 MO.PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 3 QTRLY PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 965 483 10 MO.PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 483 965 0 10 MO.PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 402 2,815 12 MO.PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 66 527 12 MO.PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 66 527 12 MO.PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 210 2,290 12 MO.PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 12 MO.PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 2,757 2,757 0 NET 30
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 2,156 2,156 0 PURCHASE ORDER
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 PURCHASE ORDER
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 PURCHASE ORDER
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 PURCHASE ORDER
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 73 293 10 MO.PYMTS
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 12 MO.PYMTS
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 3 QTRLY PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 6 MO PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 114 571 NET 30
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 10 MO. PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 3 QTRLY PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 232 348 1,020 12 MO. PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 1,368 0 NET 30
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 2,882 0 NET 30
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 10 MO. PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 79 79 79 79 314 708 80 10 MO. PYMTS.
- -----------------------------------------------------------------------------------------------------------------------------------
A *** 2,118 0 10 MO. PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 1,329 12 MO. PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 12 MO. PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- -----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 266 266 798 2 3 QTRLY PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 87 433 10 MO. PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 12 MO. PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 695 695 0 NET 30
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 10 MO. PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 109 162 10 MO. PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 570 570 570 570 3,987 6,835 718 12 MO. PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 NET 30
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 132 264 527 6 MO PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 35 70 230 10 MO. PYMTS.
---------------------------------------------------------------------------------------------------------------------------------
A *** 32 65 235 10 MO. PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 12 MO. PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
M *** 59 589 6 MO PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 222 222 222 887 275 10 MO PTMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 1,161 0 12 MO. PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 60 60 60 60 301 603 1 12 MO. PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 843 0 10 MO PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 NET 30
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 458 915 2,288 12 MO. PYMTS.
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- ----------------------------------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Page 4
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
CUSTOMER LIST BY REGION CONT # OUT-
- ---------------------------------------------------------------------------------------------------------
CUST NAME CUST # CONTRACT # CONT DATE BILL DATE ANN DATE CONT $ Per Hardcopy STANDING
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
A *** 13486304 421117200 93-05-24 95-06-04 93-06-04 2,592 2,592 - 2,592
- ---------------------------------------------------------------------------------------------------------
A *** 13683824 944440100 92-11-01 94-10-30 95-10-30 708 708 - 188
- ---------------------------------------------------------------------------------------------------------
A *** 13734902 492409000 94-11-08 95-01-10 96-06-10 1,200 1,200 - 1,200
- ---------------------------------------------------------------------------------------------------------
A *** 13694260 478875000 94-12-02 95-07-31 96-07-31 3,416 3,416 - 3,065
- ---------------------------------------------------------------------------------------------------------
A *** 10055505 449455100 94-04-28 95-04-01 96-04-10 1,368 1,368 - 899
- ---------------------------------------------------------------------------------------------------------
M *** 10067944 417647200 93-06-15 95-07-27 96-07-27 1,368 1,368 - 1,368
- ---------------------------------------------------------------------------------------------------------
A *** 13724783 492723000 94-09-02 94-09-14 95-09-14 1,500 1,500 - 0
- ---------------------------------------------------------------------------------------------------------
A *** 13715170 437434100 94-05-26 95-05-10 96-05-10 1,368 1,248 pi 1,180
- ---------------------------------------------------------------------------------------------------------
A *** 10323679 944010101 94-08-23 94-10-31 95-10-31 945 945 - 97
- ---------------------------------------------------------------------------------------------------------
A *** 13736597 464559000 94-12-15 95-01-09 96-01-09 3,600 3,600 - 0
- ---------------------------------------------------------------------------------------------------------
A *** 13736597 493582000 94-12-15 95-01-18 96-01-18 8,400 8,400 - 0
- ---------------------------------------------------------------------------------------------------------
A *** 13043806 464369000 94-10-24 94-11-01 95-11-01 1,500 1,500 - 500
- ---------------------------------------------------------------------------------------------------------
A *** 13664210 491604100 93-10-01 95-02-10 96-02-10 5,400 3,600 5,234
- ---------------------------------------------------------------------------------------------------------
A *** 13517824 469750100 94-04-01 95-05-01 96-05-01 775 708 - 0
- ---------------------------------------------------------------------------------------------------------
A *** 13682650 500181000 94-06-27 94-11-01 95-11-01 4,392 4,392 -
- ---------------------------------------------------------------------------------------------------------
A *** 13717189 485047000 94-06-21 94-10-01 95-10-01 3,009 3,009 - 0
- ---------------------------------------------------------------------------------------------------------
A *** 10081339 413457201 95-02-01 95-03-01 96-03-01 3,089 3,744 dg 0
- ---------------------------------------------------------------------------------------------------------
A *** 13689439 944460101 94-08-09 94-10-30 95-10-30 900 900 -
- ---------------------------------------------------------------------------------------------------------
A *** 13042126 421662200 94-05-18 95-07-10 96-07-10 4,170 4,170 - 4,170
- ---------------------------------------------------------------------------------------------------------
A *** 10305097 471254300 95-03-17 96-03-01 96-08-31 750 750 - 750
- ---------------------------------------------------------------------------------------------------------
M *** 10305097 471254200 95-03-17 94-03-01 96-03-01 1,585 1,500 - 1,585
- ---------------------------------------------------------------------------------------------------------
A *** 13184462 314324400 93-10-07 93-10-10 94-10-10 3,500 3,500 - 0
- ---------------------------------------------------------------------------------------------------------
A *** 13749766 463906000 95-04-24 95-05-10 95-10-10 1,600 1,600 - 1,600
- ---------------------------------------------------------------------------------------------------------
A *** 12901370 430371201 95-03-16 95-01-03 96-01-03 1,070 1,070 -
- ---------------------------------------------------------------------------------------------------------
A *** 13672004 401989101 93-12-03 94-12-10 95-12-10 708 708 - 220
- ---------------------------------------------------------------------------------------------------------
A *** 14286178 448797200 93-04-28 95-05-10 96-05-10 1,368 972 ug
- ---------------------------------------------------------------------------------------------------------
A *** 13256686 469802101 94-09-20 94-10-01 95-10-01 3,575 3,575 - 0
- ---------------------------------------------------------------------------------------------------------
A *** 17814158 418511201 94-12-05 95-01-01 96-01-01 3,033 3,033 - 917
- ---------------------------------------------------------------------------------------------------------
A *** 13723043 497443100 94-08-08 95-02-10 96-02-10 1,992 1,162 ug 0
- ---------------------------------------------------------------------------------------------------------
A *** 13114423 492092100 94-02-01 95-02-08 96-02-08 1,368 1,368 - 761
- ---------------------------------------------------------------------------------------------------------
M *** 13114423 478719000 94-12-09 94-12-30 95-12-30 1,500 1,500 -
- ---------------------------------------------------------------------------------------------------------
M *** 13522846 368523300 92-09-18 94-09-10 95-09-10 708 708 - 0
- ---------------------------------------------------------------------------------------------------------
A *** 13730153 467320000 95-06-05 95-06-05 96-06-05 1,500 1,500 - 1,240
- ---------------------------------------------------------------------------------------------------------
M *** 13730153 493476000 94-10-26 94-11-04 95-11-04 750 750 - 155
- ---------------------------------------------------------------------------------------------------------
A *** 13731570 492876000 94-10-28 94-11-17 95-11-17 1,500 1,500 - 305
- ---------------------------------------------------------------------------------------------------------
A *** 10098171 497442001 94-07-15 94-08-09 95-08-09 553 553 -
- ---------------------------------------------------------------------------------------------------------
A *** 13684726 418867100 93-09-21 94-09-29 95-09-29 2,592 2,592 - 0
- ---------------------------------------------------------------------------------------------------------
A *** 13677627 485389103 94-07-01 94-07-01 94-09-30 275 550 dg 138
- ---------------------------------------------------------------------------------------------------------
A *** 13677627 485394102 94-07-01 94-07-01 94-09-30 138 550 dg 138
- ---------------------------------------------------------------------------------------------------------
A *** 13753020 475456002 95-05-23 95-05-10 96-11-10 300 300 - 300
- ---------------------------------------------------------------------------------------------------------
***
- ---------------------------------------------------------------------------------------------------------
***
- ---------------------------------------------------------------------------------------------------------
***
- ---------------------------------------------------------------------------------------------------------
*** 196 336,639 330,691 138,288
- ---------------------------------------------------------------------------------------------------------
***
- ---------------------------------------------------------------------------------------------------------
***
- ---------------------------------------------------------------------------------------------------------
***
- ---------------------------------------------------------------------------------------------------------
W A *** 40001333 485936100 93-10-10 95-01-14 96-01-14 695 1,865 mp
- ---------------------------------------------------------------------------------------------------------
W A *** 40001333 485937100 93-10-10 95-01-14 96-01-14 695 695 -
- ---------------------------------------------------------------------------------------------------------
W A *** 40002291 432234200 93-01-08 95-01-08 96-01-08 695 1,815 mp
- ---------------------------------------------------------------------------------------------------------
W A *** 40002291 498712100 93-09-06 94-09-06 95-09-06 695 695 -
- ---------------------------------------------------------------------------------------------------------
W A *** 40000893 499099100 93-10-26 94-10-26 95-10-26 695 695 -
- ---------------------------------------------------------------------------------------------------------
W A *** 40000893 400990200 92-08-18 94-08-18 95-08-18 695 2,480 Can
- ---------------------------------------------------------------------------------------------------------
W A *** 40000893 400990201 92-08-18 94-08-14 95-08-14 695 895 mp
- ---------------------------------------------------------------------------------------------------------
W A *** 40002835 406266100 93-01-12 95-04-30 96-04-30 695 1,290 mp 695
- ---------------------------------------------------------------------------------------------------------
W A *** 40002835 406266101 93-01-12 95-04-30 96-04-30 695 1,290 mp
- ---------------------------------------------------------------------------------------------------------
W M *** 40002835 406265100 93-01-12 95-04-30 96-04-30 695 M M
- ---------------------------------------------------------------------------------------------------------
W A *** 40002943 009215001 90-03-10 94-03-10 96-03-10 235 235 -
- ---------------------------------------------------------------------------------------------------------
W A *** 40003692 401019201 89-06-05 94-09-23 95-09-23 595 1,985 mp,dg
- ---------------------------------------------------------------------------------------------------------
W A *** 40012320 457429000 94-10-21 94-12-03 95-12-03 695 695 - 504
- ---------------------------------------------------------------------------------------------------------
W A *** 40012320 494372000 94-10-21 94-12-03 95-12-03 695 1,290 mp 504
- ---------------------------------------------------------------------------------------------------------
W A *** 40012320 457431000 94-10-21 94-12-03 95-12-03 695 1,290 mp 504
- ---------------------------------------------------------------------------------------------------------
W A *** 40004071 064318300 92-02-19 94-06-10 98-09-10 695 1,390 mp 1,529
- ---------------------------------------------------------------------------------------------------------
W A *** 40004347 406252000 92-09-18 94-12-12 95-12-12 695 2,955
- ---------------------------------------------------------------------------------------------------------
W A *** 40004347 406253000 94-04-01 94-12-01 95-12-01 695 1,423
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
CUR DAYS PAST DUE TOTAL
- ---------------------------------------------------------------------------------------------------------
CUST NAME DUE 30 60 90 120 150+ REC UNBILLED TERMS
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
A *** 259 259 2,333 NET 30
- ---------------------------------------------------------------------------------------------------------
A *** 61 61 127 12 MO PYMTS
- ---------------------------------------------------------------------------------------------------------
A *** 1,200 1,200 0 2 MO PYMTS
- ---------------------------------------------------------------------------------------------------------
A *** 3,065 3,065 0 NET 30
- ---------------------------------------------------------------------------------------------------------
A *** 150 150 750 10 MO PYMTS
- ---------------------------------------------------------------------------------------------------------
M *** 139 139 1,229 10 MO PYMTS
- ---------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- ---------------------------------------------------------------------------------------------------------
A *** 116 116 1,064 12 MO PYMTS
- ---------------------------------------------------------------------------------------------------------
A *** 97 97 0 10 MO PYMTS
- ---------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- ---------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- ---------------------------------------------------------------------------------------------------------
A *** 125 124 375 12 MO PYMTS
- ---------------------------------------------------------------------------------------------------------
A *** 543 543 543 543 543 543 3,255 1,979 10 MO PYMTS
- ---------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- ---------------------------------------------------------------------------------------------------------
A *** 0 0 3 QTRLY PYMTS
- ---------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- ---------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- ---------------------------------------------------------------------------------------------------------
A *** 0 0 12 MO PYMTS
- ---------------------------------------------------------------------------------------------------------
A *** 454 454 3,716 10 MO PYMTS
- ---------------------------------------------------------------------------------------------------------
A *** 0 750 PURCHASE ORDER
- ---------------------------------------------------------------------------------------------------------
M *** 790 790 795 PURCHASE ORDER
- ---------------------------------------------------------------------------------------------------------
A *** 0 0 PURCHASE ORDER
- ---------------------------------------------------------------------------------------------------------
A *** 1,600 1,600 0 PURCHASE ORDER
- ---------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- ---------------------------------------------------------------------------------------------------------
A *** 73 73 147 10 MO PYMTS
- ---------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- ---------------------------------------------------------------------------------------------------------
A *** 0 0 3 QTRLY PYMTS
- ---------------------------------------------------------------------------------------------------------
A *** 306 306 612 10 MO PYMTS
- ---------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- ---------------------------------------------------------------------------------------------------------
A *** 139 139 621 10 MO PYMTS
- ---------------------------------------------------------------------------------------------------------
M *** 0 0 3 QTRLY PYMTS
- ---------------------------------------------------------------------------------------------------------
M *** 0 0 NET 30
- ---------------------------------------------------------------------------------------------------------
A *** 155 155 1,085 10 MO PYMTS
- ---------------------------------------------------------------------------------------------------------
M *** 78 78 78 10 MO PYMTS
- ---------------------------------------------------------------------------------------------------------
A *** 153 153 305 0 10 MO PYMTS
- ---------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- ---------------------------------------------------------------------------------------------------------
A *** 0 0 NET 30
- ---------------------------------------------------------------------------------------------------------
A *** 138 138 0 PURCH ORDER
- ---------------------------------------------------------------------------------------------------------
A *** 138 138 0 PURCH ORDER
- ---------------------------------------------------------------------------------------------------------
A *** 32 32 65 235 10 MO PYMTS
- ---------------------------------------------------------------------------------------------------------
***
- ---------------------------------------------------------------------------------------------------------
***
- ---------------------------------------------------------------------------------------------------------
***
- ---------------------------------------------------------------------------------------------------------
*** 29,105 9,285 3,481 3,018 6,859 19,378 71,127 67,162
- ---------------------------------------------------------------------------------------------------------
***
- ---------------------------------------------------------------------------------------------------------
***
- ---------------------------------------------------------------------------------------------------------
***
- ------------------------------------------------------------------------------------------ ---------------
W A *** 0 0 NET 30
- ---------------------------------------------------------------------------------------------------------
W A *** 0 0 NET 30
- ---------------------------------------------------------------------------------------------------------
W A *** 0 0 NET 30
- ---------------------------------------------------------------------------------------------------------
W A *** 0 0 NET 30
- ---------------------------------------------------------------------------------------------------------
W A *** 0 0 NET 30
- ---------------------------------------------------------------------------------------------------------
W A *** 0 0 NET 30
- ---------------------------------------------------------------------------------------------------------
W A *** 0 0 NET 30
- ---------------------------------------------------------------------------------------------------------
W A *** 695 695 0 NET 30
- ---------------------------------------------------------------------------------------------------------
W A *** 0 0 NET 30
- ---------------------------------------------------------------------------------------------------------
W M *** 0 0 NET 30
- ---------------------------------------------------------------------------------------------------------
W A *** 0 0 NET 30
- ---------------------------------------------------------------------------------------------------------
W A *** 0 0 NET 30
- ---------------------------------------------------------------------------------------------------------
W A *** 324 324 181 NET 30
- ---------------------------------------------------------------------------------------------------------
W A *** 348 348 157 NET 30
- ---------------------------------------------------------------------------------------------------------
W A *** 348 348 157 NET 30
- ---------------------------------------------------------------------------------------------------------
W A *** 695 695 1,390 139 NET 30
- ---------------------------------------------------------------------------------------------------------
W A *** 0 0 NET 30
- ---------------------------------------------------------------------------------------------------------
W A *** 0 0 NET 30
- ---------------------------------------------------------------------------------------------------------
</TABLE>
For each agreement referred herein:
A = assignable; N = non-assignable;
M = unlocated.
Page 5
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
CUSTOMER LIST BY REGION Cont $ OUT- Cur
- ---------------------------------------------------------------------------------------------------------------------------
CUST NAME CUST # CONTRACT # CONT DATE BILL DATE ANN DATE CONT $ Per Hardcopy STANDING Due
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40004347 406254000 94-04-01 94-12-01 95-12-01 695 695 -
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40004927 406112100 93-08-10 94-11-22 95-11-22 695 695 -
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40004927 406267100 94-01-30 95-04-03 96-04-03 695 695 - 777
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40004927 406231100 93-11-14 95-02-19 96-02-19 695 695 -
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40005760 499007100 93-06-22 94-09-29 95-09-29 695 1,340 mp
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40006006 412980200 93-01-12 95-04-19 96-04-19 695 695 - 752 695
- ---------------------------------------------------------------------------------------------------------------------------
W M *** 40005984 376843300 93-04-22 95-04-02 96-04-02 1,390 M M 799 695
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40006152 426296200 93-04-25 95-07-20 96-07-20 695 695 -
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40006196 494221100 94-03-19 95-05-20 96-05-20 695 1,553 mp
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40008334 063954201 91-09-27 94-09-30 95-09-30 595 2,520 mp
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40012054 400912200 92-08-15 94-08-15 95-08-15 695 695 -
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40009308 400929100 92-08-19 NO CHG NO CHG -
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40009616 400396300 94-01-13 NO CHG 695 -
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40009627 006525000 89-08-02 NO CHG NO CHG -
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40010216 485453100 93-10-10 95-01-13 96-01-13 695 695 -
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40010216 406271100 94-01-30 95-04-19 95-04-19 1,390 1,390 -
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40013110 429113100 93-04-06 94-06-12 95-06-12 595 595 -
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40014951 506251100 93-07-16 94-09-22 95-09-22 695 1,665 mp
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40015822 064739200 92-04-06 95-04-06 96-04-06 695 695 -
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40015952 542611400 93-06-21 94-09-08 95-09-08 595 695 -
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40008464 063919200 92-07-15 94-09-27 95-09-27 895 845 -
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40008497 406236000 94-06-13 94-06-13 95-06-13 895 870 -
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40009010 506255100 93-07-20 94-09-30 95-09-30 695 1,310 mp
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40012122 494234100 94-03-19 95-06-20 96-06-20 752 1,340 mp 752 752
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40012100 494233100 94-03-19 NO CHG NO CHG -
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40012627 489279000 90-01-10 95-01-10 96-01-10 495 470 -
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40012627 489280100 93-12-22 94-12-22 95-12-22 695 695 -
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40013279 506543100 94-03-08 95-03-09 96-03-09 695 695 -
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40003997 063499200 91-08-10 94-08-10 95-08-10 644 1,490 mp 644 644
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40013363 062699200 90-06-14 94-09-27 95-09-27 595 795
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40001674 412997200 93-01-13 95-04-14 96-04-14 695 920 mp
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40001979 506202100 92-09-15 94-10-31 95-10-31 695 1,291 mp
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40002097 413081200 87-03-26 95-03-24 96-03-24 695 495 ug
- ---------------------------------------------------------------------------------------------------------------------------
W M *** 40002729 062768301 94-04-01 94-11-01 95-11-01 695 M M
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40014412 400336200 92-05-10 95-05-10 96-05-10 695 3,005 mp 723
- ---------------------------------------------------------------------------------------------------------------------------
W M *** 40019112 447177200 93-04-22 95-04-22 96-04-22 1,790 M M 2,047
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40010607 063469200 91-11-20 94-12-04 95-12-04 595 595 -
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40009764 400530000 90-09-03 94-12-16 95-12-16 595 695 -
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40009764 061775200 92-09-15 94-09-12 95-09-12 695 1,140 mp 325
- ---------------------------------------------------------------------------------------------------------------------------
W A *** 40016614 376435300 92-06-08 95-06-08 96-06-08 1,390 1,390 - 777
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
46 39,756 57,732 11,333 5,195
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
448,545 538,448 176,196 37,618
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------
DAYS PAST DUE TOTAL
- -------------------------------------------------------------------------------
CUST NAME 30 60 90 120 150+ REC UNBILLED TERMS
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 695 695 82 NET 30
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 695 57 NET 30
- -------------------------------------------------------------------------------
W M *** 695 104 NET 30
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 LIEU/ADVERTISE
- -------------------------------------------------------------------------------
W A *** 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 752 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 644 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W M *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 723 NET 30
- -------------------------------------------------------------------------------
W M *** 695 895 1,590 457 NET 30
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 0 NET 30
- -------------------------------------------------------------------------------
W A *** 0 325 NET 30
- -------------------------------------------------------------------------------
W A *** 0 777 NET 30
- -------------------------------------------------------------------------------
0 1,390 0 895 695 8,175 3,158
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
11,099 6,901 3,174 7,941 21,912 88,345 87,850
- -------------------------------------------------------------------------------
</TABLE>
For each agreement referred herein:
A = assignable; N = non-assignable;
M = unlocated.
Page 6
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT G
---------
TRW REDI SUBSCRIPTION AGREEMENT
<TABLE>
<CAPTION>
<S> <C>
[LOGO] TRW REDI PROPERTY DATA Unless otherwise stipulated and agreed to herein, this is an
1700 N.W. 66th Avenue, Ft. Lauderdale, FL 33313 ANNUAL (12-MONTH) LEASE AGREEMENT for TRW REDI products and/or
1-800-345-7334 services, as specified below, relating to....
EXHIBIT G
- ------------------------------------------------------------------------------------------------------------------------------------
This is an [_] ORIGINAL-LEASE AGREEMENT
[_] ADDENDUM (Continuation and/or Revision)
Revision) PRODUCTS COUNTY NAME COUNTY STATE EDITION
- ------------------------------------------------------------------------------------------------------------------------------------
LESSEE CUSTOMER (BILLING) ADDRESS IS LOCATED IN
[_] Same county as shown above [_] Other COUNTY NUMBER
NAME OR TRADEMARK OF CUSTOMER
- ------------------------------------------------------------------------------------------------------------------------------------
REP: IF CUSTOMERS NAME OR BILLING ADDRESS HAS CHANGED SINCE LAST COUNTY NAME STATE
AGREEMENT SEE INSTRUCTIONS ON REVERSE SIDE.
- ------------------------------------------------------------------------------------------------------------------------------------
BILLING / CORRESPONDENCE SHIP TO & PICK UP FROM
ADDRESS ADDRESS/IF SAME LEAVE BLANK
- ----------------------------------------------------------------------- --------------------------------------------------------
Street Address Department Room Number Street Address Department Room Number Ship Code
- ----------------------------------------------------------------------- --------------------------------------------------------
City State City State
- ----------------------------------------------------------------------- --------------------------------------------------------
Zip Code Area Code Telephone Zip Code Area Code Telephone
- ----------------------------------------------------------------------- --------------------------------------------------------
Attention Of Department Attention Of Department
- ----------------------------------------------------------------------- --------------------------------------------------------
PLEASE SUPPLY STREET ADDRESS, WE CANNOT SHIP TO A POST OFFICE BOX
- ------------------------------------------------------------------------------------------------------------------------------------
CHECK PRODUCTS and/or SERVICES ORDERED....
APPLICABLE TO THE ABOVE NAMED COUNTY OR THIS AGREEMENT ONLY
- ------------------------------------------------------------------------------------------------------------------------------------
[X] Deliver IF THIS ORDER IS FOR # OF PRODUCT COMPONENTS
----------- LESS THAN FULL COUNTY SETS and/or SERVICES
No Yes give "SPLIT" specifics. ORDERED
Has (if more
Already than 1)
- ------------------------------------------------------------------------------------------------------------------------------------
Microfiche:
OWNERSHIP BY ASSESSOR # (NUMERICAL)
- ------------------------------------------------------------------------------------------------------------------------------------
Microfiche:
OWNERSHIP BY NAME (ALPHABETICAL)
- ------------------------------------------------------------------------------------------------------------------------------------
Microfiche:
OWNERSHIP BY ADDRESS
- ------------------------------------------------------------------------------------------------------------------------------------
Microfiche:
OWNERSHIP BY CATEGORY (INVEST. PACKAGE)
- ------------------------------------------------------------------------------------------------------------------------------------
Microfiche:
ASSESSOR MAPS
- ------------------------------------------------------------------------------------------------------------------------------------
"REALTY DIRECTORY" (OWNERSHIP)
- ------------------------------------------------------------------------------------------------------------------------------------
"AERIAL & MARSEES ATLAS"
- ------------------------------------------------------------------------------------------------------------------------------------
RECORDED PLATS LIBRARY
- ------------------------------------------------------------------------------------------------------------------------------------
RECORDED PLATS UPDATE SERVICE
- ------------------------------------------------------------------------------------------------------------------------------------
SALES TRANSACTIONS/OWNERSHIP UPDATES
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER:
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER:
- ------------------------------------------------------------------------------------------------------------------------------------
SERIAL NUMBER MICROFICHE READER (VIEWER)
(If Known)
- ------------------------------------------------------------------------------------------------------------------------------------
Annual Membership / Access Fee: NATIONAL DATA RESEARCH CENTER (DRC)
- ------------------------------------------------------------------------------------------------------------------------------------
* Check which report REDI REDI WEEKLY
and circle frequency REALTY C I & L --------------------------- MONTHLY
[_] REPORT [_] REPORT [_] OTHER TITLE QUARTERLY
- ------------------------------------------------------------------------------------------------------------------------------------
========================= =====================
CUSTOMER ACCOUNT NUMBER THIS AGREEMENT NUMBER
- ------------------------- ---------------------
[1][_][_][_][_][_][_] [0][4][6][6][5][0]
REP: If this is an ADDENDUM the number above MUST be
crossed out (on all copies).
========================= =====================
ORIGINAL LEASE NUMBER BILLING ONLY
- ------------------------- ---------------------
[_][_][_][_][_][_][_] - [_][_][_]
========================= ======================
FIELD REPRESENTATIVE SUPPORT REPRESENTATIVE
- ------------------------- ----------------------
- ------------------------- ----------------------
Name Number Name Number
- ------------------------- ----------------------
========================= =====================
LEASE TYPE ADDENDUM TYPE
NEW ACCOUNT CONTINUANCE AS IS
- ------------------------- ---------------------
REP: Check here if [_] Continuance downgrade
this is a former customer
- ------------------------- ---------------------
[_] New Existing Account [_] Add-on
[_] Superceding Lease* [_] Superceding*
- ------------------------- ---------------------
====================================================
REP: If this is a super-
ceding lease, enter here the
number of the lease it is
replacing
- -----------------------------------------------------
[_] UPON DELIVERY OF PRODUCTS ORDERED HEREIN, ON THE
MONTH OF _______________________________ 199 ___
========================= =====================
DATE OF THIS AGREEMENT LEAD SOURCE CODE
- ------------------------- ---------------------
[_][_] [_][_] [9][_] [_][_][_][_]
- ------------------------- ---------------------
Month Day Year
- -----------------------------------------------------
==========================================================================================================
ANNUAL LEASE AMOUNT
- ----------------------------------------------------------------------------------------------------------
Lease amount or 12 months $_______________ Extended Term Lease $_______________
(2nd Year)
Add on _______________
(Less Credits if any) (_______________) Extended Term Lease $_______________
(3rd Year)
SUB-TOTAL $_______________
SALES USE TAX: _______________
TOTAL PAYABLE + $_______________ TOTAL PAYABLE FOR LEASE TERMS ELECTED: $_______________
SHIPPING/HANDLING $ 25.00 (Plus applicable excess charges)
---------------
REP: If this is a "Special Rush" order via UPS 2-day service or Federal Express, change shipping charge
above to $50.00.
==========================================================================================================
==============================================================================================================
PAYMENT TERMS FOR THE LEASSEE
- --------------------------------------------------------------------------------------------------------------
A finance charge equal to the lesser of (a) 1.5% or The undersigned hereby affirms that he/she is duly
(b) the maximum rate permitted by law, will be authorized to commit the lessee to all Terms and
added to any unpaid balance hereon. Conditions set forth in this agreement...including
any "Extended Term" elected herein.
( ) PAID IN FULL
( ) PAYABLE NET 30 DAYS --------------------------------------------------
( ) PURCHASE ORDER Authorizer's Name (Please Print)
PO # ________________________
OTHER (Rep Explain): --------------------------------------------------
Authorizer's Title
X
--------------------------------------------------
Authorizer's Signature
$__________ Check Attached
( ) CREDIT CARD Customer's Business Category Code: [_][_]
HQ USE ONLY (See Other Side)
TERM CODE [_][_]
- --------------------------------------------------------------------------------------------------------------
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
[LOGO] TRW REDI PROPERTY DATA Unless otherwise stipulated and agreed to herein, this is an
1700 N.W. 66th Avenue, Ft. Lauderdale, FL 33313 ANNUAL (12-MONTH) LEASE AGREEMENT for TRW REDI products and/or
1-800-345-7334 services, as specified below, relating to....
EXHIBIT G
- ------------------------------------------------------------------------------------------------------------------------------------
This is an [_] ORIGINAL-LEASE AGREEMENT
[_] ADDENDUM (Continuation and/or Revision)
Revision) PRODUCTS COUNTY NAME COUNTY STATE EDITION
- ------------------------------------------------------------------------------------------------------------------------------------
LESSEE CUSTOMER (BILLING) ADDRESS IS LOCATED IN
[_] Same county as shown above [_] Other COUNTY NUMBER
NAME OR TRADEMARK OF CUSTOMER
- ------------------------------------------------------------------------------------------------------------------------------------
REP: IF CUSTOMERS NAME OR BILLING ADDRESS HAS CHANGED SINCE LAST COUNTY NAME STATE
AGREEMENT SEE INSTRUCTIONS ON REVERSE SIDE.
- ------------------------------------------------------------------------------------------------------------------------------------
BILLING / CORRESPONDENCE SHIP TO & PICK UP FROM
ADDRESS ADDRESS/IF SAME LEAVE BLANK
- ----------------------------------------------------------------------- --------------------------------------------------------
Street Address Department Room Number Street Address Department Room Number Ship Code
- ----------------------------------------------------------------------- --------------------------------------------------------
City State City State
- ----------------------------------------------------------------------- --------------------------------------------------------
Zip Code Area Code Telephone Zip Code Area Code Telephone
- ----------------------------------------------------------------------- --------------------------------------------------------
Attention Of Department Attention Of Department
- ----------------------------------------------------------------------- --------------------------------------------------------
PLEASE SUPPLY STREET ADDRESS, WE CANNOT SHIP TO A POST OFFICE BOX
- ------------------------------------------------------------------------------------------------------------------------------------
CHECK PRODUCTS and/or SERVICES ORDERED....
APPLICABLE TO THE ABOVE NAMED COUNTY OR THIS AGREEMENT ONLY
- ------------------------------------------------------------------------------------------------------------------------------------
[X] Deliver IF THIS ORDER IS FOR # OF PRODUCT COMPONENTS
----------- LESS THAN FULL COUNTY SETS and/or SERVICES
No Yes give "SPLIT" specifics. ORDERED
Has (if more
Already than 1)
- ------------------------------------------------------------------------------------------------------------------------------------
Microfiche:
OWNERSHIP BY ASSESSOR # (NUMERICAL)
- ------------------------------------------------------------------------------------------------------------------------------------
Microfiche:
OWNERSHIP BY NAME (ALPHABETICAL)
- ------------------------------------------------------------------------------------------------------------------------------------
Microfiche:
OWNERSHIP BY ADDRESS
- ------------------------------------------------------------------------------------------------------------------------------------
Microfiche:
OWNERSHIP BY CATEGORY (INVEST. PACKAGE)
- ------------------------------------------------------------------------------------------------------------------------------------
ASSESSOR MAPS
- ------------------------------------------------------------------------------------------------------------------------------------
"REALTY DIRECTORY" (OWNERSHIP)
- ------------------------------------------------------------------------------------------------------------------------------------
"AERIAL & MARSEES ATLAS"
- ------------------------------------------------------------------------------------------------------------------------------------
RECORDED PLATS LIBRARY
- ------------------------------------------------------------------------------------------------------------------------------------
RECORDED PLATS UPDATE SERVICE
- ------------------------------------------------------------------------------------------------------------------------------------
SALES TRANSACTIONS/OWNERSHIP UPDATES
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER:
- ------------------------------------------------------------------------------------------------------------------------------------
OTHER:
- ------------------------------------------------------------------------------------------------------------------------------------
SERIAL NUMBER MICROFICHE READER (VIEWER)
(If Known)
- ------------------------------------------------------------------------------------------------------------------------------------
Annual Membership / Access Fee: NATIONAL DATA RESEARCH CENTER (DRC)
- ------------------------------------------------------------------------------------------------------------------------------------
* Check which report REDI REDI WEEKLY
and circle frequency REALTY C 1 & L --------------------------- MONTHLY
[_] REPORT [_] REPORT [_] OTHER TITLE QUARTERLY
- ------------------------------------------------------------------------------------------------------------------------------------
========================= =====================
???????????????????? THIS AGREEMENT NUMBER
- ------------------------- ---------------------
[1][_][_][_][_][_][_] [0][4][6][6][5][0]
REP: If this is an ADDENDUM the number above MUST be
crossed out (on all copies).
========================= =====================
ORIGINAL LEASE NUMBER BILLING ONLY
- ------------------------- ---------------------
[_][_][_][_][_][_][_] - [_][_][_]
[illegible copy]
========================= =====================
LEASE TYPE ADDENDUM TYPE
NEW ACCOUNT CONTINUANCE AS IS
- ------------------------- ---------------------
REP: Check here if [_] Continuance downgrade
this is a former customer
- ------------------------- ---------------------
[_] New Existing Account [_] Add-on
[_] Superceding Lease* [_] Superceding*
- ------------------------- ---------------------
====================================================
REP: If this is a super-
ceding lease, enter here the
number of the lease it is
replacing
- -----------------------------------------------------
[_] UPON DELIVERY OF PRODUCTS ORDERED HEREIN, ON THE
MONTH OF _______________________________ 199 ___
========================= =====================
DATE OF THIS AGREEMENT LEAD SOURCE CODE
- ------------------------- ---------------------
[_][_] [_][_] [9][_] [_][_][_][_]
- ------------------------- ---------------------
Month Day Year
- -----------------------------------------------------
==========================================================================================================
ANNUAL LEASE AMOUNT
- ----------------------------------------------------------------------------------------------------------
Lease amount or 12 months $_______________ Extended Term Lease $_______________
(2nd Year)
Add on _______________
(Less Credits if any) (_______________) Extended Term Lease $_______________
(3rd Year)
SUB-TOTAL $_______________
SALES USE TAX: _______________
TOTAL PAYABLE + $_______________ TOTAL PAYABLE FOR LEASE TERMS ELECTED: $_______________
SHIPPING/HANDLING $ 25.00 (Plus ?????? excess charges)
---------------
==========================================================================================================
==============================================================================================================
PAYMENT TERMS FOR THE LEASSEE
- --------------------------------------------------------------------------------------------------------------
A finance charge equal to the lesser of (a) 1.5% or The undersigned hereby affirms that he/she is duly
(b) the maximum rate permitted by law, will be authorized to commit the lessee to all Terms and
added to any unpaid balance hereon. Conditions set forth in this agreement...including
any "Extended Term" elected herein.
( ) PAID IN FULL
( ) PAYABLE NET 30 DAYS --------------------------------------------------
( ) PURCHASE ORDER Authorizer's Name (Please Print)
PO # ________________________
OTHER (Rep Explain): --------------------------------------------------
Authorizer's Title
X
--------------------------------------------------
Authorizer's Signature
$__________ Check Attached
( ) CREDIT CARD Customer's Business Category Code: [_][_]
MO USE ONLY (See Other Side)
TERM CODE [_][_]
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TRW REDI Property Data [LOGO]
CD ROM Subscription Agreement TRW-REDI
==================================================================================================================================
Date of Agreement Field Representative Number/Name Customer Account Number
[_][_] [_][_] [_][_] [_][_][_]_________________________________________________ [_][_] - [_][_][_][_][_][_]
Month Day Year [_][_][_]_________________________________________________
==================================================================================================================================
<S> <C>
Subject to the terms and conditions of this agreement, TRW REDI =============================================================
Property Data ("Licensor") grants to Licensee, identified below LICENSED AREAS # COPIES N/R $ ADD ON ANNUAL PRICE
and Licensee accepts a limited non-exclusive, non-transferable -------------------------------------------------------------
license without right of sub-license, to use the information
published by the Licensor on CD-ROM disk(s) listed herein (the -------------------------------------------------------------
"Information"), and a limited, non-exclusive, non-transferable
license, without the right of sub-license, to use the Retrieval -------------------------------------------------------------
Software only for the purposes of retrieving the information from
CD-ROM disk(s) at the Licensee's location, solely during the term -------------------------------------------------------------
and in concordance with the terms, conditions, and restrictions of
this agreement. -------------------------------------------------------------
TERMS AND CONDITIONS. -------------------------------------------------------------
1. ACCOUNT ESTABLISHMENT FEE: The Licensee shall pay TRW
REDI a one-time, non-refundable account establishment fee. -------------------------------------------------------------
2. PRODUCT SHIPPING COSTS: The Licensee shall pay TRW REDI
recurring product shipping fees. -------------------------------------------------------------
3. PRODUCT DEFINITION: The information, the CD disks containing
the information, the retrieval software, and the security -------------------------------------------------------------
system together constitute "The Product."
4. PAYMENT TERMS: -------------------------------------------------------------
[____________] equal payment payable [____________]
5. TERM: -------------------------------------------------------------
The initial term of this agreement shall be for [_________]
months, commencing [___________] through [____________] -------------------------------------------------------------
and is non-cancelable during that period; however, the Licensor Sub Total:
may terminate the licenses granted herein at any time without Product Shipping Fee:
notice if the Licensee breaches this agreement. This agreement Sales/Use Tax:
will renew automatically for successive twelve month periods TOTAL $:
unless canceled by either party in writing not less than thirty -------------------------------------------------------------
(30) days prior to the expiration of any term. Monthly Payment $:
6. ACCEPTANCE: This agreement shall be deemed accepted by the -------------------------------------------------------------
Licensor upon issuance of the Product to the Licensee.
7. ENTIRE UNDERSTANDING: This agreement (constituting this page THE FOLLOWING ITEMS ARE PAYABLE IN ADVANCE:
and the additional terms and conditions on the reverse hereto,
sets forth the entire understanding between the Licensor and -------------------------------------------------------------
the Licensee and supersedes all prior agreements, memoranda, First Service Month:
arrangements, and understandings relating to the subject Account Establishment Fee:
matter hereof and may only be amended subsequent written PAYABLE WITH THIS AGREEMENT $:
agreement of the parties hereto. -------------------------------------------------------------
==================================================================================================================================
SUBSCRIBER'S ACCEPTANCE
Account Name:____________________________________________________________________________ Telephone Number:_________________
[_] Individual [_] Partnership [_] Corporation [_] dba
Address:_________________________________________________________________________________
City, State, Zip Code:___________________________________________________________________
Authorized Signature:____________________________________________________________________ Date:_____________________________
Print Name:______________________________________________________________________________ Title:____________________________
==================================================================================================================================
TRW REDI Property Data . 3610 Central Avenue . Riverside California 92506 . (800) 345-7334
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ON-LINE SUBSCRIPTION TRW REDI
Agreement PROPERTY DATA
[LOGO]
TRW-REDI
====================================================================================================================================
Date Account Representative Existing TRW REDI Account Number
- ----------------------------------------------- --------------------------------------------- --------------------------------
<S> <C>
. ACCOUNT ESTABLISHMENT FEE
The Subscriber shall pay TRW RED Property Data (hereinafter referred to as "TRW REDI") a one-time Account
Establishment Fee in the amount of $________. The Subscriber may cancel Application for service and receive a full
refund of the Establishment Fee for any reason up to three (3) business days after the initial date of application.
After the three (3) days cancellation period has expired, TRW REDI will not refund the Account Establishment Fee for
any reason. A reinstatement fee of $150 will be charged for all accounts which have been cancelled for ninety (90)
days or more.
. CONTRACT TERMS AND RATES (Select one and initial)
______ A) STANDARD ANNUAL TERM WITH REDUCED WEEKEND RATES
Initial The term of this agreement shall be twelve (12) months effective ______/_____/______ and will automatically renew for
successive twelve (12) month periods unless cancelled by either party in writing not less than thirty (30) days prior
to the expiration of any term.
The Subscriber will be billed a monthly minimum of $_______. The combined usage from all databases and usernames is
applied to the total monthly minimum charge.
Reduced weekend rates of __________ cents per minute for 300/1200 baud access and ______ cents per minute for 2400
baud access for usage on the Real Property File only between the hours of 7:00 PM Friday and 7:00 A.M. Monday, Local
Time. Reduced weekend rates will be effective only after the monthly minimum has been met at the standard rates.
Billing for any usage prior to the above effective date will be calculated at the per minute rate noted herein.
_____ B) ANNUAL FIXED FEE
Initial The initial term of this agreement shall be twelve (12) months, effective _____/______/___, and will automatically
renew for successive twelve (12) month periods unless cancelled by either party in writing not less than thirty (30)
days prior to the expiration of any term.
FIXED MONTHLY FEE OPTIONS (Select and initial one:)
1) 300/1200 Baud Option ____ (Initial and date here)
The Subscriber will be billed a fixed monthly fee of $_______ for access to the Real Property File at 300 or 1200
baud, providing the Subscriber up to _____ minutes (____ hours) of usage per month. Each minute of usage (at 300
or 1200 baud) which exceeds the monthly time allotment will be billed at the rate of _____ cents per minute, in
the event the Subscriber elects to access the On-Line Service at 2400 baud, the fixed monthly fee will remain the
same, however. the per minute charge will be billed at the rate of ______ cents per minute, thereby reducing the
amount of time provided at the 300/1200 baud fixed monthly fee.
2) 2400 Baud Option ____ (Initial and date here)
The Subscriber will be billed a fixed monthly fee of $______ for access to the Real Property File at 300, 1200 or
2400 baud, providing the Subscriber up to ____ minutes (____ hours) of usage per month. Each minute of usage which
exceeds the monthly time allotment, will be billed at the rate of _____ cents per minute.
Usage on all other databases will be accumulated separately from the Real Property File. The Subscriber will be billed
for usage on all other databases at the standard rates according to the On-Line Price List, dated _______, __. Billing
for any usage prior to the above effective date will be calculated at the per minute rate noted herein.
_____ C) OTHER _________________________________________
Initial The Subscriber shall be billed a monthly minimum charge of $______. The combined usage from all databases and
usernames is applied to the total monthly minimum charge.
This agreement shall remain in full force and effect until terminated by either party upon thirty (30) days advance,
written notice to the other party. For the month in which termination becomes effective, the Subscriber will pay TRW
REDI the actual accrued charges or the full monthly minimum charge, whichever is greater. Billing for any usage prior
to the above effective date will be calculated at the per minute rate noted herein.
_____ D) PREPAID ANNUAL WITH NO MONTHLY MINIMUM
Initial The term of this agreement shall be twelve (12) months effective _____/_____/____.
Subscriber shall pay TRW RED the sum of $_______ to be applied to the Subscriber's account as a prepaid, non-
refundable, annual minimum fee. The charges for actual usage shall be deducted from this credit balance on a monthly
basis. In the event that the prepaid balance is depleted prior to the expiration of this agreement, the Subscriber
shall be billed for accumulated monthly usage per the payment terms set forth on the reverse side hereof for the
remainder of the annual term. Billing for any usage prior to the above effective date will be calculated at the per
minute rate noted herein.
. ON-LINE DATABASE ACCESS AND RATES (FOR APPLICABLE FEES, REFER TO THE "ON-LINE PRICE LIST," DATED ___________)
All Subscribers will be given access to the Real Property File for their "local" region. Subscriber also requests
access to additional databases specified below:
_____________________________________ _____________________________________ ____________________________________
_____________________________________ _____________________________________ ____________________________________
_____________________________________ _____________________________________ ____________________________________
The undersigned Subscriber understands the uses and limitations of the On-Line Service and databases with regard to
the available data items. Further, the Subscriber accepts and acknowledges the terms and conditions set form on the
reverse side hereof.
====================================================================================================================================
</TABLE>
<TABLE>
<S> <C>
SUBSCRIBER'S ACCEPTANCE (Including required Subscriber's initials, where noted above)
Account Name:____________________________________________________________________________ Telephone Number:_________________
[_] Individual [_] Partnership [_] Corporation [_] dba
Address:_________________________________________________________________________________
City, State, Zip Code:___________________________________________________________________
Authorized Signature:____________________________________________________________________ Date:_____________________________
Print Name:______________________________________________________________________________ Title:____________________________
==================================================================================================================================
</TABLE>
<PAGE>
EXHIBIT H
---------
FORM OF PROMISSORY NOTE
29
<PAGE>
PROMISSORY NOTE
$750,000 San Diego, California
As of August 31, 1995
1. OBLIGATION. COMPS InfoSystems, Inc., a Delaware corporation
----------
("Maker"), for value received, hereby promises to pay to TRW REDI Property Data,
(together with any successors and assigns, "Holder"), or order, at 5601 East La
Palma Avenue, Anaheim, California 92807, or at such other place as holder may
specify, the principal amount of Seven Hundred Fifty Thousand Dollars
($750,000).
2. INTEREST RATE. Beginning on the fourth anniversary date,
-------------
December 1, 1999, any unpaid principal balance shall begin bearing interest at a
fixed rate per annum of Eight Percent (8%). Prior to December 1, 1999, this
note shall not be interest bearing.
3. PAYMENT SCHEDULE. Payment of principal shall be made according
----------------
to the Schedule attached hereto as Schedule A. Whenever any payment to be made
----------
under this Note is stated to be due on a Saturday, Sunday or a public or bank
holiday or the equivalent for banks generally under the laws of the State of
California (any other day being a "Business Day"), such payment shall be made on
the next succeeding Business Day, and such extension of time shall in such case
be included in the computation of the payment of interest.
4. PREPAYMENTS; APPLICATION. This Note may be prepaid in whole or
------------------------
in part at anytime without penalty or premium. Any principal prepayment shall
be accompanied by a payment of the interest which has accrued on the amount
prepaid. All prepayments of principal shall be applied to principal
installments in the inverse order of their maturity (that is, against the last
principal installment first). Payments received with respect to this Note shall
be applied first to any fees and expenses then owing, second to unpaid accrued
interest, and lastly to unpaid principal.
5. EVENTS OF DEFAULT. The occurrence of any of the following shall
-----------------
constitute an "Event of Default" under this Note:
(a) Maker shall fail to pay any principal, interest or other amounts
payable under this Note within ten (10) days after such principal, interest or
other amount shall be due and payable; or
(b) Maker shall suffer or consent to or apply for the appointment of
a receiver, trustee, custodian or liquidator of any substantial portion of its
property, or shall make a general assignment for the benefit of creditors; Maker
shall file a voluntary petition in bankruptcy, or seeking reorganization, in
order to effect a plan or other arrangement with creditors or any other relief
under the Bankruptcy Reform Act, Title 11 of the United States Bankruptcy Code,
as amended or recodified from time to time ("Bankruptcy Code"), or under any
state or federal law granting relief to debtors, whether now or hereafter in
effect; or any involuntary petition or proceeding pursuant to the Bankruptcy
Code or any other applicable state or federal law relating to bankruptcy,
reorganization or other relief for debtors is filed or commenced against Maker,
and such involuntary petition or proceeding is not dismissed within sixty days
of its filing or commencement; or Maker shall file an answer admitting the
jurisdiction of such a court and the
1
<PAGE>
material allegations of any involuntary petition; or Maker shall be adjudicated
a bankrupt, or an order for relief shall be entered by any court of competent
jurisdiction under the Bankruptcy Code or any other applicable state or federal
law relating to bankruptcy, reorganization or other relief for debtors; or
(c) Maker shall become insolvent or become unable to fulfill its
financial obligations as they mature.
6. MAXIMUM RATE. All agreements which either are now or which shall
------------
become agreements between Maker and the holder of this Note are hereby expressly
limited so that in no contingency or event whatever, whether by reason of
deferment of advancement of the indebtedness represented by this Note, or
otherwise, shall the amount paid or agreed to be paid to the holder of this Note
for the use, forbearance or detention of the indebtedness evidenced hereby
exceed the maximum amount of interest permissible under applicable law. If,
from any circumstance whatsoever, fulfillment of any provision hereof or of any
other agreement between Maker and the holder hereof, at the time performance of
such provision shall be due, shall involve exceeding the maximum limit as
prescribed by law, then, ipso facto, the obligation to be fulfilled shall be
reduced so as not to exceed said limit.
7. COMPLIANCE WITH PURCHASE AGREEMENT. Notwithstanding the above,
----------------------------------
Maker's performance under this Promissory Note is subject to and conditioned
upon Holder's full compliance with the terms of that certain Purchase Agreement
between Maker and Holder executed as of the date hereof (the "Purchase
Agreement"), and Maker shall be entitled as a defense to any proceeding to
enforce this Promissory Note to advance any defenses available to Maker pursuant
to the Purchase Agreement.
8. WAIVER. Presentment, demand, protest, notices of protest,
------
dishonor and non-payment of this Note and all notices of every kind are hereby
waived, except notices required by this Note. No single or partial exercise of,
or forbearance from exercising, any power hereunder or under any guaranty
pertaining to this Note shall preclude other or further exercises thereof or the
exercise of any other power.
9. GOVERNING LAW. Principal and interest are payable in lawful
-------------
money of the United States. This Note has been executed and delivered by Maker
in the State of California and shall be governed by and construed in accordance
with the laws of the State of California, without giving effect to any choice of
law or conflict of law provisions (whether of the State of California or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of California.
Maker:
COMPS InfoSystems, Inc.,
a Delaware corporation
By: /s/ Christopher Crane
------------------------------------
Christopher Crane, President
2
<PAGE>
EXHIBIT A
---------
REPAYMENT SCHEDULE
------------------
<TABLE>
<CAPTION>
Date Amount Due
---- ----------
<S> <C>
December 1, 1996 $125,000
December 1, 1997 $125,000
December 1, 1998 $125,000
December 1, 1999 $125,000
December 1, 2000 $125,000 + accrued interest
December 1, 2001 $125,000 + accrued interest
</TABLE>
3
<PAGE>
EXHIBIT I
---------
NONDISCLOSURE AGREEMENT
[To be Completed]
30
<PAGE>
EXHIBIT I
CONFIDENTIAL DISCLOSURE AGREEMENT
---------------------------------
This AGREEMENT is made and entered into on August 7, 1995 (the
"Effective Date"), by and between COMPS, Inc. having a principal place of
business at San Diego, California ("RECIPIENT") and TRW REDI Property Data ("TRW
REDI").
WHEREAS, TRW REDI desires to disclose to RECIPIENT Proprietary
Information (as defined below) relating to its Commercial and Industrial
Property Data Publishing business for the purpose of RECIPIENT conducting due
diligence for a sale of assets by TRW REDI to RECIPIENT (the "Purpose").
TRW REDI and RECIPIENT agree as follows:
1. For the purposes of this Agreement, "Proprietary Information"
means all information originated by or otherwise peculiarly within the knowledge
of TRW REDI and those in privity with TRW REDI and which TRW REDI protects
against unrestricted disclosure to others.
2. In consideration of TRW REDI disclosing Proprietary Information
to RECIPIENT, RECIPIENT shall hold all Proprietary Information in trust and
confidence, shall use same only for the Purpose, and shall not disclose
Proprietary Information to persons outside RECIPIENT or to any of its employees
not directly concerned with furthering the Purpose.
3. RECIPIENT shall have no obligation with respect to any
Proprietary Information (a) after the same is published or becomes generally
available through no act or failure to act on the part of Recipient, (b) after
the same is received by RECIPIENT from a third party having no obligation to TRW
REDI with respect thereto, or (c) is independently developed by RECIPIENT.
4. No specific item of Proprietary Information shall be deemed to be
within any one of the foregoing exceptions merely because such item is embraced
by more general information that is within such exception.
5. Prior to disclosure of Proprietary Information to any employee,
RECIPIENT shall fully advise such employee that he or she is required to hold in
confidence all information and that such information is not to be disclosed to
persons outside his or her organization nor to any co-employee not directly
concerned with furthering the Purposes. RECIPIENT shall maintain between itself
and its officers, employees and consultants duly binding agreements by such
persons as may be necessary to fulfill the confidence obligations of RECIPIENT
under this Agreement. RECIPIENT shall not disclose Proprietary Information to
consultants without the prior written approval of TRW REDI.
6. This Agreement may be terminated at any time by either party
giving thirty (30) days prior written notice to the other party. Unless earlier
terminated, this Agreement
<PAGE>
shall expire one (1) year from the Effective Date. The RECIPIENT'S obligation to
protect Proprietary Information shall survive any such termination for a period
of two (2) years.
7. No rights or obligations other than those expressly recited
herein are to be implied from this Agreement.
8. All documents, drawings and writings disclosing Proprietary
Information to RECIPIENT and all copies thereof shall be returned promptly by
RECIPIENT to TRW REDI upon TRW REDI'S request.
9. This Agreement merges all prior discussions and is the entire
understanding and agreement of the parties relating to the protection of
Proprietary Information; neither party shall be bound by any additional or other
representation, condition, or promise except as subsequently set forth in a
writing signed by the party to be bound.
10. The validity and interpretation of this Agreement shall be
governed by the laws of the State of California, U.S.A., applicable to
agreements made and to be performed wholly within such jurisdiction.
TRW REDI
By: /s/ Illegible
---------------------------------
Title: V.P. Sales
------------------------------
RECIPIENT
By: /s/ Christopher A. Crane
---------------------------------
Title: Pres.
------------------------------
<PAGE>
[LOGO]
TRW REDI Property Data
5601 E. La Palma Avenue
Anaheim, CA 92807
714 701-2100
August 31, 1995
COMPS Infosystems, Inc.
9888 Carroll Centre Road, Suite 100
San Diego, California 92126
Dear Mr. Crane:
This letter sets forth certain agreements relating to the transactions provided
for in that certain Purchase Agreement dated as of August 31, 1995, between
COMPS Infosystems, Inc., and TRW REDI Property Data (the "Agreement"). In
addition to the terms and conditions in the agreement and in consideration
thereof parties agree as follows:
. TRW REDI shall use reasonable efforts to incorporate a field for the "COMPS
Number" in its on-line output format with respect to full-detail and six-
line reports as soon as practicable; and
. TRW REDI acknowledges that specifications substantially in the form
attached hereto as Exhibit 1 are "reasonably acceptable" for purposes of
---------
section 3.1 of the agreement.
Except as set forth in this letter, the Agreement remains unmodified.
Accepted:
/s/ Edwin P. Setzer
----------------------------
Edwin P. Setzer, President
TRW REDI Property Data
Agreed:
/s/ Christopher Crane
- -----------------------------
Christopher Crane, President
COMPS lnfosystems, Inc.
A joint venture partnership of TRW Inc. and Elsevier Realty Information, Inc.
<PAGE>
PHALINX AGREEMENT
AUGUST 29, 1995
In response to your proposed set of functional specifications dated August 28,
1995, we recommend the following methodology and applications changes to satisfy
what we understand to be the users' requirements.
I. USER INPUT AND & SYSTEM FUNCTIONALITIES
When Customer logs into the C&I Online database, Customer is prompted with
command line, i.e., COMMAND/FEATURE:, to enter search parameters using current
methodology. In order to use the C&I online service Customer is required to
know a few basic commands and syntax as any other system would. The following
is an example of a search:
E.G., ORANGE CA;APARTMENTS;12-14 UNITS;CITY ANAHEIM;SEARCH
The above comps search criteria will look for apartments with 12 to 14
units in the county of Orange, California in the city of Anaheim.
Once command line is entered and the search is executed, the customer receives a
message with the number of records that matched their parameters:
- --------------------------------------------------------------------------------
35 records found.
COMMAND/FEATURE:
- --------------------------------------------------------------------------------
If the search parameter's are too wide, the search defaults to automatically
stop as soon as 100 comps are found in the database and displays the following
message:
- --------------------------------------------------------------------------------
100+ records found.
COMMAND/FEATURE:
- --------------------------------------------------------------------------------
II. MANIPULATING COMPS FOUND AND SEARCH PARAMETERS
The interface is not a menu-driven system. Experienced users are familiar with
the command line codes and do not require prompting. At anytime, however, the
new user can get help and see all the valid commands/syntax simply by typing
"HELP" at the COMMAND/FEATURE prompt. (see attachment D)
Once Customer is notified of the number of comps found in the database and the
COMMAND/FEATURE prompt is displayed, Customer has the following options:
<PAGE>
A. Customer can receive an answer set by entering the new command "VIEW'
- one row per comp identified by line numbers. The "VIEW" command
without including any range of line numbers will display on the screen
all the comps found. "VIEW" has the same effect as "80 FORMAT;PRINT".
The difference is that "VIEW" will not allow viewing in SHORT or
DETAIL format and will not trigger the warning message for extra print
fees.
In order to allow ease of viewing and to prevent data rolling off the
screen, Customer can limit the number of comps they can view by
specifying a range or specific line numbers. For example,
- --------------------------------------------------------------------------------
COMMAND/FEATURE: VIEW 1-15
- --------------------------------------------------------------------------------
Will display the following:
<TABLE>
<CAPTION>
No. Street City St Sale Price Date Bldg Area Unit Lot Area Use
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 223 E CLIFTON ANAHEIM CA $ 685,OOOC 95/05 14,442 16 20,194 106
2 527 N ANNA ANAHEIM CA $ 400,OOOC 95/05 9,951 16 14,349 106
3 120 E PINE SANTA ANA CA $ 415,OOOC 95/04 7,350 14 13,121 106
4 1651 E LA HABRA LA HABRA CA $ 725,OOOC 95/03 15,570 15 30,120 106
5 8562 WATSON CYPRESS CA $ 660,OOOC 95/03 13,600 16 50,166 106
6 121 19 HUNTINGTO CA $2,100,OOOC 95/01 15,260 18 17,700 106
7 1541 W BALL ANAHEIM CA $ 557,OOOC 95/01 10,552 16 7,952 106
8 9752 ACACIA GARDEN GR CA $ 930,OOOC 95/01 18,832 16 39,390 106
9 6742 WESTERN BUENA PAR CA $ 861,375A 95/01 14,171 17 23,736 106
10 400 W VERMONT ANAHEIM CA $ 850,OOOC 95/01 13,770 14 16,800 106
11 7681 ELLIS HUNTINGTO CA $1,650,OOOC 94/12 19,830 16 34,300 106
12 17542 JEFFERSON HUNTINGTO CA $ 980,OOOF 94/12 14,284 15 26,307 106
13 1418 W DAHL SANTA ANA CA $ 440,OOOC 94/12 9,040 16 23,045 106
14 3185 HELENA ANAHEIM CA $1,150,OOOF 94/12 12,700 14 17,955 106
15 504 PAULINE ANAHEIM CA $ 550,000F 94/11 10,172 16 19,880 106
</TABLE>
To view the next answer set, the customer will enter
- --------------------------------------------------------------------------------
COMMAND/FEATURE: VIEW 16-30
- --------------------------------------------------------------------------------
The scroll-up/scroll down feature can be accomplished by simply
supplying the line number range with the VIEW command. This also
allows Customer the ability to view any single comp or range of comps
in any sequence as many times as they wish to until they begin a "NEW"
search.
VIEW 3-10 will display comp numbers 3 through 10; VIEW 5,21,26-30 will
display comp numbers 5, 21 and 26 through 30; etc.
B. Customer can choose to PRINT, VIEW the answer set again, make
modifications to the search parameters, or EXIT the system. As
enumerated in COMPS Inc.'s
<PAGE>
proposed functional specifications, here is how these requested user
tasks can be accomplished in the current system. Once all of the
records have been viewed in the answer set format, Customer can do any
of the following:
1) PRINT SELECTED COMPS IN THE 6-LINE FORMAT
Solution: Type in SHORT;PRINT 3,5,9,16,20
(see notes below)
(see attachment A: SHORT format)
2) PRINT SELECT COMPS IN THE FULL-RECORD FORMAT.
Solution: Type in DETAIL;PRINT 1, 6,9
(see notes below)
(see attachment B: DETAIL format)
3) RETURN TO FIRST PAGE OF THE ANSWER SET
Solution: Customer can view any portion of the one-line display
at any time by using the VIEW command, e.g. VIEW 1-15
4) EXIT BACK TO THE SEARCH PARAMETERS TO MAKE ADJUSTMENTS
Solution: It is not necessary to exit. Customer simply enters
additional parameters at the COMMAND/FEATURE prompt.
5) EXIT SYSTEM
by entering one of the following: LOG, LOGOFF, BYE
Notes:
a. "Tagging" of the desired comps is accomplished by specifying the
line number(s) or range(s) in the PRINT command.
b. Additional print fees cannot be dynamically calculated. The
following new message will be displayed when DETAIL or SHORT is
selected for printing:
----------------------------------------------------------------------
Notice: You will be charged an additional fee for each record
printed. Please make sure your printer is set to capture
screen output:
[Return] to continue
[Control Z] to exit
This notice can be turned on or off by entering "SET NOTICE
OFF" or "SET NOTICE ON" at the COMMAND/FEATURE prompt.
----------------------------------------------------------------------
<PAGE>
c. The per minute fee can vary by customer. The fees for 6-line
(SHORT) and full-record (DETAIL) formats must currently be a
fixed amount for all customers.
III. OUTPUT RECORD SCREEN LAYOUTS
(see attachments A, B, C)
<PAGE>
<TABLE>
<CAPTION>
ATTACHMENT A: SHORT FORMAT
- --------------------------
<S> <C> <C> <C>
3) Address:328 W 1 ST, SAN PEDRO Use :APARTMENT
APN :7449-023-028+ Price: $ 850,000F Date:07/07/95 Bldar:17,056
County :LOS ANGELES CA $/Sq : $ 49.84 Doc#:1091308 Units:22
MapPg :79-A2 NewPg:824-C4 AssdLd: $ 681,252 Zone:R4-1 LAStory:2
Source:I <Inc#:BDV4048> Total: $2,384,384 Lot :24,400 Yrblt:1986/88
Comment:8 VACANCIES AT SALE 7/6/95
-------------------------------------------------------
5) Address:433 OHIO AV, LONG BEACH Use :APARTMENT
APN :7263-022-017 Price: $ 260,000F Date:07/12/95 Bldar:3,800
County :LOS ANGELES CA $/Sq : $ 68.42 Doc#:1118975 Units:10
MapPg :75-F5 NewPg:795-H7 AssdLd: $ 43,803 Zone:RR2N LBStory:1
Source:I <Inc#:BDW5201> Total: $ 94,263 Lot :6,400 Yrblt:1923/68
Comment:1) 8UN,2816#,23YB;2)1UN,984#,3BD,1BA
-------------------------------------------------------
9) Address:428 -32 BONITO AV, LONG BEACH Use :APARTMENT
APN :7266-009-008 Price: $ 235,000F Date:07/05/95 Bldar:5,323
County :LOS ANGELES CA $/Sq : $ 44.15 Doc#:1074294 Units:8
MapPg :75-D5 NewPg:795-E7 AssdLd: $ 47,568 Zone:RR3S LBStory:2
Source:I <Inc#:BDV2278> Total: $ 135,918 Lot :7,496 Yrblt:1922/68
Comment:MO - MARKET; SALE 6/13/95
-------------------------------------------------------
16)Address:3937 W IMPERIAL HY, HAWTHORNE Use :APARTMENT
APN :4033-025-003 Price: $ 215,000C Date:07/05/95 Bldar:5,296
County :LOS ANGELES CA $/Sq : $ 40.60 Doc#:1070595 Units:13
MapPg :57-B5 NewPg:703-E7 AssdLd: $ 164,487 Zone:C2 LAStory:2
Source:I <Inc#:BDV1923> Total: $ 546,521 Lot :7,980 Yrblt:1960/68
Comment:BUYER; SALE 5/22/95
-------------------------------------------------------
20)Address:1058 WALNUT AV, LONG BEACH Use :APARTMENT
APN :7267-011-001 Price: $ 50,000P Date:07/06/95 Bldar:6,876
County :LOS ANGELES CA $/Sq : Doc#:1083003 Units:9
MapPg :75-E4 NewPg:795-G6 AssdLd: $ 163,200 Zone:R4* LAStory:2
Source:I <Inc#:BDV3133> Total: $ 341,700 Lot :6,110 Yrblt:1962/80
Comment:2-3BR/1BA $575/MO - MARKET
-------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ATTACHMENT B: DETAIL FORMAT (1 OF 3)
- ------------------------------------
Address:328 W 1 ST, SAN PEDRO 90731
County :LOS ANGELES CA Land Use :APARTMENT
Lot Size :200X122 Bldg Area: 17,056 New Page :824-C4
Lot Area :24,400 Rent Area: Map Page :79-A2 Source :I
Zoning :R4-1 LA Bsmt Area: APN-Acct#:7449-023-028+
Ofc. Area: Census Tr:2962.00
Year Blt :1986/88 Assessed Land: $ 681,252
# Bldgs : 1 Park Type:PAVED Improvement: $1,703,132
# Stories : 2 Park Spcs:30 Total Value: $2,384,384
Units : 22 Paving : Assessed Yr:94
CLASS D BUILDING; AVERAGE QUALITY; AVERAGE CONDITION; FRAME $/Sqft : $ 49.84
CONSTRUCTION; WOODFRAME; STUCCO EXTERIOR; CONCRETE FOUNDATION; G.I.M. : 6.13
GABLE ROOF; COMPOSITION SHINGLE ROOF; WALL FURNACE HEAT; NO Cap Rate: 6.15
A/C; 22-2BR/1BA ;;$525/MO-MARKET;; 8 VACANCIES AT SALE RNT/#/MO: $0.67
7/6/95 Price/Un:$38,636
Publication Reference: SBA-08/95-0059
Multi-APN:7449-23-(27,30) A
Legal Dsc:L15, L18 & L19 /MC DONALD'S SUB
Price : $840,000F Sale Date:07/07/95 Gross Income : $ 138,600
Cash Down : $307,500 Document#:1091308 Expenses : $ 37,837
1st Mtg : $542,500H Int: Yrs: Net Income : $ 52,253
2nd Mtg : Int: Yrs:
Prev Sale : $75,000U Prev Date:12/31/91
Buyer : CARSON, THOMAS & BARBARA
Address : 500 SILVER SPUR RD #201;RLLNG HLS EST,CA 90275;310/377-5552
Seller : SHAFFER, DENNIS
Address : 500 SILVER SPUR RD #201;RLLNG HLS ES
Lender : QUAKER CITY FED'L
</TABLE>
<PAGE>
ATTACHMENT B: DETAIL FORMAT (2 OF 3)
- ------------------------------------
6) Address:5895 -909 MAKEE ST, LOS ANGELES 90001
County :LOS ANGELES CA Land Use :APARTMENT
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Lot Size :A.49 Bldg Area: 8,514 New Page :674-F5
Lot Area :21,600 Rent Area: Map Page :52-D4 Source :
Zoning :R3 LC Bsmt Area: APN-Acct#:6008-036-013
Ofc. Area: Census Tr:5327.00
Year Blt :1948/60 Assessed Land: $220,814
# Bldgs : 4 Park Type:PAVED Improvement: $618,284
# Stories : 1 Park Spcs:28 Total Value: $839,098
Units : 28 Paving : Assessed Yr:94
CLASS D BUILDING;AVERAGE QUALITY;FAIR CONDITION;FRAME $/Sqft : $ 542.87
CONSTRUCTION;WOOD FRAME;STUCCO EXTERIOR; CONCRETE FOUNDATION; G.I.M. : 4.35
GABLE ROOF;COMPOSITION SHINGLE ROOF;WALL FURNACE HEAT;NO Cap Rate : 12.52
A/C;REO SALE 7/95; 28-SG;L $250/MO;2-7UN-2160# EA; RNT/#/MO : $ 0.82
2-4UN-1332# EA;3UN-918#;2UN-612#; 27 SGLS Price/Un : $ 13,036
Publication Reference: SBA-08/95-0005
Legal Dsc:L16-20 /AHREN'S MIRAMONTE A
Price : $365,000F Sale Date:07/03/95 Gross Income : $ 84,000
Cash Down : $54,750 Document#:1056622 Expenses : $ 25,704
1st Mtg : $182,500H Int: Yrs: Net Income : $ 45,696
2nd Mtg : $127,750S Int: Yrs:
Prev Sale : $760,000F Prev Date:03/14/89
Buyer :MENDEZ ORTELIO & MENDEZ, E
Address :225 JASON CT;PERRIS,CA 925719100;213/588-5536
Seller :PRESIDENTIAL MTG
Address :21031 VENTURE BLVD 1ST FLR;WOODLAND HILL
Lender :PACIFIC T&L
</TABLE>
<PAGE>
ATTACHMENT B: DETAIL FORMAT (3 OF 3)
- ------------------------------------
9) Address:133 -35 e 73 ST, LOS ANGELES 90003
County :LOS ANGELES CA Land Use :APARTMENT
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Lot Size :60X120 Bldg Area: 3,906 New Page :704-D1
Lot Area :7,205 Rent Area: Map Page :52-B6 Source :I
Zoning :R2-1 LA Bsmt Area: APN-Acct#:6022-001-023
Ofc. Area: Census Tr:2396.00
Year Blt :1929/75 Assessed Land: $ 76,406
# Bldgs : 4 Park Type:PAVED Improvement: $199,506
# Stories : 1 Park Spcs:4 Total Value: $275,912
Units : 8 Paving : Assessed Yr:94
CLASS D BUILDING;AVERAGE QUALITY;FAIR CONDITION;FRAME S/Sqft : $ 33.28
CONSTRUCTION;WOOD FRAME;STUCCO EXTERIOR; RAISED FOUNDATION; G.I.M. : 3.01
FLAT ROOF; ROLL COMPOSITION ROFF COV; WALL FURNACE HEAT;NO Cap Rate: 9.70
A/C;REO SALE 5/26/95;; 8-1BR $450/MO;;2 DUPS 1000# EA; RNT/#/MO: $ 0.92
2SFR 500# EA; PER TENANTS Price/Un: $16,250
Publication Reference: SBA-08/95-0019
Legal Dsc:L19 TR4219
Price : $130,000F Sale Date:07/14/95 Gross Income : $ 43,200
Cash Down : $13,000 Document#:1135957 Expenses : $ 4,665
1st Mtg : $117,000S Int: Yrs: Net Income : $ 12,615
2nd Mtg : Int: Yrs:
Prev Sale : $184,820C Prev Date:05/30/91
Buyer :MELGOZA MARTIN
Address :1431 W. 89TH ST; LOS ANGELES, CA 900473417
Seller :SOUTHERN PACIFIC T & L
Address :12300 WILSHIRE BL; LOS ANGELES, CA 90025
Lender :SELLER
</TABLE>
<PAGE>
ATTACHMENT C: ONE-LINE FORMAT
- -----------------------------
<TABLE>
<CAPTION>
No. Street City St Sale Price Date Bldg Area Unit Lot Area Use
<C> <S> <C> <C> <C> <C> <C> <C> <C> <C>
1 223 E CLIFTON ANAHEIM CA $ 685,OOOC 95/05 14,442 16 20,194 106
2 527 4 ANNA ANAHEIM CA $ 400,OOOC 95/05 9,951 16 14,349 106
3 120 E PINE SANTA ANA CA $ 415,OOOC 95/04 7,350 14 13,121 106
4 1651 E LA HABRA LA HABRA CA $ 725,OOOC 95/03 15,570 15 30,120 106
5 8562 WATSON CYPRESS CA $ 660,OOOC 95/03 13,600 16 50,166 106
6 121 19 HUNTINGTO CA $2,100,OOOC 95/01 15,260 18 17,700 106
7 1541 W BALL ANAHEIM CA $ 557,OOOC 95/01 10,552 16 7,952 106
8 9752 ACACIA GARDEN GR CA $ 930,OOOC 95/01 18,832 16 39,390 106
9 6742 WESTERN BUENA PAR CA $ 861,375A 95/01 14,171 17 23,736 106
10 400 W VERMONT ANAHEIM CA $ 850,OOOC 95/01 13,770 14 16,800 106
11 7681 ELLIS HUNTINGTO CA $1,650,OOOC 94/12 19,830 16 34,300 106
12 17542 JEFFERSON HUNTINGTO CA $ 980,OOOF 94/12 14,284 15 26,307 106
13 1418 W DAHL SANTA ANA CA $ 440,OOOC 94/12 9,040 16 23,045 106
14 3185 S HELENA ANAHEIM CA $1,150,OOOF 94/12 12,700 14 17,955 106
15 504 N PAIJLINE ANAHEIM CA $ 550,OOOF 94/11 10,172 16 19,880 106
</TABLE>
<PAGE>
ATTACHMENT D
- ------------
<TABLE>
<CAPTION>
*** SEARCHABLES *** *** FILTERS ***
APN OWNER or BUYER CENSUS RECTYPE
BLDAR or LVAREA PAGEGRID or AREA CONSTRUCTION SALECODE
CITY SALEDATE DIRECTION
<S> <C> <C> <C>
SITEINFLUENCE
COUNTY SALEPRICE DOLLARSQFT SOURCE
INCOMNET STATE GRLEASE STORIES
LANDUSE STREET GROSS INCOME SUFFIX
LVAREA UNITS LOTAREA TOTALVALUE
NUMBER OFFICEAREA UNITNO
PARKSPACES YEARBUILT
POOL ZONING
RAILSPUR
*** COMMANDS *** *** FORMATS ***
DELETE MENU or OPTION DETAIL SHORT
DSORT NEW 80
FORMAT PRINT
JOBID SEARCH
LIST SORT
(VIEW)
</TABLE>
NOTE: ITEMS IN PARENTHESIS CURRENTLY NOT IMPLEMENTED.
<PAGE>
ADDENDUM TO AND AMENDMENT OF PURCHASE AGREEMENT
BY AND BETWEEN
COMPS INFOSYSTEMS, INC. AND TRW REDI PROPERTY DATA
DATED AUGUST 31, 1995
This Addendum to and Amendment ("Addendum & Amendment") of Purchase
Agreement by and between COMPS InfoSystems, Inc. ("COMPS") and TRW REDI Property
Data dated August 31, 1995 (the "Purchase Agreement") is entered into this 20th
day of November, 1997 by and between COMPS and Experian Information Solutions,
Inc. ("Experian RES"), the successor in interest to TRW REDI under the Purchase
Agreement. The relationship of the parties hereto with respect to the subject
matters hereof and the subject matters of the Purchase Agreement shall be
governed by the Purchase Agreement and this Addendum & Amendment, read together
as a whole. Except as set forth herein, all terms and provisions of the
Purchase Agreement remain unmodified and in full force and effect and are
binding upon COMPS and Experian RES. Terms used and not otherwise defined
herein shall have the definitions given them in the Purchase Agreement.
1. Recitals:
---------
WHEREAS, COMPS and TRW REDI Property Data ("TRW REDI") are parties to
the Purchase Agreement;
WHEREAS, Experian RES is the successor-in-interest to TRW REDI under
the Purchase Agreement and is bound by all of the obligations of TRW REDI
thereunder;
WHEREAS, the parties desire to provide for the purchase by COMPS of
the Florida and Georgia C&I Data Extract Business, on the terms and conditions
set forth herein;
WHEREAS, the parties desire to provide for the expansion of the Sales
Agency of Experian RES described in Section 3 of the Purchase Agreement; and
WHEREAS, the parties desire to further amend and supplement the
Purchase Agreement as set forth herein;
NOW THEREFORE, the parties hereto agree as follows:
2. Parties. The Purchase Agreement is hereby amended to substitute
-------
"Experian RES" in place of "TRW' and "TRW REDI" in each instance such defined
term occurs throughout the Purchase Agreement.
3. Business Sale and Transfer. Upon the Closing (as defined below), and
--------------------------
upon the terms and subject to the conditions of this Addendum & Amendment,
Experian RES agrees to sell, assign, transfer and convey to COMPS, and COMPS
agrees to purchase and acquire from Experian RES, all of Experian RES's right,
title and interest in and to all of the Assets of the Florida & Georgia C&I Data
Extract Business, which is part of the Real Estate Solutions Group within
Experian RES. For purposes of this Addendum & Amendment, "Assets" shall have the
meaning set forth in Section 2.2 of the Purchase Agreement and, in addition,
shall include the
<PAGE>
right to publish the products of the Purchased Businesses in substantially the
same formats and media and containing substantially the same types of
information as had been provided to customers by Experian RES; provided that the
"Purchased Businesses" shall be deemed to include the Florida & Georgia C&I Data
Extract Business. A complete and accurate schedule of the Accounts Receivable of
the Florida & Georgia C&I Data Extract Business shall be attached hereto as
Exhibit A (Experian RES will forward any accounts receivable collected after
- ---------
Closing within 30 days of receipt). Assets shall also include, without
limitation, all work-in-process, print masters, pertinent software and finished
goods inventory as relates directly to the Florida & Georgia C&I Data Extract
Business. The Assets will be sold, assigned, transferred and conveyed to COMPS
upon the Closing, free and clear of all mortgages, pledges, liens, licenses,
rights of possession, security interests, restrictions, encumbrances, charges,
title retention, conditional sale or other security arrangements and all claims
or agreements of any nature whatsoever (except for Experian RES's obligations
with respect to licenses and other agreements with customers assigned to and
accepted and assumed by COMPS pursuant to the terms of this Addendum &
Amendment, all of which are identified on Exhibit B).
----------
3.1. Assignment of Experian RES Contract; Fulfillment of Obligations
---------------------------------------------------------------
to Customers. Experian RES will assign to COMPS and COMPS agrees to fulfill and
- ------------
assume, subject to Section 3.2 ("Liabilities Not Assumed") hereof, those
agreements with customers set forth in Exhibit B. The obligations of the parties
set forth in Section 2. 1 .1 of the Purchase Agreement shall apply with respect
to contracts of the Florida & Georgia C&I Data Extract Business not assigned to
COMPS.
3.1.1. Post-Closing Publication Obligations. Following the
------------------------------------
Closing, and notwithstanding anything in this section or this Addendum &
Amendment to the contrary, Experian RES agrees to publish the regular products
of the Florida & Georgia C&I Data Extract Business identified on Exhibit C on
---------
such products' standard publication schedules and for a period of sixty (60)
days following the Closing. Such publication in the first thirty (30) days of
said period shall be at the expense of Experian RES and in the second thirty
(30) days of said period shall be at the expense of COMPS, reimbursable by COMPS
to Experian RES in an amount equal to actual publication costs (including direct
labor, printing and packaging) not to exceed Eleven Thousand Six Hundred Dollars
($11,600.00) based on existing quantities at the time of Closing. If said
quantities are greater, the actual publication cost shall be increased
proportionately. The amount due hereunder shall be paid by COMPS to Experian RES
net thirty (30) days. Notwithstanding the foregoing, in the event COMPS provides
notice to Experian RES on or prior to December 15, 1997 that COMPS does not
desire the publication or production of any product or products (or portion
thereof), Experian RES shall not publish or produce, as applicable, such product
or products (or portion(s)) during the second thirty (30) day period and the
amount of COMPS's obligations to reimburse expenses of Experian RES shall be
reduced accordingly based upon publication and production cost information
identified on Exhibit F.
---------
3.2. Liabilities Not Assumed. Except as specifically set forth in
-----------------------
Section 3.1, above, Experian RES does not transfer hereunder and COMPS does not
assume hereby, any liability associated with the Florida & Georgia C&I Data
Extract Business. Experian RES agrees to defend, indemnify and hold COMPS
harmless against any and all loss, cost, claims and liabilities not expressly
assumed by COMPS hereunder, including but not limited to any liabilities arising
under any contracts relating to the Florida & Georgia C&I Data Extract
-2-
<PAGE>
Business, and based upon facts, circumstances or events occurring prior to the
Closing. Without limiting the generality of the foregoing, Experian RES shall be
solely responsible for any refunds and/or cancellations fees it becomes
obligated to pay as a result of the attempted transfer of Experian RES customer
agreements to COMPS pursuant to this Addendum & Amendment or the Purchase
Agreement.
4. Purchase Price. At the Closing, COMPS shall pay to Experian RES ***
--------------
Dollars ($***).
4.1. Amendment of Purchase Price and Payment Terms in Purchase
---------------------------------------------------------
Agreement. The schedule of payments set forth in Section 2.5 of the Purchase
- ---------
Agreement is hereby amended to read in full as follows:
Date Amount
---- ------
12/1/97 $***
12/1/98 $***
12/31/99 $***
12/31/00 $***
12/31/01 $***
5. Purchase of Experian RES Data; Termination of Data Credit. Effective
---------------------------------------------------------
upon the Closing, the Data Credit described in Section 2.5 of the Purchase
Agreement shall terminate and be of no further force and effect with regard to
Experian RES Data ("TRW REDI Data" as defined in the Purchase Agreement prior to
the effectiveness of this Addendum & Amendment) purchased by COMPS following the
Closing.
5.1. Amended Data Purchase. Upon the Closing and on each subsequent
---------------------
annual anniversary of the Closing during the Amended Term (as defined herein),
COMPS shall pay Experian RES *** Dollars ($***). In exchange for such payment,
COMPS shall be entitled to obtain during the twelve-month period following such
payment, Experian RES Data valued at *** Dollars ($***). In addition, COMPS
shall have the right, at its option, to obtain up to an additional *** Dollars
($***) of Experian RES Data annually, based upon payment by COMPS of *** Dollars
($***) for each *** Dollars ($***) of Experian RES Data purchased by COMPS. The
value of Experian RES Data purchased by COMPS shall be based upon the lowest
price for such data offered by Experian RES to a Comparable Most Favored
Customer at the time of the purchase of such data by COMPS, less a ten percent
(10%) discount. For purposes of this Addendum & Amendment, "Comparable Most
Favored Customer" shall mean any purchaser of Experian RES Data (other than
Experian RES Related Parties, as defined below) in comparable quantities as
those purchased by COMPS. All of such Experian RES Data purchased pursuant to
this Section shall be delivered either through Experian RES's on-line service or
in CD-ROM or other digital media (including, without limitation, mag tape),
except that up to Five Percent (5%) of annual purchases by COMPS may, at COMPS's
election, be in the form of Experian RES's
-3-
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
printed and microfiche products. Any purchases by COMPS exceeding the limits
herein specified shall be at prevailing Comparable Most Favored Customer prices.
5.2. COMPS Data Purchase Option. COMPS may at its option continue to
--------------------------
purchase Experian RES Data on the terms described in Section 5.1 herein for a
period two (2) years following the expiration of the Amended Term; provided,
--------
however, in the event COMPS grants Expanded Rights to Other Existing On-line
- -------
Distributors as defined and described in Section 5.3 herein, COMPS shall forfeit
said post-Term option in accordance with the terms of Section 5.4 herein.
5.3. COMPS Arrangements With Other Existing On-line Distributors. In
-----------------------------------------------------------
consideration of Experian RES's investment of time, effort and resources to
increase the customer base and revenues for the COMPS Data, and further in
consideration of the transfer of Assets of the Florida & Georgia C&I Data
Extract Business, for a period of two (2) years commencing on the Closing Date,
COMPS shall not grant an expansion of existing on-line distribution rights for
any markets in addition to those markets for which such rights had already been
granted as of August 1, 1997 ("Expanded Rights") to any other party with which
COMPS has an existing arrangement or agreement with regard to the on-line
distribution of COMPS Data and from which COMPS is presently realizing any
royalties or other payments from said distribution ("Other Existing On-line
Distributors"); provided, however, that after one (1) year from the Closing
-------- -------
Date, COMPS shall have the right to grant such Expanded Rights to such Other
Existing On-line Distributors if COMPS gives Experian RES six (6) months prior
notice. Except as specified in this Section 5.3, none of the foregoing shall
restrict the right of COMPS with regard to the entering into or expansion of any
arrangement or agreement with any other party, including without limitation any
entity not deemed to be an Other Existing On-line Distributor. For purposes of
Section 5.3 herein, COMPS itself shall not be considered an Other Existing
Online Distributor.
5.4. Forfeiture of Data Purchase Rights. If COMPS exercises its right
----------------------------------
to grant Expanded Rights to an Other Existing On-line Distributor, less than two
(2) years from the Closing Date, then COMPS shall forfeit all rights with
respect to the post-Term purchase of Experian RES Data, as provided for in
Section 5.2 herein, for the two (2) year period following expiration of the
Amended Term.
6. Rights in Data.
--------------
6.1. Amendment of Section 4 of Purchase Agreement. Section 4 of the
--------------------------------------------
Purchase Agreement is hereby amended to read in full as follows:
Except as expressly provided in this Agreement, each
party reserves all proprietary rights in and to: (i)
all of the underlying data, compilations and information
gathered, compiled or published by such party in
connection with the creation and preparation of the
Licensed Data; (ii) all of the other data, compilations
and publications created, prepared or authorized by each
party not consisting of the Licensed Data; and (iii) all
copyrights and other proprietary rights in any of the
foregoing.
-4-
<PAGE>
However, notwithstanding anything in any Experian
RES Data subscription or other agreement to which
COMPS may be subject, COMPS is expressly licensed
and permitted to incorporate Experian RES Data into
its permanent enhanced Investment Property database;
provided, however, that (except as set forth in
-------- -------
Section 3 of the Addendum & Amendment with respect
to the Florida & Georgia C&I Data Extract Business)
such incorporated information may not be transferred,
re-sold, licensed or sub-licensed by COMPS "as is,"
except in a "work-in-process" format. The foregoing
license shall survive termination of this Purchase
Agreement as amended in the Addendum & Amendment.
For purposes of this Purchase Agreement, as amended
by this Addendum & Amendment, a "work-in-process"
format shall mean a COMPS format which COMPS will
enhance within an average of ninety (90) days from
the date of first delivery to a COMPS customer with
other proprietary and/or non-proprietary information
added by COMPS. Except as set forth in the foregoing
proviso, Experian RES Data may only be transferred,
re-sold, licensed or sub-licensed by COMPS as part of
COMPS Data or another COMPS enhanced information
product. Nothing herein shall be construed as a
license by Experian RES to COMPS relating to any
Experian RES tradenames or trademarks.
6.2. Protection of COMPS Data. COMPS may, in its sole discretion,
------------------------
upon fifteen (15) days notice to Experian RES, prohibit Experian RES or any
successor to or affiliate of Experian RES or its successors (for purposes of
this Addendum & Amendment, "Experian RES Related Parties") from providing COMPS
Data or any other COMPS proprietary information to any user or other third party
whom COMPS reasonably believes has infringed or is infringing upon COMPS
proprietary rights in such COMPS Data or COMPS proprietary information or
software, and with respect to whom COMPS has taken some remedial action such as,
for example, sending a written demand to cease and desist (a copy of which shall
be included with any notice to Experian RES). In addition, neither Experian RES
nor any Experian RES Related Party will use, provide access to, publish,
transfer, license or sub-license COMPS Data for any purpose other than the
distribution to bona fide end user customers of individual property reports.
Neither Experian RES nor any Experian RES Related Party will make or cause to be
made any derivative products or works from COMPS Data, append any data to COMPS
Data or license or otherwise permit any third party other than a bona fide end
user customer to perform analysis incorporating or relying upon COMPS Data.
7. Expansion of Sales Agency; Delivery of COMPS Data; Price. The parties
--------------------------------------------------------
intend to expand the scope of Experian RES's Sales Agency to include all markets
for which COMPS compiles and supplies an Enhanced C&I Product ("COMPS Markets")
as of the date of Closing and as may subsequently be added during the Amended
Term. Such markets as of the date hereof are set forth on Exhibit D, which
---------
shall be amended to include any additional markets added from time to time
during the Amended Term. Therefore, the definition of COMPS Data set forth in
Section 1.7 of the Purchase Agreement is hereby modified so that all references
to "California" (such references occurring in the second, ninth and last lines
of such section) are
-5-
<PAGE>
deleted, and such definition shall hereafter be read without geographic
restriction to include all geographic markets within which COMPS provides such
products.
7.1. Delivery of COMPS Data. On or before thirty (30) days following
----------------------
the Closing (as defined below), COMPS shall deliver to Experian RES one (1) year
of historical COMPS Data (as defined in the Purchase Agreement and amended and
modified by this Addendum & Amendment), to the extent such COMPS Data then
exists, for each COMPS Market and shall on a timely basis deliver to Experian
RES weekly updates of new transactions in such markets (this amends Section
5.1.2 of the Purchase Agreement). Said deliveries (of both historical and
updated data) shall be made by COMPS in accordance with subsections 5.1.3
("Shipping Address") and 5.1.4 ("Format & Layout") of the Purchase Agreement,
unless altered or modified by the mutual consent of the parties.
Notwithstanding anything herein or in the Purchase Agreement to the contrary,
COMPS may withhold the data elements "confirmed sales price" and "cap rates"
from COMPS Data for markets in Non-Disclosure States, as defined herein.
7.2. Additional COMPS Markets. For all geographic markets in addition
------------------------
to the current COMPS Markets identified on Exhibit D, for which COMPS initiates
---------
the sale of Enhanced C&I Data during the Amended Term hereof, COMPS shall
deliver to Experian RES weekly updates and, to the extent commercially available
from COMPS, historical COMPS Data.
7.3. Amendment of Fees Paid to Experian RES. The parties desire to
--------------------------------------
increase the COMPS Data Commission Fees provided in the Purchase Agreement.
Accordingly, Section 3.3 ("Fees Paid to Experian RES") of the Purchase Agreement
is amended to read in full as follows:
"3.3 Fees Paid to Experian RES. In consideration
-------------------------
of its performance under the Sales Agency,(***%) COMPS agrees
to pay Experian RES *** percent (***%) of Gross Revenues
collected by Experian RES for the benefit of COMPS."
7.4. Restrictions on Price Increases. Subsection 3.1.1 of the
-------------------------------
Purchase Agreement is hereby amended to read in full as follows:
"3.1.1 Obligations of Experian RES. In connection
---------------------------
with the Sales Agency, Experian RES agrees (i) it shall
publish COMPS Data as a stand-alone product and only in
the format attached hereto as Exhibit C-2; (ii) it shall
-----------
make COMPS Data available through its on-line database
services to Experian RES subscribers on a consistent
basis; (iii) it shall provide a level of customer service
to purchasers of COMPS Data consistent with the level of
service provided by Experian RES to subscribers to other
Experian RES on-line information services; (iv) Experian
RES will use its reasonable efforts to keep its on-line
technology current with competitive on-line services;
and (v) Experian RES shall use reasonable care to notify
its on-line subscribers that COMPS Data
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
-6-
<PAGE>
is owned by COMPS and subject to copyright and other
intellectual property protection.
7.4.1. Prices of COMPS Data. Effective from the Closing through
--------------------
December 31, 1997, prices for COMPS Data shall remain as presently determined by
COMPS. On January 1, 1998, said prices may be increased by COMPS to not more
than $13.95 for each on-line report of a property with a most recent sale price
of up to five million dollars ($5,000,000) ("Report A") or $19.95 for each on-
line report of a property with a most recent sale price of five million dollars
($5,000,000) or more ("Report B"), and shall remain in effect at least until
December 31, 1998. As of January 1, 1999, except by mutual agreement of the
parties hereto said prices shall not exceed these maximum amounts as of their
respective dates indicated. Notwithstanding any provision to the contrary
herein, Experian RES shall offer and provide COMPS Data at such prices and terms
determined by COMPS and provided to Experian RES (such prices to change at
COMPS' discretion upon 30 days notice to Experian RES). In the event COMPS
elects at its sole discretion to determine and set the prices for COMPS Data to
be charged by Experian RES at any amount(s) higher than indicated in the
following table, then COMPS shall pay to Experian RES one hundred thousand
dollars ($100,000) within thirty (30) days of giving notice of such price
change:
Maximum per Report
As of Report A Report B
----- -------- --------
January 1, 1999 $19.50 $26.00
January 1, 2000 $22.50 $30.00
January 1, 2001 $26.00 $35.00
January 1, 2002 $30.00 $40.00
7.4.2. Per-minute Usage Charges. Experian RES shall have sole
------------------------
discretion in the per-minute rates charges to users of its on-line system for
access to and on-line digital transmission of COMPS Data in connection with the
Sales Agency provided such per-minute rates are consistent with and comparable
to those established by Experian RES and in effect with regard to its customers'
access to databases other than COMPS Data on the Experian RES on-line system.
7.5. Scope of License. In connection with the expanded Sales
----------------
Agency as set forth herein, the parties agree that the license set forth in
section 3.1 ("Sales Agency") of the Purchase Agreement shall be limited such
that Experian RES, in the conduct of the Sales Agency, may not provide COMPS
Data at prices other than those established by COMPS and in no event may COMPS
Data be transferred without charge for promotional purposes or otherwise to any
third party, including, without limitation, title companies.
8. Non-Disclosure States. COMPS shall have the right to withhold the
---------------------
data element "confirmed sales price" and "cap rates" from the COMPS Data for
markets in which there is a statutory restriction on the public disclosure by
government agencies of real property sales prices (such states commonly known as
"non-disclosure states"), as listed on Exhibit E and as may change from time to
time; Experian RES shall have the commensurate right for the same states to
withhold "sales price" (whether contained in the public record or obtained
elsewhere) from the
-7-
<PAGE>
data it supplies to COMPS under the Data Purchase arrangement provided for in
Section 5 herein.
9. Certain Covenants.
-----------------
9.1. Notice in Event of Discontinuation of Coverage. Upon
----------------------------------------------
written notice to Experian RES, COMPS shall be entitled to discontinue the offer
and sale of COMPS Data and/or Experian RES Data, respectively, in any market
currently served by the Florida and Georgia C&I Data Extract Business. Each
party agrees to provide a minimum of ninety (90) days' notice prior to
discontinuing the offer and sale of COMPS Data and/or Experian RES Data,
respectively, in any other market. In the event that COMPS discontinues its
services or the products for any markets served currently by Experian RES in its
Florida & Georgia C&I Data Extract Business, Experian RES shall have no
obligation to customers with respect thereto other than any obligation remaining
with Experian RES as a result of Section 3.2 ("Liabilities Not Assumed") hereof.
9.2. Covenant Not to Compete. For a period of nine (9) months
-----------------------
commencing on the date of Closing (as defined below), Experian RES shall not,
directly or indirectly, through an Experian RES Related Party or otherwise, make
available through its on-line database services any of the COMPS Data for the
geographic markets addressed by the Florida & Georgia C&I Data Extract Business
("Florida & Georgia Markets"), and Experian RES shall not, directly or
indirectly, through an Experian RES Related Party or otherwise, solicit any
print customer of the Florida & Georgia C&I Data Extract Business to cancel its
print subscription in lieu of Experian RES's on-line services. In addition,
Experian RES agrees for such nine (9) month period following the Closing that it
will not, directly or indirectly, through an Experian RES related party or
otherwise, make any on-line pricing offers in the Florida & Georgia Markets
materially inconsistent with Experian RES's on-line pricing elsewhere. Experian
RES further agrees that, for a period of one (1) year following termination of
the Amended Term (as defined below), it shall not, directly or indirectly,
through an Experian RES Related Party or otherwise, enter into or conduct or
assist another to conduct the C&I Data Extract Business or C&I Photo Illustrated
Business in any market covered by COMPS Data as of the termination of the
Amended Term.
10. Term. The Purchase Agreement, as amended by this Addendum &
----
Amendment, shall have an initial term ("Initial Term") of five (5) years from
the date of Closing as provided for in Section 11 hereof, and shall renew
automatically for successive one (1) year periods ("Renewal Terms") unless
terminated by either party upon provision of written notice to the other at
least six (6) months prior to the end of the Initial Term or any subsequent
Renewal Term. The period from the date of the Purchase Agreement through the
termination of such agreement as amended by this Addendum & Amendment, shall be
referred to herein as the "Amended Term."
11. Closing. The closing of the transactions contemplated by this
-------
Addendum & Amendment (the "Closing") shall occur at a mutually agreeable
location and time on December 1, 1997, and shall be deemed to be closed on 12:01
a.m. on said date.
-8-
<PAGE>
11.1. Payment. At the Closing, COMPS shall deliver or cause to be
-------
delivered to Experian RES the *** Dollar ($***) payment described in Section 4
hereof and the *** Dollar ($***) payment described in Section 5.1 hereof.
11.2. Further Documents. At any time before or after the Closing,
-----------------
each party shall execute, acknowledge and deliver any further deeds,
assignments, conveyances, and other assurances, documents and instruments of
transfer reasonably requested by the other, and will take any other action
consistent with the terms of this Addendum & Amendment that may reasonably be
requested by the other.
12. Conditions Precedent to COMPS' Performance. The obligation of COMPS
------------------------------------------
to consummate the transactions contemplated by this Addendum & Amendment is
subject to the satisfaction, at or before the Closing, of all the conditions set
forth below in this Section 12. COMPS may waive in writing any or all of these
conditions, in whole or in part, without prior notice; provided, however, that
-------- -------
no such waiver of a condition shall constitute a waiver by COMPS of any of its
other rights or remedies, at law or in equity, if Experian RES shall be in
default of any of the representations or covenants under this Addendum &
Amendment.
12.1. Financial Information. Experian RES shall have provided COMPS
---------------------
with financial information to the reasonable satisfaction of COMPS that the
annual purchase commitments existing as of November 7, 1997, from customers of
Experian RES under contract for its Florida and Georgia C&I Data Extract
Business is Two Hundred and Ninety Thousand Dollars ($290,000).
12.2. Due Diligence. Within five (5) business days of the execution
-------------
of this Addendum & Amendment, COMPS shall have completed due diligence and be
satisfied, in its sole discretion (i) that the transactions contemplated herein
do not conflict with any material contract or commitment to which Experian RES
is a party; (ii) that the status and condition of the Florida and Georgia C&I
Data Extract Business are substantially as has been represented by Experian RES
to COMPS; and (iii) as to the quality and quantity of the customer base for the
Florida and Georgia C&I Data Extract Business. If such due diligence is not
completed within the time provided and COMPS has not provided Experian RES with
notice of its dissatisfaction with the results of such due diligence, this
condition shall be deemed to have been waived.
12.3. Transfer of Business. Experian RES shall have transferred to
--------------------
COMPS all of the Assets, and Experian RES shall have executed a Bill of Sale and
Assignment in form reasonably satisfactory to COMPS and its counsel relating to
the Assets.
12.4. Accuracies of Experian RES's Representations and Warranties.
-----------------------------------------------------------
Except as otherwise permitted by this Addendum & Amendment, all representations
by Experian RES in this Addendum & Amendment or in any written statement that
shall be delivered to COMPS under this Addendum & Amendment shall be true on and
as of the Closing as though made at that time.
13. Conditions Precedent to Experian RES's Performance. The obligation of
--------------------------------------------------
Experian RES to consummate the transactions contemplated by this Addendum &
Amendment is subject to the satisfaction, at or before the Closing, of all the
conditions set out below in this
-9-
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
section. Experian RES may waive in writing any or all of these conditions, in
whole or in part, without prior notice; provided, however, that no such waiver
of a condition shall constitute a waiver by Experian RES of any of its other
rights or remedies, at law or in equity, if COMPS shall be in default of any of
the representations or covenants under this Purchase Agreement.
13.1. Accuracies of COMPS's Representations. Except as otherwise
-------------------------------------
permitted by this Addendum & Amendment, all representations by COMPS in this
Addendum & Amendment shall be true on and as of the Closing as though made at
that time.
13.2. Performance by COMPS. COMPS shall have performed, satisfied,
--------------------
complied with all covenants, agreement, and conditions required by this Purchase
Agreement to be performed or complied with by COMPS on or before the Closing.
13.3. President's Certificate as to Financial Condition. Experian
-------------------------------------------------
RES shall have received a certificate duly executed by the President of COMPS,
stating that the audited balance sheet of COMPS as of December 31, 1996 and the
unaudited balance sheet of COMPS as of October 31, 1997 reflect cash and cash
equivalents, together with amounts available under COMPS bank agreements and
lines of credit, in excess of Eight Hundred Thousand Dollars ($800,000.00).
14. Warranties and Indemnification.
------------------------------
14.1. Warranties. COMPS and Experian RES each represents and
----------
warrants to the other than (i) it has the right, title and authority to enter
into and perform this Addendum & Amendment (including, in the case of Experian
RES, good and marketable title to the Assets); and (ii) its execution, delivery
and performance of this Addendum & Amendment will not conflict with the terms of
any other agreement to which it is a party. COMPS and Experian RES each further
covenant not to enter into any agreement which will conflict with the terms of
this Addendum & Amendment. Neither party guarantees the accuracy or reliability
of any Licensed Data. THIS WARRANTY IS THE ONLY WARRANTY WITH RESPECT TO THE
LICENSED DATA, AND SUCH WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES EXPRESS OR
IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
14.2. Limitation of Liability. EXCEPT AS SET FORTH IN SECTION 14.3,
-----------------------
UNDER NO CIRCUMSTANCES WILL EITHER PARTY HAVE ANY OBLIGATION OR LIABILITY TO THE
OTHER PARTY FOR ANY CLAIM, INJURY, OR DAMAGE RELATING TO, ARISING OUT OF, OR
RESULTING FROM THE INACCURACY OF ANY LICENSED DATA. NOTWITHSTANDING ANY OTHER
PROVISION OF THIS ADDENDUM & AMENDMENT, UNDER NO CIRCUMSTANCES WILL EITHER PARTY
HAVE ANY OBLIGATION OR LIABILITY TO THE OTHER FOR ANY INCIDENTAL, SPECIAL,
INDIRECT OR CONSEQUENTIAL DAMAGES INCURRED BY THE 0THER PARTY, REGARDLESS OF HOW
SUCH DAMAGES ARISE AND OF WHETHER OR NOT A PARTY WAS ADVISED SUCH DAMAGES MIGHT
ARISE.
14.3. Other Parties; Indemnification. Each party will include
------------------------------
provisions consistent with those set forth in Sections 14.1 and 14.2, above, in
any agreement pursuant to
-10-
<PAGE>
which the Licensed Data is provided to any third party. Each party to this
Addendum & Amendment will indemnify (in this capacity, the "Indemnifying
Party"), defend and hold harmless the other party (the "Indemnified Party")
hereto, its employees, agents and representatives, from and against any losses,
claims, suits, costs and/or expenses, including attorney fees, arising out of or
resulting from any claim by any third party to whom the Indemnifying Party has
provided the Licensed Data and based exclusively on such Licensed Data, whether
such data was provided prior to or during the Amended Term. The Indemnified
Party shall provide prompt notice to the Indemnifying Party of a claim
potentially giving rise to obligations under this section, and the Indemnifying
Party shall be permitted to assume and control the defense thereof. The
Indemnifying Party shall not be liable for any settlement entered into with its
prior written consent, which shall not unreasonably be withheld.
IN WITNESS WHEREOF, each party hereto has caused this Addendum &
Amendment to be executed by its duly authorized representatives.
EXPERIAN INFORMATION SOLUTIONS, INC. COMPS INFOSYSTEMS, INC.
an Ohio corporation a Delaware corporation
By: /s/ [illegible] By: /s/ CHRISTOPHER A. CRANE
-------------------------------- ------------------------------
Title: Senior V.P. and Secretary Title: Pres & CEO
------------------------------ ---------------------------
-11-
<PAGE>
<TABLE>
<CAPTION>
RESexA.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT A. Product Name=TRW REDI Comps (Commercial) Effective 01/01/96 to 11/07/97
(SALES TAX INCL.)
# OF PRODUCT FL & GA
COUNTY NAME QTY CUSTOMER NAME CUST# CONTRACT# EFFEC. ANNIV. DATE LEASE PRICE CUSTOMER AR
DATE YEARS BAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ST
FL BREVARD 1 *** 3725603 0473890 302 09/30/97 09/30/98 1 546.25 585.28
FL BREVARD 1 *** 2124016 0172865 401 10/29/96 10/29/97 1 411.60 0.00
FL BREVARD 1 *** 3477018 0323780 801 10/05/97 10/05/98 1 499.95 356.05
FL BREVARD 1 *** 3081657 0216085 303 11/10/97 11/10/98 1 1006.00 1,073.79
FL BREVARD 1 *** 2293037 2142805 500 10/10/97 10/10/98 1 757.50 763.75
FL BREVARD 1 *** 2288219 0196502 400 04/28/97 04/28/98 1 0.00 0.00
FL BREVARD 1 *** 2298708 2142871 403 05/10/97 05/10/98 1 732.60 304.38
FL BREVARD 1 *** 3400324 2008271 200 10/18/97 10/18/98 1 1006.00 1,091.36
FL BFIEVARD 1 *** 3147450 3027612 702 07/10/97 07/10/98 1 419.10 0.00
FL BREVARD 1 *** 2950648 0205905 301 03/10/97 03/10/98 1 875.00 0.00
FL BREVARD 1 *** 3613103 0220301 100 03/28/97 03/28/98 1 0.00 0.00
FL BREVARD 1 *** 2320058 2142839 401 09/30/97 09/30/98 1 732.60 633.71
FL BREVARD 1 *** 3090167 0284966 900 12/28/97 12/28/98 1 0.00 0.00
FL BREVARD 1 *** 2915683 2014768 200 10/30/97 10/30/98 1 0.00 0.00
FL BREVARD 1 *** 0038841 0237919 200 12/28/97 12/28/98 1 0.00 0.00
FL BREVARD 1 *** 3495111 0341510 701 04/10/97 04/10/98 1 1090.00 0.00
FL BREVARD 1 *** 3515332 0357563 704 08/10/97 08/10/98 1 640.00 0.00
FL BREVARD 1 *** 3014600 0187524 600 08/27/97 08/27/98 1 0.00 0.00
FL BREVARD 1 *** 2462851 0235541 001 03/10/97 03/10/98 1 750.00 0.00
FL BREVARD 1 *** 2595478 0175928 301 01/10/98 01/10/99 1 739.00 789.59
FL BREVARD 1 *** 2444796 2123182 502 11/10/97 11/10/98 1 738.75 788.94
FL BREVARD 1 *** 3175963 0239070 102 11/10/97 11/10/98 1 694.65 744.12
FL BREVARD 1 *** 2354107 2142874 503 10/10/97 10/10/98 1 0.00 0.00
FL BREVARD 1 *** 3532410 0349532 601 03/10/97 03/10/98 1 950.00 1,032.00
FL BREVARD 1 *** 3532421 0941354 701 08/25/97 08/25/98 1 431.67 0.00
FL BREVARD 1 *** 2181664 2142822 502 11/03/97 11/03/98 1 694.65 744.12
FL BREVARD 1 *** 2536361 2142830 402 04/01/97 04/01/98 1 610.00 0.00
FL BREVARD 1 *** 3665679 2027953 000 03/25/97 03/25/98 1 990.00 1,084.30
FL BREVARD 1 *** 3398940 0278748 800 04/10/97 04/10/98 1 620.00 202.88
FL BREVARD 1 *** 3800458 2018869 000 03/07/97 03/07/98 1 990.00 0.00
FL BREVARD 1 *** 2016429 0354955 602 04/10/97 04/10/98 1 640.00 0.00
</TABLE>
Page 1
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
<TABLE>
<CAPTION>
RESexA.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT A. Product Name=TRW REDI Comps (Commercial) Effective 01/01/96 to 11/07/97
- ---------
(SALES TAX INCL.)
# OF PRODUCT FL & GA
COUNTY NAME QTY CUSTOMER NAME CUST# CONTRACT# EFFEC. ANNIV. LEASE PRICE CUSTOMER AR
DATE DATE YEARS BAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ST
FL BREVARD 1 *** 2296476 0323776 702 02/10/97 02/10/97 1 422.40 0.00
FL BREVARD 1 *** 2296476 8123184 500 01/10/98 01/10/98 1 739.00 789.59
FL BREVARD 1 *** 3170300 0239042 100 08/10/97 08/10/97 1 732.60 269.45
FL BREVARD 1 *** 3733770 0504778 201 07/24/97 07/24/98 1 373.75 335.36
FL BREVARD 8 *** 3308736 8237919 100 12/30/97 12/30/98 1 0.00 0.00
FL BROWARD 1 *** 2337799 2160527 402 03/10/97 03/10/98 1 758.17 0.00
FL BROWARD 1 *** 2989020 0175905 300 08/10/97 08/10/98 1 1285.00 1,362.10
FL BROWARD 1 *** 2012003 2127986 400 08/10/97 08/10/98 2 879.50 0.00
FL BROWARD 1 *** 2255727 2146237 400 05/01/97 05/01/98 1 758.17 647.39
FL BROWARD 1 *** 2124016 2146254 401 05/01/97 05/01/98 1 573.10 0.00
FL BROWARD 1 *** 3346037 0282455 903 10/10/97 10/10/98 1 588.06 524.20
FL BROWARD 1 *** 2146351 2160504 500 02/28/98 02/28/99 1 0.00 0.00
FL BROWARD 1 *** 2774941 2123322 502 04/10/97 04/10/98 1 1009.68 0.00
FL BROWARD 1 *** 3449718 2018776 000 04/10/97 04/10/98 1 1385.00 0.00
FL BROWARD 1 *** 3096152 0259150 902 05/10/97 05/10/98 2 1100.00 0.00
FL BROWARD 1 *** 3576629 0375361 609 10/10/97 10/10/98 1 648.00 691.88
FL BROWARD 1 *** 3695102 0452568 401 12/10/97 12/10/98 1 1480.00 1,582.01
FL BROWARD 1 *** 2498113 2160466 503 01/15/98 01/15/99 1 1480.00 1,585.95
FL BROWARD 1 *** 3147416 0176031 100 07/10/97 07/10/98 1 1285.00 0.00
FL BROWARD 1 *** 2207342 2123328 404 05/10/97 05/10/98 2 679.50 0.00
FL BROWARD 1 *** 2931049 0206917 403 12/10/97 12/10/98 1 1480.00 1,593.80
FL BROWARD 1 *** 3613103 0220370 100 03/28/97 03/28/98 1 0.00 0.00
FL BROWARD 1 *** 3090167 0258778 104 08/07/97 08/07/98 1 0.00 0.00
FL BROWARD 1 *** 0038841 0271265 100 07/18/97 07/18/98 1 0.00 0.00
FL BROWARD 1 *** 2013240 2189608 402 04/10/97 04/10/98 1 0.00 0.00
FL BROWARD 1 *** 2013240 2189608 403 10/07/97 10/07/98 1 1285.00 0.00
FL BROWARD 1 *** 3014600 2160393 500 10/30/97 10/30/98 1 0.00 0.00
FL BROWARD 1 *** 3673115 0445336 402 07/01/97 07/01/98 1 887.50 891.67
FL BROWARD 1 *** 2308416 2151544 402 05/10/97 05/10/98 1 898.75 (958.93
FL BROWARD 1 *** 3756964 2007363 202 08/01/97 08/01/98 1 767.50 654.17
FL BROWARD 1 *** 2210201 2123299 401 04/15/97 04/15/98 1 1132.50 0.00
FL BROWARD 1 *** 3556151 0351443 604 06/10/97 06/10/98 1 1285.00 0.00
FL BROWARD 1 *** 3026283 0183708 203 02/28/97 02/28/98 1 1285.00 0.00
</TABLE>
Page 2
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
<TABLE>
<CAPTION>
RESexA.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT A. Product Name=TRW REDI Comps (Commercial) Effective 01/01/96 to 11/07/97
- ---------
(Sales tax incl.)
# OF PRODUCT FL & GA
COUNTY NAME QTY CUSTOMER NAME CUST# CONTRACT# EFFEC. ANNIV. LEASE PRICE CUSTOMER AR
DATE DATE YEARS BAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FL BROWARD 1 *** 3757116 2018722 101 05/20/98 05/20/99 1 1285.00 0.00
FL BROWARD 1 *** 2131795 2189613 401 05/10/97 05/10/98 1 1285.00 0.00
FL BROWARD 1 *** 3008157 0183064 302 03/10/97 03/10/98 1 1141.50 0.00
FL BROWARD 1 *** 2514587 2123343 403 05/10/97 05/10/98 1 1285.00 0.00
FL BROWARD 1 *** 2973685 0213588 300 06/10/97 06/10/98 1 1285.00 1,387.10
FL BROWARD 1 *** 2003540 0338023 701 05/01/97 05/01/98 1 1148.75 0.00
FL BROWARD 1 *** 2003540 2156536 401 05/01/97 05/01/98 1 765.83 0.00
FL BROWARD 1 *** 3625211 0408430 501 05/03/97 05/03/98 1 1285.00 970.97
FL BROWARD 1 *** 2147219 0205546 203 02/10/97 02/10/98 1 285.00 0.00
FL BROWARD 1 *** 2220136 2151556 503 02/27/97 02/27/98 1 900.00 0.00
FL BROWARD 1 *** 2780120 0450911 402 06/01/97 06/01/98 1 1285.00 0.00
FL BROWARD 1 *** 3385735 2160655 401 03/10/97 03/10/98 1 1285.00 0.00
FL BROWARD 1 *** 3805068 2017710 001 06/30/97 06/30/98 1 1285.00 0.00
FL BROWARD 1 *** 2773526 2123372 401 07/10/97 07/10/98 1 1285.00 916.89
FL BROWARD 1 *** 2170480 2123363 401 05/10/97 05/10/98 1 859.51 0.00
FL BROWARD 1 *** 2382078 2189625 403 06/10/97 06/10/98 1 0.00 0.00
FL BROWARD 1 *** 2264402 0187464 402 06/10/97 06/10/98 1 744.00 0.00
FL BROWARD 1 *** 2014881 2156510 401 04/15/97 04/15/98 1 131.84 0.00
FL BROWARD 1 *** 2162537 2002360 200 04/10/97 04/10/98 1 1285.00 182.99
FL BROWARD 1 *** 2309844 2179108 001 11/29/97 11/29/98 1 1480.00 1,505.00
FL BROWARD 1 *** 2167938 2179033 403 02/10/97 02/10/98 1 0.00 0.00
FL BROWARD 1 *** 3752427 2007221 300 09/10/97 09/10/98 1 0.00 0.00
FL BROWARD 1 *** 2795395 0482454 301 08/10/97 08/10/98 1 303.27 296.19
FL BROWARD 1 *** 2922773 0186783 402 11/15/97 11/15/98 1 999.05 1,063.16
FL BROWARD 1 *** 3662753 0427015 402 07/01/97 07/01/98 1 919.00 489.57
FL BROWARD 1 *** 2589510 0304366 805 08/15/97 08/15/98 1 1285.00 0.00
FL BROWARD 8 *** 3308736 8271265 100 12/30/97 12/30/98 1 0.00 0.00
FL DADE 1 *** 2989020 2008307 201 10/11/97 10/11/98 1 1325.00 1,429.50
FL DADE 1 *** 2012003 2167502 401 03/10/97 03/10/98 2 1155.00 0.00
FL DADE 1 *** 2255727 2146236 501 05/01/97 08/01/98 1 818.32 420.33
FL DADE 1 *** 2124016 2134363 501 11/09/97 11/09/98 1 545.00 583.55
FL DADE 1 *** 3346037 0282441 903 06/13/97 06/13/98 1 609.18 217.18
FL DADE 1 *** 2945950 8123259 503 10/01/97 10/01/98 1 2142.50 2,294.27
</TABLE>
Page 3
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
<TABLE>
<CAPTION>
RESexA.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT A. Product Name=TRW REDI Comps (Commercial) Effective 01/01/96 to 11/07/97
- ---------
(SALES TAX INCL.)
# OF PRODUCT FL & GA
COUNTY NAME QTY CUSTOMER NAME CUST# CONTRACT# EFFEC. ANNIV. LEASE PRICE CUSTOMER AR
DATE DATE YEARS BAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ST
FL DADE 1 *** 3096152 0228743 201 06/10/97 06/10/98 1 1325.00 0.00
FL DADE 1 *** 3079593 0216778 301 10/28/97 10/28/98 1 1525.00 397.98
FL DADE 1 *** 3576629 0375363 609 10/10/97 10/10/98 1 528.75 564.64
FL DADE 1 *** 2498113 2134390 602 01/19/98 01/19/99 1 1525.00 1,634.33
FL DADE 1 *** 3147416 2030659 000 03/25/97 03/25/98 1 1498.00 0.00
FL DADE 1 *** 3613103 0220302 100 03/03/97 03/03/98 1 0.00 0.00
FL DADE 1 *** 2276818 0205528 301 10/01/97 10/01/98 1 1155.00 24.73
FL DADE 1 *** 3090167 0284975 000 12/05/97 12/05/98 1 0.00 0.00
FL DADE 1 *** 0038841 0300076 100 12/05/97 12/05/98 1 0.00 0.00
FL DADE 1 *** 2572154 2156596 500 05/24/97 05/24/98 1 1325.00 0.00
FL DADE 1 *** 3014600 0196520 400 05/07/97 05/07/98 1 0.00 0.00
FL DADE 1 *** 2730251 0205515 301 07/16/97 07/16/98 1 615.33 0.00
FL DADE 1 *** 2336231 2143053 402 10/27/96 10/27/97 1 0.00 0.00
FL DADE 1 *** 3756964 2007365 202 08/01/97 08/01/98 1 711.67 606.83
FL DADE 1 *** 3539792 0369333 601 05/01/97 05/01/98 1 1325.00 0.00
FL DADE 1 *** 3026283 2028288 100 07/16/97 07/16/98 1 1325.00 0.00
FL DADE 1 *** 3757116 2008315 302 10/10/98 10/10/99 1 1325.00 1,436.13
FL DADE 1 *** 3711280 0460278 301 05/16/97 05/16/98 1 1325.00 0.00
FL DADE 1 *** 2003540 2156801 501 11/10/97 11/10/98 1 0.00 0.00
FL DADE 1 *** 2719630 2028293 000 08/06/96 08/06/97 1 825.00 0.00
FL DADE 1 *** 2147219 2143046 500 02/10/98 02/10/99 1 1525.00 1,631.85
FL DADE 1 *** 2290131 2127965 500 11/14/97 11/14/98 1 434.62 464.54
FL DADE 1 *** 2585651 2143467 600 06/10/97 06/10/98 1 1325.00 0.00
FL DADE 1 *** 2780120 2146675 601 03/14/97 03/14/98 1 1325.00 0.00
FL DADE 1 *** 2111717 2134314 501 09/28/97 09/28/98 1 883.75 947.45
FL DADE 1 *** 2773526 0262602 001 03/10/97 03/10/98 1 1325.00 707.37
FL DADE 1 *** 2249685 2156598 503 11/01/97 11/01/98 1 1139.40 1,218.86
FL DADE 1 *** 3155204 2018891 000 04/01/97 04/01/98 1 797.67 334.71
FL DADE 1 *** 2014881 8251261 902 12/10/96 12/10/97 1 592.25 0.00
FL DADE 1 *** 3291852 2146300 504 12/01/97 12/01/98 1 1392.98 1,488.35
FL DADE 1 *** 2309844 2179109 600 11/29/97 11/29/98 1 0.00 0.00
FL DADE 1 *** 2243616 2134343 501 12/10/97 12/10/98 1 1024.35 1,095.47
FL DADE 1 *** 3752427 2022838 100 06/10/97 06/10/98 1 0.00 0.00
</TABLE>
Page 4
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
<TABLE>
<CAPTION>
RESexA.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT A. Product Name=TRW REDI Comps (Commercial) Effective 01/01/96 to 11/07/97
- ---------
(SALES TAX INCL.)
# OF PRODUCT FL & GA
COUNTY NAME QTY CUSTOMER NAME CUST# CONTRACT# EFFEC. ANNIV. LEASE PRICE CUSTOMER AR
DATE DATE YEARS BAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FL DADE 1 *** 3198757 0235782 102 01/28/97 01/28/98 1 1047.38 0.00
FL DADE 1 *** 2589510 2146608 402 08/15/97 08/15/98 1 324.06 0.00
FL DADE 2 *** 2363684 0207107 700 09/30/97 09/30/98 1 0.00 0.00
FL DADE 8 *** 3308736 8271267 000 12/30/97 12/30/98 1 0.00 0.00
FL DUVAL 1 *** 3544886 0367089 600 03/22/97 03/22/98 1 965.00 0.00
FL DUVAL 1 *** 3685118 0480442 402 09/30/97 09/30/98 1 965.00 0.00
FL DUVAL 1 *** 2248864 0130038 400 06/07/97 06/07/98 1 387.75 0.00
FL DUVAL 1 *** 3613103 0220265 100 04/15/97 04/15/98 1 0.00 0.00
FL DUVAL 1 *** 3090167 0258778 301 08/07/97 08/07/98 1 0.00 0.00
FL DUVAL 1 *** 3091641 8271268 100 12/05/97 12/05/98 1 0.00 0.00
FL DUVAL 1 *** 3014600 3276128 100 08/14/97 08/14/98 1 0.00 0.00
FL DUVAL 1 *** 3221880 2017777 000 08/12/97 08/12/98 1 965.00 0.00
FL DUVAL 1 *** 3054154 0182799 200 06/10/97 06/10/98 1 387.75 0.00
FL DUVAL 1 *** 3360796 0277782 900 10/30/97 10/30/98 1 0.00 0.00
FL DUVAL 1 *** 2566722 0130020 401 07/10/97 07/10/98 1 387.75 0.00
FL DUVAL 1 *** 2002419 0358229 601 09/30/97 09/30/98 1 621.50 0.00
FL DUVAL 1 *** 3658057 0439723 500 02/25/98 02/25/99 1 1110.00 1,207.15
FL DUVAL 1 *** 3213870 0251561 100 01/10/98 01/10/99 1 1110.00 1,195.43
FL DUVAL 1 *** 3265664 0235601 000 07/10/97 07/10/98 1 457.50 370.12
FL DUVAL 1 *** 2438124 0187553 600 06/25/97 06/25/98 1 457.50 287.88
FL DUVAL 1 *** 2438124 0187553 700 06/25/97 06/25/98 1 0.00 0.00
FL DUVAL 1 *** 3128086 2002259 202 06/15/97 06/15/98 1 965.00 842.19
FL DUVAL 1 *** 2572648 2130545 502 11/04/97 11/04/98 1 447.15 484.47
FL DUVAL 1 *** 2499257 8259961 000 03/17/97 03/17/98 1 965.00 0.00
FL DUVAL 1 *** 2486189 2017775 000 07/23/97 07/23/98 1 965.00 0.00
FL DUVAL 8 *** 3308736 9271268 100 12/30/97 12/30/98 1 0.00 0.00
FL HILLSBOROUGH 1 *** 3409664 0302309 802 04/10/97 04/10/98 1 449.50 0.00
FL HILLSBOROUGH 1 *** 2327006 2015993 101 02/13/97 02/13/98 1 702.00 0.00
FL HILLSBOROUGH 1 *** 2103895 2130772 301 05/10/96 05/10/97 1 680.00 0.00
FL HILLSBOROUGH 1 *** 3614651 0409315 502 10/01/97 10/01/98 1 465.00 505.88
FL HILLSBOROUGH 1 *** 2814267 2156386 303 05/10/97 05/10/98 1 685.00 0.00
FL HILLSBOROUGH 1 *** 2174516 2125072 403 03/14/97 03/14/98 1 780.00 0.00
FL HILLSBOROUGH 1 *** 3613103 0220264 100 04/15/97 04/15/98 1 0.00 0.00
</TABLE>
Page 5
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
<TABLE>
<CAPTION>
RESexA.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT A. Product Name=TRW REDI Comps (Commercial) Effective 01/01/96 to 11/07/97
- ---------
(SALES TAX INCL.)
# OF PRODUCT FL & GA
COUNTY NAME QTY CUSTOMER NAME CUST# CONTRACT# EFFEC. ANNIV. LEASE PRICE CUSTOMER AR
DATE DATE YEARS BAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FL HILLSBOROUGH 1 *** 3229963 0251165 001 04/10/97 04/10/98 1 0.00 0.00
FL HILLSBOROUGH 1 *** 3229963 2028139 000 03/10/97 03/10/98 1 0.00 0.00
FL HILLSBOROUGH 1 *** 3090167 0258778 600 08/07/97 08/07/98 1 0.00 0.00
FL HILLSBOROUGH 1 *** 0038841 0300077 101 12/05/97 12/05/98 1 0.00 0.00
FL HILLSBOROUGH 1 *** 3014600 0207125 300 09/30/97 09/30/98 1 0.00 0.00
FL HILLSBOROUGH 1 *** 2016539 2130450 702 01/30/98 01/30/99 1 797.97 857.55
FL HILLSBOROUGH 1 *** 3729595 0459312 302 01/01/98 01/01/99 1 785.00 847.44
FL HILLSBOROUGH 1 *** 2133380 2130413 401 12/10/96 12/10/97 1 678.75 0.00
FL HILLSBOROUGH 1 *** 2227533 2160774 502 12/10/97 12/10/98 1 654.00 704.78
FL HILLSBOROUGH 1 *** 3472464 0323542 801 08/10/97 08/10/98 1 780.00 0.00
FL HILLSBOROUGH 1 *** 2943534 0213602 203 06/10/97 06/10/98 1 780.00 0.00
FL HILLSBOROUGH 1 *** 3120783 0211713 303 06/10/97 06/10/98 1 780.00 0.00
FL HILLSBOROUGH 1 *** 3774711 2026766 101 09/12/97 09/12/98 1 780.00 0.00
FL HILLSBOROUGH 1 *** 3030022 2108269 200 02/21/98 02/21/99 1 1325.00 1,429.29
FL HILLSBOROUGH 1 *** 3455564 0323476 801 05/01/97 05/01/98 1 788.00 0.00
FL HILLSBOROUGH 4 *** 3151435 0232699 200 07/14/97 07/14/98 1 0.00 0.00
FL HILLSBOROUGH 8 *** 3308736 8271269 100 12/30/97 12/30/98 1 0.00 0.00
FL ORANGE 1 *** 2124016 2146280 402 09/30/97 09/30/98 1 0.00 0.00
FL ORANGE 1 *** 3707753 0452612 306 04/12/97 04/12/98 1 760.00 0.00
FL ORANGE 1 *** 2246660 0166425 302 07/10/96 07/10/97 1 0.00 0.00
FL ORANGE 1 *** 2281193 0219404 002 12/10/96 12/10/97 1 615.00 0.00
FL ORANGE 1 *** 2525859 0277343 701 12/01/96 12/01/97 1 0.00 0.00
FL ORANGE 1 *** 2524650 2166168 400 06/10/97 06/10/98 1 825.11 0.00
FL ORANGE 1 *** 2782298 0166396 403 10/10/97 10/10/98 1 683.75 731.03
FL ORANGE 1 *** 2972778 0211755 301 01/10/98 01/10/99 1 694.00 747.23
FL ORANGE 1 *** 2743297 0166486 401 09/10/97 09/10/98 1 361.35 10.68
FL ORANGE 1 *** 3613103 0186716 100 12/28/97 12/28/98 1 0.00 0.00
FL ORANGE 1 *** 3090167 0284988 900 12/28/97 12/28/98 1 0.00 0.00
FL ORANGE 1 *** 0038841 0271275 300 12/28/97 12/28/98 1 0.00 0.00
FL ORANGE 1 *** 3676334 0189884 402 03/01/97 03/01/98 1 531.25 0.00
FL ORANGE 1 *** 3014600 2160342 500 10/30/97 10/30/98 1 0.00 0.00
FL ORANGE 1 *** 2462851 0334219 701 03/10/97 03/10/98 1 760.00 0.00
FL ORANGE 1 *** 2222754 0251195 001 06/15/97 06/15/98 1 760.00 0.00
</TABLE>
Page 6
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
<TABLE>
<CAPTION>
RESexA.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT A. Product Name=TRW REDI Comps (Commercial) Effective 01/01/96 to 11/07/97
- ---------
(SALES TAX INCL.)
# OF PRODUCT FL & GA
COUNTY NAME QTY CUSTOMER NAME CUST# CONTRACT# EFFEC. ANNIV. LEASE PRICE CUSTOMER AR
DATE DATE YEARS BAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FL ORANGE 1 *** 2300535 2166016 405 02/10/97 02/10/98 1 0.00 0.00
FL ORANGE 1 *** 2255435 0358245 603 08/10/97 08/10/98 1 507.37 511.00
FL ORANGE 1 *** 2002419 2166143 504 06/10/97 06/10/98 1 380.00 0.00
FL ORANGE 1 *** 2011985 2166158 302 11/10/96 11/10/97 1 507.40 0.00
FL ORANGE 1 *** 3807695 2017783 000 06/30/97 06/30/98 1 817.00 0.00
FL ORANGE 1 *** 3342811 0208136 201 04/10/97 04/10/98 1 825.00 0.00
FL ORANGE 1 *** 2778633 0166475 402 09/10/97 09/10/98 1 760.00 823.96
FL ORANGE 1 *** 3388923 8278680 801 01/10/97 01/10/98 1 0.00 0.00
FL ORANGE 1 *** 2236904 0462048 203 02/16/97 02/16/98 1 760.00 0.00
FL ORANGE 1 *** 3627303 8433820 503 08/30/97 08/30/98 1 760.00 0.00
FL ORANGE 7 *** 3308736 8271275 100 12/30/97 12/30/98 1 0.00 0.00
FL PALM BEACH 1 *** 2337799 2123381 402 04/10/97 04/10/98 1 784.57 0.00
FL PALM BEACH 1 *** 2989020 0175906 300 08/10/97 08/10/98 1 784.57 835.77
FL PALM BEACH 1 *** 2012003 0462283 300 08/10/97 08/10/98 2 810.00 0.00
FL PALM BEACH 1 *** 2213082 0187409 408 05/10/97 05/10/98 1 1395.00 0.00
FL PALM BEACH 1 *** 2255727 2179313 400 05/01/97 05/01/98 1 784.58 689.82
FL PALM BEACH 1 *** 2300728 2151658 400 03/10/97 03/10/98 1 780.64 193.08
FL PALM BEACH 1 *** 2124016 2146279 401 04/01/97 04/01/98 1 523.05 0.00
FL PALM BEACH 1 *** 3192694 2020690 202 11/30/97 11/30/98 1 1260.00 1,360.60
FL PALM BEACH 1 *** 3449718 2002174 001 04/10/97 04/10/98 1 1095.00 0.00
FL PALM BEACH 1 *** 3576629 0375362 606 10/10/97 10/10/98 1 846.00 903.01
FL PALM BEACH 1 *** 3147416 8321927 801 01/10/98 01/10/99 1 1262.00 1,346.22
FL PALM BEACH 1 *** 3613103 0220272 100 04/28/97 04/28/98 1 0.00 0.00
FL PALM BEACH 1 *** 3616345 0408846 603 12/10/97 12/10/98 1 445.00 477.95
FL PALM BEACH 1 *** 3090167 0271317 100 12/28/97 12/28/98 1 0.00 0.00
FL PALM BEACH 1 *** 0038841 0271272 101 12/28/97 12/28/98 1 0.00 0.00
FL PALM BEACH 1 *** 2773504 0187423 402 08/10/97 08/10/98 1 392.29 0.00
FL PALM BEACH 1 *** 3014600 0179053 400 05/07/97 05/07/98 1 0.00 0.00
FL PALM BEACH 1 *** 3673115 0445335 401 07/01/97 07/01/98 1 1061.00 1,065.67
FL PALM BEACH 1 *** 2308416 2123376 402 05/05/97 05/05/98 1 413.34 (441.90)
FL PALM BEACH 1 *** 3756964 2007364 202 08/01/97 08/01/98 1 480.00 71.67
FL PALM BEACH 1 *** 2210201 0263980 001 08/17/97 08/17/98 1 392.29 0.00
FL PALM BEACH 1 *** 3026283 8182450 203 02/28/97 02/28/98 1 1340.00 0.00
</TABLE>
Page 7
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
<TABLE>
<CAPTION>
RESexA.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT A. Product Name=TRW REDI Comps (Commercial) Effective 01/01/96 to 11/07/97
- ---------
(SALES TAX INCL.)
# OF PRODUCT FL & GA
COUNTY NAME QTY CUSTOMER NAME CUST# CONTRACT# EFFEC. ANNIV. LEASE PRICE CUSTOMER AR
DATE DATE YEARS BAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FL PALM BEACH 1 *** 3681790 0503384 303 08/28/97 08/28/97 1 0.00 0.00
FL PALM BEACH 1 *** 2003540 2179302 401 05/01/98 05/01/98 1 695.00 0.00
FL PALM BEACH 1 *** 2952051 0205845 302 11/10/98 11/10/98 1 978.65 1,043.12
FL PALM BEACH 1 *** 2709594 2015790 102 10/28/97 10/28/98 1 0.00 0.00
FL PALM BEACH 1 *** 2743938 2190126 402 05/19/97 05/19/98 1 1095.00 0.00
FL PALM BEACH 1 *** 3805068 2017709 001 06/30/97 06/30/98 1 1115.00 0.00
FL PALM BEACH 1 *** 2264402 0187465 401 06/10/97 06/10/98 1 1091.00 0.00
FL PALM BEACH 1 *** 2014881 2084351 301 04/25/97 04/25/98 1 694.20 0.00
FL PALM BEACH 1 *** 2162537 2002360 201 04/10/97 04/10/98 1 1095.00 0.00
FL PALM BEACH 1 *** 3722516 0386331 401 04/10/97 04/10/98 1 1095.00 0.00
FL PALM BEACH 1 *** 2309844 0176513 301 11/29/97 11/29/98 1 0.00 0.00
FL PALM BEACH 1 *** 3752427 2007221 203 06/30/97 06/30/98 1 0.00 0.00
FL PALM BEACH 1 *** 2795395 2017695 000 05/05/97 05/05/98 1 1095.00 638.24
FL PALM BEACH 8 *** 3308736 8271272 100 12/30/97 12/30/98 1 0.00 0.00
FL PINELLAS 1 *** 3409664 0304072 802 04/10/97 04/10/98 1 437.29 0.00
FL PINELLAS 1 *** 2174516 0208134 203 03/14/97 03/14/98 1 780.00 0.00
FL PINELLAS 1 *** 3613103 0949020 300 12/28/97 12/28/98 1 0.00 0.00
FL PINELLAS 1 *** 3229963 2028139 001 03/10/97 03/10/98 1 0.00 0.00
FL PINELLAS 1 *** 3031238 0213657 001 01/10/96 01/10/97 1 0.00 0.00
FL PINELLAS 1 *** 3090167 0271318 100 12/28/97 12/28/98 1 0.00 0.00
FL PINELLAS 1 *** 0038841 0271276 001 05/21/97 05/21/98 1 0.00 0.00
FL PINELLAS 1 *** 3676334 0189887 402 03/01/97 03/01/98 1 658.75 0.00
FL PINELLAS 1 *** 3014600 0187527 300 08/27/97 08/27/98 1 0.00 0.00
FL PINELLAS 1 *** 2124083 0187305 503 12/10/97 12/10/98 1 1345.00 1,464.15
FL PINELLAS 1 *** 3776654 2018317 100 03/12/97 03/12/98 1 1030.73 266.42
FL PINELLAS 1 *** 2016539 0226857 403 01/30/98 01/30/99 1 523.20 563.12
FL PINELLAS 1 *** 3729595 0459311 402 01/01/98 01/01/99 1 980.00 1,057.56
FL PINELLAS 1 *** 2811194 8160371 300 04/28/97 04/28/98 1 0.00 0.00
FL PINELLAS 1 *** 3120783 0322393 701 06/10/97 06/10/98 1 1170.00 0.00
FL PINELLAS 1 *** 3030022 2018268 100 02/21/97 02/21/98 1 721.50 0.00
FL PINELLAS 1 *** 2958732 0213317 301 05/10/97 05/10/98 1 1170.00 0.00
FL PINELLAS 8 *** 3308736 8271276 100 12/30/97 12/30/98 1 0.00 0.00
FL SARASOTA 1 *** 3613103 0220309 100 03/03/97 03/03/98 1 0.00 0.00
</TABLE>
Page 8
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
<TABLE>
<CAPTION>
RESexA.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT A. Product Name=TRW REDI Comps (Commercial) Effective 01/01/96 to 11/07/97
- ---------
(SALES TAX INCL.)
# OF PRODUCT FL & GA
COUNTY NAME QTY CUSTOMER NAME CUST# CONTRACT# EFFEC. ANNIV. LEASE PRICE CUSTOMER AR
DATE DATE YEARS BAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FL SARASOTA 1 *** 3090167 8258775 700 08/07/97 08/07/98 1 0.00 0.00
FL SARASOTA 1 *** 0038841 0271278 100 12/05/97 12/05/98 1 0.00 0.00
FL SARASOTA 1 *** 3014600 0207003 300 09/30/97 09/30/98 1 0.00 0.00
FL SARASOTA 1 *** 2518608 0277531 901 07/01/97 07/01/98 1 498.33 0.00
FL SARASOTA 1 *** 2904762 0187110 405 01/10/98 01/10/99 1 1650.00 1,664.08
FL SARASOTA 1 *** 2809562 0187630 304 02/25/97 02/25/98 1 260.10 56.04
FL SARASOTA 1 *** 2309233 2151773 402 05/10/97 05/10/98 1 0.00 0.00
FL SARASOTA 1 *** 2762195 2152231 402 03/10/97 03/10/98 1 1060.00 0.00
FL SARASOTA 2 *** 2309589 0179092 300 09/30/97 09/30/98 1 0.00 0.00
FL SARASOTA 7 *** 3308736 8271278 100 12/30/97 12/30/98 1 0.00 0.00
FL SEMINOLE 1 *** 2124016 2146276 402 03/01/97 03/01/98 1 760.00 0.00
FL SEMINOLE 1 *** 3707753 0452612 207 03/20/97 03/20/98 1 855.00 0.00
FL SEMINOLE 1 *** 3611447 2028502 101 07/30/97 07/30/98 1 0.00 0.00
FL SEMINOLE 1 *** 2281193 0358762 603 08/10/97 08/10/98 1 760.00 813.88
FL SEMINOLE 1 *** 3575860 0375272 502 05/03/97 05/03/98 1 760.00 0.00
FL SEMINOLE 1 *** 2525859 0277344 801 11/17/96 11/17/97 1 0.00 0.00
FL SEMINOLE 1 *** 2524650 2166169 400 06/10/97 06/10/98 1 442.50 0.00
FL SEMINOLE 1 *** 2782298 0166395 403 10/10/97 10/10/98 1 875.00 936.97
FL SEMINOLE 1 *** 2972778 0211710 201 11/10/97 11/10/98 1 389.40 0.00
FL SEMINOLE 1 *** 2743297 0166487 401 09/10/97 09/10/98 1 389.40 280.52
FL SEMINOLE 1 *** 3613103 0304031 800 05/24/97 05/24/98 1 0.00 0.00
FL SEMINOLE 1 *** 3090167 0271322 100 12/28/97 12/28/98 1 0.00 0.00
FL SEMINOLE 1 *** 0038841 8259978 100 08/27/97 08/27/98 1 0.00 0.00
FL SEMINOLE 1 *** 2323260 0166367 401 06/10/97 06/10/98 1 760.00 0.00
FL SEMINOLE 1 *** 3676334 0189886 403 03/01/97 03/01/98 1 376.25 0.00
FL SEMINOLE 1 *** 2462851 0334223 701 03/10/97 03/10/98 1 760.00 0.00
FL SEMINOLE 1 *** 2337894 0166322 307 07/10/96 07/10/97 1 0.00 0.00
FL SEMINOLE 1 *** 2222754 0297000 900 12/10/97 12/10/98 1 0.00 0.00
FL SEMINOLE 1 *** 2300535 2166017 403 02/10/97 02/10/98 1 0.00 0.00
FL SEMINOLE 1 *** 2723769 2166163 302 02/10/97 02/10/98 1 256.25 0.00
FL SEMINOLE 1 *** 2002419 2166142 402 06/10/97 06/10/98 1 760.00 0.00
FL SEMINOLE 1 *** 2011985 2166159 401 04/10/97 04/10/98 1 0.00 0.00
FL SEMINOLE 1 *** 3807695 2017781 000 06/30/97 06/30/98 1 812.25 0.00
</TABLE>
Page 9
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexA.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT A. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
<TABLE>
<CAPTION>
(Sales tax incl.)
COUNTY # OF FL & GA
ST NAME QTY CUSTOMER NAME CUST# CONTRACT# EFFEC. DATE ANNIV. DATE LEASE PRODUCT Customer AR
YEARS PRICE Bal
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FL SEMINOLE 1 *** 3342811 0208135 101 02/24/97 02/24/98 1 760.00 0.00
FL SEMINOLE 1 *** 2778633 0166474 402 09/10/97 09/10/98 1 1210.00 1,311.10
FL SEMINOLE 1 *** 3388923 0278681 803 11/29/96 11/29/97 1 0.00 0.00
FL SEMINOLE 1 *** 2233194 2152171 600 12/28/97 12/28/98 1 0.00 0.00
FL SEMINOLE 1 *** 2236904 0462048 202 02/16/97 02/16/98 1 1089.00 0.00
FL SEMINOLE 1 *** 3627303 8433820 502 08/30/97 08/30/98 1 1210.00 0.00
FL SEMINOLE 2 *** 2915683 2014759 200 10/18/97 10/18/98 1 0.00 0.00
FL SEMINOLE 7 *** 3308736 9259978 100 12/30/97 12/30/98 1 0.00 0.00
FL VOLUSIA 1 *** 2124016 0172866 401 10/10/96 10/10/97 1 541.00 0.00
FL VOLUSIA 1 *** 2281193 2125452 402 09/10/97 09/10/98 1 522.23 557.41
FL VOLUSIA 1 *** 3158120 2166170 402 08/10/97 08/10/98 1 522.23 557.69
FL VOLUSIA 1 *** 3613103 0320883 800 12/10/97 12/10/98 1 0.00 0.00
FL VOLUSIA 1 *** 3090167 0258778 000 08/07/97 08/07/98 1 0.00 0.00
FL VOLUSIA 1 *** 0038841 0271279 100 12/05/97 12/05/98 1 0.00 0.00
FL VOLUSIA 1 *** 3676334 2156449 502 03/01/97 03/01/98 1 825.00 0.00
FL VOLUSIA 1 *** 3014600 0127775 400 06/15/97 06/15/98 1 0.00 0.00
FL VOLUSIA 1 *** 2462851 0334224 701 03/10/97 03/10/98 1 910.00 0.00
FL VOLUSIA 1 *** 3040304 0208283 101 04/10/96 04/10/97 1 0.00 0.00
FL VOLUSIA 1 *** 3690996 2018481 101 03/01/97 03/01/98 1 720.38 228.18
FL VOLUSIA 1 *** 3512676 2156317 501 01/10/98 01/10/99 1 990.00 1,055.74
FL VOLUSIA 2 *** 2915683 2014758 200 10/13/97 10/13/98 1 0.00 0.00
FL VOLUSIA 7 *** 3308736 8271279 100 12/30/97 12/30/98 1 0.00 0.00
GA CHEROKEE 1 *** 3098778 0232104 200 01/10/98 01/10/99 1 0.00 0.00
GA CHEROKEE 1 *** 2925677 0351712 601 09/30/97 09/30/98 1 232.65 246.61
GA CHEROKEE 1 *** 3214266 3161878 304 06/15/96 12/15/97 1 171.00 0.00
GA CHEROKEE 1 *** 3542075 0453849 301 03/15/97 03/15/98 1 202.50 0.00
GA CHEROKEE 1 *** 3418200 3161740 402 08/18/97 08/18/98 1 163.20 123.08
GA CHEROKEE 1 *** 3571383 0453856 212 07/28/96 07/28/97 1 133.00 0.00
GA CHEROKEE 1 *** 3271724 0247892 919 02/25/97 02/25/98 1 85.50 36.25
GA CHEROKEE 1 *** 3090167 0271313 100 12/28/97 12/28/98 1 0.00 0.00
GA CHEROKEE 1 *** 3091641 0242872 100 12/28/97 12/28/98 1 0.00 0.00
GA CHEROKEE 1 *** 3345302 0354890 702 02/10/98 02/10/99 1 187.85 201.71
GA CHEROKEE 1 *** 3758218 2001659 205 08/21/97 08/21/98 1 91.80 0.00
Data as of 11/07/97 Page 10 11/20/97
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexA.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT A. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
<TABLE>
<CAPTION>
(Sales tax incl.)
# OF FL & GA
COUNTY LEASE PRODUCT Customer AR
ST NAME QTY CUSTOMER NAME CUST# CONTRACT# EFFEC. DATE ANNIV. DATE YEARS PRICE Bal
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GA CHEROKEE 1 *** 3606067 0394443 500 04/10/97 04/10/98 1 405.00 0.00
GA CHEROKEE 1 *** 3224573 0345482 726 01/16/98 01/16/99 1 465.00 497.55
GA CHEROKEE 1 *** 3688960 2008478 200 10/26/97 10/26/98 1 311.85 336.11
GA CHEROKEE 1 *** 3463866 0374898 616 12/31/97 12/31/98 1 250.00 267.50
GA CHEROKEE 1 *** 3026551 2018656 000 10/23/97 10/23/98 1 209.37 232.85
GA CHEROKEE 1 *** 3811786 2021209 002 09/18/97 09/18/98 1 243.75 234.73
GA CHEROKEE 1 *** 3707720 8355277 637 04/10/97 04/10/98 1 176.17 92.49
GA CHEROKEE 1 *** 3564183 8353721 601 06/17/97 06/17/98 1 127.71 0.00
GA CHEROKEE 1 *** 3219861 0248564 921 01/01/97 01/01/98 1 0.00 0.00
GA CHEROKEE 1 *** 3219861 0248564 921 01/01/97 01/01/98 1 195.75 0.00
GA CHEROKEE 1 *** 3012086 0228496 101 06/14/97 06/14/98 1 405.00 450.98
GA CHEROKEE 1 *** 3012075 0314749 795 08/01/97 08/01/98 1 217.50 56.08
GA CHEROKEE 1 *** 3012075 0314749 913 08/01/97 08/01/98 1 143.55 153.60
GA CHEROKEE 1 *** 3012075 0314749 928 08/01/97 08/01/98 1 405.00 433.35
GA CHEROKEE 1 *** 3012075 0314749 953 08/01/97 08/01/98 1 232.65 248.94
GA CHEROKEE 1 *** 3331688 3161588 332 02/01/97 02/01/98 1 405.00 128.79
GA CHEROKEE 1 *** 3731493 0462489 302 11/22/97 11/22/98 1 440.00 479.65
GA CHEROKEE 1 *** 3778944 2022340 100 04/05/97 04/05/98 1 237.50 0.00
GA CHEROKEE 1 *** 3513240 3161658 438 11/12/97 11/12/98 1 182.32 195.08
GA CHEROKEE 1 *** 3751745 9414194 300 09/12/97 09/12/98 1 405.00 0.00
GA CHEROKEE 1 *** 3103692 2038893 100 06/26/97 06/26/98 1 175.00 33.75
GA CHEROKEE 1 *** 3419058 0196126 400 01/29/98 01/29/99 1 166.00 179.25
GA CHEROKEE 1 *** 3804517 2017754 000 05/12/97 05/12/98 1 237.50 139.15
GA CHEROKEE 8 *** 3308736 8242872 100 12/30/97 12/30/98 1 0.00 0.00
GA CITY ATLANTA 1 *** 3098778 0232104 201 01/10/98 01/10/99 1 0.00 0.00
GA CITY ATLANTA 1 *** 3214266 3146302 250 11/08/97 11/08/98 1 580.00 0.00
GA CITY ATLANTA 1 *** 3802962 3130263 503 07/10/97 07/10/98 1 360.00 0.00
GA CITY ATLANTA 1 *** 2925769 0345525 700 02/15/98 02/15/99 1 580.00 643.25
GA CITY ATLANTA 1 *** 3090167 8244453 000 06/25/97 06/25/98 1 0.00 0.00
GA CITY ATLANTA 1 *** 0038841 0242871 100 12/28/97 12/28/98 1 0.00 0.00
GA CITY ATLANTA 1 *** 3124505 3151856 500 11/30/97 11/30/98 1 0.00 0.00
GA CITY ATLANTA 1 *** 3219861 0248564 020 01/01/97 01/01/98 1 0.00 0.00
GA CITY ATLANTA 1 *** 3219861 0248564 020 01/01/97 01/01/98 1 324.00 0.00
Data as of 11/07/97 Page 11 11/20/97
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexA.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT A. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
<TABLE>
<CAPTION>
(Sales tax incl.)
# OF FL & GA
COUNTY LEASE PRODUCT Customer AR
ST NAME QTY CUSTOMER NAME CUST# CONTRACT# EFFEC. DATE ANNIV. DATE YEARS PRICE Bal
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GA CITY ATLANTA 1 *** 3012075 0341749 800 08/01/97 08/01/98 1 505.00 540.35
GA CITY ATLANTA 1 *** 3619689 0424326 401 03/15/97 03/15/98 1 275.00 310.19
GA CITY ATLANTA 4 *** 3313101 3151857 500 01/28/98 01/28/99 1 0.00 0.00
GA CITY ATLANTA 5 *** 3308736 8242871 100 12/30/97 12/30/98 1 0.00 0.00
GA CLAYTON 1 *** 3098778 0232104 202 01/10/98 01/10/99 1 0.00 0.00
GA CLAYTON 1 *** 3214266 3146302 410 06/15/97 06/15/98 1 169.13 180.97
GA CLAYTON 1 *** 3542075 0351789 616 03/15/97 03/15/98 1 202.50 0.00
GA CLAYTON 1 *** 3257111 0187507 300 08/27/97 08/27/98 1 0.00 0.00
GA CLAYTON 1 *** 3552728 3151863 500 01/28/98 01/28/99 1 0.00 0.00
GA CLAYTON 1 *** 3255894 0260383 000 07/28/97 07/28/98 1 0.00 0.00
GA CLAYTON 1 *** 3271724 0310394 702 02/25/97 02/25/98 1 78.19 4.61
GA CLAYTON 1 *** 3268438 3146403 427 07/10/97 07/10/98 1 224.25 0.00
GA CLAYTON 1 *** 3803769 2028078 001 04/25/97 04/25/98 1 217.82 0.00
GA CLAYTON 1 *** 3090167 0320887 800 12/28/97 12/28/98 1 0.00 0.00
GA CLAYTON 1 *** 3609938 0454616 301 07/05/97 07/05/98 1 0.00 0.00
GA CLAYTON 1 *** 0038841 0242869 100 12/28/97 12/28/98 1 0.00 0.00
GA CLAYTON 1 *** 3259865 2028115 000 06/16/97 06/16/98 1 165.59 107.00
GA CLAYTON 1 *** 3758218 2001659 202 08/21/97 08/21/98 1 91.80 0.00
GA CLAYTON 1 *** 3679843 0426737 410 08/26/97 08/26/98 1 285.45 5.93
GA CLAYTON 1 *** 3123746 0229033 100 09/19/97 09/19/98 1 169.12 181.56
GA CLAYTON 1 *** 3331677 3146390 409 06/15/97 06/15/98 1 405.00 0.00
GA CLAYTON 1 *** 3463866 0374898 614 12/31/97 12/31/98 1 295.00 315.65
GA CLAYTON 1 *** 3707720 8355277 632 04/10/97 04/10/98 1 212.77 92.44
GA CLAYTON 1 *** 2970864 0348990 607 04/30/97 04/30/98 1 185.55 0.00
GA CLAYTON 1 *** 3219861 0248564 019 01/01/97 01/01/98 1 0.00 0.00
GA CLAYTON 1 *** 3219861 0248564 019 01/01/97 01/01/98 1 230.62 0.00
GA CLAYTON 1 *** 3488261 0341605 701 03/10/97 03/10/98 1 149.55 0.00
GA CLAYTON 1 *** 3012075 0341749 952 08/01/97 08/01/98 1 285.45 305.43
GA CLAYTON 1 *** 3331688 3161588 335 02/01/97 02/01/98 1 405.00 0.00
GA CLAYTON 1 *** 3513240 3161658 437 11/12/97 11/12/98 1 194.70 208.33
GA CLAYTON 1 *** 3396814 0341772 802 09/12/97 09/12/98 1 256.25 278.25
GA CLAYTON 1 *** 3019988 0181514 155 05/10/97 05/10/98 1 405.00 429.30
GA CLAYTON 1 *** 3600049 0383560 515 03/01/97 03/01/98 1 405.00 460.10
Data as of 11/07/97 Page 12 11/20/97
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexA.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT A. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
<TABLE>
<CAPTION>
(Sales tax incl.)
# OF FL & GA
COUNTY LEASE PRODUCT Customer AR
ST NAME QTY CUSTOMER NAME CUST# CONTRACT# EFFEC. DATE ANNIV. DATE YEARS PRICE Bal
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GA CLAYTON 1 *** 3697683 0503835 301 03/01/97 03/01/98 1 405.00 0.00
GA CLAYTON 5 *** 3308736 8242869 100 12/30/97 12/30/98 1 0.00 0.00
GA COBB 1 *** 3098778 0232104 203 01/10/98 01/10/99 1 0.00 0.00
GA COBB 1 *** 3214266 3146302 407 06/15/97 06/15/98 1 169.13 180.97
GA COBB 1 *** 3480869 0438768 506 12/16/97 12/16/98 1 465.00 497.55
GA COBB 1 *** 3542075 0351789 615 03/15/97 03/15/98 1 202.50 0.00
GA COBB 1 *** 3418200 3161740 403 08/18/97 08/18/98 1 189.55 142.44
GA COBB 1 *** 3611513 0394437 502 06/01/97 06/01/98 1 169.13 73.53
GA COBB 1 *** 3583403 0375456 603 12/10/97 12/10/98 1 465.00 514.50
GA COBB 1 *** 3418211 0498050 300 05/23/97 05/23/98 1 0.00 0.00
GA COBB 1 *** 3519758 0341694 625 07/10/97 07/10/98 1 218.76 0.00
GA COBB 1 *** 3571383 0453856 209 07/28/96 07/28/97 1 156.62 0.00
GA COBB 1 *** 3271724 0247892 917 02/25/97 02/25/98 1 102.94 43.65
GA COBB 1 *** 3268438 3146403 423 07/10/97 07/10/98 1 132.90 0.00
GA COBB 1 *** 3722044 0462403 300 08/17/97 08/17/98 1 256.25 0.00
GA COBB 1 *** 3090167 0320889 800 12/28/97 12/28/98 1 0.00 0.00
GA COBB 1 *** 3609938 0454616 302 07/05/97 07/05/98 1 0.00 0.00
GA COBB 1 *** 3565748 0379272 500 07/01/97 07/01/98 1 405.00 0.00
GA COBB 1 *** 3345302 2066907 000 05/17/97 05/17/98 1 405.00 0.00
GA COBB 1 *** 3758218 2001659 302 08/21/97 08/21/98 1 89.10 0.00
GA COBB 1 *** 2938435 0204210 402 02/27/98 02/27/99 1 253.00 271.18
GA COBB 1 *** 3593420 9418835 200 05/19/97 05/19/98 1 405.00 0.00
GA COBB 1 *** 3021277 0213199 202 12/31/97 12/31/98 1 465.00 488.25
GA COBB 1 *** 3009763 0213146 205 08/15/97 08/15/98 1 256.25 222.60
GA COBB 1 *** 3224573 0345482 715 08/15/97 08/15/98 1 285.45 305.43
GA COBB 1 *** 3331677 3146390 408 06/15/97 06/15/98 1 405.00 0.00
GA COBB 1 *** 3348990 3161699 328 08/31/97 08/31/98 1 285.45 0.00
GA COBB 1 *** 3463866 0374898 615 12/31/97 12/31/98 1 295.00 315.65
GA COBB 1 *** 3026551 0341738 712 05/28/97 05/28/98 1 239.23 255.98
GA COBB 1 *** 3052192 0206739 209 08/10/97 08/10/98 1 256.25 183.75
GA COBB 1 *** 3707720 8355277 633 04/10/97 04/10/98 1 212.77 111.71
GA COBB 1 *** 3500565 3161626 300 04/10/97 04/10/98 1 189.55 0.00
GA COBB 1 *** 3279685 8250635 002 09/10/97 09/10/98 1 405.00 0.00
Data as of 11/07/97 Page 13 11/20/97
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexA.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT A. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
<TABLE>
<CAPTION>
(Sales tax incl.)
# OF FL & GA
COUNTY LEASE PRODUCT Customer AR
ST NAME QTY CUSTOMER NAME CUST# CONTRACT# EFFEC. DATE ANNIV. DATE YEARS PRICE Bal
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GA COBB 1 *** 3564183 0353716 601 06/17/97 06/17/98 1 170.33 0.00
GA COBB 1 *** 2970864 0348990 608 04/30/97 04/30/98 1 185.55 108.70
GA COBB 1 *** 3219861 0248564 018 01/01/97 01/01/98 1 0.00 0.00
GA COBB 1 *** 3219861 0248564 018 01/01/97 01/01/98 1 230.62 0.00
GA COBB 1 *** 3318117 0330923 713 10/20/97 10/20/98 1 237.50 280.88
GA COBB 1 *** 3318117 0330923 714 06/10/97 06/10/98 1 0.00 0.00
GA COBB 1 *** 3012086 3146369 407 06/14/97 06/14/98 1 405.00 429.30
GA COBB 1 *** 3475593 2022446 100 04/03/97 04/03/98 1 403.75 0.47
GA COBB 1 *** 3012075 0341749 863 08/01/97 08/01/98 1 169.13 180.97
GA COBB 1 *** 3012075 0341749 895 08/01/97 08/01/98 1 142.73 149.87
GA COBB 1 *** 3012075 0341749 939 08/01/97 08/01/98 1 169.12 177.58
GA COBB 1 *** 3012075 0341749 949 08/01/97 08/01/98 1 285.44 305.42
GA COBB 1 *** 3517363 0345474 706 10/01/97 10/01/98 1 133.93 0.00
GA COBB 1 *** 3331688 3161588 336 02/01/97 02/01/98 1 405.00 0.00
GA COBB 1 *** 3052170 8353776 602 04/10/97 04/10/98 1 189.55 0.00
GA COBB 1 *** 3144237 0453886 301 07/28/97 07/28/98 1 256.25 0.00
GA COBB 1 *** 3632576 0386193 402 10/06/96 10/06/97 1 0.00 0.00
GA COBB 1 *** 3513240 3161658 441 11/12/97 11/12/98 1 212.02 226.86
GA COBB 1 *** 3212978 3146307 327 09/10/96 09/10/97 1 205.00 99.36
GA COBB 1 *** 3396814 0345472 702 09/12/97 09/12/98 1 256.25 278.25
GA COBB 1 *** 3646436 0433775 505 02/10/98 02/10/99 1 328.35 360.16
GA COBB 1 *** 3103692 0227047 201 12/23/96 12/23/97 1 256.90 0.00
GA COBB 1 *** 3812985 2027006 000 10/08/97 10/08/98 1 273.11 298.92
GA COBB 1 *** 3600049 0383560 516 03/01/97 03/01/98 1 405.00 433.35
GA COBB 2 *** 3091641 0242870 100 12/28/97 12/28/98 1 0.00 0.00
GA COBB 5 *** 3308736 8242870 100 12/30/97 12/30/98 1 0.00 0.00
GA COBB 12 *** 3550988 0238044 001 05/15/97 05/15/98 1 0.00 0.00
GA COWETA 1 *** 3214266 0438734 300 06/15/97 06/15/98 1 380.00 0.00
GA COWETA 1 *** 3090167 0439830 400 08/30/97 08/30/98 1 0.00 0.00
GA COWETA 1 *** 3609938 0439782 200 10/24/97 10/24/98 1 0.00 0.00
GA COWETA 1 *** 0038841 0031247 216 01/30/98 01/30/99 1 0.00 0.00
GA COWETA 1 *** 3091641 0454176 300 10/17/97 10/17/98 1 0.00 0.00
GA COWETA 1 *** 3219861 0248564 021 01/01/97 01/01/98 1 0.00 0.00
Data as of 11/07/97 Page 14 11/20/97
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexA.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT A. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
<TABLE>
<CAPTION>
(Sales tax incl.)
# OF FL & GA
COUNTY LEASE PRODUCT Customer AR
ST NAME QTY CUSTOMER NAME CUST# CONTRACT# EFFEC. DATE ANNIV. DATE YEARS PRICE Bal
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GA COWETA 1 *** 3219861 0248564 021 01/01/97 01/01/98 1 342.00 0.00
GA COWETA 1 *** 3552919 0378967 301 10/17/97 10/17/98 1 440.00 480.62
GA COWETA 1 *** 3019988 0181514 130 08/15/97 08/15/98 1 380.00 402.80
GA DEKALB 1 *** 3098778 0232104 204 01/10/98 01/10/99 1 0.00 0.00
GA DEKALB 1 *** 3214266 3146302 408 06/15/97 06/15/98 1 169.13 180.97
GA DEKALB 1 *** 3480869 0438768 507 12/16/97 12/16/98 1 465.00 497.55
GA DEKALB 1 *** 3542075 0351789 617 03/15/97 03/15/98 1 202.50 0.00
GA DEKALB 1 *** 3519758 0341694 623 07/10/97 07/10/98 1 218.76 0.00
GA DEKALB 1 *** 3571383 0453856 210 07/28/96 07/28/97 1 156.62 0.00
GA DEKALB 1 *** 3271724 0247892 918 02/27/97 02/27/98 1 102.94 23.31
GA DEKALB 1 *** 3268438 3146403 422 07/10/97 07/10/98 1 132.90 0.00
GA DEKALB 1 *** 3291115 3161572 401 06/25/97 06/25/98 1 475.00 486.10
GA DEKALB 1 *** 3219849 3146407 403 06/25/97 06/25/98 1 189.55 0.00
GA DEKALB 1 *** 3803769 2028078 002 04/25/97 04/25/98 1 217.81 0.00
GA DEKALB 1 *** 3090167 0320890 800 12/28/97 12/28/98 1 0.00 0.00
GA DEKALB 1 *** 3609938 0454616 304 07/05/97 07/05/98 1 0.00 0.00
GA DEKALB 1 *** 0038841 0242862 100 12/28/97 12/28/98 1 0.00 0.00
GA DEKALB 1 *** 3796357 2018740 101 12/20/97 12/20/98 1 0.00 0.00
GA DEKALB 1 *** 3565748 0379272 511 07/01/97 07/01/98 1 405.00 252.72
GA DEKALB 1 *** 3758218 2001659 201 08/21/97 08/21/98 1 95.20 0.00
GA DEKALB 1 *** 3331677 3146390 407 06/15/97 06/15/98 1 405.00 433.35
GA DEKALB 1 *** 3348990 3161699 326 08/31/97 08/31/98 1 285.45 0.00
GA DEKALB 1 *** 3463866 0374898 617 12/31/97 12/31/98 1 295.00 315.65
GA DEKALB 1 *** 3026551 0341738 615 05/28/97 05/28/98 1 235.22 251.69
GA DEKALB 1 *** 3707720 8355277 634 04/10/97 04/10/98 1 212.77 111.71
GA DEKALB 1 *** 2970864 0348990 609 04/30/97 04/30/98 1 185.55 116.91
GA DEKALB 1 *** 3219861 0248564 015 01/01/97 01/01/98 1 0.00 0.00
GA DEKALB 1 *** 3219861 0248564 015 01/01/97 01/01/98 1 230.62 0.00
GA DEKALB 1 *** 3318117 0330923 705 06/10/97 06/10/98 1 0.00 0.00
GA DEKALB 1 *** 3012086 3146369 406 06/14/97 06/14/98 1 405.00 429.30
GA DEKALB 1 *** 3475593 2022446 101 04/03/97 04/03/98 1 403.75 169.60
GA DEKALB 1 *** 3266735 0351843 610 04/10/97 04/10/98 1 154.28 108.00
GA DEKALB 1 *** 3012075 0341749 950 08/01/97 08/01/98 1 285.45 305.43
Data as of 11/07/97 Page 15 11/20/97
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexA.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT A. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
<TABLE>
<CAPTION>
(Sales tax incl.)
# OF FL & GA
COUNTY LEASE PRODUCT Customer AR
ST NAME QTY CUSTOMER NAME CUST# CONTRACT# EFFEC. DATE ANNIV. DATE YEARS PRICE Bal
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GA DEKALB 1 *** 3517363 0345474 711 10/01/97 10/01/98 1 133.97 0.00
GA DEKALB 1 *** 3331688 3161588 337 02/01/97 02/01/98 1 405.00 0.00
GA DEKALB 1 *** 3144237 0358131 604 06/14/97 06/14/98 1 256.25 0.00
GA DEKALB 1 *** 3513240 3161658 440 11/12/97 11/12/98 1 194.70 208.33
GA DEKALB 1 *** 3212978 2008643 101 09/10/96 09/10/97 1 205.00 22.39
GA DEKALB 1 *** 3396814 0291044 800 09/12/97 09/12/98 1 256.25 278.25
GA DEKALB 1 *** 3019988 0181514 156 05/10/97 05/10/98 1 405.00 429.30
GA DEKALB 1 *** 3646436 2008639 200 07/27/97 07/27/98 1 405.00 0.00
GA DEKALB 5 *** 3308736 8242862 100 12/30/97 12/30/98 1 0.00 0.00
GA DOUGLAS 1 *** 3098778 0232104 205 01/10/98 01/10/99 1 0.00 0.00
GA DOUGLAS 1 *** 3214266 3161878 405 06/15/97 06/15/98 1 132.83 142.13
GA DOUGLAS 1 *** 3611513 0394437 503 06/01/97 06/01/98 1 132.83 139.47
GA DOUGLAS 1 *** 3571383 0453856 213 07/28/96 07/28/97 1 122.50 0.00
GA DOUGLAS 1 *** 3271724 0247892 920 02/27/97 02/27/98 1 78.19 4.61
GA DOUGLAS 1 *** 3268438 3146403 425 07/10/97 07/10/98 1 103.95 0.00
GA DOUGLAS 1 *** 3425875 8172794 400 06/10/97 06/10/98 1 0.00 0.00
GA DOUGLAS 1 *** 3090167 0320891 800 12/28/97 12/28/98 1 0.00 0.00
GA DOUGLAS 1 *** 3609938 3161712 400 04/28/97 04/28/98 1 0.00 0.00
GA DOUGLAS 1 *** 0038841 0242868 100 12/28/97 12/28/98 1 0.00 0.00
GA DOUGLAS 1 *** 3758218 2001659 206 08/21/97 08/21/98 1 91.80 0.00
GA DOUGLAS 1 *** 3009763 0213146 206 08/15/97 08/15/98 1 201.25 170.66
GA DOUGLAS 1 *** 3026551 0341738 714 05/28/97 05/28/98 1 211.20 225.98
GA DOUGLAS 1 *** 3707720 8355277 640 04/10/97 04/10/98 1 163.01 85.59
GA DOUGLAS 1 *** 3564183 0353722 601 06/17/97 06/17/98 1 136.94 0.00
GA DOUGLAS 1 *** 3219861 0248564 922 01/01/97 01/01/98 1 0.00 0.00
GA DOUGLAS 1 *** 3219861 0248564 922 01/01/97 01/01/98 1 181.12 0.00
GA DOUGLAS 1 *** 3012075 0341749 955 08/01/97 08/01/98 1 211.20 225.98
GA DOUGLAS 1 *** 3331688 0302429 702 02/01/97 02/01/98 1 380.00 0.00
GA DOUGLAS 1 *** 3761465 2008428 200 09/13/97 09/13/98 1 201.25 0.00
GA DOUGLAS 1 *** 3812985 2027006 001 10/08/97 10/08/98 1 273.11 292.23
GA DOUGLAS 8 *** 3308736 8242868 100 12/30/97 12/30/98 1 0.00 0.00
GA FAYETTE 1 *** 3098778 0232104 206 01/10/98 01/10/99 1 0.00 0.00
GA FAYETTE 1 *** 3214266 3146302 411 06/15/97 06/15/98 1 132.83 142.13
Data as of 11/07/97 Page 16 11/20/97
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexA.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT A. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
<TABLE>
<CAPTION>
(Sales tax incl.)
# OF FL & GA
COUNTY LEASE PRODUCT Customer
ST NAME QTY CUSTOMER NAME CUST# CONTRACT# EFFEC. DATE ANNIV. DATE YEARS PRICE Bal
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GA FAYETTE 1 *** 3237511 0341742 702 07/14/97 07/14/98 1 211.20 0.00
GA FAYETTE 1 *** 3102053 0228441 200 02/10/98 02/10/99 1 231.25 249.38
GA FAYETTE 1 *** 3701362 0454303 301 04/01/97 04/01/98 1 201.25 0.00
GA FAYETTE 1 *** 2304924 3161571 404 05/15/97 05/15/98 1 167.90 0.00
GA FAYETTE 1 *** 3090167 0320893 800 12/28/97 12/28/98 1 0.00 0.00
GA FAYETTE 1 *** 0038841 0242866 100 12/28/97 12/28/98 1 0.00 0.00
GA FAYETTE 1 *** 3259865 2028115 001 06/16/97 06/16/98 1 132.45 83.45
GA FAYETTE 1 *** 3758218 2001659 207 08/21/97 08/21/98 1 91.80 0.00
GA FAYETTE 1 *** 3679843 0426737 408 08/10/97 08/10/98 1 211.20 0.00
GA FAYETTE 1 *** 3707720 8355277 638 04/10/97 04/10/98 1 163.01 85.59
GA FAYETTE 1 *** 3219861 0248564 926 01/01/97 01/01/98 1 0.00 0.00
GA FAYETTE 1 *** 3219861 0248564 926 01/01/97 01/01/98 1 181.12 0.00
GA FAYETTE 1 *** 3552919 3161301 400 04/10/97 04/10/98 1 132.80 0.00
GA FAYETTE 1 *** 3012075 0341749 956 08/01/97 08/01/98 1 211.20 225.98
GA FAYETTE 1 *** 3721160 3161359 403 12/10/97 12/10/98 1 152.63 164.59
GA FAYETTE 1 *** 3331688 3161588 330 02/01/97 02/01/98 1 380.00 120.84
GA FAYETTE 1 *** 3513240 3161658 439 11/12/97 11/12/98 1 152.62 163.30
GA FAYETTE 1 *** 3019988 0181514 157 05/10/97 05/10/98 1 380.00 402.80
GA FAYETTE 8 *** 3308736 8242866 100 12/30/97 12/30/98 1 0.00 0.00
GA FORSYTH 1 *** 3098778 0232104 207 01/10/98 01/10/99 1 0.00 0.00
GA FORSYTH 1 *** 2925677 0351712 612 09/30/97 09/30/98 1 211.20 223.87
GA FORSYTH 1 *** 3214266 3161878 415 06/15/97 06/15/98 1 211.20 225.98
GA FORSYTH 1 *** 3780079 0351786 600 04/19/97 04/19/98 1 380.00 0.00
GA FORSYTH 1 *** 3121458 0452391 202 01/17/96 01/17/97 1 0.00 0.00
GA FORSYTH 1 *** 3645833 0433758 506 01/15/98 01/15/99 1 231.25 247.44
GA FORSYTH 1 *** 3542075 0453934 301 03/15/97 03/15/98 1 190.00 0.00
GA FORSYTH 1 *** 3812084 2027009 001 09/26/97 09/26/98 1 221.13 0.00
GA FORSYTH 1 *** 3271724 0247892 921 02/27/97 02/27/98 1 79.50 0.00
GA FORSYTH 1 *** 3533619 0345394 612 05/01/97 05/01/98 1 0.00 0.00
GA FORSYTH 1 *** 3268438 3146403 426 07/10/97 07/10/98 1 103.95 0.00
GA FORSYTH 1 *** 3397084 0435407 400 04/12/97 04/12/98 1 190.08 0.00
GA FORSYTH 1 *** 3090167 0320894 800 12/28/97 12/28/98 1 0.00 0.00
GA FORSYTH 1 *** 0038841 0242883 100 12/28/97 12/28/98 1 0.00 0.00
Data as of 11/07/97 Page 17 11/20/97
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexA.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT A. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
<TABLE>
<CAPTION>
(Sales tax incl.)
# OF FL & GA
COUNTY LEASE PRODUCT Customer
ST NAME QTY CUSTOMER NAME CUST# CONTRACT# EFFEC. DATE ANNIV. DATE YEARS PRICE Bal
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GA FORSYTH 1 *** 3796357 2018740 102 12/20/97 12/20/98 1 0.00 0.00
GA FORSYTH 1 *** 3758218 2001659 208 09/20/97 09/20/98 1 101.20 0.00
GA FORSYTH 1 *** 3538953 0349640 608 06/04/97 06/04/98 1 380.00 0.00
GA FORSYTH 1 *** 3224573 0345482 727 01/30/98 01/30/99 1 260.00 299.60
GA FORSYTH 1 *** 3348990 3161699 415 08/31/97 08/31/98 1 211.20 21.53
GA FORSYTH 1 *** 3026551 0341738 713 05/28/97 05/28/98 1 179.32 191.87
GA FORSYTH 1 *** 3811786 2021209 003 09/18/97 09/18/98 1 227.50 219.08
GA FORSYTH 1 *** 3707720 8355277 641 04/10/97 04/10/98 1 172.80 90.72
GA FORSYTH 1 *** 2970864 0348990 610 04/30/97 04/30/98 1 172.30 108.56
GA FORSYTH 1 *** 3539938 0355268 621 09/15/97 09/15/98 1 211.20 232.62
GA FORSYTH 1 *** 3219861 0248564 920 01/01/97 01/01/98 1 0.00 0.00
GA FORSYTH 1 *** 3219861 0248564 920 01/01/97 01/01/98 1 181.12 0.00
GA FORSYTH 1 *** 3012086 0205769 302 06/14/97 06/14/98 1 380.00 402.80
GA FORSYTH 1 *** 3266735 0351843 612 04/10/97 04/10/98 1 117.98 82.59
GA FORSYTH 1 *** 3012075 0341749 865 08/01/97 08/01/98 1 132.83 142.13
GA FORSYTH 1 *** 3012075 0341749 957 08/01/97 08/01/98 1 132.83 142.13
GA FORSYTH 1 *** 3012075 2000764 201 08/01/97 08/01/98 1 211.20 223.87
GA FORSYTH 1 *** 3012075 2013809 100 11/02/96 11/02/97 1 380.00 406.60
GA FORSYTH 1 *** 3774300 2020615 200 02/08/98 02/08/99 1 520.00 583.15
GA FORSYTH 1 *** 3331688 3161588 329 02/01/97 02/01/98 1 380.00 120.84
GA FORSYTH 1 *** 3746385 9414173 200 04/07/97 04/07/98 1 380.00 0.00
GA FORSYTH 1 *** 3513240 2022494 100 08/08/97 08/08/98 1 380.00 0.00
GA FORSYTH 1 *** 3751745 9414194 200 04/10/97 04/10/98 1 380.00 0.00
GA FORSYTH 1 *** 3588068 0379210 603 02/02/98 02/02/99 1 244.20 258.85
GA FORSYTH 1 *** 3103692 2008741 100 12/04/96 12/04/97 1 175.00 133.85
GA FORSYTH 1 *** 3475526 3161745 402 09/10/97 09/10/98 1 0.00 0.00
GA FORSYTH 1 *** 3429460 0351793 601 06/15/97 06/15/98 1 190.08 0.00
GA FORSYTH 8 *** 3308736 8242883 400 12/30/97 12/30/98 1 0.00 0.00
GA FULTON 1 *** 3214266 3146302 406 06/15/97 06/15/98 1 246.67 268.35
GA FULTON 1 *** 3680238 0426742 422 11/05/97 11/05/98 1 520.00 583.15
GA FULTON 1 *** 3480869 0324237 802 12/16/97 12/16/98 1 705.00 781.10
GA FULTON 1 *** 3220823 3161872 402 06/15/97 06/15/98 1 404.25 0.00
GA FULTON 1 *** 3271724 0247892 915 02/27/97 02/27/98 1 126.56 0.00
Data as of 11/07/97 Page 18 11/20/97
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexA.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT A. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
<TABLE>
<CAPTION>
(Sales tax incl.)
# OF FL & GA
COUNTY LEASE PRODUCT Customer
ST NAME QTY CUSTOMER NAME CUST# CONTRACT# EFFEC. DATE ANNIV. DATE YEARS PRICE Bal
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GA FULTON 1 *** 3268438 3146403 415 07/10/97 07/10/98 1 192.90 0.00
GA FULTON 1 *** 3803769 2028078 000 04/25/97 04/25/98 1 318.00 0.00
GA FULTON 1 *** 3090167 0320895 800 12/28/97 12/28/98 1 0.00 0.00
GA FULTON 1 *** 3609938 0454616 307 07/05/97 07/05/98 1 0.00 0.00
GA FULTON 1 *** 3718650 0453860 301 10/01/97 10/01/98 1 190.00 0.00
GA FULTON 1 *** 3331677 3146390 406 06/15/97 06/15/98 1 610.00 0.00
GA FULTON 1 *** 3463866 0374898 618 12/31/97 12/31/98 1 430.00 466.79
GA FULTON 1 *** 3707720 8355277 636 04/10/97 04/10/98 1 302.63 158.89
GA FULTON 1 *** 3318117 0330923 703 10/20/97 10/20/98 1 237.50 254.13
GA FULTON 1 *** 3012086 3146363 702 06/14/97 06/14/98 1 610.00 667.19
GA FULTON 1 *** 3475593 2022446 200 06/01/97 06/01/98 1 475.00 299.27
GA FULTON 1 *** 3331688 3161588 339 02/01/97 02/01/98 1 610.00 0.00
GA FULTON 1 *** 3320943 0345468 709 08/10/97 08/10/98 1 404.25 0.00
GA FULTON 1 *** 3513240 3161658 435 11/12/97 11/12/98 1 283.80 307.60
GA FULTON 1 *** 3212978 3146307 325 09/10/96 09/10/97 1 299.00 0.00
GA FULTON 1 *** 3646436 0433775 502 02/01/98 02/01/99 1 465.30 497.87
GA FULTON 1 *** 3600049 0383560 518 03/01/97 03/01/98 1 610.00 652.70
GA FULTON 1 *** 3098778 0232104 208 01/10/98 01/10/99 1 0.00 0.00
GA FULTON 1 *** 2925677 0351712 610 09/30/97 09/30/98 1 285.45 311.32
GA FULTON 1 *** 3500792 0341746 902 01/10/98 01/10/99 1 352.50 390.55
GA FULTON 1 *** 3615113 0386162 501 09/04/97 09/04/98 1 305.00 0.00
GA FULTON 1 *** 3518395 3161821 405 12/16/97 12/16/98 1 364.80 400.50
GA FULTON 1 *** 3542075 0351789 614 03/15/97 03/15/98 1 152.50 0.00
GA FULTON 1 *** 3812084 2027009 000 09/26/97 09/26/98 1 221.12 0.00
GA FULTON 1 *** 3198779 8262398 100 01/10/98 01/10/99 1 543.00 602.69
GA FULTON 1 *** 3755051 2001751 200 06/30/97 06/30/98 1 188.10 203.44
GA FULTON 1 *** 3519758 0341694 633 07/10/97 07/10/98 1 156.68 0.00
GA FULTON 1 *** 3571383 0453856 208 07/28/96 07/28/97 1 174.12 0.00
GA FULTON 1 *** 3565748 0379272 510 07/01/97 07/01/98 1 305.00 63.55
GA FULTON 1 *** 3758218 2001659 204 08/21/97 08/21/98 1 44.55 0.00
GA FULTON 1 *** 3510690 3146420 400 06/10/97 06/10/98 1 405.00 0.00
GA FULTON 1 *** 3224573 0345482 705 08/15/97 08/15/98 1 202.12 220.13
GA FULTON 1 *** 3348990 3161699 327 08/31/97 08/31/98 1 285.45 0.00
Data as of 11/07/97 Page 19 11/20/97
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexA.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT A. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
<TABLE>
<CAPTION>
(Sales tax incl.)
# OF FL & GA
COUNTY LEASE PRODUCT Customer
ST NAME QTY CUSTOMER NAME CUST# CONTRACT# EFFEC. DATE ANNIV. DATE YEARS PRICE Bal
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GA FULTON 1 *** 3026551 0181538 203 05/28/97 05/28/98 1 254.22 280.75
GA FULTON 1 *** 3811786 2021209 000 09/18/97 09/18/98 1 287.50 282.88
GA FULTON 1 *** 3564183 8353720 601 06/17/97 06/17/98 1 188.19 0.00
GA FULTON 1 *** 2970864 0348990 611 04/30/97 04/30/98 1 205.88 129.71
GA FULTON 1 *** 3219861 0248564 016 01/01/97 01/01/98 1 0.00 0.00
GA FULTON 1 *** 3219861 0248564 016 01/01/97 01/01/98 1 168.19 0.00
GA FULTON 1 *** 3318117 0330923 704 06/10/97 06/10/98 1 0.00 0.00
GA FULTON 1 *** 3025967 0181533 300 02/21/98 02/21/99 1 465.00 524.30
GA FULTON 1 *** 3266735 0351843 609 04/10/97 04/10/98 1 108.90 40.97
GA FULTON 1 *** 3012075 0341749 670 08/01/97 08/01/98 1 196.35 210.09
GA FULTON 1 *** 3012075 0341749 912 08/01/97 08/01/98 1 142.73 152.72
GA FULTON 1 *** 3012075 0341749 925 08/01/97 08/01/98 1 405.00 433.35
GA FULTON 1 *** 3012075 2000711 202 08/01/97 08/01/98 1 188.10 201.27
GA FULTON 1 *** 3517363 0345474 716 10/01/97 10/01/98 1 92.00 0.00
GA FULTON 1 *** 3144237 0358130 601 05/14/97 05/14/98 1 188.10 0.00
GA FULTON 1 *** 3583063 0374671 603 11/10/97 11/10/98 1 141.90 154.04
GA FULTON 1 *** 3396814 0291044 003 09/12/97 09/12/98 1 123.34 132.93
GA FULTON 1 *** 3019988 0181514 158 05/10/97 05/10/98 1 305.00 336.55
GA FULTON 1 *** 3589560 0379219 608 02/23/98 02/23/99 1 465.00 519.40
GA FULTON 1 *** 3751745 9414194 201 04/10/97 04/10/98 1 360.00 0.00
GA FULTON 1 *** 3103692 0227047 123 03/10/97 03/10/98 1 226.25 170.47
GA FULTON 1 *** 3618224 0395886 524 07/29/97 07/06/98 1 0.00 0.00
GA FULTON 1 *** 3475526 3161745 512 09/10/97 09/10/98 1 0.00 0.00
GA FULTON 1 *** 3388901 0310773 801 10/25/97 10/25/98 1 232.65 250.98
GA FULTON 1 *** 3429460 3161813 406 06/15/97 06/15/98 1 169.29 0.00
GA FULTON 1 *** 3098778 0232104 208 01/10/98 01/10/99 1 0.00 0.00
GA FULTON 1 *** 3500792 0341746 902 01/10/98 01/10/99 1 352.50 390.55
GA FULTON 1 *** 3615113 0386162 501 09/04/97 09/04/98 1 305.00 0.00
GA FULTON 1 *** 3542075 0351789 614 03/15/97 03/15/98 1 152.50 0.00
GA FULTON 1 *** 3519758 0341694 633 07/10/97 07/10/98 1 156.68 0.00
GA FULTON 1 *** 3571383 0453865 200 07/28/96 07/28/97 1 0.00 0.00
GA FULTON 1 *** 2304924 3161571 402 05/10/97 05/10/98 1 315.15 0.00
GA FULTON 1 *** 3259865 2028115 002 06/16/97 06/16/98 1 245.98 154.97
Data as of 11/07/97 Page 20 11/20/97
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
<TABLE>
<CAPTION>
RESexA.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Reprot
EXHIBIT A Product Name=TRW RED Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
(Sales tax
incl.)
# OF FL & GA
LEASE PRODUCT CUSTOMER AR
COUNTY NAME QTY CUSTOMER NAME CUST # CONTRACT # EFFEC.DATE ANNIV.DATE YEARS PRICE BAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ST
GA FULTON 1 *** 3565748 0379272 510 07/01/97 07/01/98 1 305.00 63.55
GA FULTON 1 *** 3758218 2001659 204 08/21/97 08/21/98 1 44.55 0.00
GA FULTON 1 *** 3679843 0426737 409 08/26/97 08/26/98 1 285.45 0.00
GA FULTON 1 *** 3778449 2022323 100 04/03/97 04/03/98 1 326.66 355.09
GA FULTON 1 *** 3224573 0345482 705 08/15/97 08/15/98 1 202.13 220.14
GA FULTON 1 *** 3026551 0181538 204 08/29/97 08/29/98 1 259.50 277.67
GA FULTON 1 *** 2970864 0348990 611 04/03/97 04/03/98 1 205.88 129.71
GA FULTON 1 *** 3219861 0248564 016 01/01/97 01/01/98 1 0.00 0.00
GA FULTON 1 *** 3219861 0248564 016 01/01/97 01/01/98 1 168.19 0.00
GA FULTON 1 *** 3318117 0330923 704 06/10/97 06/10/98 1 0.00 0.00
GA FULTON 1 *** 3266735 0351843 609 04/10/97 04/10/98 1 108.90 40.97
GA FULTON 1 *** 3012075 0341749 670 08/01/97 08/01/98 1 196.35 210.09
GA FULTON 1 *** 3517363 0345474 716 10/01/97 10/01/98 1 97.75 0.00
GA FULTON 1 *** 3583063 0374671 603 11/10/97 11/10/98 1 141.90 154.04
GA FULTON 1 *** 3396814 0291044 003 09/12/97 09/12/98 1 123.34 132.93
GA FULTON 1 *** 3019988 0181514 158 05/10/97 05/10/98 1 305.00 336.55
GA FULTON 1 *** 3618224 0395886 524 07/29/97 07/06/98 1 0.00 0.00
GA FULTON 1 *** 3388901 0310773 801 10/25/97 10/25/98 1 232.65 250.98
GA FULTON 2 *** 3091641 0242865 100 12/28/97 12/28/98 1 0.00 0.00
GA FULTON 4 *** 3313101 2001040 100 07/22/97 07/22/98 1 0.00 0.00
GA FULTON 4 *** 3313101 2001040 100 07/22/97 07/22/98 1 0.00 0.00
GA FULTON 5 *** 3308736 8242865 100 12/30/97 12/30/98 1 0.00 0.00
GA GWINNETT 1 *** 3098778 0232104 209 01/10/98 01/10/99 1 0.00 0.00
GA GWINNETT 1 *** 3214266 3146302 409 06/15/97 06/15/98 1 169.12 180.96
GA GWINNETT 1 *** 3584886 0379201 404 06/10/97 06/10/98 1 405.00 150.50
GA GWINNETT 1 *** 3504581 0341883 701 06/13/97 06/13/98 1 256.25 0.00
GA GWINNETT 1 *** 3674462 2001643 200 07/09/97 07/09/98 1 405.00 439.33
GA GWINNETT 1 *** 3680238 2022338 100 05/31/97 05/31/98 1 405.00 0.00
GA GWINNETT 1 *** 3480869 0438768 508 12/16/97 12/16/98 1 465.00 497.55
GA GWINNETT 1 *** 3500758 0341867 701 07/16/97 07/16/98 1 189.55 0.00
GA GWINNETT 1 *** 3542075 0351789 618 03/15/97 03/15/98 1 202.50 0.00
GA GWINNETT 1 *** 3482636 0324075 702 02/15/97 02/15/98 1 405.00 0.00
GA GWINNETT 1 *** 3519758 0341694 624 07/10/97 07/10/98 1 218.76 0.00
</TABLE>
Page 21
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
<TABLE>
<CAPTION>
RESexA.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Reprot
EXHIBIT A Product Name=TRW RED Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
(SALES TAX
INCL.)
# OF FL & GA
LEASE PRODUCT CUSTOMER AR
COUNTY NAME QTY CUSTOMER NAME CUST # CONTRACT # EFFEC.DATE ANNIV.DATE YEARS PRICE BAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ST
GA GWINNETT 1 *** 3792401 2030389 100 10/23/97 10/23/98 1 274.54 295.51
GA GWINNETT 1 *** 3571383 0453856 211 07/28/96 07/28/97 1 156.62 0.00
GA GWINNETT 1 *** 3127694 0230026 102 07/03/97 07/03/98 1 405.00 0.00
GA GWINNETT 1 *** 3795013 2018643 100 11/26/97 11/26/98 1 550.00 588.50
GA GWINNETT 1 *** 3713622 0461640 300 06/06/97 06/06/98 1 405.00 0.00
GA GWINNETT 1 *** 3271724 0247892 916 02/27/97 02/27/98 1 102.94 6.07
GA GWINNETT 1 *** 3268438 3146403 424 07/10/97 07/10/98 1 132.90 0.00
GA GWINNETT 1 *** 3090167 0271334 100 12/28/97 12/28/98 1 0.00 0.00
GA GWINNETT 1 *** 3609938 0454616 308 07/05/97 07/05/98 1 0.00 0.00
GA GWINNETT 1 *** 0038841 0242864 100 12/28/97 12/28/98 1 0.00 0.00
GA GWINNETT 1 *** 3453232 0311030 809 10/21/97 10/21/98 1 0.00 0.00
GA GWINNETT 1 *** 3565748 0379272 601 07/01/97 07/01/98 1 256.25 163.80
GA GWINNETT 1 *** 3577426 3161641 406 03/10/97 03/10/98 1 405.00 0.00
GA GWINNETT 1 *** 3758218 2001659 301 10/19/97 10/19/98 1 62.10 0.00
GA GWINNETT 1 *** 3200894 3071759 304 07/28/97 07/28/98 1 0.00 0.00
GA GWINNETT 1 *** 3562558 0353670 601 05/29/97 05/29/98 1 285.45 0.00
GA GWINNETT 1 *** 3610039 0395837 500 05/07/97 05/07/98 1 405.00 0.00
GA GWINNETT 1 *** 2999632 0213788 304 11/21/97 11/21/98 1 328.35 356.80
GA GWINNETT 1 *** 3224573 0345482 716 08/15/97 08/15/98 1 285.45 305.43
GA GWINNETT 1 *** 3654433 0435417 506 02/23/98 02/23/99 1 328.35 360.16
GA GWINNETT 1 *** 3615089 0386062 501 06/11/97 06/11/98 1 256.25 0.00
GA GWINNETT 1 *** 3331677 3146390 405 06/15/97 06/15/98 1 405.00 0.00
GA GWINNETT 1 *** 3348990 0206516 203 08/31/97 08/31/98 1 285.45 2.85
GA GWINNETT 1 *** 3463866 0374898 613 12/31/97 12/31/98 1 295.00 315.65
GA GWINNETT 1 *** 3026551 0341682 715 05/28/97 05/28/98 1 328.23 351.21
GA GWINNETT 1 *** 3811786 2021209 001 09/18/97 09/18/98 1 287.50 276.86
GA GWINNETT 1 *** 3707720 8355277 635 04/10/97 04/10/98 1 212.76 111.70
GA GWINNETT 1 *** 2970864 0348990 612 04/30/97 04/30/98 1 185.55 116.91
GA GWINNETT 1 *** 3539938 0355268 609 09/15/97 09/15/98 1 256.25 278.25
GA GWINNETT 1 *** 3219861 0248564 017 01/01/97 01/01/98 1 0.00 0.00
GA GWINNETT 1 *** 3219861 0248564 017 01/01/97 01/01/98 1 230.63 0.00
GA GWINNETT 1 *** 3318117 0330923 711 11/04/97 11/04/98 1 237.50 254.13
GA GWINNETT 1 *** 3318117 0330923 715 06/10/97 06/10/98 1 0.00 0.00
</TABLE>
Page 22
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
<TABLE>
<CAPTION>
RESexA.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Reprot
EXHIBIT A Product Name=TRW RED Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
(SALES TAX
INCL.)
# OF FL & GA
LEASE PRODUCT CUSTOMER AR
COUNTY NAME QTY CUSTOMER NAME CUST # CONTRACT # EFFEC.DATE ANNIV.DATE YEARS PRICE BAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ST
GA GWINNETT 1 *** 3012086 3146369 408 06/14/97 06/14/98 1 405.00 450.98
GA GWINNETT 1 *** 3475593 2022446 103 04/03/97 04/03/98 1 403.75 169.60
GA GWINNETT 1 *** 3266735 0271825 001 10/10/97 10/10/98 1 169.13 172.92
GA GWINNETT 1 *** 3012075 0341749 864 08/01/97 08/01/98 1 169.13 180.97
GA GWINNETT 1 *** 3012075 0341749 919 08/01/97 08/01/98 1 169.13 179.28
GA GWINNETT 1 *** 3012075 0341749 951 08/01/97 08/01/98 1 285.45 305.43
GA GWINNETT 1 *** 3537729 0349633 608 08/01/97 08/01/98 1 285.45 0.00
GA GWINNETT 1 *** 3110300 0374613 601 08/20/97 08/20/98 1 256.25 275.63
GA GWINNETT 1 *** 3517363 0345474 712 10/14/97 10/14/98 1 133.93 0.00
GA GWINNETT 1 *** 3525298 3161606 402 06/25/97 06/25/98 1 169.13 0.00
GA GWINNETT 1 *** 3331688 3161588 338 02/01/97 02/01/98 1 405.00 0.00
GA GWINNETT 1 *** 3748026 2022464 101 05/24/97 05/24/98 1 475.00 0.00
GA GWINNETT 1 *** 3375932 3161826 402 05/28/97 05/28/98 1 405.00 0.00
GA GWINNETT 1 *** 3774744 2008089 101 10/10/97 10/10/98 1 170.00 0.00
GA GWINNETT 1 *** 3590210 0379218 602 02/15/98 02/15/99 1 328.35 356.80
GA GWINNETT 1 *** 3590221 0379217 602 02/15/98 02/15/99 1 328.35 356.80
GA GWINNETT 1 *** 3513240 3161658 436 11/12/97 11/12/98 1 194.70 208.33
GA GWINNETT 1 *** 3212978 3146307 326 09/10/96 09/10/97 1 205.00 28.42
GA GWINNETT 1 *** 3805389 2017755 000 05/21/97 05/21/98 1 475.00 0.00
GA GWINNETT 1 *** 3396814 0341720 802 09/12/97 09/12/98 1 256.25 278.25
GA GWINNETT 1 *** 3646436 2008629 200 08/02/97 08/02/98 1 405.00 0.00
GA GWINNETT 1 *** 3589560 0379219 607 02/23/98 02/23/99 1 465.00 492.90
GA GWINNETT 1 *** 3744468 9415765 200 05/01/97 05/01/98 1 285.45 0.00
GA GWINNETT 1 *** 3751262 2001702 200 08/23/97 08/23/98 1 256.25 0.00
GA GWINNETT 1 *** 3588068 0379210 602 02/10/98 02/10/99 1 328.35 356.80
GA GWINNETT 1 *** 3103692 0227047 325 03/10/97 03/10/98 1 221.25 162.62
GA GWINNETT 1 *** 3812985 2027006 002 10/08/97 10/08/98 1 216.11 231.24
GA GWINNETT 1 *** 3600049 0383560 519 03/01/97 03/01/98 1 405.00 433.35
GA GWINNETT 1 *** 3796687 2028067 100 06/27/97 06/27/98 1 475.00 0.00
GA GWINNETT 1 *** 3475526 3161745 505 09/10/97 09/10/98 1 0.00 0.00
GA GWINNETT 1 *** 3429460 3146377 405 06/15/97 06/15/98 1 230.61 0.00
GA GWINNETT 5 *** 3308736 8242864 100 12/30/97 12/30/98 1 0.00 0.00
GA GWINNETT 8 *** 3200894 3071759 500 06/10/97 06/10/98 1 0.00 0.00
</TABLE>
Page 23
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
<TABLE>
<CAPTION>
RESexA.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Reprot
EXHIBIT A Product Name=TRW RED Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
(SALES TAX
INCL.)
# OF FL & GA
LEASE PRODUCT CUSTOMER AR
COUNTY NAME QTY CUSTOMER NAME CUST # CONTRACT # EFFEC.DATE ANNIV.DATE YEARS PRICE BAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ST
GA HALL 1 *** 3098778 0232104 210 01/10/98 01/10/99 1 0.00 0.00
GA HALL 1 *** 3214266 3146302 412 06/15/97 06/15/98 1 211.20 225.98
GA HALL 1 *** 3795013 2028063 000 03/18/97 03/18/98 1 251.75 0.00
GA HALL 1 *** 3090167 0320898 800 12/28/97 12/28/98 1 0.00 0.00
GA HALL 1 *** 0038841 9410090 100 05/24/97 05/24/98 1 0.00 0.00
GA HALL 1 *** 3091641 0242863 100 12/28/97 12/28/98 1 0.00 0.00
GA HALL 1 *** 3577426 3161641 407 03/10/97 03/10/98 1 380.00 0.00
GA HALL 1 *** 3758218 2001659 209 08/21/97 08/21/98 1 145.20 0.00
GA HALL 1 *** 3783870 2018685 100 06/13/97 06/13/98 1 150.15 0.00
GA HALL 1 *** 2321325 0302129 704 04/03/97 04/03/98 1 211.20 0.00
GA HALL 1 *** 3224573 2001797 201 07/27/97 07/27/98 1 211.20 234.81
GA HALL 1 *** 3654433 2017753 000 04/23/97 04/23/98 1 288.00 0.00
GA HALL 1 *** 3539938 0355268 620 09/15/97 09/15/98 1 211.20 232.62
GA HALL 1 *** 3219861 0248564 923 01/01/97 01/01/98 1 0.00 0.00
GA HALL 1 *** 3219861 0248564 923 01/01/97 01/01/98 1 181.12 0.00
GA HALL 1 *** 3012086 2022339 100 06/14/97 06/14/98 1 380.00 402.80
GA HALL 1 *** 3266735 0351843 611 04/10/97 04/10/98 1 117.98 82.59
GA HALL 1 *** 3012075 0341749 914 08/01/97 08/01/98 1 380.00 406.60
GA HALL 1 *** 3012075 0341749 943 08/01/97 08/01/98 1 211.20 223.87
GA HALL 1 *** 3012075 0341749 958 08/01/97 08/01/98 1 211.20 225.98
GA HALL 1 *** 3537729 0349633 607 08/01/97 08/01/98 1 202.50 0.00
GA HALL 1 *** 3331688 3161588 331 02/01/97 02/01/98 1 380.00 120.84
GA HALL 1 *** 3774744 2008090 200 02/15/98 02/15/99 1 244.20 267.60
GA HALL 1 *** 3751262 2001702 201 05/23/97 05/23/98 1 132.83 0.00
GA HALL 1 *** 3751273 2001703 201 05/30/97 05/30/98 1 87.63 0.00
GA HALL 1 *** 3429460 3146377 501 06/15/97 06/15/98 1 190.08 0.00
GA HALL 4 *** 3347607 8152111 400 07/28/97 07/28/98 1 0.00 0.00
GA HALL 8 *** 3308736 8242863 100 12/30/97 12/30/98 1 0.00 0.00
GA HENRY 1 *** 3214266 0302431 805 06/19/97 06/19/98 1 380.00 0.00
GA HENRY 1 *** 3808870 2050023 000 07/21/97 07/21/98 1 237.60 0.00
GA HENRY 1 *** 3271724 0438774 402 02/27/97 02/27/98 1 96.00 0.00
GA HENRY 1 *** 3090167 0320899 800 12/28/97 12/28/98 1 0.00 0.00
GA HENRY 1 *** 0038841 0031247 202 01/19/98 01/19/99 1 0.00 0.00
</TABLE>
Page 24
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
<TABLE>
<CAPTION>
RESexA.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Reprot
EXHIBIT A Product Name=TRW RED Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
(SALES TAX
INCL.)
# OF FL & GA
LEASE PRODUCT CUSTOMER AR
COUNTY NAME QTY CUSTOMER NAME CUST # CONTRACT # EFFEC.DATE ANNIV.DATE YEARS PRICE BAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ST
GA HENRY 1 *** 3259865 2028115 003 06/16/97 06/16/98 1 233.10 146.86
GA HENRY 1 *** 3679843 2008631 200 08/26/97 08/26/98 1 211.20 155.08
GA HENRY 1 *** 3218927 0353661 504 11/06/97 11/06/98 1 440.00 497.55
GA HENRY 1 *** 3219861 0248564 925 01/01/97 01/01/98 1 0.00 0.00
GA HENRY 1 *** 3219861 0248564 925 01/01/97 01/01/98 1 201.38 0.00
GA HENRY 1 *** 3488261 0351796 604 03/10/97 03/10/98 1 120.75 0.00
GA HENRY 1 *** 3019988 0181514 005 08/15/97 08/15/98 1 380.00 402.80
GA HENRY 8 *** 3308736 0450895 500 11/30/97 11/30/98 1 0.00 0.00
GA ROCKDALE 1 *** 3098778 0232104 211 01/10/98 01/10/99 1 0.00 0.00
GA ROCKDALE 1 *** 3490994 0461639 301 06/06/97 06/06/98 1 201.25 0.00
GA ROCKDALE 1 *** 3214266 0248316 001 06/15/97 06/15/98 1 105.60 0.00
GA ROCKDALE 1 *** 3121458 0441571 401 05/20/97 05/20/98 1 380.00 0.00
GA ROCKDALE 1 *** 3271724 0341687 602 02/27/97 02/27/98 1 78.19 4.61
GA ROCKDALE 1 *** 3090167 0320816 800 12/28/97 12/28/98 1 0.00 0.00
GA ROCKDALE 1 *** 0038841 0271251 100 12/28/97 12/28/98 1 0.00 0.00
GA ROCKDALE 1 *** 3758218 2001659 210 08/21/97 08/21/98 1 91.80 0.00
GA ROCKDALE 1 *** 3348990 3161699 414 08/31/97 08/31/98 1 211.20 0.00
GA ROCKDALE 1 *** 3707720 8355277 639 04/10/97 04/10/98 1 163.01 85.59
GA ROCKDALE 1 *** 2966854 0341645 600 06/01/97 06/01/98 1 132.83 83.99
GA ROCKDALE 1 *** 3219861 0248564 924 01/01/97 01/01/98 1 0.00 0.00
GA ROCKDALE 1 *** 3219861 0248564 924 01/01/97 01/01/98 1 181.12 0.00
GA ROCKDALE 1 *** 3318117 0435487 403 06/10/97 06/10/98 1 0.00 0.00
GA ROCKDALE 1 *** 3266735 0351843 513 08/10/97 08/10/98 1 132.83 136.54
GA ROCKDALE 1 *** 3012075 0341749 959 08/01/97 08/01/98 1 211.20 225.98
GA ROCKDALE 1 *** 3265697 0271849 004 08/21/97 08/21/98 1 201.25 0.00
GA ROCKDALE 1 *** 3331688 3161588 328 02/01/97 02/01/98 1 380.00 75.25
GA ROCKDALE 1 *** 3513240 2017747 000 05/05/97 05/05/98 1 211.20 0.00
GA ROCKDALE 1 *** 3768208 2008785 201 12/14/97 12/14/98 1 268.33 296.03
GA ROCKDALE 8 *** 3308736 8271251 100 12/30/97 12/30/98 1 0.00 0.00
TOTAL 293,803.83 131,473.19
</TABLE>
Page 25
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
<TABLE>
<CAPTION>
RESexB.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT B. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
COUNTY NAME QTY CUSTOMER NAME CUST CUST# CON. # EFFEC. ANNIV. LEASE PRODUCT PRICE TOT. SALE
TYPE DATE DATE #YRS AMT, FL/GA
C&I ONLY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BREVARD, FL 1 *** 01 3725603 0473890 302 09/30/97 09/30/98 1 546.25 546.25
BREVARD, FL 1 *** 01 2124016 0172865 401 10/29/96 10/29/97 1 411.60 411.60
BREVARD, FL 1 *** 01 3477018 0323780 801 10/05/97 10/05/98 1 499.95 499.95
BREVARD, FL 1 *** 99 3081657 0216085 303 11/10/97 11/10/98 1 1006.00 1006.00
BREVARD, FL 1 *** 38 2293037 2142805 500 10/10/97 10/10/98 1 757.50 757.50
BREVARD, FL 1 *** 38 2288219 0196502 400 04/28/97 04/28/98 1 0.00 0.00
BREVARD, FL 1 *** 50 2298708 2142871 403 05/10/97 05/10/98 1 732.60 732.60
BREVARD, FL 1 *** 50 3400324 2008271 200 10/18/97 10/18/98 1 1006.00 1006.00
BREVARD, FL 1 *** 50 3147450 3027612 702 07/10/97 07/10/98 1 419.10 419.10
BREVARD, FL 1 *** 54 2950648 0205905 301 03/10/97 03/10/98 1 875.00 875.00
BREVARD, FL 1 *** 87 3613103 0220301 100 03/28/97 03/28/98 1 0.00 0.00
BREVARD, FL 1 *** 50 2320058 2142839 401 09/30/97 09/30/98 1 732.60 732.60
BREVARD, FL 1 *** 87 3090167 0284966 900 12/28/97 12/28/98 1 0.00 0.00
BREVARD, FL 1 *** 86 2916683 2014768 200 10/30/97 10/30/98 1 0.00 0.00
BREVARD, FL 1 *** 99 0038841 0237919 200 12/28/97 12/28/98 1 0.00 0.00
BREVARD, FL 1 *** 50 3495111 0341510 701 04/10/97 04/10/98 1 1090.00 1090.00
BREVARD, FL 1 *** 01 3515332 0357563 704 08/10/97 08/10/98 1 640.00 640.00
BREVARD, FL 1 *** 37 3014600 0187524 600 08/27/97 08/27/98 1 0.00 0.00
BREVARD, FL 1 *** 37 2462851 0235541 001 03/10/97 03/10/98 1 750.00 750.00
BREVARD, FL 1 *** 01 2595478 0175928 301 01/10/98 01/10/98 1 739.00 739.00
BREVARD, FL 1 *** 01 2444796 2123182 502 11/10/97 11/10/98 1 738.75 738.75
BREVARD, FL 1 *** 50 3175963 0239070 102 11/10/97 11/10/98 1 694.65 694.65
BREVARD, FL 1 *** 01 2354107 2142874 503 10/10/97 10/10/98 1 0.00 0.00
BREVARD, FL 1 *** 50 3532410 0349532 601 03/10/97 03/10/98 1 950.00 950.00
BREVARD, FL 1 *** 50 3532421 0941354 701 08/25/97 08/25/98 1 431.67 431.67
BREVARD, FL 1 *** 50 2181664 2142822 502 11/03/97 11/03/98 1 694.65 694.65
BREVARD, FL 1 *** 50 2536361 2142830 402 04/01/97 04/01/98 1 610.00 610.00
BREVARD, FL 1 *** 50 3665679 2027953 000 03/25/97 03/25/98 1 990.00 990.00
BREVARD, FL 1 *** 01 3398940 0278748 800 04/10/97 04/10/98 1 620.00 620.00
BREVARD, FL 1 *** 50 3800458 2018869 000 03/07/97 03/07/98 1 990.00 990.00
BREVARD, FL 1 *** 50 2016429 0354955 602 04/10/97 04/10/98 1 640.00 640.00
</TABLE>
Page 1
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
<TABLE>
<CAPTION>
RESexB.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT B. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
COUNTY NAME QTY CUSTOMER NAME CUST CUST# CON. # EFFEC. ANNIV. LEASE PRODUCT PRICE TOT. SALE
TYPE DATE DATE #YRS AMT, FL/GA
C&I ONLY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BREVARD, FL 1 *** 01 2296476 0323776 702 02/10/97 02/10/98 1 422.40 422.40
BREVARD, FL 1 *** 01 2296476 8123184 500 01/10/98 01/10/99 1 739.00 739.00
BREVARD, FL 1 *** 50 3170300 0239042 100 08/10/97 08/10/98 1 732.60 732.60
BREVARD, FL 1 *** 01 3733770 0504778 201 07/24/97 07/24/98 1 373.75 373.75
BREVARD, FL 8 *** 87 3308736 8237919 100 12/30/97 12/30/98 1 0.00 0.00
BROWARD, FL 1 *** 01 2337799 2160527 402 03/10/97 03/10/98 1 758.17 758.17
BROWARD, FL 1 *** 01 2989020 0175905 300 08/10/97 08/10/98 1 1285.00 1285.00
BROWARD, FL 1 *** 01 2102003 2127986 400 08/10/97 08/10/98 2 879.50 1759.00
BROWARD, FL 1 *** 01 2255727 2146237 400 05/01/97 05/01/98 1 758.17 758.17
BROWARD, FL 1 *** 01 2124016 2146254 401 05/01/97 05/01/98 1 573.10 573.10
BROWARD, FL 1 *** 01 3346037 0282455 903 10/10/97 10/10/98 1 588.06 588.06
BROWARD, FL 1 *** 38 2146351 2160504 500 02/28/98 02/28/99 1 0.00 0.00
BROWARD, FL 1 *** 38 2774941 2123322 502 04/10/97 04/10/98 1 1009.68 1009.68
BROWARD, FL 1 *** 01 3449718 2018776 000 04/10/97 04/10/98 1 1385.00 1385.00
BROWARD, FL 1 *** 01 3096152 0259150 902 05/10/97 05/10/98 2 1100.00 2200.00
BROWARD, FL 1 *** 01 3576629 0375361 609 10/10/97 10/10/98 1 648.00 648.00
BROWARD, FL 1 *** 01 3695102 0452568 401 12/10/97 12/10/98 1 1480.00 1480.00
BROWARD, FL 1 *** 51 2498113 2160466 503 01/15/98 01/15/99 1 1480.00 1480.00
BROWARD, FL 1 *** 51 3147416 0176031 100 07/10/97 07/10/98 1 1285.00 1285.00
BROWARD, FL 1 *** 01 2207342 2123328 404 05/10/97 05/10/98 2 679.50 1359.00
BROWARD, FL 1 *** 50 2931049 0206917 403 12/10/97 12/10/98 1 1480.00 1480.00
BROWARD, FL 1 *** 87 3613103 0220370 100 03/28/97 03/28/98 1 0.00 0.00
BROWARD, FL 1 *** 87 3090167 0258778 104 08/07/97 08/07/98 1 0.00 0.00
BROWARD, FL 1 *** 99 0038841 0271265 100 07/18/97 07/18/98 1 0.00 0.00
BROWARD, FL 1 *** 01 2013240 2189608 402 04/10/97 04/10/98 1 0.00 0.00
BROWARD, FL 1 *** 01 2013240 2189608 403 10/07/97 10/07/98 1 1285.00 1285.00
BROWARD, FL 1 *** 37 3014600 2160393 500 10/30/97 10/30/98 1 0.00 0.00
BROWARD, FL 1 *** 37 3673115 0445336 402 07/01/97 07/01/98 1 887.50 887.50
BROWARD, FL 1 *** 53 2308416 2151544 402 05/10/97 05/10/98 1 898.75 898.75
BROWARD, FL 1 *** 01 3756964 2007363 202 08/01/97 08/01/98 1 767.50 767.50
BROWARD, FL 1 *** 01 2210201 2123299 401 04/15/97 04/15/98 1 1132.50 1132.50
BROWARD, FL 1 *** 01 3556151 0351443 604 06/10/97 06/10/98 1 1285.00 1285.00
BROWARD, FL 1 *** 01 3026283 0183708 203 02/28/97 02/28/98 1 1285.00 1285.00
</TABLE>
Page 2
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
<TABLE>
<CAPTION>
RESexB.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT B. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
COUNTY NAME QTY CUSTOMER NAME CUST CUST# CON. # EFFEC. ANNIV. LEASE PRODUCT PRICE TOT. SALE
TYPE DATE DATE #YRS AMT, FL/GA
C&I ONLY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BROWARD, FL 1 *** 50 3757116 2018722 101 05/20/98 05/20/99 1 1285.00 1285.00
BROWARD, FL 1 *** 01 2131795 2189613 401 05/10/97 05/10/98 1 1285.00 1285.00
BROWARD, FL 1 *** 08 3008157 0183064 302 03/10/97 03/10/98 1 1141.50 1141.50
BROWARD, FL 1 *** 01 2514587 2123343 403 05/10/97 05/10/98 1 1285.00 1285.00
BROWARD, FL 1 *** 01 2973685 0213588 300 06/10/97 06/10/98 1 1285.00 1285.00
BROWARD, FL 1 *** 50 2003540 0338023 701 05/01/97 05/01/98 1 1148.75 1148.75
BROWARD, FL 1 *** 50 2003540 2156536 401 05/01/97 05/01/98 1 765.83 765.83
BROWARD, FL 1 *** 50 3625211 0408430 501 05/03/97 05/03/98 1 1285.00 1285.00
BROWARD, FL 1 *** 50 2147219 0205546 203 02/10/97 02/10/98 1 285.00 285.00
BROWARD, FL 1 *** 01 2220136 2151556 503 02/27/97 02/27/98 1 900.00 900.00
BROWARD, FL 1 *** 01 2780120 0450911 402 06/01/97 06/01/98 1 1285.00 1285.00
BROWARD, FL 1 *** 50 3385735 2160655 401 03/10/97 03/10/98 1 1285.00 1285.00
BROWARD, FL 1 *** 51 3805068 2017710 001 06/30/97 06/30/98 1 1285.00 1285.00
BROWARD, FL 1 *** 01 2773526 2123372 401 07/10/97 07/10/98 1 1285.00 1285.00
BROWARD, FL 1 *** 01 2170480 2123363 401 05/10/97 05/10/98 1 859.51 859.51
BROWARD, FL 1 *** 53 2382078 2189625 403 06/10/97 06/10/98 1 0.00 0.00
BROWARD, FL 1 *** 01 2264402 0187464 402 06/10/97 06/10/98 1 744.00 744.00
BROWARD, FL 1 *** 01 2014881 2156510 401 04/15/97 04/15/98 1 131.84 131.84
BROWARD, FL 1 *** 50 2162537 2002360 200 04/10/97 04/10/98 1 1285.00 1285.00
BROWARD, FL 1 *** 61 2309844 2179108 001 11/29/97 11/29/98 1 1480.00 1480.00
BROWARD, FL 1 *** 54 2167938 2179033 403 02/10/97 02/10/98 1 0.00 0.00
BROWARD, FL 1 *** 01 3752427 2007221 300 09/10/97 09/10/98 1 0.00 0.00
BROWARD, FL 1 *** 01 2795395 0482454 301 08/10/97 08/10/98 1 303.27 303.27
BROWARD, FL 1 *** 01 2922773 0186783 402 11/15/97 11/15/98 1 999.05 999.05
BROWARD, FL 1 *** 01 3662753 0427015 402 07/01/97 07/01/98 1 919.00 919.00
BROWARD, FL 1 *** 01 2589510 0304366 805 08/15/97 08/15/98 1 1285.00 1285.00
BROWARD, FL 8 *** 87 3308736 8271266 100 12/30/97 12/30/98 1 0.00 0.00
BROWARD, FL 1 *** 87 3098778 0232104 200 01/10/98 01/10/99 1 0.00 0.00
CHEROKEE, GA 1 *** 50 2925677 0351712 601 09/30/97 09/30/98 1 232.65 232.65
CHEROKEE, GA 1 *** 53 3214266 3161878 304 06/15/96 12/15/97 1 171.00 171.00
CHEROKEE, GA 1 *** 50 3542075 0453849 301 03/15/97 03/15/98 1 202.50 202.50
CHEROKEE, GA 1 *** 50 3418200 3161740 402 08/18/97 08/18/98 1 163.20 163.20
CHEROKEE, GA 1 *** 53 3571383 0453856 212 07/28/96 07/28/97 1 133.00 133.00
</TABLE>
Page 3
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
<TABLE>
<CAPTION>
RESexB.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT B. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
COUNTY NAME QTY CUSTOMER NAME CUST CUST# CON. # EFFEC. ANNIV. LEASE PRODUCT PRICE TOT. SALE
TYPE DATE DATE #YRS AMT, FL/GA
C&I ONLY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CHEROKEE, GA 1 *** 01 3271724 0247892 919 02/25/97 02/25/98 1 85.50 85.50
CHEROKEE, GA 1 *** 87 3090167 0271313 100 12/28/97 12/28/98 1 0.00 0.00
CHEROKEE, GA 1 *** 99 3091641 0242872 100 12/28/97 12/28/98 1 0.00 0.00
CHEROKEE, GA 1 *** 01 3345302 0354890 702 02/10/98 02/10/99 1 187.85 187.85
CHEROKEE, GA 1 *** 37 3758218 2001659 205 08/21/97 08/21/98 1 91.80 91.80
CHEROKEE, GA 1 *** 01 3606067 0394443 500 04/10/97 04/10/98 1 405.00 405.00
CHEROKEE, GA 1 *** 50 3224573 0345482 726 01/16/98 01/16/99 1 465.00 465.00
CHEROKEE, GA 1 *** 01 3688960 2008478 200 10/26/97 10/26/98 1 311.85 311.85
CHEROKEE, GA 1 *** 50 3463866 0374898 616 12/31/97 12/31/98 1 250.00 250.00
CHEROKEE, GA 1 *** 50 3026551 2018656 000 10/23/97 10/23/98 1 209.37 209.37
CHEROKEE, GA 1 *** 50 3811786 2021209 002 09/18/97 09/18/98 1 243.75 243.75
CHEROKEE, GA 1 *** 01 3707720 8355277 637 04/10/97 04/10/98 1 176.17 176.17
CHEROKEE, GA 1 *** 01 3564183 8353721 601 06/17/97 06/17/98 1 127.71 127.71
CHEROKEE, GA 1 *** 53 3219861 0248564 921 01/01/97 01/01/98 1 0.00 0.00
CHEROKEE, GA 1 *** 53 3219861 0248564 921 01/01/97 01/01/98 1 195.75 195.75
CHEROKEE, GA 1 *** 50 3012086 0228496 101 06/14/97 06/14/98 1 405.00 405.00
CHEROKEE, GA 1 *** 50 3012075 0314749 795 08/01/97 08/01/98 1 217.50 217.50
CHEROKEE, GA 1 *** 50 3012075 0341749 913 08/01/97 08/01/98 1 143.55 143.55
CHEROKEE, GA 1 *** 50 3012075 0341749 928 08/01/97 08/01/98 1 405.00 405.00
CHEROKEE, GA 1 *** 50 3012075 0341749 953 08/01/97 08/01/98 1 232.65 232.65
CHEROKEE, GA 1 *** 01 3331688 3161588 332 02/01/97 02/01/98 1 405.00 405.00
CHEROKEE, GA 1 *** 01 3731493 0462489 302 11/22/97 11/22/98 1 440.00 440.00
CHEROKEE, GA 1 *** 01 3778944 2022340 100 04/05/97 04/05/98 1 237.50 237.50
CHEROKEE, GA 1 *** 01 3513240 3161658 438 11/12/97 11/12/98 1 182.32 182.32
CHEROKEE, GA 1 *** 99 3751745 9414194 300 09/12/97 09/12/98 1 405.00 405.00
CHEROKEE, GA 1 *** 01 3103692 2038893 100 06/26/97 06/26/98 1 175.00 175.00
CHEROKEE, GA 1 *** 50 3419058 0196126 400 01/29/98 01/29/99 1 166.00 166.00
CHEROKEE, GA 1 *** 01 3804517 2017754 000 05/12/97 05/12/98 1 237.50 237.50
CHEROKEE, GA 1 *** 87 3308736 8242872 100 12/30/97 12/30/98 1 0.00 0.00
CITY ATLANTA, GA 1 *** 87 3008778 0232104 201 01/10/98 01/10/99 1 0.00 0.00
CITY ATLANTA, GA 1 *** 53 3214266 3146302 250 11/08/97 11/08/98 1 580.00 580.00
CITY ATLANTA, GA 1 *** 39 3802962 3130263 503 07/10/97 07/10/98 1 360.00 360.00
CITY ATLANTA, GA 1 *** 33 2925769 0345525 700 02/15/98 02/15/99 1 580.00 580.00
</TABLE>
Page 4
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
<TABLE>
<CAPTION>
RESexB.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT B. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
COUNTY NAME QTY CUSTOMER NAME CUST CUST# CON. # EFFEC. ANNIV. LEASE PRODUCT PRICE TOT. SALE
TYPE DATE DATE #YRS AMT, FL/GA
C&I ONLY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CITY ATLANTA, GA 1 *** 87 3090167 8244453 000 06/26/97 06/26/98 1 0.00 0.00
CITY ATLANTA, GA 1 *** 99 0038841 0242871 100 12/28/97 12/28/98 1 0.00 0.00
CITY ATLANTA, GA 1 *** 50 3124505 3151856 500 11/30/97 11/30/98 1 0.00 0.00
CITY ATLANTA, GA 1 *** 53 3219861 0248564 020 01/01/97 01/01/98 1 0.00 0.00
CITY ATLANTA, GA 1 *** 53 3219861 0248564 020 01/01/97 01/01/98 1 324.00 324.00
CITY ATLANTA, GA 1 *** 50 3012075 0341749 800 08/01/97 08/01/98 1 505.00 505.00
CITY ATLANTA, GA 1 *** 20 3619689 0424326 401 03/15/97 03/15/98 1 275.00 275.00
CITY ATLANTA, GA 4 *** 38 3313101 3151857 500 01/28/98 01/28/99 1 0.00 0.00
CITY ATLANTA, GA 5 *** 87 3308736 8242871 100 12/30/97 12/30/98 1 0.00 0.00
CLAYTON, GA 1 *** 87 3098778 0232104 202 01/10/98 01/10/99 1 0.00 0.00
CLAYTON, GA 1 *** 53 3214266 3146302 410 06/15/97 06/15/98 1 169.13 169.13
CLAYTON, GA 1 *** 50 3542075 0351789 616 03/15/97 03/15/98 1 202.50 202.50
CLAYTON, GA 1 *** 38 3257111 0187507 300 08/27/97 08/27/98 1 0.00 0.00
CLAYTON, GA 1 *** 38 3552728 3151863 500 01/28/98 01/28/99 1 0.00 0.00
CLAYTON, GA 1 *** 38 3255894 0260383 000 07/28/97 07/28/98 1 0.00 0.00
CLAYTON, GA 1 *** 01 3271724 0310394 702 02/25/97 02/25/98 1 78.19 78.19
CLAYTON, GA 1 *** 50 3268438 3146403 427 07/10/97 07/10/98 1 224.25 224.25
CLAYTON, GA 1 *** 54 3803769 2028078 001 04/25/97 04/25/98 1 217.82 217.82
CLAYTON, GA 1 *** 87 3090167 0320887 800 12/28/97 12/28/98 1 0.00 0.00
CLAYTON, GA 1 *** 85 3609938 0454616 301 07/05/97 07/05/98 1 0.00 0.00
CLAYTON, GA 1 *** 99 0038841 0242869 100 12/28/97 12/28/98 1 0.00 0.00
CLAYTON, GA 1 *** 50 3259865 2028115 000 06/16/97 06/16/98 1 165.59 165.59
CLAYTON, GA 1 *** 37 3758218 2001659 202 08/21/97 08/21/98 1 91.80 91.80
CLAYTON, GA 1 *** 52 3679843 0426737 410 08/26/97 08/26/98 1 285.45 285.45
CLAYTON, GA 1 *** 50 3123746 0229033 100 09/19/97 09/19/98 1 169.12 169.12
CLAYTON, GA 1 *** 01 3331677 3146390 409 06/15/97 06/15/98 1 405.00 405.00
CLAYTON, GA 1 *** 50 3463866 0374898 614 12/31/97 12/31/98 1 295.00 295.00
CLAYTON, GA 1 *** 01 3707720 8355277 632 04/10/97 04/10/98 1 212.77 212.77
CLAYTON, GA 1 *** 01 2970864 0348990 607 04/30/97 04/30/98 1 185.55 185.55
CLAYTON, GA 1 *** 53 3219861 0248564 019 01/01/97 01/01/98 1 0.00 0.00
CLAYTON, GA 1 *** 53 3219861 0248564 019 01/01/97 01/01/98 1 230.62 230.62
CLAYTON, GA 1 *** 50 3488261 0341605 701 03/10/97 03/10/98 1 149.55 149.55
CLAYTON, GA 1 *** 50 3012075 0341749 952 08/01/97 08/01/98 1 285.45 285.45
</TABLE>
Page 5
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<PAGE>
RESexB.XLS, EXPERIAN CONFIDENTIAL
Southeast C&I Report
EXHIBIT B. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
<TABLE>
<CAPTION>
COUNTY NAME QTY CUSTOMER NAME CUST# CUST CON # EFFEC. ANNIV. LEASE PRODUCT TOT.SALE
TYPE DATE DATE # YRS PRICE AMT, FL/GA
C&I ONLY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLAYTON, GA 1 *** 01 3331688 3161588 335 02/01/97 02/01/98 1 405.00 405.00
CLAYTON, GA 1 *** 01 3513240 3161658 437 11/12/97 11/12/98 1 194.70 194.70
CLAYTON, GA 1 *** 50 3396814 0341772 802 09/12/97 09/12/98 1 256.25 256.25
CLAYTON, GA 1 *** 01 3019988 0181514 155 05/10/97 05/10/98 1 405.00 405.00
CLAYTON, GA 1 *** 01 3600049 0383560 515 03/01/97 03/01/98 1 405.00 405.00
CLAYTON, GA 1 *** 01 3697683 0503835 301 03/01/97 03/01/98 1 405.00 405.00
CLAYTON, GA 5 *** 87 3308736 8242869 100 12/30/97 12/30/98 1 0.00 0.00
COBB, GA 1 *** 87 3098778 0232104 203 01/10/98 01/10/99 1 0.00 0.00
COBB, GA 1 *** 53 3214266 3146302 407 06/15/97 06/15/98 1 169.13 169.13
COBB, GA 1 *** 01 3480869 0438768 506 12/16/97 12/16/98 1 465.00 465.00
COBB, GA 1 *** 50 3542075 0351789 615 03/15/97 03/15/98 1 202.50 202.50
COBB, GA 1 *** 50 3418200 3161740 403 08/18/97 08/18/98 1 189.55 189.55
COBB, GA 1 *** 51 3611513 0394437 502 06/01/97 06/01/98 1 169.13 169.13
COBB, GA 1 *** 50 3583403 0375456 603 12/10/97 12/10/98 1 465.00 465.00
COBB, GA 1 *** 38 3418211 0498050 300 05/23/97 05/23/98 1 0.00 0.00
COBB, GA 1 *** 01 3519758 0341694 625 07/10/97 07/10/98 1 218.76 218.76
COBB, GA 1 *** 53 3571383 0453856 209 07/28/96 07/28/97 1 156.62 156.62
COBB, GA 1 *** 01 3271724 0247892 917 02/25/97 02/25/98 1 102.94 102.94
COBB, GA 1 *** 50 3268438 3146403 423 07/10/97 07/10/98 1 132.90 132.90
COBB, GA 1 *** 51 3722044 0462403 300 08/17/97 08/17/98 1 256.25 256.25
COBB, GA 1 *** 87 3090167 0320889 800 12/28/97 12/28/98 1 0.00 0.00
COBB, GA 1 *** 85 3609938 0454616 302 07/06/97 07/06/98 1 0.00 0.00
COBB, GA 1 *** 01 3565748 0379272 500 07/01/97 07/01/98 1 405.00 405.00
COBB, GA 1 *** 01 3345302 2066907 000 05/17/97 05/17/98 1 405.00 405.00
COBB, GA 1 *** 37 3758218 2001659 302 08/21/97 08/21/98 1 89.10 89.10
COBB, GA 1 *** 50 2938435 0204210 402 02/27/98 02/27/99 1 253.00 253.00
COBB, GA 1 *** 50 3593420 9418835 200 05/19/97 05/19/98 1 405.00 405.00
COBB, GA 1 *** 01 3021277 0213199 202 12/31/97 12/31/98 1 465.00 465.00
COBB, GA 1 *** 54 3009763 0213146 205 08/15/97 08/15/98 1 256.25 256.25
COBB, GA 1 *** 50 3224573 0345482 715 08/15/97 08/15/98 1 285.45 285.45
COBB, GA 1 *** 01 3331677 3146390 408 06/16/97 06/16/98 1 405.00 405.00
COBB, GA 1 *** 50 3348990 3161699 328 08/31/97 08/31/98 1 285.45 285.45
COBB, GA 1 *** 50 3463866 0374898 615 12/31/97 12/31/98 1 295.00 295.00
Date as of 11/07/97 Page 6 11/20/97
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
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<PAGE>
RESexB.XLS, EXPERIAN CONFIDENTIAL
<TABLE>
<CAPTION>
Southeast C&I Report
EXHIBIT B. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
TOT. SALE
CUST CUST# CON.# EFFEC. ANNIV. LEASE PRODUCT AMT. FL/GA
COUNTY NAME QTY CUSTOMER NAME TYPE DATE DATE #YRS PRICE C&I ONLY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
COBB, GA 1 *** 50 3026551 0341738 712 05/28/97 05/28/98 1 239.23 239.23
COBB, GA 1 *** 50 3052192 0206739 209 08/10/97 08/10/98 1 256.25 256.25
COBB, GA 1 *** 01 3707720 8355277 633 04/10/97 04/10/98 1 212.77 212.77
COBB, GA 1 *** 50 3500565 3161626 300 04/10/97 04/10/98 1 189.55 189.55
COBB, GA 1 *** 32 3279685 8250635 002 09/10/97 09/10/98 1 405.00 405.00
COBB, GA 1 *** 01 3564183 0353716 601 06/17/97 06/17/98 1 170.33 170.33
COBB, GA 1 *** 01 2970864 0348990 608 04/30/97 04/30/98 1 185.55 185.55
COBB, GA 1 *** 53 3219861 0248564 018 01/01/97 01/01/98 1 0.00 0.00
COBB, GA 1 *** 53 3219861 0248564 018 01/01/97 01/01/98 1 230.62 230.62
COBB, GA 1 *** 50 3318117 0330923 713 10/20/97 10/20/98 1 237.50 237.50
COBB, GA 1 *** 50 3318117 0330923 714 06/10/97 06/10/98 1 0.00 0.00
COBB, GA 1 *** 50 3012086 3146369 407 06/14/97 06/14/98 1 405.00 405.00
COBB, GA 1 *** 50 3475593 2022446 100 04/03/97 04/03/98 1 403.75 403.75
COBB, GA 1 *** 50 3012075 0341749 863 08/01/97 08/01/98 1 169.13 169.13
COBB, GA 1 *** 50 3012075 0341749 895 08/01/97 08/01/98 1 142.73 142.73
COBB, GA 1 *** 50 3012075 0341749 939 08/01/97 08/01/98 1 169.12 169.12
COBB, GA 1 *** 50 3012075 0341749 949 08/01/97 08/01/98 1 285.44 285.44
COBB, GA 1 *** 01 3517363 0345474 706 10/01/97 10/01/98 1 133.93 133.93
COBB, GA 1 *** 01 3331688 3161588 336 02/01/97 02/01/98 1 405.00 405.00
COBB, GA 1 *** 01 3052170 8353776 602 04/10/97 04/10/98 1 189.55 189.55
COBB, GA 1 *** 50 3144237 0453886 301 07/28/97 07/28/98 1 256.25 256.25
COBB, GA 1 *** 19 3632576 0386193 402 10/06/96 10/06/97 1 0.00 0.00
COBB, GA 1 *** 01 3513240 3161658 441 11/12/97 11/12/98 1 212.02 212.02
COBB, GA 1 *** 01 3212978 3146307 327 09/10/96 09/10/97 1 205.00 205.00
COBB, GA 1 *** 50 3396814 0345472 702 09/12/97 09/12/98 1 256.25 256.25
COBB, GA 1 *** 54 3646436 0433775 505 02/10/98 02/10/99 1 328.35 328.35
COBB, GA 1 *** 01 3103692 0227047 201 12/23/96 12/23/97 1 256.90 256.90
COBB, GA 1 *** 12 3812985 2027006 000 10/08/97 10/08/98 1 273.11 273.11
COBB, GA 1 *** 01 3600049 0383560 516 03/10/97 03/10/98 1 405.00 405.00
COBB, GA 2 *** 99 3091611 0242870 100 12/28/97 12/28/98 1 0.00 0.00
COBB, GA 6 *** 87 3308736 0242870 100 12/28/97 12/28/98 1 0.00 0.00
COBB, GA 12 *** 38 3550988 0238044 001 05/15/97 05/15/98 1 0.00 0.00
COWETA, GA 1 *** 53 3214266 0438734 300 06/15/97 06/15/98 1 380.00 380.00
Data as of 11/07/97 Page 7 11/20/97
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexB.XLS, EXPERIAN CONFIDENTIAL
<TABLE>
<CAPTION>
Southeast C&I Report
EXHIBIT B. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
TOT. SALE
CUST CUST# CON.# EFFEC. ANNIV. LEASE PRODUCT AMT. FL/GA
COUNTY NAME QTY CUSTOMER NAME TYPE DATE DATE #YRS PRICE C&I ONLY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
COWETA, GA 1 *** 87 3090167 0439830 400 08/30/97 08/30/98 1 0.00 0.00
COWETA, GA 1 *** 85 3609938 0439782 200 10/24/97 10/24/98 1 0.00 0.00
COWETA, GA 1 *** 99 0038841 0031247 216 01/30/98 01/30/99 1 0.00 0.00
COWETA, GA 1 *** 99 3091641 0454176 300 10/17/97 10/17/98 1 0.00 0.00
COWETA, GA 1 *** 53 3219861 0248564 021 01/01/97 01/01/98 1 0.00 0.00
COWETA, GA 1 *** 53 3219861 0248564 021 01/01/97 01/01/98 1 342.00 342.00
COWETA, GA 1 *** 11 3552919 0378967 301 10/17/97 10/17/98 1 440.00 440.00
COWETA, GA 1 *** 01 3019988 0181514 130 08/15/97 08/15/98 1 380.00 380.00
DADE, FL 1 *** 01 2989020 2008307 201 10/11/97 10/11/98 1 1325.00 1325.00
DADE, FL 1 *** 01 2012003 2167502 401 03/10/97 03/10/98 2 1155.00 1155.00
DADE, FL 1 *** 01 2255727 2146236 501 05/01/97 05/01/98 1 818.32 818.32
DADE, FL 1 *** 01 2124016 2134363 501 11/09/97 11/09/98 1 545.00 545.00
DADE, FL 1 *** 01 3346037 0282441 903 06/13/97 06/13/98 1 609.18 609.18
DADE, FL 1 *** 51 2945950 8123259 503 10/01/97 10/01/98 1 2142.50 2142.50
DADE, FL 1 *** 01 3096152 0228743 201 06/10/97 06/10/98 1 1325.00 1325.00
DADE, FL 1 *** 50 3079593 0216778 301 10/28/97 10/28/98 1 1525.00 1525.00
DADE, FL 1 *** 01 3576629 0375363 609 10/10/97 10/10/98 1 528.75 528.75
DADE, FL 1 *** 51 2498113 2134390 602 01/19/98 01/19/98 1 1525.00 1525.00
DADE, FL 1 *** 51 3147416 2030659 000 03/25/97 03/25/98 1 1498.00 1498.00
DADE, FL 1 *** 87 3613103 0220302 100 03/03/97 03/03/98 1 0.00 0.00
DADE, FL 1 *** 50 2276818 0205528 301 10/01/97 10/01/98 1 1155.00 1155.00
DADE, FL 1 *** 87 3090167 0284975 000 12/05/97 12/05/98 1 0.00 0.00
DADE, FL 1 *** 99 0038841 0300076 100 12/05/97 12/05/98 1 0.00 0.00
DADE, FL 1 *** 50 2572154 2156596 500 05/24/97 05/24/98 1 1325.00 1325.00
DADE, FL 1 *** 37 3014600 0196520 400 05/07/97 05/07/98 1 0.00 0.00
DADE, FL 1 *** 37 2730251 0205515 301 07/16/97 07/16/98 1 615.33 615.33
DADE, FL 1 *** 01 2336231 2143053 402 10/27/96 10/27/97 1 0.00 0.00
DADE, FL 1 *** 01 3756964 2007365 202 08/01/97 08/01/98 1 711.67 711.67
DADE, FL 1 *** 01 3539792 0369333 601 05/01/97 05/01/98 1 1325.00 1325.00
DADE, FL 1 *** 01 3026283 2028288 100 07/16/97 07/16/98 1 1325.00 1325.00
DADE, FL 1 *** 50 3757116 2008315 302 10/10/98 10/10/99 1 1325.00 1325.00
DADE, FL 1 *** 01 3711280 0460278 301 05/16/97 05/16/98 1 1325.00 1325.00
DADE, FL 1 *** 50 2003540 2156801 501 11/10/97 11/10/98 1 0.00 0.00
Data as of 11/07/97 Page 8 11/20/97
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexB.XLS, EXPERIAN CONFIDENTIAL
<TABLE>
<CAPTION>
Southeast C&I Report
EXHIBIT B. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
TOT. SALE
CUST CUST# CON.# EFFEC. ANNIV. LEASE PRODUCT AMT. FL/GA
COUNTY NAME QTY CUSTOMER NAME TYPE DATE DATE #YRS PRICE C&I ONLY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DADE, FL 1 *** 50 2719630 2028293 000 08/06/96 08/06/97 1 825.00 825.00
DADE, FL 1 *** 50 2147219 2143046 500 02/10/98 02/10/98 1 1525.00 1525.00
DADE, FL 1 *** 53 2290131 2127965 500 11/14/97 11/14/98 1 434.62 434.62
DADE, FL 1 *** 01 2585651 2143467 600 06/10/97 06/10/98 1 1325.00 1325.00
DADE, FL 1 *** 01 2780120 2146675 601 03/14/97 03/14/98 1 1325.00 1325.00
DADE, FL 1 *** 50 2111717 2134314 501 09/28/97 09/28/98 1 883.75 883.75
DADE, FL 1 *** 01 2773526 0262602 001 03/10/97 03/10/98 1 1325.00 1325.00
DADE, FL 1 *** 53 2249685 2156598 503 11/01/97 11/01/98 1 1139.40 1139.40
DADE, FL 1 *** 01 3155204 2018891 000 04/01/97 04/01/98 1 797.67 797.67
DADE, FL 1 *** 01 2014881 8251261 902 12/10/96 12/10/97 1 592.25 592.25
DADE, FL 1 *** 01 3291852 2146300 504 12/01/97 12/01/98 1 1392.98 1392.98
DADE, FL 1 *** 61 2309844 2179109 600 11/29/97 11/29/98 1 0.00 0.00
DADE, FL 1 *** 10 2243616 2134343 501 12/10/97 12/10/98 1 1024.35 1024.35
DADE, FL 1 *** 01 3752427 2022838 100 06/10/97 06/10/98 1 0.00 0.00
DADE, FL 1 *** 01 3198757 0235782 102 01/28/97 01/28/98 1 1047.38 1047.38
DADE, FL 1 *** 01 2589510 2146608 402 08/15/97 08/15/98 1 324.06 324.06
DADE, FL 2 *** 38 2363684 0207107 700 09/30/97 09/30/98 1 0.00 0.00
DADE, FL 8 *** 87 3308736 8271267 000 12/30/97 12/30/98 1 0.00 0.00
DEKALB, GA 1 *** 87 3098778 0232104 204 01/10/98 01/10/99 1 0.00 0.00
DEKALB, GA 1 *** 53 3214266 3146302 408 06/15/97 06/15/98 1 169.13 169.13
DEKALB, GA 1 *** 01 3480869 0438768 507 12/16/97 12/16/98 1 465.00 465.00
DEKALB, GA 1 *** 50 3542075 0351789 617 03/15/97 03/15/98 1 202.50 202.50
DEKALB, GA 1 *** 01 3519758 0341694 623 07/10/97 07/10/98 1 218.76 218.76
DEKALB, GA 1 *** 53 3571383 0453856 210 07/28/96 07/28/97 1 156.62 156.62
DEKALB, GA 1 *** 01 3271724 0247892 918 02/27/97 02/27/98 1 102.94 102.94
DEKALB, GA 1 *** 50 3268438 3146403 422 07/10/97 07/10/98 1 132.90 132.90
DEKALB, GA 1 *** 38 3291115 3161572 401 06/25/97 06/25/98 1 475.00 475.00
DEKALB, GA 1 *** 68 3219849 3146407 403 06/25/97 06/25/98 1 189.55 189.55
DEKALB, GA 1 *** 54 3803769 2028078 002 04/25/97 04/25/98 1 217.81 217.81
DEKALB, GA 1 *** 87 3090167 0320890 800 12/28/97 12/28/98 1 0.00 0.00
DEKALB, GA 1 *** 85 3609938 0454616 304 07/06/97 07/05/98 1 0.00 0.00
DEKALB, GA 1 *** 99 0038841 0242862 100 12/28/97 12/28/98 1 0.00 0.00
DEKALB, GA 1 *** 85 3796357 2018740 101 12/20/97 12/20/98 1 0.00 0.00
Data as of 11/07/97 Page 9 11/20/97
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexB.XLS, EXPERIAN CONFIDENTIAL
<TABLE>
<CAPTION>
Southeast C&I Report
EXHIBIT B. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
TOT. SALE
CUST CUST# CON.# EFFEC. ANNIV. LEASE PRODUCT AMT. FL/GA
COUNTY NAME QTY CUSTOMER NAME TYPE DATE DATE #YRS PRICE C&I ONLY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DEKALB, GA 1 *** 01 3565748 0379272 511 07/01/97 07/01/98 1 405.00 405.00
DEKALB, GA 1 *** 37 3758218 2001559 201 08/21/97 08/21/98 1 95.20 95.20
DEKALB, GA 1 *** 01 3331677 3146390 407 06/15/97 06/15/98 1 405.00 405.00
DEKALB, GA 1 *** 50 3348990 3161699 326 08/31/97 08/31/98 1 285.45 285.45
DEKALB, GA 1 *** 50 3463866 0374898 617 12/31/97 12/31/98 1 295.00 295.00
DEKALB, GA 1 *** 50 3026551 0341738 615 05/28/97 05/28/98 1 235.22 235.22
DEKALB, GA 1 *** 01 3707720 8355277 634 04/10/97 04/10/98 1 212.77 212.77
DEKALB, GA 1 *** 01 2970864 0348990 609 04/30/97 04/30/98 1 185.55 185.55
DEKALB, GA 1 *** 53 3219861 0248564 015 01/01/97 01/01/98 1 0.00 0.00
DEKALB, GA 1 *** 53 3219861 0248564 015 01/01/97 01/01/98 1 230.62 230.62
DEKALB, GA 1 *** 50 3318117 0330923 705 06/10/97 06/10/98 1 0.00 0.00
DEKALB, GA 1 *** 50 3012086 3146369 406 06/14/97 06/14/98 1 405.00 405.00
DEKALB, GA 1 *** 50 3475593 2022446 101 04/03/97 04/03/98 1 403.75 403.75
DEKALB, GA 1 *** 53 3266735 0351843 610 04/10/97 04/10/98 1 154.28 154.28
DEKALB, GA 1 *** 50 3012075 0341749 950 08/01/97 08/01/98 1 285.45 285.45
DEKALB, GA 1 *** 01 3517363 0345474 711 10/01/97 10/01/98 1 133.97 133.97
DEKALB, GA 1 *** 01 3331688 3161588 337 02/01/97 02/01/98 1 405.00 405.00
DEKALB, GA 1 *** 50 3144237 0358131 604 06/14/97 06/14/98 1 256.25 256.25
DEKALB, GA 1 *** 01 3513240 3161658 440 11/12/97 11/12/98 1 194.70 194.70
DEKALB, GA 1 *** 01 3212978 2008543 101 09/10/96 09/10/97 1 205.00 205.00
DEKALB, GA 1 *** 50 3396814 0291044 800 09/12/97 09/12/98 1 256.25 256.25
DEKALB, GA 1 *** 01 3019988 0181514 156 05/10/97 05/10/98 1 405.00 405.00
DEKALB, GA 1 *** 54 3646436 2008530 200 07/27/97 07/27/98 1 405.00 405.00
DEKALB, GA 5 *** 87 3308736 8242962 100 12/30/97 12/30/98 1 0.00 0.00
DOUGLAS, GA 1 *** 87 3098778 0232104 205 01/10/98 01/10/99 1 0.00 0.00
DOUGLAS, GA 1 *** 53 3214266 3161878 405 06/15/97 06/15/98 1 132.83 132.83
DOUGLAS, GA 1 *** 51 3611513 0394437 503 06/01/97 06/01/98 1 132.83 132.83
DOUGLAS, GA 1 *** 53 3571383 0453956 213 07/28/96 07/28/97 1 122.50 122.50
DOUGLAS, GA 1 *** 01 3271724 0247892 920 02/27/97 02/27/98 1 78.19 78.19
DOUGLAS, GA 1 *** 50 3268438 3146403 425 07/10/97 07/10/98 1 103.95 103.95
DOUGLAS, GA 1 *** 38 3425875 8172794 400 06/10/97 06/10/98 1 0.00 0.00
DOUGLAS, GA 1 *** 87 3090167 0320891 800 12/28/97 12/28/98 1 0.00 0.00
DOUGLAS, GA 1 *** 85 3609938 3161712 400 04/28/97 04/28/98 1 0.00 0.00
Data as of 11/07/97 Page 10 11/20/97
</TABLE>
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<PAGE>
RESexB.XLS, EXPERIAN CONFIDENTIAL
<TABLE>
<CAPTION>
Southeast C&I Report
EXHIBIT B. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
TOT. SALE
CUST CUST# CON.# EFFEC. ANNIV. LEASE PRODUCT AMT. FL/GA
COUNTY NAME QTY CUSTOMER NAME TYPE DATE DATE #YRS PRICE C&I ONLY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DOUGLAS, GA 1 *** 99 0038841 0242868 100 12/28/97 12/28/98 1 0.00 0.00
DOUGLAS, GA 1 *** 37 3758218 2001659 206 08/21/97 08/21/98 1 91.80 91.80
DOUGLAS, GA 1 *** 54 3009763 0213146 206 08/15/97 08/15/98 1 201.25 201.25
DOUGLAS, GA 1 *** 50 3026551 0341738 714 05/28/97 05/28/98 1 211.20 211.20
DOUGLAS, GA 1 *** 01 3707720 8355277 640 04/10/97 04/10/98 1 163.01 163.01
DOUGLAS, GA 1 *** 01 3564183 0353722 601 06/17/97 06/17/98 1 136.94 136.94
DOUGLAS, GA 1 *** 53 3219861 0248564 922 01/01/97 01/01/98 1 0.00 0.00
DOUGLAS, GA 1 *** 53 3219861 0248564 922 01/01/97 01/01/98 1 181.12 181.12
DOUGLAS, GA 1 *** 50 3012075 0341749 955 08/01/97 08/01/98 1 211.20 211.20
DOUGLAS, GA 1 *** 01 3331688 0302429 702 02/01/97 02/01/98 1 380.00 380.00
DOUGLAS, GA 1 *** 99 3761465 2008428 200 09/13/97 09/13/98 1 201.25 201.25
DOUGLAS, GA 1 *** 12 3812985 2027006 001 10/08/97 10/08/98 1 273.11 273.11
DOUGLAS, GA 8 *** 87 3308736 8242868 100 12/30/97 12/30/98 1 0.00 0.00
DUVAL, FL 1 *** 01 3544886 0367089 600 03/22/97 03/22/98 1 965.00 965.00
DUVAL, FL 1 *** 50 3685118 0480442 402 09/30/97 09/30/98 1 965.00 965.00
DUVAL, FL 1 *** 99 2248864 0130038 400 06/07/97 06/07/98 1 387.75 387.75
DUVAL, FL 1 *** 87 3613103 0220266 100 04/15/97 04/15/98 1 0.00 0.00
DUVAL, FL 1 *** 87 3090167 0268778 301 08/07/97 08/07/98 1 0.00 0.00
DUVAL, FL 1 *** 99 3091641 8271268 100 12/05/97 12/05/98 1 0.00 0.00
DUVAL, FL 1 *** 37 3014600 3276128 100 08/14/97 08/14/98 1 0.00 0.00
DUVAL, FL 1 *** 44 3221880 2017777 000 08/12/97 08/12/98 1 965.00 965.00
DUVAL, FL 1 *** 01 3054154 0182799 200 06/10/97 06/10/98 1 387.75 387.75
DUVAL, FL 1 *** 39 3360796 0277782 900 10/30/97 10/30/98 1 0.00 0.00
DUVAL, FL 1 *** 53 2566722 0130020 401 07/10/97 07/10/98 1 398.75 398.75
DUVAL, FL 1 *** 01 2002419 0358229 601 09/30/97 09/30/98 1 621.50 621.50
DUVAL, FL 1 *** 01 3658057 0439723 500 02/25/98 02/25/99 1 1110.00 1110.00
DUVAL, FL 1 *** 19 3213870 0251561 100 01/10/98 01/10/99 1 1110.00 1110.00
DUVAL, FL 1 *** 01 3265664 0235601 000 07/10/97 07/10/98 1 457.50 457.50
DUVAL, FL 1 *** 54 2438124 0187553 600 06/25/97 06/25/98 1 457.50 457.50
DUVAL, FL 1 *** 54 2438124 0187553 700 06/25/97 06/25/98 1 0.00 0.00
DUVAL, FL 1 *** 01 3128086 2002259 202 06/15/97 06/15/98 1 965.00 965.00
DUVAL, FL 1 *** 50 2572648 2130545 502 11/04/97 11/04/98 1 447.15 447.15
DUVAL, FL 1 *** 01 2499257 8259961 000 03/17/97 03/17/98 1 965.00 965.00
Data as 11/07/97 Page 11 11/20/97
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexB.XLS, EXPERIAN CONFIDENTIAL
<TABLE>
<CAPTION>
Southeast C&I Report
EXHIBIT B. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
TOT. SALE
CUST CUST# CON.# EFFEC. ANNIV. LEASE PRODUCT AMT. FL/GA
COUNTY NAME QTY CUSTOMER NAME TYPE DATE DATE #YRS PRICE C&I ONLY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DUVAL, FL 1 *** 50 2486189 2017775 000 07/23/97 07/23/98 1 965.00 965.00
DUVAL, FL 8 *** 87 3308736 9271268 100 12/30/97 12/30/98 1 0.00 0.00
FAYETTE, GA 1 *** 87 3098778 0232104 206 01/10/98 01/10/99 1 0.00 0.00
FAYETTE, GA 1 *** 53 3214266 3146302 411 06/15/97 06/15/98 1 132.83 132.83
FAYETTE, GA 1 *** 50 3237511 0341742 702 07/14/97 07/14/98 1 211.20 211.20
FAYETTE, GA 1 *** 50 3702053 0228441 200 02/10/98 02/10/99 1 231.25 231.25
FAYETTE, GA 1 *** 50 3701362 0454303 301 04/01/97 04/01/98 1 201.25 201.25
FAYETTE, GA 1 *** 50 2304924 3161571 404 05/15/97 05/15/98 1 167.90 167.90
FAYETTE, GA 1 *** 87 3090167 0320893 800 12/28/97 12/28/98 1 0.00 0.00
FAYETTE, GA 1 *** 99 0038841 0242866 100 12/28/97 12/28/98 1 0.00 0.00
FAYETTE, GA 1 *** 50 3259865 2028115 001 06/16/97 06/16/98 1 132.45 132.45
FAYETTE, GA 1 *** 37 3758218 2001659 207 08/21/97 08/21/98 1 91.80 91.80
FAYETTE, GA 1 *** 52 3679843 0426737 408 08/10/97 08/10/98 1 211.20 211.20
FAYETTE, GA 1 *** 01 3707720 8355277 638 04/10/97 04/10/98 1 163.01 163.01
FAYETTE, GA 1 *** 53 3219861 0248564 926 01/01/97 01/01/98 1 0.00 0.00
FAYETTE, GA 1 *** 53 3219861 0248564 926 01/01/97 01/01/98 1 181.12 181.12
FAYETTE, GA 1 *** 11 3552919 3161301 400 04/10/97 04/10/98 1 132.80 132.80
FAYETTE, GA 1 *** 50 3012075 0341749 956 08/01/97 08/01/98 1 211.20 211.20
FAYETTE, GA 1 *** 50 3721160 3161359 403 12/10/97 12/10/98 1 152.63 152.63
FAYETTE, GA 1 *** 01 3331688 3161588 330 02/01/97 02/01/98 1 380.00 380.00
FAYETTE, GA 1 *** 01 3513240 3161658 439 11/12/97 11/12/98 1 152.62 152.62
FAYETTE, GA 1 *** 01 3019988 0181514 157 05/10/97 05/10/98 1 380.00 380.00
FAYETTE, GA 8 *** 87 3308736 8242866 100 12/30/97 12/30/98 1 0.00 0.00
FORSYTH, GA 1 *** 87 3098778 0232104 207 01/10/98 01/10/99 1 0.00 0.00
FORSYTH, GA 1 *** 50 2925677 0351712 612 09/30/97 09/30/98 1 211.20 211.20
FORSYTH, GA 1 *** 53 3214266 3161878 415 06/15/97 06/15/98 1 211.20 211.20
FORSYTH, GA 1 *** 50 3780079 0351786 600 04/19/97 04/19/98 1 380.00 380.00
FORSYTH, GA 1 *** 50 3121458 0452391 202 01/17/96 01/17/97 1 0.00 0.00
FORSYTH, GA 1 *** 51 3645833 0433758 506 01/15/98 01/15/99 1 231.25 231.25
FORSYTH, GA 1 *** 50 3542075 0453934 301 03/15/97 03/15/98 1 190.00 190.00
FORSYTH, GA 1 *** 50 3812084 2027009 001 09/26/97 09/26/98 1 221.13 221.13
FORSYTH, GA 1 *** 01 3271724 0247892 921 02/27/97 02/27/98 1 79.50 79.50
FORSYTH, GA 1 *** 50 3533619 0345394 612 05/01/97 05/01/98 1 0.00 0.00
Data as of 11/07/97 Page 12 11/20/97
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexB.XLS, EXPERIAN CONFIDENTIAL
<TABLE>
<CAPTION>
Southeast C&I Report
EXHIBIT B. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
TOT. SALE
CUST CUST# CON.# EFFEC. ANNIV. LEASE PRODUCT AMT. FL/GA
COUNTY NAME QTY CUSTOMER NAME TYPE DATE DATE #YRS PRICE C&I ONLY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FORSYTH, GA 1 *** 50 3268438 3146403 426 07/10/97 07/10/98 1 103.95 103.95
FORSYTH, GA 1 *** 50 3397084 0435407 400 04/12/97 04/12/98 1 190.08 190.08
FORSYTH, GA 1 *** 87 3090167 0320894 800 12/28/97 12/28/98 1 0.00 0.00
FORSYTH, GA 1 *** 99 0038841 0242883 100 12/28/97 12/28/98 1 0.00 0.00
FORSYTH, GA 1 *** 85 3796857 2018740 102 12/20/97 12/20/98 1 0.00 0.00
FORSYTH, GA 1 *** 37 3758218 2001659 208 09/20/97 09/20/98 1 101.20 101.20
FORSYTH, GA 1 *** 50 3538953 0349640 608 06/04/97 06/04/98 1 380.00 380.00
FORSYTH, GA 1 *** 50 3224573 0345482 727 01/30/98 01/30/99 1 260.00 260.00
FORSYTH, GA 1 *** 50 3348990 3161699 415 08/31/97 08/31/98 1 211.20 211.20
FORSYTH, GA 1 *** 50 3026551 0341738 713 05/28/97 05/28/98 1 179.32 179.32
FORSYTH, GA 1 *** 50 3811786 2021209 003 09/18/97 09/18/98 1 227.50 227.50
FORSYTH, GA 1 *** 01 3707720 8355277 641 04/10/97 04/10/98 1 172.80 172.80
FORSYTH, GA 1 *** 01 2970864 0348990 610 04/30/97 04/30/98 1 172.30 172.30
FORSYTH, GA 1 *** 01 3539938 0355268 621 09/15/97 09/15/98 1 211.20 211.20
FORSYTH, GA 1 *** 53 3219861 0248564 920 01/01/97 01/01/98 1 0.00 0.00
FORSYTH, GA 1 *** 53 3219861 0248564 920 01/01/97 01/01/98 1 181.12 181.12
FORSYTH, GA 1 *** 50 3012086 0205769 302 06/14/97 06/14/98 1 380.00 380.00
FORSYTH, GA 1 *** 53 3266735 0351843 612 04/10/97 04/10/98 1 117.98 117.98
FORSYTH, GA 1 *** 50 3012075 0341749 865 08/01/97 08/01/98 1 132.83 132.83
FORSYTH, GA 1 *** 50 3012075 0341749 957 08/01/97 08/01/98 1 132.83 132.83
FORSYTH, GA 1 *** 50 3012075 2000764 201 08/01/97 08/01/98 1 211.20 211.20
FORSYTH, GA 1 *** 50 3012075 2013809 100 11/02/96 11/02/97 1 380.00 380.00
FORSYTH, GA 1 *** 01 3774300 2020615 200 02/08/98 02/08/99 1 520.00 520.00
FORSYTH, GA 1 *** 01 3331688 3161588 329 02/01/97 02/01/98 1 380.00 380.00
FORSYTH, GA 1 *** 50 3746385 9414173 200 04/07/97 04/07/98 1 380.00 380.00
FORSYTH, GA 1 *** 01 3513240 2022494 100 08/08/97 08/08/98 1 380.00 380.00
FORSYTH, GA 1 *** 99 3751745 9414194 200 04/10/97 04/10/98 1 380.00 380.00
FORSYTH, GA 1 *** 51 3588068 0379210 603 02/02/98 02/02/99 1 244.20 244.20
FORSYTH, GA 1 *** 01 3103692 2008741 100 12/04/96 12/04/97 1 175.00 175.00
FORSYTH, GA 1 *** 02 3475526 3161745 402 09/10/97 09/10/98 1 0.00 0.00
FORSYTH, GA 1 *** 01 3429460 0351793 601 06/15/97 06/15/98 1 190.08 190.08
FORSYTH, GA 8 *** 87 3308736 8242883 400 12/30/97 12/30/98 1 0.00 0.00
FULTON, GA 1 *** 53 3214266 3146302 406 06/15/97 06/15/98 1 246.67 246.67
Data as of 11/07/97 Page 13 11/20/97
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexB.XLS, EXPERIAN CONFIDENTIAL
<TABLE>
<CAPTION>
Southeast C&I Report
EXHIBIT B. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
TOT. SALE
CUST CUST# CON.# EFFEC. ANNIV. LEASE PRODUCT AMT. FL/GA
COUNTY NAME QTY CUSTOMER NAME TYPE DATE DATE #YRS PRICE C&I ONLY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FULTON, GA 1 *** 52 3680238 0426742 422 11/05/97 11/05/98 1 520.00 520.00
FULTON, GA 1 *** 01 3480869 0324237 802 12/16/97 12/16/98 1 705.00 705.00
FULTON, GA 1 *** 50 3220823 3161872 402 06/15/97 06/15/98 1 404.25 404.25
FULTON, GA 1 *** 01 3271724 0247892 915 02/27/97 02/27/98 1 126.56 126.56
FULTON, GA 1 *** 50 3268438 3146403 415 07/10/97 07/10/98 1 192.90 192.90
FULTON, GA 1 *** 54 3803769 2028078 000 04/25/97 04/25/98 1 318.00 318.00
FULTON, GA 1 *** 87 3090167 0320895 800 12/28/97 12/28/98 1 0.00 0.00
FULTON, GA 1 *** 85 3609938 0454616 307 07/05/97 07/05/98 1 0.00 0.00
FULTON, GA 1 *** 38 3718650 0453860 301 10/01/97 10/01/98 1 190.00 190.00
FULTON, GA 1 *** 01 3331677 3146390 406 06/15/97 06/15/98 1 610.00 610.00
FULTON, GA 1 *** 50 3463866 0374898 618 12/31/97 12/31/98 1 430.00 430.00
FULTON, GA 1 *** 01 3707720 8355277 636 04/10/97 04/10/98 1 302.63 302.63
FULTON, GA 1 *** 50 3318117 0330923 703 10/20/97 10/20/98 1 237.50 237.50
FULTON, GA 1 *** 50 3012086 3146363 702 06/14/97 06/14/98 1 610.00 610.00
FULTON, GA 1 *** 50 3475593 2022446 200 06/01/97 06/01/98 1 475.00 475.00
FULTON, GA 1 *** 01 3331688 3161588 339 02/01/97 02/01/98 1 610.00 610.00
FULTON, GA 1 *** 54 3320943 0345468 709 08/10/97 08/10/98 1 404.25 404.25
FULTON, GA 1 *** 01 3513240 3161658 435 11/12/97 11/12/98 1 283.80 283.80
FULTON, GA 1 *** 01 3212978 3146307 325 09/10/96 09/10/97 1 299.00 299.00
FULTON, GA 1 *** 54 3646436 0433775 502 02/01/98 02/01/99 1 465.30 465.30
FULTON, GA 1 *** 01 3600049 0383560 518 03/01/97 03/01/98 1 610.00 610.00
FULTON, GA 1 *** 87 3098778 0232104 208 01/10/98 01/10/99 1 0.00 0.00
FULTON, GA 1 *** 50 2925677 0351712 610 09/30/97 09/30/98 1 285.45 285.45
FULTON, GA 1 *** 32 3500792 0341746 902 01/10/98 01/10/99 1 352.50 352.50
FULTON, GA 1 *** 32 3615113 0386162 501 09/04/97 09/04/98 1 305.00 305.00
FULTON, GA 1 *** 50 3518395 3161821 405 12/16/97 12/16/98 1 364.80 364.80
FULTON, GA 1 *** 50 3542075 0351789 614 03/15/97 03/15/98 1 152.50 152.50
FULTON, GA 1 *** 50 3812084 2027009 000 09/26/97 09/26/98 1 221.12 221.12
FULTON, GA 1 *** 50 3198779 8262398 100 01/10/98 01/10/99 1 543.00 543.00
FULTON, GA 1 *** 02 3755051 2001751 200 06/30/97 06/30/98 1 188.10 188.10
FULTON, GA 1 *** 01 3519758 0341694 633 07/10/97 07/10/98 1 156.68 156.68
FULTON, GA 1 *** 53 3571383 0453856 208 07/28/96 07/28/97 1 174.12 174.12
FULTON, GA 1 *** 01 3565748 0379272 510 07/01/97 07/01/98 1 305.00 305.00
Data as of 11/07/97 Page 14 11/20/97
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexB.XLS, EXPERIAN CONFIDENTIAL
<TABLE>
<CAPTION>
Southeast C&I Report
EXHIBIT B. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
TOT. SALE
CUST CUST# CON.# EFFEC. ANNIV. LEASE PRODUCT AMT. FL/GA
COUNTY NAME QTY CUSTOMER NAME TYPE DATE DATE #YRS PRICE C&I ONLY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FULTON, GA 1 *** 37 3758218 2001659 204 08/21/97 08/21/98 1 44.55 44.55
FULTON, GA 1 *** 50 3510690 3146420 400 06/10/97 06/10/98 1 405.00 405.00
FULTON, GA 1 *** 50 3224573 0345482 705 08/15/97 08/15/98 1 202.12 202.12
FULTON, GA 1 *** 50 3348990 3161699 327 08/31/97 08/31/98 1 285.45 285.45
FULTON, GA 1 *** 50 3026551 0181538 203 05/28/97 05/28/98 1 254.22 254.22
FULTON, GA 1 *** 50 3811786 2021209 000 09/18/97 09/18/98 1 287.50 287.50
FULTON, GA 1 *** 01 3564183 8353720 601 06/17/97 06/17/98 1 188.19 188.19
FULTON, GA 1 *** 01 2970864 0348990 611 04/30/97 04/30/98 1 205.88 205.88
FULTON, GA 1 *** 53 3219861 0248564 016 01/01/97 01/01/98 1 0.00 0.00
FULTON, GA 1 *** 53 3219861 0248564 016 01/01/97 01/01/98 1 168.19 168.19
FULTON, GA 1 *** 50 3318117 0330923 704 06/10/97 06/10/98 1 0.00 0.00
FULTON, GA 1 *** 50 3025967 0181533 300 02/21/98 02/21/99 1 465.00 465.00
FULTON, GA 1 *** 53 3266735 0351843 609 04/10/97 04/10/98 1 108.90 108.90
FULTON, GA 1 *** 50 3012075 0341749 670 08/01/97 08/01/98 1 196.35 196.35
FULTON, GA 1 *** 50 3012075 0341749 912 08/01/97 08/01/98 1 142.73 142.73
FULTON, GA 1 *** 50 3012075 0341749 925 08/01/97 08/01/98 1 405.00 405.00
FULTON, GA 1 *** 50 3012075 2000711 202 08/01/97 08/01/98 1 188.10 188.10
FULTON, GA 1 *** 01 3517363 0345474 716 10/01/97 10/01/98 1 92.00 92.00
FULTON, GA 1 *** 50 3144237 0358130 601 05/14/97 05/14/98 1 188.10 188.10
FULTON, GA 1 *** 50 3583063 0374671 603 11/10/97 11/10/98 1 141.90 141.90
FULTON, GA 1 *** 50 3396814 0291044 003 09/12/97 09/12/98 1 123.34 123.34
FULTON, GA 1 *** 01 3019988 0181514 158 05/10/97 05/10/98 1 305.00 305.00
FULTON, GA 1 *** 51 3589560 0379219 608 02/23/98 02/23/99 1 465.00 465.00
FULTON, GA 1 *** 99 3751745 9414194 201 04/10/97 04/10/98 1 360.00 360.00
FULTON, GA 1 *** 01 3103692 0227047 123 03/10/97 03/10/98 1 226.25 226.25
FULTON, GA 1 *** 10 3618224 0395886 524 07/29/97 07/06/98 1 0.00 0.00
FULTON, GA 1 *** 02 3475526 3161745 512 09/10/97 09/10/98 1 0.00 0.00
FULTON, GA 1 *** 50 3388901 0310773 801 10/25/97 10/25/98 1 232.65 232.65
FULTON, GA 1 *** 01 3429460 3161813 406 06/15/97 06/15/98 1 169.29 169.29
FULTON, GA 1 *** 87 3098778 0232104 208 01/10/98 01/10/99 1 0.00 0.00
FULTON, GA 1 *** 32 3500792 0341746 902 01/10/98 01/10/99 1 352.50 352.50
FULTON, GA 1 *** 32 3615113 0386162 501 09/04/97 09/04/98 1 305.00 305.00
FULTON, GA 1 *** 50 3542075 0351789 614 03/15/97 03/15/98 1 152.50 152.50
Data as of 11/07/97 Page 15 11/20/97
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexB.XLS, EXPERIAN CONFIDENTIAL
<TABLE>
<CAPTION>
Southeast C&I Report
EXHIBIT B. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
TOT. SALE
CUST CUST# CON.# EFFEC. ANNIV. LEASE PRODUCT AMT. FL/GA
COUNTY NAME QTY CUSTOMER NAME TYPE DATE DATE #YRS PRICE C&I ONLY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FULTON, GA 1 *** 01 3519758 0341694 633 071/0/97 071/0/98 1 156.68 156.68
FULTON, GA 1 *** 53 3571383 0453865 200 07/28/96 07/28/97 1 0.00 0.00
FULTON, GA 1 *** 50 2304924 3161571 402 05/10/97 05/10/98 1 315.15 315.15
FULTON, GA 1 *** 50 3259865 2028115 002 06/16/97 06/16/98 1 245.98 245.98
FULTON, GA 1 *** 01 3565748 0379272 510 07/01/97 07/01/98 1 305.00 305.00
FULTON, GA 1 *** 37 3758218 2001659 204 08/21/97 08/21/98 1 44.55 44.55
FULTON, GA 1 *** 52 3679843 0426737 409 08/26/97 08/26/98 1 285.45 285.45
FULTON, GA 1 *** 51 3778449 2022323 100 04/03/97 04/03/98 1 326.66 326.66
FULTON, GA 1 *** 50 3224573 0345482 705 08/15/97 08/15/98 1 202.13 202.13
FULTON, GA 1 *** 50 3026551 0181538 204 08/29/97 08/29/98 1 259.50 259.50
FULTON, GA 1 *** 01 2970864 0348990 611 04/30/97 04/30/98 1 205.88 205.88
FULTON, GA 1 *** 53 3219861 0248564 016 01/01/97 01/01/98 1 0.00 0.00
FULTON, GA 1 *** 53 3219861 0248564 016 01/01/97 01/01/98 1 168.19 168.19
FULTON, GA 1 *** 50 3318117 0330923 704 06/10/97 06/10/98 1 0.00 0.00
FULTON, GA 1 *** 53 3266735 0351843 609 04/10/97 04/10/98 1 108.90 108.90
FULTON, GA 1 *** 50 3012075 0341749 670 08/01/97 08/01/98 1 196.35 196.35
FULTON, GA 1 *** 01 3517363 0345474 716 10/01/97 10/01/98 1 97.75 97.75
FULTON, GA 1 *** 50 3583063 0374671 603 11/10/97 11/10/98 1 141.90 141.90
FULTON, GA 1 *** 50 3396814 0291044 003 09/12/97 09/12/98 1 123.34 123.34
FULTON, GA 1 *** 01 3019988 0181514 158 05/10/97 05/10/98 1 305.00 305.00
FULTON, GA 1 *** 10 3618224 0395886 524 07/29/97 07/06/98 1 0.00 0.00
FULTON, GA 1 *** 50 3388901 0310773 801 10/25/97 10/25/98 1 232.65 232.65
FULTON, GA 2 *** 99 3091641 0242866 100 12/28/97 12/28/98 1 0.00 0.00
FULTON, GA 4 *** 38 3313101 2001040 100 07/22/97 07/22/98 1 0.00 0.00
FULTON, GA 4 *** 38 3313101 2001040 100 07/22/97 07/22/98 1 0.00 0.00
FULTON, GA 5 *** 87 3308736 8242865 100 12/30/97 12/30/98 1 0.00 0.00
GWINNETT, GA 1 *** 87 3098778 0232104 209 01/10/98 01/10/99 1 0.00 0.00
GWINNETT, GA 1 *** 53 3214266 3146302 409 06/15/97 06/15/98 1 169.12 169.12
GWINNETT, GA 1 *** 01 3584886 0379201 404 06/10/97 06/10/98 1 405.00 405.00
GWINNETT, GA 1 *** 50 3504581 0341883 701 06/13/97 06/13/98 1 256.25 256.25
GWINNETT, GA 1 *** 01 3674462 2001643 200 07/09/97 07/09/98 1 405.00 405.00
GWINNETT, GA 1 *** 52 3680238 2022338 100 05/31/97 05/31/98 1 405.00 405.00
GWINNETT, GA 1 *** 01 3480869 0438768 508 12/16/97 12/16/98 1 465.00 465.00
Data as of 11/07/97 Page 16 11/20/97
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexB.XLS, EXPERIAN CONFIDENTIAL
<TABLE>
<CAPTION>
Southeast C&I Report
EXHIBIT B. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
TOT. SALE
CUST CUST# CON.# EFFEC. ANNIV. LEASE PRODUCT AMT. FL/GA
COUNTY NAME QTY CUSTOMER NAME TYPE DATE DATE #YRS PRICE C&I ONLY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GWINNETT, GA 1 *** 01 3500758 0341867 701 07/16/97 07/16/98 1 189.55 189.55
GWINNETT, GA 1 *** 50 3542075 0351789 618 03/15/97 03/15/98 1 202.50 202.50
GWINNETT, GA 1 *** 50 3482636 0324075 702 02/15/97 02/15/98 1 405.00 405.00
GWINNETT, GA 1 *** 01 3519758 0341694 624 07/10/97 07/10/98 1 218.76 218.76
GWINNETT, GA 1 *** 54 3792401 2030389 100 10/23/97 10/23/98 1 274.54 274.54
GWINNETT, GA 1 *** 53 3571383 0453856 211 07/28/96 07/28/97 1 156.62 156.62
GWINNETT, GA 1 *** 50 3127694 0230026 102 07/03/97 07/03/98 1 405.00 405.00
GWINNETT, GA 1 *** 51 3795013 2018643 100 11/26/97 11/26/98 1 550.00 550.00
GWINNETT, GA 1 *** 51 3713622 0461640 300 06/06/97 06/06/98 1 405.00 405.00
GWINNETT, GA 1 *** 01 3271724 0247892 916 02/27/97 02/27/98 1 102.94 102.94
GWINNETT, GA 1 *** 50 3268438 3146403 424 07/10/97 07/10/98 1 132.90 132.90
GWINNETT, GA 1 *** 87 3090167 0271334 100 12/28/97 12/28/98 1 0.00 0.00
GWINNETT, GA 1 *** 86 3609938 0461616 308 07/05/97 07/05/98 1 0.00 0.00
GWINNETT, GA 1 *** 99 0038841 0242864 100 12/28/97 12/28/98 1 0.00 0.00
GWINNETT, GA 1 *** 50 3453232 0311030 809 10/21/97 10/21/98 1 0.00 0.00
GWINNETT, GA 1 *** 01 3565748 0379272 601 07/01/97 07/01/98 1 256.25 256.25
GWINNETT, GA 1 *** 44 3577426 3161641 406 03/10/97 03/10/98 1 405.00 405.00
GWINNETT, GA 1 *** 37 3758218 2001659 301 10/19/97 10/19/98 1 62.10 62.10
GWINNETT, GA 1 *** 38 3200894 3071759 304 07/28/97 07/28/98 1 0.00 0.00
GWINNETT, GA 1 *** 02 3562558 0353670 601 05/29/97 05/29/98 1 285.45 285.45
GWINNETT, GA 1 *** 51 3610039 0395837 500 05/07/97 05/07/98 1 405.00 405.00
GWINNETT, GA 1 *** 50 2999632 0213788 304 11/21/97 11/21/98 1 328.35 328.35
GWINNETT, GA 1 *** 50 3224573 0345482 716 08/15/97 08/15/98 1 285.45 285.45
GWINNETT, GA 1 *** 51 3654433 0435417 506 02/23/98 02/23/99 1 328.35 328.35
GWINNETT, GA 1 *** 01 3615089 0386062 501 06/11/97 06/11/98 1 256.25 256.25
GWINNETT, GA 1 *** 01 3331677 3146390 405 06/15/97 06/15/98 1 405.00 405.00
GWINNETT, GA 1 *** 50 3348990 0206516 203 08/31/97 08/31/98 1 285.45 285.45
GWINNETT, GA 1 *** 50 3463866 0374898 613 12/31/97 12/31/98 1 295.00 295.00
GWINNETT, GA 1 *** 50 3026551 0341682 715 05/28/97 05/28/98 1 328.23 328.23
GWINNETT, GA 1 *** 50 3811786 2021209 001 09/18/97 09/18/98 1 287.50 287.50
GWINNETT, GA 1 *** 01 3707720 8355277 635 04/10/97 04/10/98 1 212.76 212.76
GWINNETT, GA 1 *** 01 2970864 0348990 612 04/30/97 04/30/98 1 185.55 185.55
GWINNETT, GA 1 *** 01 3539938 0355268 609 09/15/97 09/15/98 1 256.25 256.25
Data as of 11/07/97 Page 17 11/20/97
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexB.XLS, EXPERIAN CONFIDENTIAL
<TABLE>
<CAPTION>
Southeast C&I Report
EXHIBIT B. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
TOT. SALE
COUNTRY NAME QTY CUSTOMER NAME CUST CUST# CON.# EFFEC. ANNIV LEASE PRODUCT AMT,FL/GA
TYPE DATE DATE #YRS PRICE C&I ONLY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GWINNETT, GA 1 *** 53 3219861 0248564 017 01/01/97 01/01/98 1 0.00 0.00
GWINNETT, GA 1 *** 53 3219861 0248564 017 01/01/97 01/01/98 1 230.63 230.63
GWINNETT, GA 1 *** 50 3318117 0330923 711 11/04/97 11/04/98 1 237.50 237.50
GWINNETT, GA 1 *** 50 3318117 0330923 715 06/10/97 06/10/98 1 0.00 0.00
GWINNETT, GA 1 *** 50 3012086 3146369 408 06/14/97 06/14/98 1 405.00 405.00
GWINNETT, GA 1 *** 50 3475593 2022446 103 04/03/97 04/03/98 1 403.75 403.75
GWINNETT, GA 1 *** 53 3266735 0271825 001 10/10/97 10/10/98 1 169.13 169.13
GWINNETT, GA 1 *** 50 3012075 0341749 864 08/01/97 08/01/98 1 169.13 169.13
GWINNETT, GA 1 *** 50 3012075 0341749 919 08/01/97 08/01/98 1 169.13 169.13
GWINNETT, GA 1 *** 50 3012075 0341749 951 08/01/97 08/01/98 1 285.45 285.45
GWINNETT, GA 1 *** 50 3537729 0349633 608 08/01/97 08/01/98 1 285.45 285.45
GWINNETT, GA 1 *** 50 3110300 0374613 601 08/20/97 08/20/98 1 256.25 256.25
GWINNETT, GA 1 *** 01 3517363 0345474 712 10/14/97 10/14/98 1 133.93 133.93
GWINNETT, GA 1 *** 01 3525298 3161606 402 06/25/97 06/25/98 1 169.13 169.13
GWINNETT, GA 1 *** 01 3331688 3161588 338 02/01/97 02/01/98 1 405.00 405.00
GWINNETT, GA 1 *** 50 3748026 2022464 101 05/24/97 05/24/98 1 475.00 475.00
GWINNETT, GA 1 *** 50 3375932 3161826 402 05/28/97 05/28/98 1 405.00 405.00
GWINNETT, GA 1 *** 02 3774744 2008089 101 10/10/97 10/10/98 1 170.00 170.00
GWINNETT, GA 1 *** 50 3590210 0379218 602 02/15/98 02/15/99 1 328.35 328.35
GWINNETT, GA 1 *** 50 3590221 0379217 602 02/15/98 02/15/99 1 328.35 328.35
GWINNETT, GA 1 *** 01 3513240 3161658 436 11/12/97 11/12/98 1 194.70 194.70
GWINNETT, GA 1 *** 01 3212978 3146307 326 09/10/96 09/10/97 1 205.00 205.00
GWINNETT, GA 1 *** 51 3805389 2017755 000 05/21/97 05/21/98 1 475.00 475.00
GWINNETT, GA 1 *** 50 3396814 0341720 802 09/12/97 09/12/98 1 256.25 256.25
GWINNETT, GA 1 *** 54 3646436 2008629 200 08/02/97 08/02/98 1 405.00 405.00
GWINNETT, GA 1 *** 51 3589560 0379219 607 02/23/98 02/23/99 1 465.00 465.00
GWINNETT, GA 1 *** 51 3744468 9415765 200 05/01/97 05/01/98 1 285.45 285.45
GWINNETT, GA 1 *** 50 3751262 2001702 200 08/23/97 08/23/98 1 256.25 256.25
GWINNETT, GA 1 *** 51 3588068 0379210 602 02/10/98 02/10/99 1 328.35 328.35
GWINNETT, GA 1 *** 01 3103692 0227047 325 03/10/97 03/10/98 1 221.25 221.25
GWINNETT, GA 1 *** 12 3812985 2027006 002 10/08/97 10/08/98 1 216.11 216.11
GWINNETT, GA 1 *** 01 3600049 0383560 519 03/01/97 03/01/98 1 405.00 405.00
GWINNETT, GA 1 *** 51 3796687 2028067 100 06/27/97 06/27/98 1 475.00 475.00
</TABLE>
PAGE 18
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexB.XLS, EXPERIAN CONFIDENTIAL
<TABLE>
<CAPTION>
Southeast C&I Report
EXHIBIT B. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
TOT. SALE
COUNTRY NAME QTY CUSTOMER NAME CUST CUST# CON.# EFFEC. ANNIV LEASE PRODUCT AMT,FL/GA
TYPE DATE DATE #YRS PRICE C&I ONLY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GWINNETT, GA 1 *** 02 3475526 3161745 505 09/10/97 09/10/98 1 0.00 0.00
GWINNETT, GA 1 *** 01 3429460 3146377 405 06/15/97 06/15/98 1 230.61 230.61
GWINNETT, GA 5 *** 87 3308736 8242864 100 12/30/97 12/30/98 1 0.00 0.00
GWINNETT, GA 8 *** 38 3200894 3071759 500 06/10/97 06/10/98 1 0.00 0.00
HALL, GA 1 *** 87 3098778 0232104 210 01/10/98 01/10/99 1 0.00 0.00
HALL, GA 1 *** 53 3214266 3146302 412 06/15/97 06/15/98 1 211.20 211.20
HALL, GA 1 *** 51 3795013 2028063 000 03/18/97 03/18/98 1 251.75 251.75
HALL, GA 1 *** 87 3090167 0320898 800 12/28/97 12/28/98 1 0.00 0.00
HALL, GA 1 *** 99 0038841 9410090 100 05/24/97 05/24/98 1 0.00 0.00
HALL, GA 1 *** 99 3091641 0242863 100 12/28/97 12/28/98 1 0.00 0.00
HALL, GA 1 *** 44 3577426 3161641 407 03/10/97 03/10/98 1 380.00 380.00
HALL, GA 1 *** 37 3758218 2001659 209 08/21/97 08/21/98 1 145.20 145.20
HALL, GA 1 *** 10 3783870 2018685 100 06/13/97 06/13/98 1 150.15 150.15
HALL, GA 1 *** 50 2321325 0302129 704 04/03/97 04/03/98 1 211.20 211.20
HALL, GA 1 *** 50 3224573 2001797 201 07/27/97 07/27/98 1 211.20 211.20
HALL, GA 1 *** 51 3654433 2017753 000 04/23/97 04/23/98 1 288.00 288.00
HALL, GA 1 *** 01 3539938 0355268 620 09/15/97 09/15/98 1 211.20 211.20
HALL, GA 1 *** 53 3219861 0248564 923 01/01/97 01/01/98 1 0.00 0.00
HALL, GA 1 *** 53 3219861 0248564 923 01/01/97 01/01/98 1 181.12 181.12
HALL, GA 1 *** 50 3012086 2022339 100 06/14/97 06/14/98 1 380.00 380.00
HALL, GA 1 *** 53 3266735 0351843 611 04/10/97 04/10/98 1 117.98 117.98
HALL, GA 1 *** 50 3012075 0341749 914 08/01/97 08/01/98 1 380.00 380.00
HALL, GA 1 *** 50 3012075 0341749 943 08/01/97 08/01/98 1 211.20 211.20
HALL, GA 1 *** 50 3012075 0341749 958 08/01/97 08/01/98 1 211.20 211.20
HALL, GA 1 *** 50 3537729 0349633 607 08/01/97 08/01/98 1 202.50 202.50
HALL, GA 1 *** 01 3331688 3161588 331 02/01/97 02/01/98 1 380.00 380.00
HALL, GA 1 *** 02 3774744 2008090 200 02/15/98 02/15/99 1 244.20 244.20
HALL, GA 1 *** 50 3751262 2001702 201 05/23/97 05/23/98 1 132.83 132.83
HALL, GA 1 *** 50 3751273 2001703 201 05/30/97 05/30/98 1 87.63 87.63
HALL, GA 1 *** 01 3429460 3146377 501 06/15/97 06/15/98 1 190.08 190.08
HALL, GA 4 *** 38 3347607 8152111 400 07/28/97 07/28/98 1 0.00 0.00
HALL, GA 8 *** 87 3308736 8242863 100 12/30/97 12/30/98 1 0.00 0.00
HENRY, GA 1 *** 53 3214266 0302431 805 06/19/97 06/19/98 1 380.00 380.00
</TABLE>
PAGE 19
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Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexB.XLS, EXPERIAN CONFIDENTIAL
<TABLE>
<CAPTION>
Southeast C&I Report
EXHIBIT B. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
TOT. SALE
COUNTRY NAME QTY CUSTOMER NAME CUST CUST# CON.# EFFEC. ANNIV LEASE PRODUCT AMT,FL/GA
TYPE DATE DATE #YRS PRICE C&I ONLY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
HENRY, GA 1 *** 50 3808870 2050023 000 07/21/97 07/21/98 1 237.60 237.60
HENRY, GA 1 *** 01 3271724 0438774 402 02/27/97 02/27/98 1 96.00 96.00
HENRY, GA 1 *** 87 3090167 0320899 800 12/28/97 12/28/98 1 0.00 0.00
HENRY, GA 1 *** 99 0038841 0031247 202 01/19/98 01/19/99 1 0.00 0.00
HENRY, GA 1 *** 50 3259865 2028115 003 06/16/97 06/16/98 1 233.10 233.10
HENRY, GA 1 *** 52 3679843 2008631 200 08/26/97 08/26/98 1 211.20 211.20
HENRY, GA 1 *** 01 3218927 0353661 504 11/06/97 11/06/98 1 440.00 440.00
HENRY, GA 1 *** 53 3219861 0248564 925 01/01/97 01/01/98 1 0.00 0.00
HENRY, GA 1 *** 53 3219861 0248564 925 01/01/97 01/01/98 1 201.38 201.38
HENRY, GA 1 *** 50 3488261 0351796 604 03/10/97 03/10/98 1 120.75 120.75
HENRY, GA 1 *** 01 3019988 0181514 005 08/15/97 08/15/98 1 380.00 380.00
HENRY, GA 8 *** 87 3308736 0150895 500 11/30/97 11/30/98 1 0.00 0.00
HILLSBOROUGH, FL 1 *** 01 3409664 0302309 802 04/10/97 04/10/98 1 449.50 449.50
HILLSBOROUGH, FL 1 *** 01 2327006 2015993 101 02/13/97 02/13/98 1 702.00 702.00
HILLSBOROUGH, FL 1 *** 50 2103895 2130772 301 05/10/96 05/10/97 1 680.00 680.00
HILLSBOROUGH, FL 1 *** 01 3614651 0409315 502 10/01/97 10/01/98 1 465.00 465.00
HILLSBOROUGH, FL 1 *** 01 2814267 2156386 303 05/10/97 05/10/98 1 685.00 685.00
HILLSBOROUGH, FL 1 *** 50 2174516 2125072 403 03/14/97 03/14/98 1 780.00 780.00
HILLSBOROUGH, FL 1 *** 87 3613103 0220264 100 04/15/97 04/15/98 1 0.00 0.00
HILLSBOROUGH, FL 1 *** 01 3229963 0251165 001 04/10/97 04/10/98 1 0.00 0.00
HILLSBOROUGH, FL 1 *** 01 3229963 2028139 000 03/10/97 03/10/98 1 0.00 0.00
HILLSBOROUGH, FL 1 *** 87 3090167 0258778 600 08/07/97 08/07/98 1 0.00 0.00
HILLSBOROUGH, FL 1 *** 99 0038841 0300077 101 12/05/97 12/05/98 1 0.00 0.00
HILLSBOROUGH, FL 1 *** 37 3014600 0207125 300 09/30/97 09/30/98 1 0.00 0.00
HILLSBOROUGH, FL 1 *** 53 2016539 2130450 702 01/30/98 01/30/99 1 797.97 797.97
HILLSBOROUGH, FL 1 *** 01 3729595 0459312 302 01/01/98 01/01/99 1 785.00 785.00
HILLSBOROUGH, FL 1 *** 38 2133380 2130413 401 12/10/96 12/10/97 1 678.75 678.75
HILLSBOROUGH, FL 1 *** 01 2227533 2160774 502 12/10/97 12/10/98 1 654.00 654.00
HILLSBOROUGH, FL 1 *** 01 3472464 0323542 801 08/10/97 08/10/98 1 780.00 780.00
HILLSBOROUGH, FL 1 *** 01 2943534 0213602 203 06/10/97 06/10/98 1 780.00 780.00
HILLSBOROUGH, FL 1 *** 01 3120783 0211713 303 06/10/97 06/10/98 1 780.00 780.00
HILLSBOROUGH, FL 1 *** 01 3774711 2026766 101 09/12/97 09/12/98 1 780.00 780.00
HILLSBOROUGH, FL 1 *** 50 3030022 2018269 200 02/21/98 02/21/99 1 1325.00 1325.00
</TABLE>
PAGE 20
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Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexB.XLS, EXPERIAN CONFIDENTIAL
<TABLE>
<CAPTION>
Southeast C&I Report
EXHIBIT B. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
TOT. SALE
COUNTRY NAME QTY CUSTOMER NAME CUST CUST# CON.# EFFEC. ANNIV LEASE PRODUCT AMT,FL/GA
TYPE DATE DATE #YRS PRICE C&I ONLY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
HILLSBOROUGH, FL 1 *** 01 3455564 0323476 801 05/01/97 05/01/98 1 788.00 788.00
HILLSBOROUGH, FL 4 *** 38 3151435 0232699 200 07/14/97 07/14/98 1 0.00 0.00
HILLSBOROUGH, FL 8 *** 87 3308736 8271269 100 12/30/97 12/30/98 1 0.00 0.00
ORANGE, FL 1 *** 01 2124016 2146280 402 09/30/97 09/30/98 1 0.00 0.00
ORANGE, FL 1 *** 01 3707753 0452612 306 04/12/97 04/12/98 1 760.00 760.00
ORANGE, FL 1 *** 50 2246660 0166425 302 07/10/96 07/10/97 1 0.00 0.00
ORANGE, FL 1 *** 01 2281193 0219404 002 12/10/96 12/10/97 1 615.00 615.00
ORANGE, FL 1 *** 01 2525859 0277343 701 12/01/96 12/01/97 1 0.00 0.00
ORANGE, FL 1 *** 14 2524650 2166168 400 06/10/97 06/10/98 1 825.11 825.11
ORANGE, FL 1 *** 01 2782298 0166396 403 10/10/97 10/10/98 1 683.75 683.75
ORANGE, FL 1 *** 12 2972778 0211755 301 01/10/98 01/10/99 1 694.00 694.00
ORANGE, FL 1 *** 01 2743297 0166486 401 09/10/97 09/10/98 1 361.35 361.35
ORANGE, FL 1 *** 87 3613103 0186716 100 12/28/97 12/28/98 1 0.00 0.00
ORANGE, FL 1 *** 87 3090167 0284988 900 12/28/97 12/28/98 1 0.00 0.00
ORANGE, FL 1 *** 99 0038841 0271275 300 12/28/97 12/28/98 1 0.00 0.00
ORANGE, FL 1 *** 43 3676334 0189884 402 03/01/97 03/01/98 1 531.25 531.25
ORANGE, FL 1 *** 37 3014600 2160342 500 10/30/97 10/30/98 1 0.00 0.00
ORANGE, FL 1 *** 37 2462851 0334219 701 03/10/97 03/10/98 1 760.00 760.00
ORANGE, FL 1 *** 01 2222754 0251195 001 06/15/97 06/15/98 1 760.00 760.00
ORANGE, FL 1 *** 19 2300535 2166016 405 02/10/97 02/10/98 1 0.00 0.00
ORANGE, FL 1 *** 68 2255435 0358245 603 08/10/97 08/10/98 1 507.37 507.37
ORANGE, FL 1 *** 01 2002419 2166143 504 06/10/97 06/10/98 1 380.00 380.00
ORANGE, FL 1 *** 01 2011985 2166158 302 11/10/96 11/10/97 1 507.40 507.40
ORANGE, FL 1 *** 01 3807695 2017783 000 06/30/97 06/30/98 1 817.00 817.00
ORANGE, FL 1 *** 50 3342811 0208136 201 04/10/97 04/10/98 1 825.00 825.00
ORANGE, FL 1 *** 01 2778633 0166475 402 09/10/97 09/10/98 1 760.00 760.00
ORANGE, FL 1 *** 02 3388923 8278680 801 01/10/97 01/10/98 1 0.00 0.00
ORANGE, FL 1 *** 54 2236904 0462048 203 02/16/97 02/16/98 1 760.00 760.00
ORANGE, FL 1 *** 50 3627303 8433820 503 08/30/97 08/30/98 1 760.00 760.00
ORANGE, FL 7 *** 87 3308736 8271275 100 12/30/97 12/30/98 1 0.00 0.00
PALM BEACH, FL 1 *** 01 2337799 2123381 402 04/10/97 04/10/98 1 784.57 784.57
PALM BEACH, FL 1 *** 01 2989020 0175906 300 08/10/97 08/10/98 1 784.57 784.57
PALM BEACH, FL 1 *** 01 2012003 0462283 300 08/10/97 08/10/98 2 810.00 1620.00
</TABLE>
PAGE 21
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexB.XLS, EXPERIAN CONFIDENTIAL
<TABLE>
<CAPTION>
Southeast C&I Report
EXHIBIT B. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
TOT. SALE
COUNTRY NAME QTY CUSTOMER NAME CUST CUST# CON.# EFFEC. ANNIV LEASE PRODUCT AMT,FL/GA
TYPE DATE DATE #YRS PRICE C&I ONLY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PALM BEACH, FL 1 *** 54 2213082 0187409 408 05/10/97 05/10/98 1 1395.00 1395.00
PALM BEACH, FL 1 *** 01 2255727 2179313 400 05/01/97 05/01/98 1 784.58 784.58
PALM BEACH, FL 1 *** 01 2300728 2151658 400 03/10/97 03/10/98 1 780.64 780.64
PALM BEACH, FL 1 *** 01 2124016 2146279 401 04/01/97 04/01/98 1 523.05 523.05
PALM BEACH, FL 1 *** 01 3192694 2020690 202 11/30/97 11/30/98 1 1260.00 1260.00
PALM BEACH, FL 1 *** 01 3449718 2002174 001 04/10/97 04/10/98 1 1095.00 1095.00
PALM BEACH, FL 1 *** 01 3576629 0375362 606 10/10/97 10/10/98 1 846.00 846.00
PALM BEACH, FL 1 *** 51 3147416 8321927 801 01/10/98 01/10/99 1 1262.00 1262.00
PALM BEACH, FL 1 *** 87 3613103 0220272 100 04/28/97 04/28/98 1 0.00 0.00
PALM BEACH, FL 1 *** 01 3616345 0408846 603 12/10/97 12/10/98 1 445.00 445.00
PALM BEACH, FL 1 *** 87 3090167 0271317 100 12/28/97 12/28/98 1 0.00 0.00
PALM BEACH, FL 1 *** 99 0038841 0271272 101 12/28/97 12/28/98 1 0.00 0.00
PALM BEACH, FL 1 *** 01 2773504 0187423 402 08/10/97 08/10/98 1 392.29 392.29
PALM BEACH, FL 1 *** 37 3014600 0179053 400 05/07/97 05/07/98 1 0.00 0.00
PALM BEACH, FL 1 *** 37 3673115 0445335 401 07/01/97 07/01/98 1 1061.00 1061.00
PALM BEACH, FL 1 *** 53 2308416 2123376 402 05/05/97 05/05/98 1 413.34 413.34
PALM BEACH, FL 1 *** 01 3756964 2007364 202 08/01/97 08/01/98 1 480.00 480.00
PALM BEACH, FL 1 *** 01 2210201 0263980 001 08/17/97 08/17/98 1 392.29 392.29
PALM BEACH, FL 1 *** 01 3026283 8182450 203 02/28/97 02/28/98 1 1340.00 1340.00
PALM BEACH, FL 1 *** 01 3681790 0503384 303 08/28/96 08/28/97 1 0.00 0.00
PALM BEACH, FL 1 *** 50 2003540 2179302 401 05/01/97 05/01/98 1 695.00 695.00
PALM BEACH, FL 1 *** 50 2952051 0205845 302 11/10/97 11/10/98 1 978.65 978.65
PALM BEACH, FL 1 *** 38 2709594 2015790 102 10/28/97 10/28/98 1 0.00 0.00
PALM BEACH, FL 1 *** 01 2743938 2190126 402 05/19/97 05/19/98 1 1095.00 1095.00
PALM BEACH, FL 1 *** 51 3805068 2017709 001 06/30/97 06/30/98 1 1115.00 1115.00
PALM BEACH, FL 1 *** 01 2264402 0187465 401 06/10/97 06/10/98 1 1091.00 1091.00
PALM BEACH, FL 1 *** 01 2014881 2084351 301 04/25/97 04/25/98 1 694.20 694.20
PALM BEACH, FL 1 *** 50 2162537 2002360 201 04/10/97 04/10/98 1 1095.00 1095.00
PALM BEACH, FL 1 *** 01 3722516 0386331 401 04/10/97 04/10/98 1 1095.00 1095.00
PALM BEACH, FL 1 *** 61 2309844 0176513 301 11/29/97 11/29/98 1 0.00 0.00
PALM BEACH, FL 1 *** 01 3752427 2007221 203 06/30/97 06/30/98 1 0.00 0.00
PALM BEACH, FL 1 *** 01 2795395 2017695 000 05/05/97 05/05/98 1 1095.00 1095.00
PALM BEACH, FL 8 *** 87 3308736 8271272 100 12/30/97 12/30/98 1 0.00 0.00
</TABLE>
PAGE 22
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexB.XLS, EXPERIAN CONFIDENTIAL
<TABLE>
<CAPTION>
Southeast C&I Report
EXHIBIT B. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
TOT. SALE
COUNTRY NAME QTY CUSTOMER NAME CUST CUST# CON.# EFFEC. ANNIV LEASE PRODUCT AMT,FL/GA
TYPE DATE DATE #YRS PRICE C&I ONLY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PINELLAS, FL 1 *** 01 3409664 0304072 802 04/10/97 04/10/98 1 437.29 437.29
PINELLAS, FL 1 *** 50 2-74516 0208134 203 03/14/97 03/14/98 1 780.00 780.00
PINELLAS, FL 1 *** 87 3613103 0949020 300 12/28/97 12/28/98 1 0.00 0.00
PINELLAS, FL 1 *** 01 3229963 2028139 001 03/10/97 03/10/98 1 0.00 0.00
PINELLAS, FL 1 *** 50 3031238 0213657 001 01/10/96 01/10/97 1 0.00 0.00
PINELLAS, FL 1 *** 87 3090167 0271318 100 12/28/97 12/28/98 1 0.00 0.00
PINELLAS, FL 1 *** 99 0038841 0271276 001 05/21/97 05/21/98 1 0.00 0.00
PINELLAS, FL 1 *** 43 3676334 0189887 402 03/01/97 03/01/98 1 658.75 658.75
PINELLAS, FL 1 *** 37 3014600 0187527 300 08/27/97 08/27/98 1 0.00 0.00
PINELLAS, FL 1 *** 01 2-24083 0187305 503 12/10/97 12/10/98 1 1345.00 1345.00
PINELLAS, FL 1 *** 50 3776654 2018317 100 03/12/97 03/12/98 1 1030.73 1030.73
PINELLAS, FL 1 *** 53 2016539 0226857 403 01/30/98 01/30/99 1 523.20 523.20
PINELLAS, FL 1 *** 01 3729595 0459311 402 01/01/98 01/01/99 1 980.00 980.00
PINELLAS, FL 1 *** 38 2811194 8160371 300 04/28/97 04/28/98 1 0.00 0.00
PINELLAS, FL 1 *** 01 3-20783 0322393 701 06/10/97 06/10/98 1 1170.00 1170.00
PINELLAS, FL 1 *** 50 3030022 2018268 100 02/21/97 02/21/98 1 721.50 721.50
PINELLAS, FL 1 *** 01 2958732 0213317 301 05/10/97 05/10/98 1 1170.00 1170.00
PINELLAS, FL 8 *** 87 3308736 8271276 100 12/30/97 12/30/98 1 0.00 0.00
ROCKDALE, GA 1 *** 87 3098778 0232104 211 01/10/98 01/10/99 1 0.00 0.00
ROCKDALE, GA 1 *** 50 3490994 0461639 301 06/06/97 06/06/98 1 201.25 201.25
ROCKDALE, GA 1 *** 53 3214266 0248316 001 06/15/97 06/15/98 1 105.60 105.60
ROCKDALE, GA 1 *** 50 3121458 0441571 401 05/20/97 05/20/98 1 380.00 380.00
ROCKDALE, GA 1 *** 01 3271724 0341687 602 02/27/97 02/27/98 1 78.19 78.19
ROCKDALE, GA 1 *** 87 3090167 0320816 800 12/28/97 12/28/98 1 0.00 0.00
ROCKDALE, GA 1 *** 99 0038841 0271251 100 12/28/97 12/28/98 1 0.00 0.00
ROCKDALE, GA 1 *** 37 3758218 2001659 210 08/21/97 08/21/98 1 91.80 91.80
ROCKDALE, GA 1 *** 50 3348990 3161699 414 08/31/97 08/31/98 1 211.20 211.20
ROCKDALE, GA 1 *** 01 3707720 8355277 639 04/10/97 04/10/98 1 163.01 163.01
ROCKDALE, GA 1 *** 50 2966854 0341645 600 06/01/97 06/01/98 1 132.83 132.83
ROCKDALE, GA 1 *** 53 3219861 0248564 924 01/01/97 01/01/98 1 0.00 0.00
ROCKDALE, GA 1 *** 53 3219861 0248564 924 01/01/97 01/01/98 1 181.12 181.12
ROCKDALE, GA 1 *** 50 3318117 0435487 403 06/10/97 06/10/98 1 0.00 0.00
ROCKDALE, GA 1 *** 53 3266735 0351843 513 08/10/97 08/10/98 1 132.83 132.83
</TABLE>
PAGE 23
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexB.XLS, EXPERIAN CONFIDENTIAL
<TABLE>
<CAPTION>
Southeast C&I Report
EXHIBIT B. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
TOT. SALE
COUNTRY NAME QTY CUSTOMER NAME CUST CUST# CON.# EFFEC. ANNIV LEASE PRODUCT AMT,FL/GA
TYPE DATE DATE #YRS PRICE C&I ONLY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ROCKDALE, GA 1 *** 50 3012075 0341749 959 08/01/97 08/01/98 1 211.20 211.20
ROCKDALE, GA 1 *** 54 3265697 0271849 004 08/21/97 08/21/98 1 201.25 201.25
ROCKDALE, GA 1 *** 01 3331688 3161588 328 02/01/97 02/01/98 1 380.00 380.00
ROCKDALE, GA 1 *** 01 3513240 2017747 000 05/05/97 05/05/98 1 211.20 211.20
ROCKDALE, GA 1 *** 01 3768208 2008785 201 12/14/97 12/14/98 1 268.33 268.33
ROCKDALE, GA 8 *** 87 3308736 8271251 100 12/30/97 12/30/98 1 0.00 0.00
SARASOTA, FL 1 *** 87 3613103 0220309 100 03/03/97 03/03/98 1 0.00 0.00
SARASOTA, FL 1 *** 87 3090167 8258775 700 08/07/97 08/07/98 1 0.00 0.00
SARASOTA, FL 1 *** 99 0038841 0271278 100 12/05/97 12/05/98 1 0.00 0.00
SARASOTA, FL 1 *** 37 3014600 0207003 300 09/30/97 09/30/98 1 0.00 0.00
SARASOTA, FL 1 *** 37 2518608 0277531 901 07/01/97 07/01/98 1 498.33 498.33
SARASOTA, FL 1 *** 01 2904762 0187110 405 01/10/98 01/10/99 1 1650.00 1650.00
SARASOTA, FL 1 *** 01 2809562 0187630 304 02/25/97 02/25/98 1 260.10 260.10
SARASOTA, FL 1 *** 53 2309233 2151773 402 05/10/97 05/10/98 1 0.00 0.00
SARASOTA, FL 1 *** 01 2762195 2152231 402 03/10/97 03/10/98 1 1060.00 1060.00
SARASOTA, FL 2 *** 38 2309589 0179092 300 09/30/97 09/30/98 1 0.00 0.00
SARASOTA, FL 7 *** 87 3308736 8271278 100 12/30/97 12/30/98 1 0.00 0.00
SEMINOLE, FL 1 *** 01 2124016 2146276 402 03/01/97 03/01/98 1 760.00 760.00
SEMINOLE, FL 1 *** 01 3707753 0452612 207 03/20/97 03/20/98 1 855.00 855.00
SEMINOLE, FL 1 *** 01 3611447 2028502 101 07/30/97 07/30/98 1 0.00 0.00
SEMINOLE, FL 1 *** 01 2281193 0358762 603 08/10/97 08/10/98 1 760.00 760.00
SEMINOLE, FL 1 *** 54 3575860 0375272 502 05/03/97 05/03/98 1 760.00 760.00
SEMINOLE, FL 1 *** 01 2525859 0277344 801 11/17/96 11/17/97 1 0.00 0.00
SEMINOLE, FL 1 *** 14 2524650 2166169 400 06/10/97 06/10/98 1 442.50 442.50
SEMINOLE, FL 1 *** 01 2782298 0166395 403 10/10/97 10/10/98 1 875.00 875.00
SEMINOLE, FL 1 *** 12 2972778 0211710 201 11/10/97 11/10/98 1 389.40 389.40
SEMINOLE, FL 1 *** 01 2743297 0166487 401 09/10/97 09/10/98 1 389.40 389.40
SEMINOLE, FL 1 *** 87 3613103 0304031 800 05/24/97 05/24/98 1 0.00 0.00
SEMINOLE, FL 1 *** 87 3090167 0271322 100 12/28/97 12/28/98 1 0.00 0.00
SEMINOLE, FL 1 *** 99 0038841 8259978 100 08/27/97 08/27/98 1 0.00 0.00
SEMINOLE, FL 1 *** 54 2323260 0166367 401 06/10/97 06/10/98 1 760.00 760.00
SEMINOLE, FL 1 *** 43 3676334 0189886 403 03/01/97 03/01/98 1 376.25 376.25
SEMINOLE, FL 1 *** 37 2462851 0334223 701 03/10/97 03/10/98 1 760.00 760.00
</TABLE>
PAGE 24
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
RESexB.XLS, EXPERIAN CONFIDENTIAL
<TABLE>
<CAPTION>
Southeast C&I Report
EXHIBIT B. Product Name=TRW REDI Comps (Commercial)
- ---------
Effective 01/01/96 to 11/07/97
TOT. SALE
COUNTRY NAME QTY CUSTOMER NAME CUST CUST# CON.# EFFEC. ANNIV LEASE PRODUCT AMT,FL/GA
TYPE DATE DATE #YRS PRICE C&I ONLY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SEMINOLE, FL 1 *** 01 2337894 0166322 307 07/10/96 07/10/97 1 0.00 0.00
SEMINOLE, FL 1 *** 01 2222754 0297000 900 12/10/97 12/10/98 1 0.00 0.00
SEMINOLE, FL 1 *** 19 2300535 2166017 403 02/10/97 02/10/98 1 0.00 0.00
SEMINOLE, FL 1 *** 01 2723769 2166163 302 02/10/97 02/10/98 1 256.25 256.25
SEMINOLE, FL 1 *** 01 2002419 2166142 402 06/10/97 06/10/98 1 760.00 760.00
SEMINOLE, FL 1 *** 01 2011985 2166159 401 04/10/97 04/10/98 1 0.00 0.00
SEMINOLE, FL 1 *** 01 3807695 2107781 000 06/30/97 06/30/98 1 812.25 812.25
SEMINOLE, FL 1 *** 50 3342811 0208135 101 02/24/97 02/24/98 1 760.00 760.00
SEMINOLE, FL 1 *** 01 2778633 0166474 402 09/10/97 09/10/98 1 1210.00 1210.00
SEMINOLE, FL 1 *** 02 3388923 0278681 803 11/29/96 11/29/97 1 0.00 0.00
SEMINOLE, FL 1 *** 38 2233194 2152171 600 12/28/97 12/28/98 1 0.00 0.00
SEMINOLE, FL 1 *** 54 2236904 0462048 202 02/16/97 02/16/98 1 1089.00 1089.00
SEMINOLE, FL 1 *** 50 3627303 8433820 502 08/30/97 08/30/98 1 1210.00 1210.00
SEMINOLE, FL 2 *** 85 2915683 2014759 200 10/18/97 10/18/98 1 0.00 0.00
SEMINOLE, FL 7 *** 87 3308736 9259978 100 12/30/97 12/30/98 1 0.00 0.00
VOLUSIA, FL 1 *** 01 2124016 0172866 401 10/10/96 10/10/97 1 541.00 541.00
VOLUSIA, FL 1 *** 01 2281193 2125452 402 09/10/97 09/10/98 1 522.23 522.23
VOLUSIA, FL 1 *** 02 3158120 2166170 402 08/10/97 08/10/98 1 522.23 522.23
VOLUSIA, FL 1 *** 87 3613103 0320883 800 12/10/97 12/10/98 1 0.00 0.00
VOLUSIA, FL 1 *** 87 3090167 0258778 000 08/07/97 08/07/98 1 0.00 0.00
VOLUSIA, FL 1 *** 99 0038841 0271279 100 12/05/97 12/05/98 1 0.00 0.00
VOLUSIA, FL 1 *** 43 3676334 2156449 502 03/01/97 03/01/98 1 825.00 825.00
VOLUSIA, FL 1 *** 37 3014600 0127775 400 06/15/97 06/15/98 1 0.00 0.00
VOLUSIA, FL 1 *** 37 2462851 0334224 701 03/10/97 03/10/98 1 910.00 910.00
VOLUSIA, FL 1 *** 01 3040304 0208283 101 04/10/96 04/10/97 1 0.00 0.00
VOLUSIA, FL 1 *** 01 3690996 2018481 101 03/01/97 03/01/98 1 720.38 720.38
VOLUSIA, FL 1 *** 01 3512676 2156317 501 01/10/98 01/10/99 1 990.00 990.00
VOLUSIA, FL 2 *** 85 2915683 2014758 200 10/13/97 10/13/98 1 0.00 0.00
VOLUSIA, FL 7 *** 87 3308736 8271279 100 12/30/97 12/30/98 1 0.00 0.00
Total All Above 293,803.83 298,427.83
</TABLE>
PAGE 25
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
EXHIBIT C -
-----------
REGULAR PRODUCTS OF EXPERIAN RES'S
----------------------------------
FLORIDA AND GEORGIA C&I DATA EXTRACT BUSINESS
---------------------------------------------
All are in printed media only.
Monthly publication:
Florida: Brevard, Broward, Dade, Duval, Hillsborough, Orange, Palm Beach,
Pinellas, Sarasota, Seminole and Volusia counties.
Georgia: Cherokee, Coweta, Douglas, Fayette, Forsyth, Hall, Henry and Rock-
dale counties.
Weekly publication:
Georgia: City of Atlanta, and Clayton, Cobb, Dekalb, Fulton and Gwinnett
counties.
<PAGE>
EXHIBIT D - COMPS MARKETS
-------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
1 AZ Maricopa 37 FL Orange
2 AZ Pima 38 FL Osceola
3 CA Alameda 39 FL Seminole
4 CA Contra Costa 40 GA Forsyth
5 CA El Dorado 41 GA Fulton
6 CA Fresno 42 GA Gwinnett
7 CA Los Angeles 43 IL Cook
8 CA Madera 44 IL DuPage
9 CA Marin 45 IL Lake
10 CA Merced 46 MA Essex
11 CA Napa 47 MA Middlesex
12 CA Orange 48 MA Norfolk
13 CA Placer 49 MA Suffolk
14 CA Riverside 50 MD Montgomery
15 CA Sacramento 51 MD Prince George's
16 CA San Bernardino 52 MD Washington, D.C.
17 CA San Diego 53 MD Anne Arundel
18 CA San Francisco 54 MD Baltimore
19 CA San Joaquin 55 MD City of Baltimore
20 CA San Mateo 56 MD Harford
21 CA Santa Clara 57 MD Howard
22 CA Solano 58 NV Clark
23 CA Sonoma 59 NY Manhattan
24 CA Stanislau 60 TX Collin
25 CA Ventura 61 TX Dallas
26 CA Yolo 62 TX Denton
27 CO Adams 63 TX Tarrant
28 CO Arapahoe 64 VA Fairfax
29 CO Boulder 65 VA Loudoun
30 CO Denver 66 VA Prince William
31 CO Douglas 67 VA Arlington
32 CO El Paso 68 VA City of Alexandria
33 CO Jefferson 69 WA King
34 GA Clayton 70 WA Pierce
35 GA Cobb 71 WA Snohomish
36 GA DeKalb
</TABLE>
<PAGE>
EXHIBIT E - NON-DISCLOSURE STATES
---------------------------------
<TABLE>
<S> <C> <C> <C>
1 Alabama 8 Montana
2 Alaska 9 Michigan
3 Idaho 10 New Mexico
4 Indiana 11 North Dakota
5 Kansas 12 Texas
6 Missouri 13 Utah
7 Mississippi 14 Wyoming
</TABLE>
<PAGE>
EXHIBIT F -
-----------
PUBLICATION AND PRODUCTION COST INFORMATION
-------------------------------------------
Estimated for January 1997:
Direct labor (including research and preparation), printing and packaging:
$11,600 for all Florida and Georgia regular products, or $6,000 for all Florida
only
Reproduction-ready masters only (if COMPS elects to print, package and
fulfill itself, with such services from Experian RES): $3,575 for Florida only,
$3,575 for Georgia only
<PAGE>
Exhibit 10.44
ACQUISITION OF ASSETS
OF
REALBID LLC,
a California Limited Liability Company
by
COMPS INFOSYSTEMS, INC.,
a Delaware Corporation
November 6, 1998
*** Certain confidential portions of this Exhibit were omitted by means of
blackout of the text (the "Mark"). This Exhibit has been filed separately
with the Secretary of the Commission without the Mark pursuant to the
Company's Application Requesting Confidential Treatment under Rule 406 under
the Act.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE 1 DEFINITIONS 1
1.1 Certain Definitions................................................ 1
ARTICLE 2 PURCHASE AND SALE OF PURCHASED ASSETS 3
2.1 Purchase and Sale of REALBID Assets................................ 3
2.2 Assumed Liabilities................................................ 5
2.3 Excluded Assets.................................................... 5
2.4 Purchase Price..................................................... 5
2.5 Closing Date....................................................... 5
2.6 Allocation of Aggregate Purchase Price............................. 5
2.7 Bulk Sales......................................................... 6
2.8 Sales and Use Taxes................................................ 6
2.9 Title.............................................................. 6
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF REALBID 6
3.1 Ownership of REALBID Interests..................................... 6
3.2 Organization and Good Standing..................................... 6
3.3 Authorization...................................................... 7
3.4 Equity Securities of REALBID....................................... 7
3.5 No Conflict or Violation........................................... 7
3.6 Consents and Approvals............................................. 7
3.7 Books and Records.................................................. 7
3.8 Financial Statements............................................... 7
3.9 Accounts Receivable................................................ 8
3.10 Absence of Certain Changes or Events............................... 8
3.11 Contracts and Commitments.......................................... 10
3.12 Insurance.......................................................... 10
3.13 Litigation......................................................... 10
3.14 Liabilities........................................................ 11
3.15 Compliance with Law................................................ 11
3.16 No Brokers......................................................... 11
3.17 No Other Agreements to Sell REALBID................................ 11
3.18 Tax Matters........................................................ 11
3.19 Employment Matters and Benefit Plans............................... 12
3.20 Transaction with Certain Persons................................... 13
3.21 Environmental Quality.............................................. 13
3.22 Certain Advances................................................... 14
3.23 Licenses and Permits............................................... 14
3.24 Proprietary Rights................................................. 14
3.25 Material Misstatements or Omissions................................ 16
3.26 Exclusive Dealing.................................................. 16
</TABLE>
<PAGE>
TABLE OF CONTENTS (CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
3.27 Real Property...................................................... 17
3.28 Location of Purchased Assets....................................... 17
3.29 Prepaid Expenses................................................... 17
3.30 Certain Agreements................................................. 17
3.31 Year 2000 Compliance............................................... 17
3.32 Necessary Property................................................. 18
3.33 Bank Accounts...................................................... 18
3.34 Valuation of COMPS................................................. 18
3.35 Full Disclosure.................................................... 18
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF COMPS 18
4.1 Organization of COMPS.............................................. 18
4.2 Capitalization of COMPS............................................ 19
4.3 Authorization...................................................... 19
4.4 No Conflict or Violation........................................... 19
4.5 Consents and Approvals............................................. 20
4.6 No Brokers......................................................... 20
4.7 Litigation......................................................... 20
4.8 Liabilities........................................................ 20
4.9 Compliance with Law................................................ 20
4.10 COMPS Financial Statements......................................... 20
4.11 Absence of Certain Changes or Events for COMPS..................... 20
4.12 Full Disclosure.................................................... 21
ARTICLE 5 [INTENTIONALLY LEFT BLANK] 21
ARTICLE 6 CONDITIONS TO REALBID AND REALBID PRINCIPALS OBLIGATIONS 21
6.1 Representations, Warranties and Covenants.......................... 21
6.2 No Litigation or Governmental Proceedings.......................... 21
6.3 Delivery at the Closing............................................ 21
6.4 Material Adverse Change............................................ 22
ARTICLE 7 CONDITIONS TO COMPS' OBLIGATIONS 22
7.1 Representations, Warranties and Covenants.......................... 22
7.2 No Governmental Proceedings or Litigation.......................... 22
7.3 Third Party Consents............................................... 22
7.4 Delivery at Closing................................................ 22
7.5 Material Adverse Change............................................ 23
ARTICLE 8 ACTIONS BY COMPS AND THE REALBID PRINCIPALS AFTER THE CLOSING 23
8.1 Survival of Representations........................................ 23
8.2 Indemnification.................................................... 24
ARTICLE 9 MISCELLANEOUS 25
9.1 [Intentionally Left Blank]......................................... 25
9.2 Notices............................................................ 25
</TABLE>
ii
<PAGE>
TABLE OF CONTENTS (CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
9.3 Choice of Law...................................................... 27
9.4 Entire Agreement; Amendments and Waivers........................... 27
9.5 Counterparts....................................................... 27
9.6 Expenses........................................................... 27
9.7 Invalidity......................................................... 27
9.8 Confidentiality.................................................... 27
9.9 Arbitration and Venue.............................................. 28
9.10 Announcements...................................................... 28
9.11 Construction....................................................... 28
9.12 Schedules and Exhibits not Attached................................ 29
9.13 Severability....................................................... 29
9.14 Assignment......................................................... 29
</TABLE>
iii
<PAGE>
ASSET PURCHASE AGREEMENT
THIS ASSET AGREEMENT (this "Agreement") is made and entered into as of
November 6, 1998 (the "Closing Date"), by and among COMPS INFOSYSTEMS, INC., a
Delaware corporation ("COMPS"), REALBID LLC, a California limited liability
company ("REALBID"), Emmett DeMoss, an individual ("DeMoss"), and Robert Potter,
an individual ("Potter," and together with DeMoss, the "REALBID Principals").
RECITALS
--------
WHEREAS, REALBID desires to sell to COMPS, and the REALBID Principals
desire to cause REALBID to sell to COMPS, and COMPS desires to purchase from
REALBID, substantially all of the assets, properties and rights of REALBID; and
WHEREAS, REALBID, the REALBID Principals and COMPS desire to make certain
representations, warranties, covenants and agreements in connection with such
purchase and sale.
NOW, THEREFORE, in consideration of the respective undertakings stated
herein, COMPS, REALBID and the REALBID Principals agree as follows:
ARTICLE 1
DEFINITIONS
-----------
1.1 Certain Definitions. The terms in this Section 1.1, for all purposes
------------------- -----------
of this Agreement, have the meaning herein specified:
(a) "Actions" shall have the meaning as defined in Section 3.13.
------------
(b) "Agreement" shall have the meaning as defined in the
introduction.
(c) "Balance Sheets" shall have the meaning as defined in Section
-------
3.8.(a).
- -------
(d) "Business" means the business and operations of REALBID as
conducted immediately prior to Closing.
(e) "COMPS" shall have the meaning as defined in the introduction.
(f) "COMPS" Disclosure Schedule shall have the meaning as defined in
Section 4.
(g) "COMPS Group" shall have the meaning as defined in Section
-------
8.2(a).
- ------
(h) Confidential Information" shall have the meaning as defined in
Section 9.8(c).
- --------------
(i) "Damages" shall have the meaning as defined in Section 8.2(e).
--------------
(j) "Disclosure Schedule" shall have the meaning as defined in
Section 3.
- ---------
<PAGE>
(k) "Employment Agreement" shall have the meaning as defined in
Section 6.3(b).
- --------------
(l) "Encumbrance" means any mortgage, pledge, assessment, security
interest, deed of trust, lease, lien, adverse claim, levy, charge or other
encumbrance of any kind, or any conditional sale or title retention agreement or
other agreement to give any of the foregoing in the future, except for Permitted
Encumbrances.
(m) "Financial Statements" shall have the meaning as defined in
Section 3.8.
- -----------
(n) "GAAP" shall have the meaning as defined in Section 3.8.
------------
(o) "General Assignment" shall have the meaning as defined in Section
6.3(d).
(p) "Hazardous Material" shall have the meaning as defined in Section
-------
3.21(a).
- -------
(q) "Income Statements" shall have the meaning as defined in Section
-------
3.8(b).
- ------
(r) "Industry Initiative" shall have the meaning as defined in
Section 3.26.
- ------------
(s) "Intellectual Property" shall have the meaning as defined in
Section 3.24(a).
- ---------------
(t) "Knowledge of COMPS" shall mean the knowledge of any executive
officer of COMPS, in each case after due inquiry and reasonable investigation.
(u) "Knowledge of REALBID" shall mean the knowledge of any officer,
director or manager of REALBID, in each case after due inquiry and reasonable
investigation.
(v) "Knowledge of the REALBID Principals" shall mean the knowledge of
any REALBID Principal in each case after due inquiry and reasonable
investigation.
(w) "LLC" shall have the meaning as defined in Section 3.2.
------------
(x) "LOI" shall have the meaning as defined in Section 6.4.
------------
(y) "Material Adverse Effect" means for any person or entity, a
material adverse effect whether individually or in the aggregate (i) on the
business, operations, financial condition, assets and properties, liabilities or
prospects of such person or entity, or (ii) on the ability of such person or
entity to consummate the transactions contemplated hereby.
(z) "Non-Competition Agreement" shall have the meaning as defined in
Section 7.4(a).
(aa) "Other Contracts" shall have the meaning as defined in Section
-------
3.11.
- ----
2
<PAGE>
(bb) "Permitted Encumbrances" shall mean (a) liens, charges,
encumbrances and security interests (i) for taxes not yet due and payable or
being contested in good faith by appropriate proceedings or for which adequate
reserves have been established on the Financial Statements of REALBID or (ii)
arising in the ordinary course of business in connection with the equipment
leases listed as items 3 and 4 of Section 3.11 of the Disclosure Schedule,
------------
provided that such liens, charges, encumbrances and security interests do not
arise in connection with any default or breach of such equipment leases by
REALBID (including without limitation any failure by REALBID to pay fees due
under such leases in a timely manner); (b) with respect to real property,
easements, covenants, conditions and restrictions as to which no violation or
encroachment exists which could in the aggregate have a Material Adverse Effect
or which in the aggregate do not interfere or detract, in any material respect,
from the use or value of such real property; and (c) mechanics', materialmans',
suppliers', vendors' or similar security interests arising by operation of law
and in the ordinary course of business securing amounts which are not
delinquent.
(cc) "Plan" shall have the meaning as defined in Section 3.19(c).
---------------
(dd) "properly perform the Year 2000 Processing" shall have the
meaning as defined in Section 3.31.
------------
(ee) "REALBID" shall have the meaning as defined in the introduction.
(ff) "REALBID Intellectual Property" shall have the meaning as defined
in Section 3.24(b).
---------------
(gg) "REALBID Members' Shares" shall have the meaning as defined in
Section 3.1.
- -----------
(hh) "REALBID Principals" shall have the meaning as defined in the
introduction.
(ii) "Taxes" shall have the meaning as defined in Section 3.18(d).
---------------
(jj) "Transaction" means the sale by REALBID of substantially all of
the assets, properties and rights of REALBID to COMPS, including the Employment
Agreements, the Non-Competition Agreements and the transactions contemplated
thereby.
(kk) "Year 2000 Processing" shall have the meaning as defined in
Section 3.31.
- ------------
ARTICLE 2
PURCHASE AND SALE OF PURCHASED ASSETS
-------------------------------------
2.1 Purchase and Sale of REALBID Assets. Subject to the terms and
-----------------------------------
conditions of this Agreement, at the Closing, REALBID agrees to grant, sell,
convey, assign, transfer and deliver to COMPS, and COMPS agrees to purchase and
acquire from REALBID, free and clear of any Encumbrance or adverse claim of any
kind whatsoever, except Permitted Encumbrances, all of REALBID's right, title,
and interest in and to all assets, properties, rights, leases, fixtures,
accessions, claims, contracts and interests of REALBID of every kind, type or
description, real,
3
<PAGE>
personal and mixed, tangible and intangible, wherever located and whether or not
specifically referred to in this Agreement, that are used in or pertain to the
Business (collectively, the "Purchased Assets"), including without limitation:
(a) the machinery, equipment, leasehold improvements, furniture and
fixtures, vehicles and other operating assets owned or leased by REALBID and
used in the Business as set forth in Schedule 2.1(a) attached hereto;
---------------
(b) the miscellaneous supplies of REALBID used in connection with the
Business;
(c) all of REALBID's right, title and interest in and to license
agreements, supply agreements, sales and purchase agreements, real property
leases, orders and the other contracts and agreements, written or oral,
necessary for REALBID to operate the Business as set forth in Schedule 2.1(c)
---------------
attached hereto (and to the extent oral, accurately described in Schedule 3.11
-------------
of the Disclosure Schedule the terms of such contract) (the "REALBID Assumed
Contracts");
(d) to the extent assignable, all licenses, permits, consents,
approvals, orders, certificates, authorizations, declarations and filings held
by REALBID necessary or incidental to the conduct of the Business set forth in
Schedule 2.1(d) attached hereto (the "REALBID Permits");
- ---------------
(e) all of REALBID's customer lists, mailing lists, telephone
numbers, correspondence, credit, sales and other records, business and
accounting records, computer printouts, vendor lists, and sales and other
literature, operating data, and books, files, documents and records relating to
the Business (collectively, the "Books and Records"); provided, that REALBID
will retain certain Books and Records necessary for REALBID to wind up its
involvement in the Business and provide COMPS, at the sole cost and expense of
COMPS, with access to such Books and Records upon reasonable prior request and
during normal business hours as necessary to conduct the Business after the
Closing Date (as defined below);
(f) all right, title and interest in and to all of the REALBID
Intellectual Property (as defined below), including without limitation (i) all
of REALBID's rights to the name "REALBID" and variations thereof and all
trademarks, tradenames, service marks and goodwill associated therewith; (ii)
the domain name on the World Wide Web known as "realbid.com" and any successor
thereto; and (iii) all items set forth in Section 3.24 of the Disclosure
------------
Schedule (as defined below) and all improvements, modifications and other
Intellectual Property (as defined below) derived therefrom;
(g) all prepaid expenses, deposits and deferred items in effect as of
the Closing Date and from which COMPS may derive future benefit;
(h) all accounts, accounts receivable, notes and notes receivable
(collectively the "REALBID Account Receivables") of REALBID's Business as of the
Closing Date, including without limitation those which are not evidenced by
instruments or invoices, whether or not they have been earned by performance or
have been written off or reserved against as a
4
<PAGE>
bad debt or doubtful account, together with all instruments and all documents of
title representing any of the foregoing and all right, title, security and
guaranties in favor of REALBID with respect to any of the foregoing, as
identified in Schedule 2.1(h) attached hereto;
---------------
(i) the real properties leased or owned by REALBID set forth on
Schedule 2.1(i) attached hereto (the "Assumed Real Property");
(j) all cash and cash equivalents of REALBID as of the Closing Date;
and
(k) the goodwill and going concern value of REALBID's Business.
2.2 Assumed Liabilities. COMPS agrees to assume, satisfy and perform when
-------------------
due only those liabilities arising from all of the liabilities and obligations
of REALBID under the Purchased Assets which arise on or after the Closing Date
(the "Assumed Liabilities"). Except for the Assumed Liabilities, COMPS is not
required to, and shall not, assume, pay, perform, defend or discharge REALBID's
liabilities or obligations of any and every kind whatsoever, direct, indirect,
absolute, contingent, secured, unsecured, accrued or otherwise, whether known or
unknown, including without limitation (i) any accrued payroll, accrued payroll
taxes, accrued vacation, accrued sick pay and accrued workman's compensation
incurred by REALBID in connection with the operation of the Business, (ii) the
BAP Loan, the ERD Loan and the LLC Managers Accrued Fee (as such terms are
described in the Financial Statements) and (iii) any and all payables, costs and
expenses of REALBID incurred before the Closing Date including those payables,
costs and expenses set forth in the Financial Statements. Further, COMPS shall
not assume or agree to pay, perform or discharge, nor be responsible for, any
obligation or liability of REALBID with respect to breach by REALBID of any
contract or commitment or any action, suit or proceeding.
2.3 Excluded Assets. Notwithstanding Section 2.1 hereof, the Purchased
--------------- -----------
Assets do not include the assets set forth on Schedule 2.3 attached hereto (the
------------
"REALBID Excluded Assets").
2.4 Purchase Price. As consideration for the Purchased Assets, COMPS
--------------
agrees to (i) assume the Assumed Liabilities and (ii) pay, or cause to be paid,
to REALBID an aggregate purchase price in cash of One Hundred Sixty-Three
Thousand Dollars ($163,000) (the "Purchase Price. The Purchase Price shall be
delivered to REALBID at the Closing by wire transfer in immediately available
funds to an account designated by REALBID; and
2.5 Closing Date. The closing of the Transaction (the "Closing") shall be
------------
held at 10:00 A.M. local time on October 23, 1998 at the offices of COMPS, 9888
Carroll Centre Road, Suite 100, San Diego, California, or at such other time and
place as the parties shall mutually agree (the "Closing Date").
2.6 Allocation of Aggregate Purchase Price. As promptly as practicable
--------------------------------------
following the Closing Date, but in no event later than 30 days thereafter (the
"30-Day Period"), COMPS shall prepare and deliver to the REALBID Principals an
allocation schedule which sets forth the allocation of the Purchase Price plus
other relevant items for the transactions contemplated under this Agreement,
which allocation schedule shall be in compliance with Section 1060 of the
5
<PAGE>
Internal Revenue Code and Regulations. During the 30-Day Period, COMPS shall
consult with the REALBID Principals in preparing such allocation schedule and
each of COMPS and the REALBID Principals shall use their best efforts to agree
upon a mutually acceptable allocation schedule. COMPS, REALBID and the REALBID
Principals, as applicable, will file all returns, reports, information returns
schedule or other documents (including any related or supporting information)
filed or required to be filed with respect to any taxing authority in a manner
consistent with such allocation.
2.7 Bulk Sales. COMPS hereby waives compliance by REALBID with the
----------
provisions of the applicable Bulk Sales Law of any state. REALBID and the
REALBID Principals, jointly and severally, warrant and agree to pay and
discharge when due all claims of creditors which could be asserted against COMPS
by reason of such noncompliance. REALBID and the REALBID Principals shall,
jointly and severally, indemnify and hold COMPS harmless from, against and in
respect of any Damages (as defined in Article 8 below) suffered or incurred by
COMPS by reason of the failure of REALBID to pay or discharge such claims.
2.8 Sales and Use Taxes. REALBID and the REALBID Principals shall be
-------------------
responsible for all sales and use taxes, if any, arising out of the sale of the
Purchased Assets to COMPS pursuant to this Agreement.
2.9 Title. Title to the Purchased Assets shall pass to COMPS at the
-----
Closing and the Purchased Assets shall be at the risk of REALBID prior to the
Closing.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF REALBID
-----------------------------------------
Each of REALBID and the REALBID Principals, jointly and severally,
represents and warrants to COMPS as on the date hereof, except as set forth on
the disclosure schedule furnished to COMPS (the "Disclosure Schedule"),
specifically identifying the relevant section hereof, which exceptions shall be
deemed to be representations and warranties as if made in this Article 3
---------
(provided that the disclosure in such exceptions shall be true, complete and
correct), as follows:
3.1 Ownership of REALBID Interests. The REALBID Principals own
------------------------------
beneficially and of record all of the issued and outstanding interests/stock of
REALBID (the "REALBID Members' Shares"), consisting of the number of REALBID
Members' Shares listed opposite such REALBID Principal's name in Section 3.1 of
-----------
the Disclosure Schedule, free and clear of all Encumbrances, and have, and on
the Closing Date will have, good and valid title to such REALBID Members'
Shares.
3.2 Organization and Good Standing. REALBID is a limited liability
------------------------------
company ("LLC"), validly existing and in good standing under the laws of the
State of California, and has all requisite LLC power and LLC authority to
conduct the business in which it is now engaged and to own, lease, license and
use the assets and properties now owned, leased, licensed or used by it. REALBID
is duly qualified to do business as a foreign LLC and is in good standing in
each jurisdiction in which such qualification is necessary under the applicable
law as a result of the conduct of its business or the ownership of it properties
and where the failure to be so
6
<PAGE>
qualified, singly or in the aggregate, would have a Material Adverse Effect on
the Business, financial condition of REALBID or the Purchased Assets. Each
jurisdiction, if any, in which REALBID is qualified to do business as a foreign
LLC is listed on Section 3.2 of the Disclosure Schedule, except where failure to
-----------
be qualified would not have a Material Adverse Effect on the Business or the
Purchased Assets. Section 3.2 of the Disclosure Schedule also contains a correct
-----------
and complete copy of REALBID's Operating Agreement as amended to date, that was
previously delivered to COMPS.
3.3 Authorization. REALBID and the REALBID Principals have all the
-------------
necessary power and authority and have taken all action necessary to enter into
this Agreement, to consummate the Transaction contemplated hereby and to perform
their respective obligations hereunder. This Agreement has been duly executed
and delivered by REALBID and the REALBID Principals and is a legal, valid and
binding obligation enforceable against REALBID and the REALBID Principals in
accordance with the terms herein, except as such enforceability may be limited
by (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws,
or by equitable principles, relating to or limiting the rights of creditors
generally and (b) limitations imposed by law or equitable principles upon the
availability of specific performance, injunctive relief or other equitable
remedies.
3.4 Equity Securities of REALBID. The authorized equity securities of
----------------------------
REALBID consists solely of Eight Thousand (8,000) REALBID Members' Shares, of
which Eight Thousand (8,000) shares are issued and outstanding as of the date
hereof. All such issued and outstanding REALBID Members' Shares have been issued
to the REALBID Principals. The REALBID Members' Shares are duly authorized,
validly issued, fully paid and nonassessable, and issued in accordance with all
federal and state securities laws.
3.5 No Conflict or Violation. Except as described in Section 3.5 of the
------------------------ -----------
Disclosure Schedule, neither the execution and delivery of this Agreement by
REALBID or the REALBID Principals nor the consummation of the transactions
contemplated hereby will result in (a) a violation of or a conflict with any of
REALBID's charter documents; (b) a breach of, or a default under, or constitute
a basis for terminating any term or provision of any REALBID Assumed Contract;
(c) a conflict with or result in a violation or breach of any law, order,
judgment, license, statute or regulation applicable to REALBID or the Purchased
Assets; or (d) an imposition of any Encumbrance, restriction or charge on
REALBID or the Purchased Assets.
3.6 Consents and Approvals. Except as set forth in Section 3.6 of the
---------------------- -----------
Disclosure Schedule, no consent, approval or authorization of, or declaration,
filing or registration with, any governmental or regulatory authority, or any
other person or entity, is required to be had or obtained by REALBID or the
REALBID Principals in connection with the execution, delivery and performance of
this Agreement and the consummation of the Transaction contemplated hereby.
3.7 Books and Records. The Books and Records as made available by REALBID
-----------------
to COMPS are true, correct and complete.
3.8 Financial Statements. REALBID has delivered to COMPS the Balance
--------------------
Sheets (as defined below) and the related Income Statements (as defined below)
for REALBID
7
<PAGE>
(collectively, the "Financial Statements"). The Financial Statements (i) are in
accordance with the Books and Records of REALBID, (ii) have been prepared with
the use of the software Quicken throughout the period covered thereby, (iii) to
the Knowledge of REALBID and the REALBID Principals, have been prepared in a
manner that is not materially different from generally accepted accounting
principles ("GAAP"), (iii) fairly, accurately and completely present the assets,
liabilities, Members' interests and financial position and the results of
operations of REALBID for the periods covered thereby and (iv) are true, correct
and complete. Section 3.8 of the Disclosure Schedule contains complete copies of
-----------
the following Financial Statements including:
(a) REALBID's balance sheet for the year ended December 31, 1997 and
unaudited interim balance sheet for the period ended October 31, 1998
(collectively, the "Balance Sheets").
(b) REALBID's income statement for the year ended December 31, 1997;
and unaudited interim income statement for the period ended October 31, 1998
(collectively the "Income Statements").
3.9 Accounts Receivable. All of the REALBID Accounts Receivable shown on
-------------------
the Financial Statements or thereafter acquired arose in the usual and ordinary
course of business consistent with past practices, and the values at which such
REALBID Accounts Receivable are carried on the Books and Records of REALBID
reflect the accounts receivable valuation policy of REALBID which is consistent
with REALBID's past practice and, to the Knowledge of REALBID and the REALBID
Principals, is prepared in a manner that is not materially different from GAAP.
Such REALBID Accounts Receivables are bona fide receivables and are collectible,
legal, valid and binding obligations of the obligors, and to the Knowledge of
REALBID and the REALBID Principals, should be able to be collected by REALBID
without counterclaim or setoff.
3.10 Absence of Certain Changes or Events. Except as specifically set
------------------------------------
forth on Section 3.10 of the Disclosure Schedule, since September 30, 1998 and
------------
up to the Closing Date, REALBID and the REALBID Principals have conducted
business only in the ordinary and usual course and, there has not been any
material adverse change in, or any event or development which, individually or
together with other such events, could reasonably be expected to result in a
Material Adverse Effect on REALBID or the Purchased Assets including, without
limiting the generality of the foregoing, the events as described below.
(a) change in REALBID's condition (financial or otherwise), the
Purchased Assets, liabilities, working capital, reserves, earnings, business or
prospects, except for changes which have not, individually or in the aggregate,
been materially adverse, and, to the Knowledge of REALBID or the REALBID
Principals, any developments in the Business which could reasonably be expected
to have a Material Adverse Effect on the condition (financial or otherwise),
earnings, business or prospects the Business or the Purchased Assets;
(b) failure to operate the Business in the ordinary course so as to
use REALBID and the REALBID Principals' respective efforts to preserve the
Business and the
8
<PAGE>
Purchased Assets intact and to preserve the goodwill of REALBID's suppliers,
customers and others having business relations with REALBID;
(c) sale, assignment for transfer of any of the Purchased Assets,
including the REALBID Intellectual Property, other than in the ordinary course
of business, consistent with past practices;
(d) additional indebtedness for borrowed money over Five Thousand
Dollars ($5,000) in the aggregate, without the express written consent of COMPS;
(e) hiring of individuals earning an annual compensation, including
salary, cash bonuses and commissions, in excess of Thirty Thousand Dollars
($30,000), without the express written consent of COMPS;
(f) material change in the terms or termination of any REALBID
Assumed Contract;
(g) amendments or changes to the charter documents of REALBID;
(h) individual capital expenditure or commitment, or series of
related capital expenditure or commitments, by REALBID or any of the REALBID
Principals outside of the ordinary course of business exceeding Five Thousand
Dollars ($5,000);
(i) destruction of, damage to or loss of any Purchased Assets or
other assets or properties material to the Business (whether or not covered by
insurance);
(j) material adverse change in a material customer relationship
including without limitation any cancellation or termination or notice of
termination or cancellation by any material customer of its relationship or a
material portion of its relationship with REALBID;
(k) labor trouble or claim of wrongful discharge or other unlawful
labor practice or action that would have a Material Adverse Effect on the
Business;
(l) material change in accounting methods or practices (including any
change in depreciation or amortization policies or rates) by REALBID;
(m) declaration, setting aside or payment of a dividend or other
distribution with respect to the capital stock of REALBID, or any direct or
indirect redemption, purchase or other acquisition by REALBID of any of its
capital stock;
(n) increase in the salary or other compensation payable or to become
payable to any of its (i) officers, managers or directors or (ii) employees or
advisors, or the declaration, payment or commitment or obligation of any kind
for the payment of a bonus or other additional salary or compensation to any
such person except for increases, payments or commitments in the ordinary course
of business consistent with past practices;
9
<PAGE>
(o) waiver or release of any material right or claim of REALBID,
including any write-off or other compromise of any REALBID Account Receivable
other than in the ordinary course of business consistent with past practices;
(p) any Encumbrances or other restriction on any of the Purchased
Assets;
(q) delayed or postponed the payment of accounts payable or other
liabilities outside of the ordinary course of business; or
(r) any other event or condition which in any one case or in the
aggregate has or might reasonably be expected to have a Material Adverse Effect
on the Purchased Assets or the condition (financial or otherwise), earnings or
prospectus of the Business.
3.11 Contracts and Commitments. Section 3.11 of the Disclosure Schedule
------------------------- ------------
constitutes a correct and complete list of (i) all of the REALBID Assumed
Contracts and (ii) all other written and oral material contracts and material
commitments to which REALBID is a party or by which the Purchased Assets are
bound in any material respect (and, to the extent oral, accurately described the
terms of such contracts or commitments) (the "Other Contracts").
(a) The REALBID Assumed Contracts and the Other Contracts are, in all
material aspects, valid and legally binding obligations, enforceable in
accordance with their terms (subject to applicable bankruptcy, insolvency and
other laws effecting the enforceability of creditors rights generally).
(b) REALBID is current in the performance of all material obligations
required of it under any of the REALBID Assumed Contracts and the Other
Contracts.
(c) Except as stated on Section 3.11 of the Disclosure Schedule, to
------------
the Knowledge of REALBID and the REALBID Principals, no party with whom REALBID
has entered into one of the REALBID Assumed Contracts or the Other Contracts is
in material default in its performance thereunder or has materially breached any
terms thereof.
(d) All of the REALBID Assumed Contracts and the Other Contracts are
available to the officers, employees and representatives of COMPS for their
review and examination (and, to the extent oral, accurate written description of
the terms of such contracts are available.)
3.12 Insurance. REALBID has no insurance policies of any nature and no
---------
insurance policy of any nature is required by any federal, state, local or other
governmental or regulatory authorities to operate the Business or to own the
Purchased Assets nor is any insurance policy necessary or incidental to the
conduct of the Business or the ownership of the Purchased Assets.
3.13 Litigation. There is no action, order, writ, injunction, judgment,
----------
decree, claim, suit, litigation, proceeding, labor dispute, arbitral action,
investigation or similar dispute of any sort whatsoever (collectively,
"Actions") outstanding or pending or, to the Knowledge of REALBID and the
REALBID Principals, threatened or anticipated against, relating to or effecting
REALBID, the Purchased Assets or the Transaction contemplated by this Agreement.
REALBID and the REALBID Principals are not in default with respect to any
judgment, order,
10
<PAGE>
writ, injunction or decree of any court or governmental agency, and there are no
unsatisfied judgments against REALBID, the Purchased Assets or the Business.
3.14 Liabilities. REALBID or the REALBID Principals have no liabilities or
-----------
obligations (absolute, accrued, contingent or otherwise), which may have an
adverse effect on the Business, the Purchased Assets, or this Transaction,
except the liabilities which are reflected and reserved against on the Financial
Statements or liabilities incurred in the ordinary course of business and
consistent with past practice since the last period covered in the Financial
Statements which have not had, and could not reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Effect on REALBID or the
Purchased Assets.
3.15 Compliance with Law. REALBID and the REALBID Principals are in
-------------------
compliance with all applicable laws, statutes, ordinances and regulations in
effect as of the Closing Date whether federal, state or local, except where the
failure to comply would not have a Material Adverse Effect on the Business, the
Purchased Assets, the Transaction or prospects of REALBID. Neither REALBID nor
any of the REALBID Principals has received any written notice to the effect
that, or otherwise been advised that, it is not in compliance with any of such
statutes, regulations, orders, ordinances or other laws where the failure to
comply would have a Material Adverse Effect on the Business, prospects of
REALBID, the Purchased Assets or the transaction, and neither the REALBID
Principals nor REALBID has any reason to anticipate that any presently existing
circumstances are likely to result in violations of any such regulations which
would, in any one case or in the aggregate, have a Material Adverse Effect on
the Business, the Purchased Assets, the Transaction or prospects of REALBID.
3.16 No Brokers. Neither REALBID nor the REALBID Principals has paid, nor
----------
incurred any obligation to pay, any finder's fee, brokerage commission or
similar payment of any sort whatsoever in connection with the Transaction
contemplated by this Agreement. COMPS has not and will not have any obligation
to pay any broker's, finder's, investment broker's, financial advisor's or
similar fee in connection with this Agreement or the Transaction by reason of
any action taken by or on behalf of REALBID.
3.17 No Other Agreements to Sell REALBID. Neither REALBID nor the REALBID
-----------------------------------
Principals nor any affiliate or representative of REALBID has any obligation,
absolute or contingent, to any other person or firm to sell or encumber REALBID,
the Purchased Assets or to effect any sale, consolidation or other
reorganization of REALBID or to enter into any agreement with respect thereto,
nor has any such party had any discussion with any third party regarding any of
the foregoing.
3.18 Tax Matters
-----------
(a) REALBID is a limited liability company which is and at all times
has prepared all federal and state income tax returns and reports as a
partnership. No jurisdiction has at any time asserted or indicated that it may
assert that REALBID should be treated as an association taxable as a
corporation. REALBID has duly and timely filed all Tax reports and returns
required to be filed by, including all federal, state, local and foreign tax
returns and reports prior to the Closing. All such Tax returns were correct and
complete in all material respects when filed. All Taxes of REALBID or for which
REALBID could be held liable
11
<PAGE>
(whether or not shown on any Tax return or report) have been paid in full. To
the Knowledge of REALBID and the REALBID Principals, REALBID has made adequate
provision in its financial statements in a manner not materially different from
GAAP, for the payment of all Taxes which may subsequently become due. All Taxes
which any Taxpayer has been required to collect or withhold at the time of the
Closing have been duly collected or withheld and, to the extent required, have
been or will be duly paid to the proper taxing authority. REALBID has not been a
member of an affiliated group filing a consolidated federal income Tax return.
The Company is not a party to any Tax allocation or sharing agreement.
(b) No audit is currently pending with respect to any Tax return or
report of REALBID, nor is any REALBID Principal aware of any information which
has caused or should cause them to believe that an audit by any Tax authority
may be forthcoming, and there are no claims which have been or may be asserted
relating to any of REALBID's Tax returns filed for any year which if determined
adversely would result in the assertion by any governmental agency of any
deficiency in Tax. There are no liens for Taxes on the Purchased Assets and all
Taxes due or payable, and all interest and penalties thereon, whether disputed
or not, which could result in the imposition of any lien on the Purchased Assets
or REALBID, have been paid in full. REALBID has not waived any statute of
limitations in respect of Taxes or agreed to any extension of time for the
assessment of any Tax. No claim has ever been made by an authority in a
jurisdiction where REALBID does not file Tax returns or reports that it is or
may be subject to taxation by that jurisdiction.
(c) REALBID does not have any liability for the Taxes of any other
Person (A) under Treasury Regulations (S) 1.1502-6 (or any similar provision of
state, local, or foreign law), (B) as a transferee or successor, (C) by
contract, or (D) otherwise.
(d) For the purpose of this Agreement, "Tax" means and includes any
federal, state, local or foreign income, sales, use, withholding, transfer,
payroll, excise, personal property, occupancy or other tax, levy, impost, fee,
imposition, assessment or charge imposed by or on behalf of any governmental
entity or any agency or instrumentality thereof, together with any related
addition to tax, interest or penalty thereon.
3.19 Employment Matters and Benefit Plans.
------------------------------------
(a) Except for the REALBID Principals, REALBID has no and never has
had any employees. REALBID has complied in all material respects with all
applicable laws relating to the employment of labor, including provisions
thereof relating to wages, hours, equal opportunity, collective bargaining, age
and sex discrimination and the withholding and payment of social security and
other taxes.
(b) None of the REALBID Principals is in violation of any term of any
employment contract, patent disclosure agreement, non-competition agreement, or
any restrictive covenant to a former employer relating to the right of any such
REALBID Principal because of the nature of the business conducted or presently
proposed to be conducted by REALBID or to the use of trade secrets or
proprietary information of others.
12
<PAGE>
(c) REALBID has no and never has had any benefit plan, arrangement or
understanding of any kind ("Plan") nor is any REALBID Principal or his
respective affiliate entitled to any rights under any REALBID Plan or other
benefits or arrangements of REALBID of any kind, including but not limited to
payments of deferred compensation.
3.20 Transaction with Certain Persons. Except as set forth on Schedule
-------------------------------- --------
3.20, no officer, director or employee of REALBID or any member of any such
- ----
person's immediate family is presently a party to any transaction with REALBID
relating to the Business or the Purchased Assets, including without limitation,
any contract, agreement or other arrangement (i) providing for the furnishing of
services by, (ii) providing for the rental of real or personal property from, or
(iii) otherwise requiring payments to (other than for services as officers,
directors or employees of REALBID) any such person or corporation, partnership,
trust or other entity in which any such person has a substantial interest as a
shareholder, officer, director, trustee or partner.
3.21 Environmental Quality.
---------------------
(a) Hazardous Material. To the Knowledge of REALBID and the REALBID
------------------
Principals, no underground storage tanks are present under any property that is
a part of the Purchased Assets. No material amount of any substance that has
been designated by any governmental entity or by applicable federal, state or
local law to be radioactive, hazardous or otherwise to pose an unreasonable
danger to human health or the environment, including, without limitation, PCBs,
friable asbestos, petroleum, urea-formaldehyde and all substances listed as
hazardous substances pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, or defined as a hazardous
waste pursuant to the United States Resource Conservation and Recovery Act of
1976, as amended and in effect as of the Closing Date, and the regulations
promulgated pursuant to said laws, (a "Hazardous Material"), but excluding
office, maintenance, shipping and janitorial supplies, are present as a result
of the actions of REALBID or, to the Knowledge of REALBID and the REALBID
Principals, as a result of any actions of any third party or otherwise, in, on
or under any property, including the land and the improvements, ground water and
surface water thereof, that REALBID has at any time owned, operated, occupied
or leased. Section 3.21 of the Disclosure Schedule lists all locations that
------------
REALBID formerly owned or leased where, to the Knowledge of REALBID and the
REALBID Principals, Hazardous Materials are present in a volume or concentration
that would reasonably be expected to have a Material Adverse Effect on the
Business or the Purchased Assets.
(b) Environmental Liabilities. No material action, proceeding,
-------------------------
revocation proceeding, amendment procedure, writ, injunction or claim is
pending, or to the Knowledge of REALBID and the REALBID Principals, threatened
concerning any Hazardous Material in, on or under any property owned or leased
REALBID. REALBID is not aware of any fact or circumstance that could involve
REALBID in any environmental litigation that would reasonably be expected to
have a Material Adverse Effect on the Business or the Purchased Assets or impose
upon REALBID any material environmental liability.
13
<PAGE>
3.22 Certain Advances. No receivable of REALBID is owing by a director,
----------------
officer, or employee, consultant or shareholder of REALBID or owing by any
relative of any such person, other than for advances in the ordinary and usual
course of business to an officer or employee for reimbursable business expenses.
3.23 Licenses and Permits. Schedule 2.1(d) is a true and complete list of
-------------------- ---------------
all of the REALBID Permits. All such REALBID Permits are currently effective and
valid and have been validly issued. No additional permits or licenses are
necessary to enable REALBID to conduct the Business in compliance with all
applicable federal, state and local laws, except where failure to obtain such
licenses or permits would not have a Material Adverse Effect on the Business or
the Purchased Assets. Neither the execution, delivery or performance of this
Agreement nor the mere passage of time (except as specifically noted in the
Disclosure Schedule) will have any effect on the continued validity or
sufficiency of the REALBID Permits. There are no actions or proceedings pending
or, to the Knowledge of REALBID and the REALBID Principals, threatened which may
result in the revocation, cancellation, suspension, or any adverse modification
of any REALBID Permit.
3.24 Proprietary Rights.
(a) "Intellectual Property" consists of the following:
(i) all patents, trademarks, trade names, service marks, trade
dress, copyrights and any renewal rights therefor, mask works, net lists,
schematics, technology, inventions, manufacturing processes, supplier lists,
trade secrets, know-how, moral rights, computer software programs or
applications (in both source and object code form), applications and
registrations for any of the foregoing;
(ii) all software and firmware listings, and updated software
source code, and complete system build software and instructions related to all
software described herein;
(iii) all documents, records and files relating to design, end
user documentation, manufacturing, quality control, sales, marketing or customer
support for all intellectual property described herein;
(iv) all other tangible or intangible proprietary information
and materials; and
(v) all license and other rights in any third party product,
intellectual property, proprietary or personal rights, documentation, or
tangible or intangible property, including without limitation the types of
intellectual property and tangible and intangible proprietary information
described in sub-sections (i) through (iv) above.
(b) "REALBID Intellectual Property" consists of all Intellectual
Property described in sub-sections (a)(i)-(iv) in this Section 3.24 that are
----
owned or held by or on behalf of REALBID, and/or any REALBID Principal, or that
are being, and/or have been, used, or are currently under development for use,
in the business of REALBID as it has been, is currently anticipated or is
reasonably anticipated (as of the date of this Agreement and as of the Closing
14
<PAGE>
Date) by REALBID and/or the REALBID Principals to be, conducted. Each REALBID
Principal shall specifically identify on Section 3.24 of the
------------
Disclosure Schedule any intellectual property as to which he asserts individual
rights and identify any Intellectual Property which he will not assign or
license to REALBID.
(c) Section 3.24 of the Disclosure Schedule lists: (i) all patents,
------------
copyrights, mask works, trademarks, service marks, trade dress, any renewal
rights for any of the foregoing, and any applications and registrations for any
of the foregoing, which are included in the REALBID Intellectual Property and
owned by or on behalf of REALBID; (ii) all material hardware products and tools,
software products and tools, and services that are currently published, offered,
or under development by REALBID; and (iii) all material licenses, sublicenses
and other agreements to which REALBID is a party and pursuant to which REALBID
or any other person is authorized to use the REALBID Intellectual Property or
exercise any other right with regard thereto.
(d) The REALBID Intellectual Property consists solely of items and
rights which are either: (i) owned by REALBID, (ii) in the public domain or
(iii) rightfully used and authorized for use by REALBID and its successors
pursuant to a valid license. All REALBID Intellectual Property which consists of
license or other rights to third party property is set forth in Section 3.24 of
------------
the Disclosure Schedule. REALBID has all rights in the REALBID Intellectual
Property necessary to carry out REALBID's current and former activities,
including without limitation rights to make, use, reproduce, modify, adapt,
create derivative works based on, translate, distribute (directly and
indirectly), transmit, display and perform publicly, license, rent, lease,
assign, and sell the REALBID Intellectual Property and products embodying the
REALBID Intellectual Property in all geographic locations and fields of use, and
to sublicense any or all such rights to third parties, including the right to
grant further sublicenses.
(e) REALBID and each REALBID Principal is not, nor as a result of the
execution or delivery of this Agreement, or performance of REALBID's obligations
hereunder, will REALBID be, in violation of any license, sublicense or other
agreement to which REALBID or any REALBID Principal is a party or otherwise
bound. Except as specifically described in Section 3.24 of the Disclosure
------------
Schedule, neither REALBID nor any REALBID Principal is obligated to provide any
consideration (whether financial or otherwise) to any third party, nor is any
third party otherwise entitled to any consideration, with respect to any
exercise of rights by REALBID or COMPS in the REALBID Intellectual Property.
(f) To the Knowledge of REALBID and the REALBID Principals, the use,
reproduction, modification, distribution, licensing, sublicensing, sale, or
any other exercise of rights in any product, work, technology, service or
process as used, provided or offered at any time, or as reasonably proposed by
REALBID and/or the REALBID Principals for use, reproduction, modification,
distribution, licensing, sublicensing, sale or any other exercise of rights, by
REALBID does not infringe any copyright, patent, trade secret, trademark,
service mark, trade name, firm name, logo, trade dress, mask work, moral right,
other intellectual property right, right of privacy or right in personal data of
any person. No claims (i) challenging the validity, effectiveness, or ownership
by REALBID of any of the REALBID Intellectual Property, or (ii) to the effect
that the use, reproduction, modification, manufacturing, distribution,
licensing, sublicensing, sale or any other exercise of rights in any product,
work, technology,
15
<PAGE>
service or process as used, provided or offered at any time, or as currently
proposed or reasonably proposed (as of the date of this Agreement and as of the
Closing Date) by REALBID and/or the REALBID Principals for use, reproduction,
modification, distribution, licensing, sublicensing, sale or any other exercise
of rights, by REALBID infringes or will infringe on any intellectual property or
other proprietary or personal right of any person have been asserted or, to the
Knowledge of REALBID and each of the REALBID Principals, are threatened by any
person nor are there any valid grounds for any bona fide claim of any such kind.
All granted or issued patents and mask works and all registered trademarks
listed on Section 3.24 of the Disclosure Schedule and all copyright
------------
registrations held by REALBID are valid, enforceable and subsisting. To the
Knowledge of REALBID and the REALBID Principals, there is no unauthorized use,
infringement or misappropriation of any of the REALBID Intellectual Property by
any third party, employee or former employee.
(g) No parties other than REALBID possess any current or contingent
rights to any source code which is part of the REALBID Intellectual Property.
(h) Section 3.24 of the Disclosure Schedule lists all parties other
------------
than employees who have created any portion of, or otherwise have any rights in
or to, the REALBID Intellectual Property. REALBID has secured from all parties
who have created any portion of, or otherwise have any rights in or to, the
REALBID Intellectual Property valid and enforceable written assignments of any
such work or other rights to REALBID and has provided true and complete copies
of such assignments to COMPS.
(i) Section 3.24 of the Disclosure Schedule includes a true and
------------
complete list of each support and maintenance agreement relating to REALBID
Intellectual Property including without limitation the identity of the parties
entitled to receive such service or maintenance, the term of such agreements and
any other provisions relating to the termination of such agreements.
3.25 Material Misstatements or Omissions. No representations or warranties
-----------------------------------
by REALBID and the REALBID Principals in this Agreement, nor any document,
exhibit, statement, certificate or schedule furnished to COMPS pursuant hereto,
or in connection with the transactions contemplated hereby, contain or will
contain any untrue statement of a material fact, or omit or will omit to state
any material fact necessary to make the statements or facts contained therein
not misleading. REALBID and the REALBID Principals have disclosed all events,
conditions and facts materially affecting the Business, condition (financial or
otherwise) or prospects of such REALBID or the Purchased Assets.
3.26 Exclusive Dealing. REALBID and the REALBID Principals represent and
-----------------
warrant that they are not entertaining any bids, inquiries or other offers
toward a transaction with any other entity that would affect the ownership of
REALBID, and that they will continue not to do and will not orally or in writing
agree to any such transaction until this Agreement has been terminated. Any such
offers or indications of interest received by REALBID will be promptly disclosed
to COMPS. COMPS is aware that REALBID is involved in ongoing discussions with
certain brokerage firms who are formulating an Industry Initiative ("Industry
Initiative"), which discussions do not involve any purchase or sale of REALBID.
This initiative may or may not involve REALBID. REALBID will update COMPS on any
material developments regarding the
16
<PAGE>
Industry Initiative. COMPS acknowledges and agrees that REALBID's participation
in the Industry Initiative will not constitute a breach of this Section 3.26.
------------
3.27 Real Property.
-------------
(a) Schedule 2.1(i) contains a complete and accurate list and legal
---------------
description of the Assumed Real Property.
Except as provided in Section 3.27 of the Disclosure Schedule, REALBID has
------------
good and marketable title to, or a valid leasehold interest in, all of the
Assumed Real Property, free and clear of all Encumbrances. Each lease with
respect to the Assumed Real Property is a legal, valid and binding agreement of
the party thereto, subsisting in full force and effect and enforceable in
accordance with its terms, and, except as set forth in Section 3.27 of the
------------
Disclosure Schedule, there is no, and none of REALBID Principals or REALBID has
received notice of any, default (or any condition or event which, after notice
or lapse of time or both, would constitute a default) thereunder. REALBID does
not owe any brokerage commissions with respect to any such Assumed Real
Property.
3.28 Location of Purchased Assets. The Disclosure Schedule contains a
----------------------------
complete and accurate schedule specifying the location of all of the Purchased
Assets, where applicable, as of the Closing Date. REALBID has good and
marketable title to, or a valid leasehold interest in all of the Purchased
Assets, free and clear of all Encumbrances. Except as set forth in the
Disclosure Schedule, the Purchased Assets being transferred to COMPS pursuant to
this Agreement include all the Intellectual Property necessary for the ownership
and operation of the Business as currently conducted.
3.29 Prepaid Expenses. All prepaid expenses of REALBID that are reflected
----------------
on the Financial Statements, and all prepaid expenses incurred by REALBID since
the last period covered in the Financial Statements and set forth in Section
-------
3.29 of the Disclosure Schedule, are bona fide prepaid expenses and represent
- ----
amounts due with respect to actual, arms-length transactions entered into in the
ordinary course of business of REALBID.
3.30 Certain Agreements. Except as disclosed in Section 3.30 of the
------------------ ------------
Disclosure Schedule or as contemplated by this Agreement, neither the execution
and delivery of this Agreement, nor the consummation of the Transaction
contemplated hereby will: (i) result in any payment by REALBID (including,
without limitation, severance, unemployment compensation, parachute payment,
bonus or otherwise) becoming due to any officer, director, employee or
independent contractor of REALBID or any REALBID Principal under any Plan,
agreement or otherwise, (ii) increase any benefits otherwise payable under any
Plan or agreement, or (iii) result in the acceleration of the time of payment or
vesting of any such benefits.
3.31 Year 2000 Compliance. For purposes of this Section: (i) "Year 2000
--------------------
Processing" means processing by the REALBID Intellectual Property that manage
and/or manipulate data involving dates, including single century formulas and
multi-century formulas and dates on or after January 1, 2000; and (ii) "properly
perform the Year 2000 Processing" means that REALBID Intellectual Property will
not cause an abnormally ending dating scenario within the application or result
in incorrect values generated involving such dates. REALBID and the
17
<PAGE>
REALBID Principals warrant that (x) any version of the REALBID Intellectual
Property created and provided by REALBID shall properly perform Year 2000
Processing, and (y) to the Knowledge of REALBID and the REALBID Principals, all
other versions of the REALBID Intellectual Property provided by REALBID shall
properly perform Year 2000 Processing.
3.32 Necessary Property. The Purchased Assets constitute all of the assets
------------------
and properties necessary for the conduct of the Business in the manner and to
the extent presently conducted by REALBID.
3.33 Bank Accounts. Section 3.33 of the Disclosure Schedule contains a
------------- ------------
complete and accurate list of each deposit account or asset maintained by or on
behalf of REALBID with any bank, brokerage house or other financial institution,
specifying the name and address of the institution, the name under which the
account is maintained, the account number, and the name and title or capacity of
each person or entity authorized to have access thereto.
3.34 Valuation of COMPS. REALBID and the REALBID Principals agree and
------------------
acknowledge that (i) neither COMPS nor any representative of COMPS has made any
representation, whether written or oral, about, or taken any action or inaction
representing, the fair market value of the capital stock of COMPS, the stock
options of COMPS or any other valuation of COMPS and (ii) any valuation of the
capital stock of COMPS, the stock options of COMPS or any other valuation of
COMPS made by REALBID, the REALBID Principals or any representative of the
REALBID or the REALBID Principals (collectively, the "REALBID Group") were made
by REALBID Group based on their independent due diligence review of COMPS and
not in reliance on any discussions with or materials from COMPS (except for the
COMPS Financial Statements).
3.35 Full Disclosure. All information requested by COMPS and the
---------------
opportunity to enter into discussions with officers, employees and consultants
of REALBID, at or before the Closing Date have been made available to COMPS and
such information, together with the schedules, exhibits and any other agreements
and certificates executed and delivered by REALBID or any of the REALBID
Principals pursuant to this Agreement, does not contain any untrue statement of
material fact, or omits to state a material fact necessary to make the
statements or facts contained herein or therein not misleading in light of the
circumstances under which they were furnished.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF COMPS
---------------------------------------
COMPS represents and warrants to REALBID and the REALBID Principals as of
the Closing Date, except as set forth on the disclosure schedule furnished to
REALBID and the REALBID Principals (the "COMPS Disclosure Schedule"),
specifically identifying the relevant section hereof, which exceptions shall be
deemed to be representations and warranties as if made in this Article 4
---------
(provided that the disclosure in such exceptions shall be true, correct and
complete), as follows:
4.1 Organization of COMPS. COMPS is a corporation duly organized, validly
---------------------
existing and in good standing under the laws of the State of Delaware, has full
corporate power
18
<PAGE>
and authority to conduct its business in which it is now engaged and to own,
lease, license and use the properties and assets now owned, licensed or used by
it. COMPS is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which such qualification is necessary
under the applicable law as a result of the conduct of its business or the
ownership of its properties and where the failure to be so qualified, singly or
in the aggregate, would have a Material Adverse Effect on COMPS.
4.2 Capitalization of COMPS. The authorized capital stock of COMPS
-----------------------
consists of (i) Twenty-Two Million Five Hundred Thousand (22,500,000) shares of
Class A Common Stock, par value $.01 per share, of which there were Four Million
Seven Hundred Seventy-Three Thousand Eight Hundred Sixty (4,773,860) shares
issued and outstanding as of October 28, 1998, (ii) Two Million Five Hundred
Thousand (2,500,000) shares of Class B Common Stock, par value $.01 per share,
of which there were Thirty-Three Thousand Five Hundred (33,500) shares issued
and outstanding as of October 28, 1998, and (iii) Five Million (5,000,000)
shares of Preferred Stock, par value $.01 per share, of which there were Four
Million Nine Hundred Eight Thousand One Hundred Twenty-Six (4,908,126) shares
issued or outstanding as of October 28, 1998. No shares of COMPS Class A or
Class B Common Stock or Preferred Stock have been issued since October 28, 1998
except pursuant to the exercise of stock options or warrants listed on Section
-------
4.2 of the COMPS Disclosure Schedule. All outstanding shares of COMPS Common
- ---
Stock and Preferred Stock are duly authorized, validly issued, fully paid and
non-assessable, and issued in accordance with all federal and state securities
laws. An aggregate of Thirty-Seven Thousand Three Hundred Twenty-Nine (37,329)
shares of COMPS Class A Common Stock and One Million Nine Hundred Forty-Seven
Thousand Two Hundred Eighty-Four (1,947,294) shares of COMPS Class B Common
Stock are issuable upon the exercise of COMPS options and warrants which were
outstanding as of October 28, 1998. All shares of COMPS Common Stock subject to
issuance as aforesaid, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, would be duly authorized,
validly issued, fully paid and nonassessable.
4.3 Authorization. COMPS has all the necessary corporate power and
-------------
authority and has taken all corporate action necessary to enter into this
Agreement, to consummate the Transaction contemplated hereby and to perform its
obligations hereunder. This Agreement has been duly executed and delivered by
COMPS and is a legal, valid and binding obligation enforceable against COMPS in
accordance with the terms except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium or other similar laws, or by
equitable principles, relating to or limiting the rights of creditors generally
and (b) limitations imposed by law or equitable principles upon the availability
of specific performance, injunctive relief or other equitable remedies.
4.4 No Conflict or Violation. Except as described in Section 4.4, of the
------------------------ -----------
COMPS Disclosure Schedule, neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated hereby will result in (a)
a violation of or a conflict with any of COMPS' charter documents; (b) a breach
of, or a default under, or constitute a basis for terminating any term or
provision of any contract, agreement, indebtedness, lease to which COMPS is a
party (c) a violation by COMPS of any law, order or judgment; or (d) an
imposition of any encumbrance, restriction or charge on COMPS.
19
<PAGE>
4.5 Consents and Approvals. Except as set forth in Section 4.5 of the
---------------------- -----------
COMPS Disclosure Schedule, no consent, approval or authorization of, or
declaration, filing or registration with, any governmental or regulatory
authority, or any other person or entity, is required to be had or obtained by
COMPS in connection with the execution, delivery and performance of this
Agreement and the consummation of the Transaction contemplated hereby.
4.6 No Brokers. COMPS has not paid nor incurred any obligation to pay, any
----------
finder's fee, brokerage commission or similar payment of any sort whatsoever in
connection with the Transaction contemplated by this Agreement. REALBID has no
and will have no obligation to pay any broker's, finder's, investment broker's,
financial advisor's or similar fee in connection with this Agreement or the
Transaction by reason of any action taken by or on behalf of COMPS.
4.7 Litigation. There is no action, order, writ, injunction, judgment,
----------
decree, claim, suit, litigation, proceeding, labor dispute, arbitral action,
investigation or similar dispute of any sort whatsoever outstanding or pending
or, to the Knowledge of COMPS, threatened or anticipated against, relating to,
effecting or which would have reasonable potential to obstruct or prevent the
consummation of the Transaction contemplated by this Agreement.
4.8 Liabilities. COMPS has no liabilities or obligations (absolute,
-----------
accrued, contingent or otherwise), which may have had an adverse effect on this
Transaction, except the liabilities which are reflected and reserved against on
the COMPS' financial statements or liabilities incurred in the ordinary course
of business and consistent with past practice which have not had, and could not
reasonably be expected to result, individually or in the aggregate, in a
Material Adverse Effect on the Transaction.
4.9 Compliance with Law. COMPS is in compliance with all applicable laws,
-------------------
statutes, ordinances and regulations in effect as of the Closing Date, whether
federal, state or local, except where the failure to comply would not have a
Material Adverse Effect on the Transaction. COMPS has not received any written
notice to the effect that, or otherwise been advised that, it is not in
compliance with any of such statutes, regulations, orders, ordinances or other
laws where the failure to comply would have a Material Adverse Effect on the
Transaction, and COMPS has no reason to anticipate that any presently existing
circumstances are likely to result in violations of any such regulations which
would, in any one case or in the aggregate, have a Material Adverse Effect on
the Transaction.
4.10 COMPS Financial Statements. COMPS has delivered to REALBID its
--------------------------
balance sheets for the year ended December 31, 1997 and the related income
statements for the year ended December 31, 1997 (collectively, the "COMPS
Financial Statements"). The COMPS Financial Statements (i) are in accordance
with the books and records of COMPS, (ii) have been prepared in conformity with
GAAP for the periods covered thereby, (iii) fairly, accurately and completely
present the assets, liabilities and financial position and the results of
operations of COMPS for the periods covered thereby and (iv) are true, correct
and complete.
4.11 Absence of Certain Changes or Events for COMPS. Except as
----------------------------------------------
specifically set forth on Section 4.11 of the COMPS Disclosure Schedule, since
------------
December 31, 1997 and up to the Closing Date, COMPS has conducted business only
in the ordinary and usual course and, there has not been any material adverse
change in, or any event or development which,
20
<PAGE>
individually or together with other such events, could reasonably be expected to
result in a Material Adverse Effect on COMPS..
4.12 Full Disclosure. All information requested by REALBID and the
---------------
opportunity to enter into discussions with officers, employees and consultants
of COMPS, at or before the Closing Date have been made available to REALBID and
such information, together with the schedules, exhibits and any other agreements
and certificates executed and delivered by COMPS pursuant to this Agreement,
does not contain any untrue statement of material fact, or omits to state a
material fact necessary to make the statements or facts contained herein or
therein not misleading in light of the circumstances under which they were
furnished.
ARTICLE 5
[INTENTIONALLY LEFT BLANK]
--------------------------
ARTICLE 6
CONDITIONS TO REALBID AND REALBID PRINCIPALS OBLIGATIONS
--------------------------------------------------------
The obligations of REALBID and the REALBID Principals to consummate the
Transaction provided for hereby are subject, in the reasonable discretion of
REALBID, to the satisfaction, on or prior to the Closing Date, of each of the
following conditions:
6.1 Representations, Warranties and Covenants. All representations and
-----------------------------------------
warranties of COMPS contained in the Agreement (including the COMPS Disclosure
Schedule) shall be true and correct at and as of the Closing Date and COMPS
shall have performed all agreements and covenants required to be performed by it
prior to or at the Closing Date.
6.2 No Litigation or Governmental Proceedings. There shall be no
-----------------------------------------
litigation or proceeding pending or threatened against COMPS for the purpose on
enjoining or preventing the consummation of the Agreement or otherwise claiming
that such consummation is unlawful, an there shall be no governmental
investigation or inquiry pending or threatened which in good faith judgment of
REALBID or the REALBID Principals, might lead to or result in any litigation or
proceeding of the nature referred to above.
6.3 Delivery at the Closing. COMPS shall have delivered to the REALBID
-----------------------
Principals at the Closing:
(a) One Hundred Sixty-Three Thousand Dollars ($163,000) by wire
transfer in immediately available funds to the account specified by REALBID.
(b) The employment agreements by and between COMPS and each of DeMoss
and Potter, respectively, substantially in the form of Exhibit 6.3(b) attached
--------------
hereto and by this reference incorporated herein (the "Employment
Agreements"), duly executed by COMPS.
(c) Stock option agreements in connection with the issuance of the
options referenced in The Employment Agreements for DeMoss and Potter, duly
executed by COMPS.
21
<PAGE>
(d) Assignment and Assumption Agreement by and between COMPS and
REALBID substantially in the form of Exhibit 6.3(d) attached hereto and by this
--------------
reference incorporated herein (the "General Assignment"), duly executed by
COMPS.
(e) A certificate of an officer of COMPS substantially in the form of
Exhibit 6.3(e) attached hereto and by this reference incorporated herein, to
- --------------
evidence compliance with Section 6.1.
-----------
(f) (i) Certified copies of the Certificate of Incorporation and
Bylaws of COMPS and (ii) certificates of good standing for COMPS issued by the
appropriate governmental office of its state of incorporation and each state in
which it is qualified to do business.
(g) Such other documents as REALBID may reasonably request for the
purpose of facilitating the consummation of the Transaction.
6.4 Material Adverse Change. Since December 31, 1997, there shall have
-----------------------
been no material adverse change in the business of COMPS, except such changes or
circumstances as are contemplated, disclosed or required by the terms of this
Agreement.
ARTICLE 7
CONDITIONS TO COMPS' OBLIGATIONS
--------------------------------
The obligations of COMPS to consummate the Transaction provided for hereby
are subject, in the reasonable discretion of COMPS, to the satisfaction, on or
prior to the Closing Date, of each of the following conditions:
7.1 Representations, Warranties and Covenants. All representations and
-----------------------------------------
warranties of REALBID and REALBID Principals contained in the Agreement
(including the Disclosure Schedule) shall be true and correct at and as of the
Closing Date and REALBID and the REALBID Principals shall have performed all
agreements and covenants required to be performed by them prior to or at the
Closing Date.
7.2 No Governmental Proceedings or Litigation. There shall be no
-----------------------------------------
litigation or proceeding pending or threatened against REALBID or the REALBID
Principals for the purpose on enjoining or preventing the consummation of the
Agreement or otherwise claiming that such consummation is unlawful, an there
shall be no governmental investigation or inquiry pending or threatened which in
good faith judgment of REALBID or the REALBID Principals, might lead to or
result in any litigation or proceeding of the nature referred to above
7.3 Third Party Consents. REALBID shall have obtained all consents,
--------------------
approvals and waivers from third parties and governmental and regulatory
authorities necessary or appropriate to permit REALBID to perform its
obligations hereunder and to consummate the Transaction hereby shall have been
obtained, including without limitation the consents necessary for REALBID to
assign the REALBID Assumed Contracts to COMPS.
7.4 Delivery at Closing. REALBID and the REALBID Principals shall have
-------------------
delivered to COMPS at the Closing:
22
<PAGE>
(a) Non-Competition Agreements by and between COMPS and each of the
REALBID Principals and REALBID respectively, substantially in the form of
Exhibit 7.4(a) attached hereto and by this reference incorporated herein (the
- --------------
"Non-Competition Agreements"), duly executed by each of the REALBID Principals
and REALBID.
(b) Employment Agreements for DeMoss and Potter, duly executed by each of
DeMoss and Potter.
(c) Certified copies of the chartered documents and the operating
agreement of REALBID and (ii) certificates of good standing for REALBID issued
by the appropriate governmental office of its state of domicile and each state
in which it is qualified to do business.
(d) A certificate of the an officer of REALBID substantially in the form
of Exhibit 7.4(d) attached hereto and by this reference incorporated herein, to
--------------
evidence compliance with Section 7.1.
-----------
(e) An original bill of sale substantially in the form of Exhibit 7.4(e)
--------------
attached hereto and by this reference incorporated herein, duly executed by
REALBID.
(f) The General Assignment duly executed by REALBID.
(g) An original assignment substantially in the form of Exhibit 7.4(g)
--------------
attached hereto and by this reference incorporated herein of all the REALBID
Intellectual Property.
(h) A general release and waiver substantially in the form of Exhibit
-------
7.4(h) attached hereto and by this reference incorporated herein, duly executed
- ------
by Institutional Real Estate, Inc. and Geoffrey Dohrmann.
(i) Possession of all of the Purchased Assets, including all Books and
Records relating to the Purchased Assets.
(j) Such other documents as COMPS may reasonably request for the purpose
of facilitating the consummation of the Transaction.
7.5 Material Adverse Change. Since the date of the LOI, there shall have
-----------------------
been no material adverse change in the Business of REALBID, except such changes
or circumstances as are contemplated, disclosed or required by the terms of the
Agreement.
ARTICLE 8
ACTIONS BY COMPS AND THE REALBID PRINCIPALS AFTER THE CLOSING
-------------------------------------------------------------
8.1 Survival of Representations. The representations and warranties of
---------------------------
COMPS, REALBID and the REALBID Principals contained herein shall survive the
Closing Date and shall thereafter continue in full force and effect for a period
of twenty-four (24) months following the Closing Date, without regard to any
investigation made by any of the parties hereto.
23
<PAGE>
8.2 Indemnification.
---------------
(a) By the REALBID Principals. The REALBID Principals shall,
-------------------------
jointly and severally, indemnify, save and hold harmless COMPS, and its
officers, directors, employees, agents, successors, affiliates and assigns and
their respective representatives (collectively, the "COMPS Group") from and
against any and all Damages, incurred in connection with, arising out of,
resulting from or incident to (i) any breach of any covenant, representation,
warranty or agreement or the inaccuracy of any representation, made by REALBID
and/or the REALBID Principals in or pursuant to this Agreement, (ii) any
liability, obligation or commitment of any nature (absolute, accrued, contingent
or otherwise) relating to the Business and arising out of transactions entered
into or events occurring prior to the Closing.
(b) By COMPS. COMPS shall indemnify and save and hold harmless the
--------
REALBID Principals, its affiliates and its and their respective representatives
from and against any and all Damages incurred in connection with or arising out
of or resulting from or incident to (i) any breach of any covenant,
representation, warranty or agreement or the inaccuracy of any representation,
made by COMPS in or pursuant to this Agreement or (ii) any liability, obligation
or commitment of any nature (absolute, accrued, contingent or otherwise)
relating to the business and arising out of transactions entered into or events
occurring subsequent to the Closing which are not the subject of a matter
covered in Section 8.2(a) or (iii) any claims arising out of the personal
--------------
guarantees of Potter and DeMoss with respect to the equipment leases listed as
items 3 and 4 of Section 3.11 of the Disclosure Schedule, provided that such
claims are a result of a breach of such equipment leases by COMPS.
(c) Assistance. The REALBID Principals and COMPS shall cooperate
----------
with one another in all reasonable respects, at their own cost, risk and
expense, in the investigation, prosecution, trial, and defense of any lawsuit,
claim, proceeding, arbitration or action that is subject to indemnification
hereunder.
(d) Defense of Claims. If any lawsuit or enforcement action is
-----------------
filed against any party entitled to the benefit of indemnity hereunder, written
notice thereof shall be given to the indemnifying party as promptly as practical
(and in any event within fifteen (15) days after the service of the citation or
summons); that the failure of any indemnified party to give timely notice shall
not effect the rights to indemnification hereunder except to the extent that the
indemnifying party demonstrates actual damage caused by such failure. After such
notice, if the indemnifying party shall acknowledge in writing to the
indemnified party that the indemnifying party shall be obligated under the terms
of its indemnity hereunder in connection with such lawsuit or action, then the
indemnified party shall be entitled, if it so elects, to take control of the
defense and investigation of such lawsuit or action and to employ and engage
attorneys of its own choice to handle and defend the same, at the indemnifying
party's cost, risk and expense unless (i) the indemnifying party and the
indemnified party has been advised in writing by counsel that there may be one
or more legal defenses available to such indemnified that are different from or
additional to those available to the indemnifying party, and to compromise or
settle such claim, which compromise or settlement shall be made only with the
written consent of the indemnifying party, such consent not to be unreasonably
withheld. If the indemnified party notifies the indemnifying party that it does
not want to assume the defense or it fails to assume the defense of such claim
within fifteen (15) days after receipt of notice of the claim pursuant to
24
<PAGE>
this Section 8.2, not to assume the defense, then the indemnifying party will be
-----------
entitled to take control of the defense, at its own cost, risk and expense;
provided, however, that such claim shall not be compromised or settled without
the written consent of the indemnified party, which consent shall not be
unreasonably withheld. In the event the indemnified party assumes defense of the
claim, the indemnified party will keep the indemnifying party reasonably
informed of the progress of any such defense, compromise or settlement. The
indemnifying party shall be liable for any settlement of any action effected
pursuant to and in accordance with this Section 8.2 and for any final judgment
-----------
(subject to any right of appeal), and the indemnifying party agrees to indemnify
and hold harmless an indemnified party from and against any Damages of such
settlement of judgment.
(e) Damages. The term "Damages" as used in this Section 8.2 shall
------- -----------
mean all costs, losses (including, without limitation, diminution in value),
taxes, diminutions in value, liabilities, damages, lawsuits, deficiencies,
claims and expenses (whether or not arising out of third party claims),
including without limitation, interest, penalties, costs of mitigation, lost
profits and other losses resulting from any shutdown or curtailment of
operations, reasonable attorneys' fees and all amounts paid in investigation,
defense or settlement of any of the foregoing. Damages are not limited to
matters asserted by third parties against REALBID and the REALBID Principals or
COMPS in the absence of third party claims. Payments by REALBID and the REALBID
Principals or COMPS of amounts for which they are indemnified hereunder shall
not be a condition precedent to recovery. The parties' obligation to indemnify
one another shall not limit any other rights, including without limitation,
rights of contribution they may have with respect to each other under statute or
common law.
(f) Limitation on Indemnification
-----------------------------
(i) REALBID and the REALBID Principals shall have no liability
for amounts payable to any member of the COMPS Group pursuant their
indemnification obligations in this Article until the total of all exceeds
-------
Twenty-Five Thousand Dollars ($25,000) in the aggregate after which the
indemnification obligations of REALBID and the REALBID Principals shall include
all such Damages as if this Section 8.2(f)(i) were not part of this Agreement.
-----------------
(ii) REALBID and the REALBID Principals shall have no liability
to any member of the COMPS Group pursuant to their indemnification obligations
in this Article 8 to the extent that the total of all paid by REALBID and the
---------
REALBID Principals in the aggregate to members of the COMPS Group pursuant to
such indemnification obligations exceeds Three Hundred Thousand Dollars
($300,000); provided, however, that this clause (ii) shall not apply to any
-------- ------- -----------
intentional breach by REALBID or any REALBID Principals of any covenant or
agreement of such Seller.
ARTICLE 9
MISCELLANEOUS
-------------
9.1 [INTENTIONALLY LEFT BLANK]
9.2 Notices. All notices, requests and other communications hereunder must
-------
be in writing and will be deemed to have been duly given only if delivered
personally against written
25
<PAGE>
receipt or by facsimile transmission with answer back confirmation or mailed
(postage prepaid by certified or registered mail, return receipt requested) or
by overnight courier to the parties at the following addresses or facsimile
numbers:
If to COMPS, addressed to:
COMPS InfoSystems, Inc.
9888 Carroll Centre Road, Suite 100
San Diego, CA 92126
Facsimile No.: (619) 684-3292
Attn: Christopher Crane
With a copy to:
Brobeck, Phleger & Harrison LLP
550 West "C" Street, Suite 1200
San Diego, CA 92101
Facsimile No.: (619) 234-3848
Attn: Craig S. Andrews, Esq.
If to REALBID or the REALBID Principals addressed to:
REALBID LLC
700 Larkspur Landing Circle, Suite 199
Larkspur, CA 94939
Facsimile No.: (415) 464-4944
Attn: Mr. Emmett DeMoss & Mr. Robert Potter
With a copy to:
Luce, Forward, Hamilton & Scripps LLP
600 West Broadway, Suite 2600
San Diego, CA 92101
Facsimile No.: (619) 232-8311
Attn: Dennis J. Doucette, Esq.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section 9.2, be deemed given upon
-----------
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section 9.2, be deemed given upon receipt, and (iii) if
-----------
delivered by mail in the manner described above to the address as provided in
this Section 9.2, be deemed given upon receipt (in each case regardless of
-----------
whether such notice, request or other communication is received by any other
person to whom a copy of such notice, request or other communication is to be
delivered pursuant to this Section). Any party from time to time may change its
address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other parties hereto.
26
<PAGE>
9.3 Choice of Law. This Agreement shall be construed, interpreted and the
-------------
rights of the parties determined in accordance with the laws of the State of
California, without reference to the choice of law provisions thereof.
9.4 Entire Agreement; Amendments and Waivers. This Agreement, together
----------------------------------------
with all schedules and exhibits hereto, constitutes the complete, final and
exclusive statement of the terms of the agreement among the parties pertaining
to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions of the parties. No modification or
rescission of this Agreement shall be binding unless executed in writing by the
party to be bound thereby. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar), nor shall such waiver constitute a continuing waiver
unless otherwise expressly provided.
9.5 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.6 Expenses. Except as expressly provided herein, each party hereto shall
--------
pay its own legal, accounting, and other expenses incident to this Agreement and
to any action taken by such party in preparation for carrying this Agreement
into effect.
9.7 Invalidity. In the event that any one or more of the provisions
----------
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not effect any other provision or this
Agreement or nay other such instrument.
9.8 Confidentiality.
---------------
(a) Except as and to the extent required by law, the parties hereto
will not disclose or use, and will direct their respective representatives not
to disclose or use to the detriment of the other parties, any Confidential
Information (as defined below) with respect to such other party furnished, or to
be furnished, by such other party or its representatives to the disclosing party
or its representatives at any time or in any manner other than in connection
with the transaction contemplated in this Agreement. Notwithstanding the
foregoing, Confidential Information shall not include any information which is
generally known to the public or to companies in businesses similar to the
Business, or which later, through no act of the disclosing party, becomes
generally known.
(b) Upon consummation of this Agreement, REALBID shall (a) return to
COMPS, or shall destroy in a manner satisfactory to COMPS, all tangible forms of
Confidential Information provided by COMPS, including any and all copies
thereof, and those portions of any documents, memoranda, notes, studies and
analyses prepared by or on behalf of REALBID or any of its directors, officers,
employees, advisors or representatives that incorporate or are derived from such
Confidential Information, and (b) immediately cease, and shall cause its
directors, officers, employees, partners, advisors and representatives to cease,
use of such
27
<PAGE>
Confidential Information as well as any information or materials that
incorporate or are derived from such Confidential Information.
(c) "Confidential Information" means all of the following (whether or
not reduced to writing and whether or not patentable or protected by copyright):
(i) any and all trade secrets concerning the business and affairs of any person
or entity, product specifications, data, know-how, formulae, compositions,
processes, designs, sketches, photographs, graphs, drawings, samples, inventions
and ideas, past, current and planned research and development, current and
planned manufacturing and distribution methods and processes, customer lists,
current and anticipated customer requirements, price lists, market studies,
business plans, computer software and programs (including object code and source
code), computer software and database technologies, systems, structures and
architectures (and related processes, formulae, compositions, improvements,
derivatives, devices, know-how, inventions, discoveries, concepts, ideas,
designs, methods and information) of a person or entity and any other
information, however, documented, of a person or entity that is a trade secret
within the meaning of any and all applicable state and federal trade secret
laws; (ii) any and all information concerning the business and affairs of a
person or entity (which includes historical financial statements, financial
projections and budgets, historical and projected sales, capital spending
budgets and plans, the names and backgrounds of key personnel and personnel
training and techniques and materials), however documented; and (iii) any and
all notes, analysis, compilations, studies, summaries, and other material
prepared by or for a person or entity containing or based, in whole or in part,
on any information included in the foregoing.
9.9 Arbitration and Venue. Any controversy or claim arising out of or
---------------------
relating to this Agreement or the making, performance or interpretation thereof
shall be submitted to arbitration in San Diego, California, pursuant to the
rules and procedures of the American Arbitration Association before a panel of
three arbitrators. The ruling of the arbitrator shall be final, and judgment
thereon may be entered in any court having jurisdiction. If any question is
submitted to a court of law for resolution, then the Superior Court of the
County of San Diego, California, or the United States District Court having
jurisdiction in the County of San Diego, shall be the exclusive court of
competent jurisdiction for the resolution of such question. Each party will bear
one half of the cost of the arbitration filing and hearing fees, and the cost of
the arbitrator. Each party will bear its own attorneys' fees, unless otherwise
decided by the arbitrator. The parties understand and agree that the arbitration
shall be instead of any civil litigation and that the arbitrator's decision
shall be final and binding to the fullest extent permitted by law and
enforceable by any court having jurisdiction thereof. Each party shall be
entitled to pre-hearing discovery as provided in California Code of Civil
Procedure Section 1283.05.
9.10 Announcements. Neither COMPS, REALBID, the REALBID Principals nor any
-------------
of their respective affiliates shall issue or authorize to be issued any press
release or similar announcement concerning the Letter of Intent, this Agreement,
or the Transaction contemplated hereby, without the prior written approval of
the parties hereto.
9.11 Construction. No provision of this Agreement shall be construed in
------------
favor of or against any party on the ground that such party or its counsel
drafted the provision. Any remedies provided for herein are not exclusive of any
other lawful remedies which may be
28
<PAGE>
available to either party. This Agreement shall at all times be construed so as
to carry out the purposes stated herein.
9.12 Schedules and Exhibits not Attached. Any item disclosed hereunder
-----------------------------------
(including in any schedule or exhibit hereto or thereto) shall be deemed
disclosed for all purposes hereof irrespective of the specific representation or
warranty to which it is explicitly referenced. Without limiting the generality
of the foregoing, the fact that any disclosure on any of the schedules or
exhibits hereto or thereto is not required to be disclosed in order to render
the applicable representation or warranty to which it relates true, or that the
absence of such disclosure on the schedules or exhibits hereto or thereto would
not constitute a breach of such representation or warranty, shall not be deemed
or construed to expand the scope of any representation or warranty hereunder or
to establish a standard of disclosure in respect of any representation or
warranty.
9.13 Severability. If any term, provision, covenant or restriction of this
------------
letter is held by an arbitrator or a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions contained within this letter will remain in full
force and effect and will in no way be affected, impaired or invalidated.
9.14 Assignment. This Agreement and all right hereunder shall not be
----------
assignable by any party without the prior written consent of the other party,
except by will or the laws of descent and distribution. Subject to the
foregoing, all of the terms of this Agreement shall be binding upon and inure to
the benefit of an be enforceable by the parties and their respective heirs,
executors, administrators, personal representatives, successors and permitted
assigns. Except as expressly stated, nothing herein shall be deemed to confer
any benefit upon any person or business entity that is not a party to this
Agreement. Notwithstanding the foregoing, COMPS may assign its rights under this
Agreement to a wholly owned subsidiary.
29
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
COMPS InfoSystems, Inc., REALBID LLC,
a Delaware corporation a California limited liability
company
By: /s/ Christopher A. Crane By: /s/ Robert A. Potter
-------------------------------------- --------------------------------
Christopher A. Crane Robert A. Potter, Manager
President and Chief Executive Officer
By: /s/ Emmett DeMoss
--------------------------------
Emmett DeMoss, Manager
THE REALBID PRINCIPALS
/s/ Robert Potter
-----------------------------------
Robert Potter
/s/ Emmett DeMoss
-----------------------------------
Emmett DeMoss
<PAGE>
Exhibit 6.3(b)
--------------
Forms of Employment Agreements
See Exhibit 10.17 to Registration Statement on Form S-1
<PAGE>
Exhibit 6.3(d)
--------------
Form of Assignment and Assumption Agreement
See Exhibit 10.39 to Registration Statement on Form S-1
<PAGE>
Exhibit 6.3(e)
--------------
Form of COMPS Officer Certificate
CERTIFICATE OF OFFICER
COMPS INFOSYSTEMS, INC.
This Certificate is delivered pursuant to Section 6.3(e) of that certain
Asset Purchase Agreement (the "Agreement"), dated as of __________________,
1998, by and among COMPS InfoSystems, Inc., REALBID LLC, Emmett DeMoss and
Robert Potter. Capitalized terms used herein without definition shall have the
same meaning as set forth in the Agreement.
I, ________________________, do hereby certify that I am the duly elected,
qualified and acting ______________________ of COMPS and as such, am authorized
to execute this Certificate on its behalf, and I further certify that:
1. All representations and warranties of COMPS contained in the Agreement
are true and correct on and as of the date hereof COMPS has performed all
agreements and covenants in a timely manner required to be performed by it prior
to or on the date hereof.
2. No actions or proceedings have been instituted or threatened which
question the validity or legality of the transactions contemplated by the
Agreement.
3. All Permits, authorizations, consents, approvals and waivers from third
parties and governmental or regulatory authorities and other persons or entities
necessary or appropriate to permit COMPS to perform its obligations hereunder
and to consummate the transactions contemplated by the Agreement have been
obtained.
IN WITNESS WHEREOF, I have executed this Certificate as of the Closing
Date, this ____ day of November, 1998.
By:__________________________
Name:________________________
Title:_______________________
<PAGE>
Exhibit 7.4(a)
--------------
Forms of Non-Competition Agreements
See Exhibit 10.19 to Registration Statement on Form S-1
<PAGE>
Exhibit 7.4(d)
--------------
Form of REALBID Officer Certificate
CERTIFICATE OF OFFICER
REALBID LLC
This Certificate is delivered pursuant to Section 7.4(d) of that certain
Asset Purchase Agreement (the "Agreement"), dated as of __________________,
1998, by and among COMPS InfoSystems, Inc., REALBID LLC, Emmett DeMoss and
Robert Potter. Capitalized terms used herein without definition shall have the
same meaning as set forth in the Agreement.
I, ________________________, do hereby certify that I am the duly elected,
qualified and acting ______________________ of REALBID and as such, am
authorized to execute this Certificate on its behalf, and I further certify
that:
1. All representations and warranties of REALBID and the REALBID
Principals contained in the Agreement are true and correct on and as of the date
hereof and REALBID and the REALBID Principals have performed all agreements and
covenants in a timely manner required to be performed by them prior to or on the
date hereof.
2. No actions or proceedings have been instituted or threatened which
question the validity or legality of the transactions contemplated by the
Agreement.
3. All Permits, authorizations, consents, approvals and waivers from third
parties and governmental or regulatory authorities and other persons or entities
necessary or appropriate to permit REALBID and the REALBID Principals to perform
their respective obligations hereunder and to consummate the transactions
contemplated by the Agreement have been obtained.
IN WITNESS WHEREOF, I have executed this Certificate as of the Closing
Date, this ____ day of November, 1998.
By:______________________
Name:____________________
Title:___________________
<PAGE>
Exhibit 7.4(e)
--------------
Form of Bill of Sale
THIS BILL OF SALE dated as of ____________, 1998, is being executed
and delivered by REALBID LLC, a California limited liability company, Emmett
DeMoss, and Robert Potter (collectively, "Sellers") pursuant to that certain
Asset Purchase Agreement dated as of November 6, 1998 (the "Purchase
Agreement"), by and among Sellers and COMPS InfoSystems, Inc., a Delaware
corporation ("Buyer"). The execution and delivery of this Bill of Sale is a
condition to Buyer's obligations under the Purchase Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Sellers hereby agree as follows:
1. Capitalized terms used herein but not defined herein shall have
the meanings assigned such terms in the Purchase Agreement.
Subject to the terms and conditions set forth in the Purchase
Agreement, Sellers hereby grants, sell, convey, assign, transfer and deliver to
Buyer, and Buyer hereby acquires from Sellers, free and clear of any Encumbrance
or adverse claim of any kind whatsoever (except Permitted Encumbrances), all of
REALBID LLC's ("REALBID") right, title, and interest in and to all assets,
properties, rights, leases, fixtures, accessions, claims, contracts and
interests of REALBID of every kind, type or description, real, personal and
mixed, tangible and intangible, wherever located and whether or not specifically
referred to in this Agreement, that are used in or pertain to the Business
(collectively, the "Purchased Assets"), including without limitation:
(a) the machinery, equipment, leasehold improvements, furniture
and fixtures, vehicles and other operating assets owned or leased by REALBID and
used in the Business as set forth in Schedule 2.1(a) to the Purchase Agreement;
---------------
(b) the miscellaneous supplies of REALBID used in connection
with the Business;
(c) REALBID's right, title and interest in and to license
agreements, supply agreements, sales and purchase agreements, real property
leases, orders and the other contracts and agreements, written or oral,
necessary for REALBID to operate the Business as set forth in Schedule 2.1(c) to
---------------
the Purchase Agreement (and to the extent oral, accurately described in Schedule
--------
3.11 of the Disclosure Schedule the terms of such contract;
- ----
(d) to the extent assignable, all licenses, permits, consents,
approvals, orders, certificates, authorizations, declarations and filings held
by REALBID necessary or incidental to the conduct of the Business set forth in
Schedule 2.1(d) to the Purchase Agreement;
- ---------------
(e) all of REALBID's customer lists, mailing lists, telephone
numbers, correspondence, credit, sales and other records, business and
accounting records, computer printouts, vendor lists, and sales and other
literature, operating data, and books, files, documents
<PAGE>
and records relating to the Business (collectively, the "Books and Records");
provided, that REALBID will retain certain Books and Records necessary for
REALBID to wind up its involvement in the Business and provide COMPS, at the
sole cost and expense of COMPS, with access to such Books and Records upon
reasonable prior request and during normal business hours as necessary to
conduct the Business after the Closing Date (as defined below);
(f) all right, title and interest in and to all of the REALBID
Intellectual Property, including without limitation (i) all of REALBID's rights
to the name "REALBID" and variations thereof and all trademarks, tradenames,
service marks and goodwill associated therewith, (ii) the domain name on the
World Wide Web known as "realbid.com" and any successor name thereto and (iii)
all items set forth in Section 3.24 of the Disclosure Schedule and all
------------
improvements, modifications and other Intellectual Property derived therefrom;
(h) all prepaid expenses, deposits and deferred items in effect
as of the Closing Date and from which COMPS may derive future benefit;
(i) all accounts, accounts receivable, notes and notes
receivable of REALBID's Business as of the Closing Date, including without
limitation those which are not evidenced by instruments or invoices, whether or
not they have been earned by performance or have been written off or reserved
against as a bad debt or doubtful account, together with all instruments and all
documents of title representing any of the foregoing and all right, title,
security and guaranties in favor of REALBID with respect to any of the
foregoing, as identified in Schedule 2.1(h) to the Purchase Agreement;
---------------
(j) the real properties leased or owned by REALBID set forth on
Schedule 2.1(i) to the Purchase Agreement;
(k) all cash and cash equivalents of REALBID as of the Closing
Date; and
(l) the goodwill and going concern value of REALBID's Business.
2. Buyer hereby waives compliance by Sellers with the provisions of
the bulk transfer laws of any state. Sellers warrant and agree to pay and
discharge when due all claims of creditors which could be asserted against Buyer
by reason of such noncompliance. Pursuant to the terms of the Purchase
Agreement, Sellers shall indemnify and hold Buyer harmless from, against and in
respect of (and shall on demand reimburse Buyer for) any Damages suffered or
incurred by Buyer by reason of the failure of Sellers to pay or discharge such
claims.
3. From time to time after the date hereof, Sellers will execute and
deliver, or cause its affiliates to execute and deliver, to Buyer such
instruments of sale, transfer, conveyance, assignment and delivery, and such
consents, assurances, powers of attorney and other instruments as may be
reasonably requested by Buyer or its counsel in order to vest in the Company all
right, title and interest of Seller in and to the Purchased Assets and otherwise
in order to carry out the purpose and intent of this Bill of Sale.
2
<PAGE>
4. Notwithstanding any other provisions of this Bill of Sale to the
contrary, nothing contained in this Bill of Sale shall in any way supersede,
modify, replace, amend, change, rescind, waive, exceed, expand, enlarge or in
any way affect the provisions, including warranties, covenants, agreements,
conditions, representations or, in general any of rights and remedies, and any
of the obligations and indemnifications of Sellers or Buyer set forth in the
Purchase Agreement nor shall this Bill of Sale expand or enlarge any remedies
under the Purchase Agreement including without limitation any limits on
indemnification specified therein. This Bill of Sale is intended only to effect
the transfer of certain property transferred pursuant to the Purchase Agreement
and shall be governed entirely in accordance with the terms and conditions of
the Purchase Agreement.
5. This Bill of Sale shall in all respects be construed in
accordance with and governed by the laws of the State of California without
giving effect to its conflicts-of-laws principles (other than any provisions
thereof validating the choice of the laws of the State of California in the
governing law).
6. This Bill of Sale may be executed by the parties herein in
separate counterparts and by facsimile, each of which when so executed and
delivered shall be an original, but all such counterparts and facsimile shall
together shall constitute one and the same instrument.
[SIGNATURE PAGE TO FOLLOW]
3
<PAGE>
IN WITNESS WHEREOF, Sellers have caused this Bill of Sale to be
executed and delivered on the date and year first written above.
REALBID LLC,
a California limited liability company
By:_____________________________________
Robert A. Potter, Manager
By:_____________________________________
Emmett DeMoss, Manager
________________________________________
Emmett DeMoss
________________________________________
Robert A. Potter
[SIGNATURE PAGE TO THE BILL OF SALE]
<PAGE>
Exhibit 7.4(g)
--------------
Form of Intellectual Property Assignment
See Exhibit 10.40 to Registration on Form S-1
<PAGE>
Exhibit 7.4(h)
--------------
Form of General Release and Waiver
GENERAL RELEASE AND WAIVER
--------------------------
THIS RELEASE (this "Agreement"), effective as of November ___, 1998,
is entered into by and among Institutional Real Estate, Inc., a California
corporation ("IREI"), Geoffrey Dohrmann, in his individual capacity ("Mr.
Dohrmann"), COMPS INFOSYSTEMS, INC., a Delaware corporation ("COMPS"), and
REALBID LLC, a California limited liability company ("REALBID");
WHEREAS, Mr. Dohrmann is the majority shareholder and President of
IREI;
WHEREAS, IREI owns twenty-five percent (25%) of the membership
interest in REALBID;
WHEREAS, IREI claims to be entitled to certain consideration from the
sale by REALBID of substantially all of its assets to COMPS pursuant to that
certain Asset Purchase Agreement dated November 6, 1998 by and among COMPS,
REALBID, Emmett DeMoss and Robert Potter;
WHEREAS, the parties to this Agreement intend and desire to avoid the
risks and expenses attendant upon litigation of such dispute and to effect and
accomplish a full and final settlement of all rights, claims and demands IREI or
Mr. Dohrmann may have against COMPS and/or REALBID;
NOW, THEREFORE, the parties hereto, in and for the consideration of
the representations, promises, and agreements contained herein, do agree as
follows:
1. Concurrently with the execution and delivery of this Agreement by
IREI and Mr. Dohrmann, COMPS shall grant IREI stock options to purchase that
number of shares of COMPS Class B Common Stock equal to 1.25% of the issued and
outstanding shares of COMPS Class B Common Stock as of the date hereof as
consideration for a release and waiver by IREI and Mr. Dohrmann pursuant to
Section 2 and Section 3 hereof.
2. IREI, on behalf of itself, as well as on behalf of its past and
present directors, shareholders, officers, employees, agents, predecessors,
successors, attorneys, representatives, affiliates, partners, joint venturers
and assigns, if any, and Mr. Dohrmann, on behalf of himself, as well as on
behalf of his past and present agents, employees, successors, attorneys,
representatives, affiliates, partners, joint venturers and assigns, if any,
hereby forever release, acquit and discharge, COMPS and REALBID, as well as
their respective past and present directors, officers, managers, members,
shareholders, agents, employees, successors, attorneys, representatives,
affiliates, partners, joint venturers and assigns, if any, from any and all
claims, demands, actions, causes of action, cross claims, counter claims,
obligations, indemnities, contributions, suits, debts, sums, accounts,
controversies, damages, costs, attorneys'
<PAGE>
fees, defenses, and liabilities of any kind whatsoever, whether in law or in
equity, whether contractual, common law, statutory, federal, state, or otherwise
(collectively, "Claims"), whether known or unknown, whether suspected to exist
or not, that IREI or Mr. Dohrmann has, ever had, or hereafter may have or claim
to have, against COMPS or REALBID or any of their respective past and present
directors, officers, managers, members, shareholders, agents, employees,
successors, attorneys, representatives, affiliates, partners, joint venturers
and assigns, if any.
3. IREI and Mr. Dohrmann may have Claims against COMPS and REALBID,
as well as their respective past and present directors, officers, managers,
members, shareholders, partners, affiliates, joint venturers, agents, employees,
successors, attorneys, and assigns, if any, of which, at the time this Agreement
is executed, IREI or Mr. Dohrmann has no knowledge or suspicion. However, the
parties hereby agree and represent that this Agreement is specifically intended
to, and does, extend to any and all such Claims, whether or not known, claimed,
or suspected by IREI or Mr. Dohrmann, and, therefore, IREI and Mr. Dohrmann, on
behalf of themselves, as well as on behalf of their respective past and present
directors, officers, agents, employees, successors, attorneys, and assigns, if
any, hereby expressly waive with respect to the claims described in this Section
3 the benefits of Section 1542 of the California Civil Code which provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR."
4. This Agreement is a release and compromise of disputed claims and
none of the parties hereto by its execution of this Agreement is making an
admission of liability or against their respective interest.
5. The terms of this Agreement shall be binding on and inure to the
benefit of each of the directors, officers, manager, agents, employees,
successors, attorneys, and assigns, if any, of each of the parties hereto.
6. If any legal action or any arbitration or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach, default, or misrepresentation in connection with any of the provisions
of this Agreement, the successful or prevailing party or parties shall be
entitled to recover reasonable attorneys' fees and other costs incurred in that
action or proceeding, in addition to any other relief to which it or they may be
entitled.
7. Each party hereto hereby acknowledges that it has sought or has
the right, ability or opportunity to seek the advice of legal counsel prior to
the execution of this Agreement.
8. This Agreement shall be governed by and construed in accordance
with the laws of the State of California.
2
<PAGE>
9. If any term, provision, covenant or restriction of this Agreement
is held by an arbitrator or a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions contained within this agreement will remain in full force and
effect and will in no way be affected, impaired or invalidated.
10. This Agreement constitutes the complete, final and exclusive
statement of the terms of the Agreement among the parties hereto pertaining to
the subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions of the parties hereto. No amendment, modification
or recession of this Agreement shall be binding unless executed in writing by
the party to be bound thereby. No waiver of this Agreement shall be deemed or
shall constitute a waiver of any other provision hereof (whether or not
similar), nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided.
11. Each party hereto, at the request of any of the other parties
hereto, shall execute and deliver such other instruments and do and perform such
other acts and things as may be necessary or desirable for effecting completely
the consummation of this Agreement and the transactions contemplated hereby.
12. This Agreement may be executed in any number of counterparts and
by facsimile, each of which shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument, and this
Agreement shall become effective upon the execution and delivery of a
counterpart hereof by each of the parties hereto.
[Signature Page To Follow]
3
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above set forth.
COMPS INFOSYSTEMS, INC.,
a Delaware Corporation
DATED: November ___, 1998 By:_____________________________
Name:___________________________
Title:__________________________
REALBID LLC,
a California limited liability company
DATED: November ___, 1998 By:_____________________________
Robert Potter, Manager
DATED: November ___, 1998 By:_____________________________
Emmett DeMoss, Manager
INSTITUTIONAL REAL ESTATE, INC.,
a California corporation
DATED: November ___, 1998 By:_____________________________
Name:___________________________
Title:__________________________
DATED: November ___, 1998 ________________________________
Geoffrey Dohrmann
4
<PAGE>
COMPS DISCLOSURE SCHEDULES
Section 4.1 ORGANIZATION OF COMPS.
---------------------
None.
Section 4.2 CAPITALIZATION.
--------------
No options or warrants were exercised between October 28, 1998 and the
Closing Date.
Section 4.3 AUTHORIZATION.
-------------
None
Section 4.4 NO CONFLICT OR VIOLATION.
------------------------
Mr. Christopher Crane is a partner in a partnership that owns the building
where COMPS' San Diego office is located.
Section 4.5 CONSENTS AND APPROVALS.
----------------------
Under the Loan Agreement dated September 24, 1996 by and between COMPS
InfoSystems, Inc.and Venture Lending & Leasing, Inc. (the "Lender"), the
Lender's prior written consent is required for COMPS to consummate the
Transactions.
Section 4.6 NO BROKERS.
----------
None
Section 4.7 LITIGATION.
----------
None
Section 4.8 LIABILITIES.
-----------
None
Section 4.9 Compliance with Law.
None
Section 4.10 COMPS Financial Statements.
None
<PAGE>
COMPS DISCLOSURE SCHEDULE
PAGE 2
Section 4.11 Absence of Certain Changes or Events for COMPS.
None
Section 4.12 Full Disclosure.
None
<PAGE>
SCHEDULE 2.1(A)
Fixed Assets
<PAGE>
SCHEDULE 2.1(A)
Fixed Assets
All of the computer equipment described in Items 3 and 4 of Section 3.11 of
the Disclosure Schedule and one fax machine located at REALBID's offices, 700
Larkspur Landing Circle, Suite 199, Larkspur, California 94939.
<PAGE>
SCHEDULE 2.1(C)
REALBID Assumed Contracts
<PAGE>
SCHEDULE 2.1(C)
REALBID ASSUMED CONTRACTS
Each of the contracts and agreements described in Items 1, 3, 4, 5, 6 and 7
of Section 3.11 of the Disclosure Schedule.
<PAGE>
SCHEDULE 2.1(D)
REALBID Permits
<PAGE>
SCHEDULE 2.1(D)
REALBID PERMITS
None.
<PAGE>
SCHEDULE 2.1(H)
REALBID Accounts Receivables
<PAGE>
SCHEDULE 2.1(H)
REALBID ACCOUNTS RECEIVABLES
See attached.
<PAGE>
REALBID LLC
A/R Aging Detail
As of October 31, 1998
<TABLE>
<CAPTION>
Type Date Num P.O.# Name Terms Due Date Class
Current
<S> <C> <C> <C> <C> <C> <C> <C>
Invoice 10/7/98 108 *** Net 30 11/6/98 Brokers
Invoice 10/12/98 109 *** Net 30 11/11/98 Brokers
Invoice 10/12/98 110 *** Net 30 11/11/98 Brokers
Invoice 10/30/98 113 *** Net 30 11/29/98 Brokers
Total Current
1 - 30
Invoice 9/1/98 71 *** Net 30 10/1/98 Realty Advis....
Invoice 9/3/98 72 *** Net 30 10/3/98 Brokers
Invoice 10/7/98 107 *** 10/7/98 Life Insuranc...
Invoice 9/18/98 74 *** Net 30 10/8/98 Brokers
Payment 10/9/98 ***
Invoice 9/15/98 77 *** Net 30 10/15/98 Brokers
Invoice 9/15/98 78 *** Net 30 10/15/98 Brokers
Invoice 9/15/98 80 *** Net 30 10/15/98 Builders/Dev....
Invoice 9/15/98 81 *** Net 30 10/15/98 Realty Advis....
Invoice 9/15/98 84 *** Net 30 10/15/98 Brokers
Invoice 9/23/98 95 *** Net 30 10/23/98 Realty Advis....
Invoice 9/29/98 102 *** Net 30 10/29/98 Brokers
Invoice 10/30/98 114 *** 10/30/98 Brokers
Invoice 10/30/98 115 *** 10/30/98
Total 1 - 30
31 - 60
Invoice 8/18/98 65 *** Net 30 9/17/98 Realty Advis....
Invoice 9/23/98 94 *** 9/23/98 Brokers
Invoice 9/23/98 96 *** 9/23/98 Brokers
Invoice 9/23/98 98 *** 9/23/98 Corporation
Invoice 8/27/98 69 *** Net 30 9/26/98 Brokers
Invoice 8/28/98 67 *** Net 30 9/27/98 Brokers
Invoice 9/28/98 101 *** 9/28/98 Life Insuranc....
Total 31 - 60
61 - 90
Invoice 7/20/98 55 *** Net 30 8/19/98 Brokers
Total 61 - 90
greater
than 90
Invoice 4/24/98 24 *** 4/26/98 Realty Advis
Invoice 5/14/98 33 *** Net 30 6/13/98 Brokers
Invoice 5/27/98 38 *** Net 30 6/26/98 Realty Advis
Invoice 5/27/98 39 *** Net 30 6/26/98 Broker
Total greater than 90
TOTAL
<CAPTION>
Type Aging Open Balance
Current
<S> <C> <C>
Invoice 2,500.00
Invoice 2,500.00
Invoice 2,500.00
Invoice 2,500.00
------------
Total Current 10,000.00
1 - 30
Invoice 30 3,000.00 (1)
Invoice 28 2,500.00
Invoice 24 2,500.00
Invoice 23 2,500.00 (2)
Payment -1,000.00 (3)
Invoice 16 500.00
Invoice 16 500.00
Invoice 16 2,500.00
Invoice 16 2,500.00
Invoice 16 2,500.00 (4)
Invoice 8 2,500.00
Invoice 2 2,500.00
Invoice 1 2,500.00
Invoice 1 2,500.00
------------
Total 1 - 30 28,000.00
31 - 60
Invoice 44 2,500.00
Invoice 38 2,500.00
Invoice 38 1,500.00
Invoice 38 2,000.00 (7)
Invoice 35 750.00
Invoice 34 5,000.00
Invoice 33 2,500.00
------------
Total 31 - 60 16,750.00
61 - 90
Invoice 73 1,750.00 (5)
------------
Total 61 - 90 1,750.00
greater
than 90
Invoice 190 1,500.00
Invoice 140 4,000.00 (6)
Invoice 123 2,500.00
Invoice 123 2,500.00
------------
Total greater than 90 10,500.00
TOTAL 67,800.00
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
SCHEDULE 2.1(I)
Assumed Real Property
<PAGE>
SCHEDULE 2.1(I)
ASSUMED REAL PROPERTY
The leasehold interest described in Item 1 of Schedule 3.11 of the
Disclosure Schedule.
<PAGE>
SCHEDULE 2.3
Excluded Assets
<PAGE>
SCHEDULE 2.3
EXCLUDED ASSETS
All office furniture and filing cabinets and the color printer located at
REALBID's offices, 700 Larkspur Landing Circle, Suite 199, Larkspur, California
94939.
<PAGE>
REALBID DISCLOSURE SCHEDULE
---------------------------
<PAGE>
REALBID, LLC
DISCLOSURE SCHEDULE
DATED OCTOBER 28, 1998
Section 3.1 Ownership of REALBID Interests
------------------------------
Emmett DeMoss: 3,000 Members' Shares
Robert Potter: 3,000 Members' Shares
Institutional Real Estate, Inc.: 2,000 Member's Shares
SECTION 3.2 Organization and Good Standing
------------------------------
None.
SECTION 3.2 Authorization
-------------
None.
SECTION 3.4 Equity Securities of REALBID
----------------------------
None.
SECTION 3.5 No Conflict or Violation
------------------------
See Section 3.6 hereof.
SECTION 3.6 Consents and Approvals
----------------------
1. Consent of Landlord with respect to lease referenced in Item 1
of Section 3.11 hereof is required for assignment.
2. Consent of Lessor with respect to the equipment leases
referenced in Items 3 and 4 of Section 3.11 hereof is required
for assignment
SECTION 3.7 Books and Records
-----------------
None.
SECTION 3.8 Financial Statements
--------------------
See attached financial statements: (a) balance sheets as of December 31,
1997 and October 31, 1998; and (b) income statements for the year ended
December 31, 1997 and for the period ended October 31, 1998.
SECTION 3.9 Accounts Receivable
-------------------
None.
SECTION 3.10 Absence of Certain Changes or Events
------------------------------------
None.
<PAGE>
SECTION 3.11 Contracts and Commitments
-------------------------
List of Assumed Contracts and Other Contracts:
- ---------------------------------------------
1. Office Sublease and Service Agreement dated July 6, 1998 between
Executive Business Network, Inc. d/b/a/ Executive Business Centers and
REALBID, LLC for premises located at 700 Larkspur Landing Circle,
Suite 199, Larkspur, California 94939.
2. Contribution Agreement dated July 1, 1997 by and among REALBID and the
REALBID Principals.
3. Business Lease Agreement (Lease #521542) between Dana Commercial
Credit Corporation and REALBID for computer equipment listed on
Schedule A thereto.
4. Business Lease Agreement (Lease #535079) between Dana Commercial
Credit Corporation and REALBID for computer equipment described
therein.
5. Web Hosting and Maintenance Agreement dated January 1, 1998 between
REALBID and RealPage Communications, Inc. ("RealPage").
6. Marketing Services Agreement dated August 15, 1997 between REALBID and
Prudential Insurance Company of America.
7. Oral Agreements All of REALBID's customer agreements with the
exception of the agreement reference in Item 6 of this Section 3.11
are oral agreements whereby REALBID posts the subject property at its
web site and then broadcasts the availability of the property for sale
to buyers whose acquisition parameters meet the characteristics of the
property. See Schedule 2.1(h) for a list of clients for which REALBID
has an oral agreement and see Attachment 3.11(7)-A hereto.
SECTION 3.11(A)
None.
SECTION 3.11(B)
See Section 3.12 hereof.
SECTION 3.11(C)
None.
SECTION 3.11(D)
None.
SECTION 3.12 Insurance
---------
The lease listed as Item 1 of Section 3.11 hereof requires that REALBID
maintain bodily injury insurance of at least $300,000 per person and $1,000,000
per occurrence and property damage insurance of at least $200,000 per accident
or occurrence. REALBID does not maintain such insurance.
<PAGE>
The leases listed as Items 3 and 4 of Section 3.11 hereof require REALBID
to pay, and REALBID has paid, a risk charge of 125% of the original equipment
cost until REALBID obtains insurance for such equipment.
SECTION 3.13 Litigation
----------
None.
SECTION 3.14 Liabilities
-----------
None.
SECTION 3.15 Compliance with Law
-------------------
REALBID has not complied with local ordinances (if any) requiring REALBID
to maintain a business license or similar permit.
SECTION 3.16 No Brokers
----------
None.
SECTION 3.17 No Other Agreements to Sell REALBID
-----------------------------------
None.
SECTION 3.18 Tax Matters
-----------
None.
SECTION 3.19 Employment Matters and Benefit Plans
------------------------------------
None.
SECTION 3.20 Transaction with Certain Persons
--------------------------------
None.
SECTION 3.21 Environmental Quality
---------------------
None.
SECTION 3.22 Certain Advances
----------------
None.
SECTION 3.23 Licenses and Permits
--------------------
None.
SECTION 3.24 Proprietary Rights
------------------
(a) None.
(b) None.
(c) (i) Service mark for "REALBID" (application No. 75/277,110), filed
with U.S. Patent and Trademark Office), copyrighted material
including information and text on REALBID's website and
REALBID's buyer profile database, domain name of
"www.realbid.com" and any and all software developed by
RealPage Communications, Inc. in connection with the agreement
listed as Item 5 of Section 3.11 hereof.
<PAGE>
(ii) See "Attachment 3.24(c)" attached hereto for a description of
the services offered by REALBID.
(iii) See Item 5 of Section 3.11 hereof.
(d) None.
(e) None.
(f) None.
(g) None.
(h) None.
(i) See item 5 of Section 3.11 hereof. Pursuant to the terms of such
agreement, RealPage has agreed to implement, support, host and maintain
REALBID's website. Such agreement has a term of one year commencing on January
1, 1998 and may be terminated by either REALBID or RealPage upon 30 days' prior
written notice.
SECTION 3.25 Material Misstatements or Omissions
-----------------------------------
None.
SECTION 3.26 Exclusive Dealing
-----------------
None.
SECTION 3.27 Lease
-----
See lease listed as Item 1 of Section 3.11 hereof.
SECTION 3.28 Location of Purchased Assets
----------------------------
The Purchased Assets are located at 700 Larkspur Landing Circle, Suite 199,
Larkspur, California 94939.
The computer equipment reference in Items 3 and 4 of Section 3.11 hereof is
subject to the equipment leases referenced therein and the Assumed Real Property
is subject to the lease referenced in Item 1 of Section 3.11 hereof.
SECTION 3.29 Prepaid Expenses
----------------
None.
SECTION 3.30 Certain Agreements
------------------
None.
SECTION 3.31 Year 2000 Compliance
--------------------
None.
SECTION 3.32 Necessary Property
------------------
The Excluded Assets are currently used in operation of REALBID's business.
SECTION 3.33 Bank Accounts
-------------
Wells Fargo Bank
100 Bon Air Center
Greenbrea, California 94904
Account Name: REALBID, LLC
<PAGE>
Account Number: Basic Business Checking Branch Plan 0224-352427
Authorized Access: Manager REALBID Emmett DeMoss
Manager REALBID Robert Potter
SECTION 3.34 Valuation of Comps
------------------
None.
SECTION 3.35 Full Disclosure
---------------
None.
<PAGE>
REALBID LLC
BALANCE SHEET
As of December 31, 1997
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current Assets
Checking/Savings
Wells Fargo 9.66
Wells Fargo Checking 1,584.51
Total Checking/Savings 1,594.17
Total Current Assets 1,594.17
Other Assets
Organization Costs 3,687.28
Total Other Assets 3,678.28
TOTAL ASSETS 5,272.45
-----------
LIABILITIES & EQUITY
Liabilities
Current Liabilities
Accounts Payable
Accounts Payable -750.00
Total Accounts Payable -750.00
Other Current Liabilities
BAP Lease 12,881.97
ERD Lease 20,000.00
LLC Managers Accrued Fee 150,000.00
Total Other Current Liabilities 182,901.97
Total Current Liabilities 182,151.97
Total Liabilities 182,151.97
Equity
Net Income -176,879.52
Total Equity -176,879.52
TOTAL LIABILITIES & EQUITY 5,272.45
-----------
</TABLE>
<PAGE>
REALBID LLC
BALANCE SHEET
As of October 31, 1998
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current Assets
Checking/Savings
Wells Fargo Checking 7,481.24
Total Checking/Savings 7,481.24
Accounts Receivable
Accounts Receivable 67,000.00
Total Accounts Receivable 67,000.00
Total Current Assets 74,481.24
Other Assets
Organization Costs 3,687.28
Total Other Assets 3,678.28
TOTAL ASSETS 78,159.52
-----------
LIABILITIES & EQUITY
Liabilities
Current Liabilities
Accounts Payable
Accounts Payable 1,050.98
Total Accounts Payable 1,050.98
Other Current Liabilities
BAP Lease 18,776.79
ERD Lease 26,875.02
LLC Managers Accrued Fee 324,000.00
Total Other Current Liabilities 369,651.81
Total Current Liabilities 370,702.79
Total Liabilities 370,702.79
Equity
Retained Earnings -176,879.52
Net Income -115,663.75
Total Equity -292,543.27
TOTAL LIABILITIES & EQUITY 78,159.52
-----------
</TABLE>
<PAGE>
REALBID LLC
PROFIT AND LOSS
June through December 1997
<TABLE>
<S> <C>
Ordinary Income/Expenses
Income
Marketing Service Fee 15,500.00
Total Income 15,500.00
Gross Profit 15,500.00
Expenses
Bank Service Charges 46.00
LLC Managers Fee 150,000.00
Professional Fees
Legal Fees 24,859.14
Total Professional Fees 24,859.14
Rent 7,881.97
Uncategorized Expenses 0.00
Web Site Hosting & Maintenance 9,615.00
Total Expense 192,402.11
Net Ordinary Income -176,902.11
Other Income/Expense
Other Income
Interest Earned 0.22
Total Other Income 0.22
Net Other Income 0.22
Net Income -176,901.89
-----------
</TABLE>
<PAGE>
REALBID LLC
PROFIT AND LOSS
January through October, 1998
<TABLE>
<S> <C>
Ordinary Income/Expenses
Income
Marketing Service Fee 223,166.00
Total Income 223,166.00
Cost of Goods Sold
Cost of Goods Sold 20,910.00
Total COGS 20,910.00
Gross Profit 202,256.00
Expenses
Bank Service Charges 108.01
Data Base Modifications 705.00
Direct Property Service Cost
Broadcasting Expenses 4,518.25
Posting Expense 8,605.00
Total Direct Property Service Cost 13,123.25
____ and Subscriptions 500.00
Leased Equipment - Computers 2,360.30
Licenses and Permits 10.00
LLC Managers Fee 250,000.00
Office Expense 16.36
Professional Fees
Accounting 900.00
Legal Fees 3,553.16
Total Professional Fees 4,453.16
Promotions 1,345.00
Rent 28,279.97
Taxes
State 800.00
Total Taxes 800.00
Telephone 400.57
Travel & Ent. 7,568.14
Uncategorized Expenses 0.00
Web Site Hosting & Maintenance 8,250.00
Total Expense 317,919.76
Net Ordinary Income -115,663.76
Other Income/Expense
Other Income
Interest Earned 0.01
Total Other Income 0.01
Net Other Income 0.01
Net Income -115,663.75
-----------
</TABLE>
<PAGE>
Attachment 3.11 (7) - a
The attached sheet reflects the outstanding account receivables as of October
31, 998 for REALBID. The following comments pertain to these receivables:
Generally, all work assignments into by REALBID are by oral contracts. Upon
completion of an assignment (Generally when information about a subject property
is "broadcast" to specific categories of REALBIDS data base.) an invoice is
issued to the client. In the normal course of business the invoice is for a
fixed amount and due upon receipt. Industry practice however is payment within
30 60 days. Upon certain occasions REALBID will deviate from its normal practice
of billing in order to obtain a new client, experiment with a new category of
property, encourage greater volume from an existing client, etc. The notes below
relate to those invoices that were created by a deviation from REALBIDS normal
billing policy (See the attached A/R Aging Detail report with identifying
numbers corresponding to the footnotes below.)
1. Staubach Retail Investments: This is a new client. REALBID offered him to
be the judge as to whether to pay based upon our value added. Upon recent
inquiry he said he liked the service would use it again and was continuing
to market the property; consequently the amount and timing of the payment
is uncertain.
2. Stephen N. Frankel Real Estate: REALBID proceeded with this transaction
based upon the client paying $500 upon completion of the broadcast and
$2,500 upon the "closing" of the property. The $500 has been paid. There
has not been a "closing". Consequently the timing is uncertain.
3. Prudent Realty Advisors: Prudential inadvertently paid us twice for the
same assignment. They instructed us to hold the money and give them a
credit on the next assignment.
4. Grubb & Ellis (Florence Business Park): The terms for this transaction
were $1,250 upon broadcast and $1,250 upon close. The broker is optimistic
about a close, the timing of which is uncertain.
5. CBRichard Ellis (John Hancock Portfolio): The terms of this transaction
were $1,750 upon the broadcast and an additional $1,750 upon the close of
the property. The initial payment has been made and the broker is
optimistic about the sale of the property the timing of which is uncertain.
6. Manekin Brokerage: The terms for this transaction were $4,000 upon
closing. The closing has occurred, payment has been made (subsequent to
October 31st .) and the cash is in the bank.
7. Boeing: The terms of this transaction are $2,500 upon the close of the
portfolio. The portfolio just fell out of escrow, consequently the timing
of payment is uncertain.
<PAGE>
REALBID LLC
A/R Aging Detail
As of October 31, 1998
<TABLE>
<CAPTION>
Type Date Num P.O.# Name Terms Due Date Class
Current
<S> <C> <C> <C> <C> <C> <C> <C>
Invoice 10/7/98 108 *** Net 30 11/6/98 Brokers
Invoice 10/12/98 109 *** Net 30 11/11/98 Brokers
Invoice 10/12/98 110 *** Net 30 11/11/98 Brokers
Invoice 10/30/98 113 *** Net 30 11/29/98 Brokers
Total Current
1 - 30
Invoice 9/1/98 71 *** Net 30 10/1/98 Realty Advis....
Invoice 9/3/98 72 *** Net 30 10/3/98 Brokers
Invoice 10/7/98 107 *** 10/7/98 Life Insuranc...
Invoice 9/18/98 74 *** Net 30 10/8/98 Brokers
Payment 10/9/98 ***
Invoice 9/15/98 77 *** Net 30 10/15/98 Brokers
Invoice 9/15/98 78 *** Net 30 10/15/98 Brokers
Invoice 9/15/98 80 *** Net 30 10/15/98 Builders/Dev....
Invoice 9/15/98 81 *** Net 30 10/15/98 Realty Advis....
Invoice 9/15/98 84 *** Net 30 10/15/98 Brokers
Invoice 9/23/98 95 *** Net 30 10/23/98 Realty Advis....
Invoice 9/29/98 102 *** Net 30 10/29/98 Brokers
Invoice 10/30/98 114 *** 10/30/98 Brokers
Invoice 10/30/98 115 *** 10/30/98
Total 1 - 30
31 - 60
Invoice 8/18/98 65 *** Net 30 9/17/98 Realty Advis....
Invoice 9/23/98 94 *** 9/23/98 Brokers
Invoice 9/23/98 96 *** 9/23/98 Brokers
Invoice 9/23/98 98 *** 9/23/98 Corporation
Invoice 8/27/98 69 *** Net 30 9/26/98 Brokers
Invoice 8/28/98 67 *** Net 30 9/27/98 Brokers
Invoice 9/28/98 101 *** 9/28/98 Life Insuranc...
Total 31 - 60
61 - 90
Invoice 7/20/98 55 *** Net 30 8/19/98 Brokers
Total 61 - 90
greater
than 90
Invoice 4/24/98 24 *** 4/26/98 Realty Advis....
Invoice 5/14/98 33 *** Net 30 6/13/98 Brokers
Invoice 5/27/98 38 *** Net 30 6/26/98 Realty Advis....
Invoice 5/27/98 39 *** Net 30 6/26/98 Broker
Total greater than 90
TOTAL
<CAPTION>
Type Aging Open Balance
Current
<S> <C> <C>
Invoice 2,500.00
Invoice 2,500.00
Invoice 2,500.00
Invoice 2,500.00
------------
Total Current 10,000.00
1 - 30
Invoice 30 3,000.00 (1)
Invoice 28 2,500.00
Invoice 24 2,500.00
Invoice 23 2,500.00 (2)
Payment -1,000.00 (3)
Invoice 16 500.00
Invoice 16 500.00
Invoice 16 2,500.00
Invoice 16 2,500.00
Invoice 16 2,500.00 (4)
Invoice 8 2,500.00
Invoice 2 2,500.00
Invoice 1 2,500.00
Invoice 1 2,500.00
------------
Total 1 - 30 28,000.00
31 - 60
Invoice 44 2,500.00
Invoice 38 2,500.00
Invoice 38 1,500.00
Invoice 38 2,000.00 (7)
Invoice 35 750.00
Invoice 34 5,000.00
Invoice 33 2,500.00
------------
Total 31 - 60 16,750.00
61 - 90
Invoice 73 1,750.00 (5)
------------
Total 61 - 90 1,750.00
greater
than 90
Invoice 190 1,500.00
Invoice 140 4,000.00 (6)
Invoice 123 2,500.00
Invoice 123 2,500.00
------------
Total greater than 90 10,500.00
TOTAL 67,800.00
</TABLE>
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
Attachment 3.24(c)
REALBID is a disposition marketing tool that can help quickly identify, contact,
inform and capture potential investors and help organize competitive, efficient
and orderly sales by leveraging current communication technology. Here is how
it works.
First we develop a Web site specifically for the property using your executive
summary. This will usually include property information, maps, site plans,
pictures, summary financials, broker contact information and confidentiality
agreement. For complete Posting Instructions please click here. Current
----
examples can be viewed at the Bid Center.
----------
We then identify and match investors with that property using REALBID's Buyer
-----
Profile database. The investors whose profiles are in REALBID's database
- -------
transacted over $50 billion last year. It includes the specific investment
criteria of the pension fund managers, REITs, opportunistic funds, private
investors and insurance companies. (Go to Buyer Profile to include or update
-------------
your investment objectives in the database.)
A broadcast announcement is then sent to matched investors by email, fax or
phone. The announcement briefly describes the disposition, identifies the
broker and invites investors to view property and market information, execute
the confidentiality agreement and register online or to contact the broker
directly. You control exposure and access by choosing one of three increasingly
restrictive broadcast protocols. All questions, registrations and responses are
directed to the broker for processing.
REALBID automates and accelerates the disposition process and provides an extra
level of assurance that you are achieving highest price and the most efficient
execution.
REALBID does not:
. Participate in commissions,
. Act as a broker,
. Negotiate with potential investors nor
. Independently prepare any sales documentation
The standard price for a REALBID posting and broadcasting is $3,500 per
property. On average that represents less than 3 basis points. Significant price
breaks are offered for contracts that involve multiple transactions.
CONTACT INFORMATION:
Please contact us directly via any of the following:
Email: Bob Potter
----------
Telephone: (415) 464-4916
Fax: (415) 464-4944
Address: 700 Larkspur Landing Circle, Suite #199, Larkspur, CA 94939
<PAGE>
Exhibit 10.45
- --------------------------------------------------------------------------------
ASSET PURCHASE AGREEMENT
by and among
COMPS INFOSYSTEMS, INC.,
AOBR, INC.,
LINDA HOFFMAN,
GUY GOODWIN
and
DON GUY
dated as of December 4, 1998
- --------------------------------------------------------------------------------
*** Certain confidential portions of this Exhibit were omitted by means of
blackout of the text (the "Mark"). This Exhibit has been filed separately
with the Secretary of the Commission without the Mark pursuant to the
Company's Application Requesting Confidential Treatment under Rule 406 under
the Act.
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
ARTICLE 1 DEFINITIONS........................................................... 1
1.1 Defined Terms....................................................... 1
1.2 Construction of Certain Terms and Phrases........................... 5
ARTICLE 2 PURCHASE AND SALE OF PURCHASED ASSETS................................. 6
2.1 Purchase and Sale of the Company's Assets........................... 6
2.2 Excluded Assets..................................................... 6
2.3 Assumed Liabilities................................................. 7
2.4 Purchase Price...................................................... 7
2.5 Allocation of Aggregate Purchase Price.............................. 7
2.6 Sales, Use and Other Taxes.......................................... 7
2.7 Title............................................................... 7
2.8 Bulk Sales Compliance............................................... 8
2.9 Closing............................................................. 8
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLERS............................. 10
3.1 Organization and Ownership of the Company........................... 10
3.2 Authority of Sellers and the Company Principals..................... 10
3.3 Ownership of the Business/Purchased Assets.......................... 10
3.4 The Report Agreement................................................ 11
3.5 No Conflicts........................................................ 11
3.6 Governmental Approvals and Filings.................................. 11
3.7 Books and Records................................................... 12
3.8 Financial Statements................................................ 12
3.9 Absence of Changes.................................................. 12
3.10 No Undisclosed Liabilities.......................................... 12
3.11 Purchased Assets.................................................... 12
3.12 Intellectual Property Rights........................................ 13
3.13 Litigation.......................................................... 13
3.14 Compliance with Law................................................. 14
3.15 Tax Matters......................................................... 14
3.16 No Other Agreements to Sell the Business or the Purchased Assets.... 14
3.17 Exclusive Dealing................................................... 14
3.18 [Intentionally Left Blank].......................................... 15
3.19 Customers........................................................... 15
3.20 Third Party Consents................................................ 15
3.21 Brokers............................................................. 15
3.22 Disclosure.......................................................... 15
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER............................... 16
4.1 Organization of Buyer............................................... 16
4.2 Authority of Buyer.................................................. 16
</TABLE>
i
<PAGE>
<TABLE>
<C> <S> <C>
4.3 Litigation.......................................................... 16
4.4 Governmental Approvals and Filings.................................. 16
4.5 No Undisclosed Liabilities.......................................... 16
4.6 Brokers............................................................. 17
4.7 Third Party Consents................................................ 17
ARTICLE 5 CONDITIONS TO THE OBLIGATIONS OF SELLERS.............................. 17
5.1 Representations, Warranties and Covenants........................... 17
5.2 No Actions or Proceedings........................................... 17
5.3 Consents............................................................ 17
5.4 Performance of Agreement............................................ 18
5.5 Approval of Documentation........................................... 18
5.6 Closing Deliveries.................................................. 18
ARTICLE 6 CONDITIONS TO THE OBLIGATIONS OF BUYER................................ 18
6.1 Representations, Warranties and Covenants........................... 18
6.2 No Actions or Proceedings........................................... 18
6.3 Due Diligence....................................................... 18
6.4 Material Adverse Effect............................................. 18
6.5 Consents............................................................ 19
6.6 Board Approval...................................................... 19
6.7 Company Board and Shareholder Approval.............................. 19
6.8 Performance of Agreement............................................ 19
6.9 Approval of Documentation........................................... 19
6.10 Possible Infringement Claims........................................ 19
6.11 Closing Deliveries.................................................. 19
ARTICLE 7 COVENANTS OF THE PARTIES.............................................. 19
7.1 Covenants by Sellers and Buyer...................................... 19
7.2 Covenants of Sellers................................................ 21
7.3 Covenant of Buyer................................................... 23
ARTICLE 8 ACTIONS BY THE PARTIES AFTER THE CLOSING.............................. 23
8.1 Survival of Representations, Warranties, Etc........................ 23
8.2 Indemnification..................................................... 23
ARTICLE 9 MISCELLANEOUS......................................................... 26
9.1 Termination......................................................... 26
9.2 Notices............................................................. 26
9.3 Entire Agreement.................................................... 27
9.4 Waiver.............................................................. 28
9.5 Amendment........................................................... 28
9.6 No Third Party Beneficiary.......................................... 28
9.7 No Assignment; Binding Effect....................................... 28
9.8 Headings............................................................ 28
9.9 Severability........................................................ 28
9.10 Governing Law....................................................... 29
</TABLE>
ii
<PAGE>
<TABLE>
<C> <S> <C>
9.11 Arbitration and Venue............................................... 29
9.12 Expense............................................................. 29
9.13 Construction........................................................ 29
9.14 Counterparts........................................................ 29
</TABLE>
iii
<PAGE>
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "AGREEMENT") is made and entered
into as of December 4, 1998 (the "Effective Date"), by and among Comps
InfoSystems, Inc., a Delaware corporation ("Buyer"), AOBR, Inc., a Texas
corporation (the "Company"), Linda Hoffman, an individual ("Hoffman, and
together with AOBR, "Sellers"), Guy Goodwin, an individual ("Goodwin"), and Don
Guy, an individual ("Guy," and together with Goodwin, the "Company Principals).
RECITALS
--------
WHEREAS, pursuant to that certain Agreement of Purchase and Sale dated
March 24, 1998, by and between Hoffman and Jones and Jones Enterprises, Inc.
("Jones and Jones") (the "Jones Agreement"), Hoffman acquired from Jones and
Jones all of Jones and Jones' right, title and interest in the Business (as
defined below) free and clear of all Encumbrances (as defined below), which
interest equaled fifty percent (50%) of the Business;
WHEREAS, Hoffman owned one hundred percent (100%) of the Business free
and clear of all Encumbrances after her purchase of Jones and Jones' interest in
the Business;
WHEREAS, pursuant to that certain Agreement Between Linda Hoffman and
AOBR, Inc., dated March 23, 1998 (the "Report Agreement"), AOBR acquired from
Hoffman fifty percent (50%) of Hoffman's right, title and interest in the
Business free and clear of all Encumbrances;
WHEREAS, Sellers desire to sell to Buyer and the Company Principals
desire to cause Sellers to sell to Buyer, and Buyer desires to purchase from
Sellers the assets, properties and rights of Sellers to the Business as set
forth in Section 2.1; and
-----------
WHEREAS, Buyer, Sellers and the Company Principals desire to make
certain representations, warranties, covenants and agreements in connection with
such purchase and sale.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and promises contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which hereby are acknowledged, the
parties agree as follows:
ARTICLE 1
DEFINITIONS
-----------
1.1 DEFINED TERMS. As used in this Agreement, the following defined terms
-------------
have the meanings indicated below:
"ACTIONS OR PROCEEDINGS" means any action, suit, proceeding,
arbitration, Order (as defined below), inquiry, hearing, assessment with respect
to fines or penalties or litigation (whether civil, criminal, administrative,
investigative or informal) commenced, brought,
1
<PAGE>
conducted or heard by or before, or otherwise involving, any Governmental or
Regulatory Authority (as defined below).
"ADVERSE CONSEQUENCE" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, Orders, decrees, rulings,
damages, dues, penalties, fines, costs, amounts paid in settlements,
liabilities, obligations, taxes, liens, losses, expenses, and fees, including
court costs and reasonable attorneys' fees and expenses.
"AFFILIATE" means, with respect to any Person (as defined below),
another Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with such Person.
"ASSETS AND PROPERTIES" and "ASSETS OR PROPERTIES" of any Person each
means all assets and properties of every kind, nature, character and description
(whether real, personal or mixed, whether tangible or intangible, whether
absolute, accrued, contingent, fixed or otherwise and wherever situated),
including the goodwill related thereto, operated, owned or leased by such
Person, including, without limitation, documents, instruments, general
intangibles, real estate, equipment, inventory, goods and Intellectual Property.
"BEST KNOWLEDGE OF SELLERS OR THE COMPANY PRINCIPALS" or "BEST KNOWN
TO SELLERS OR THE COMPANY PRINCIPALS" means the knowledge of Hoffman, Goodwin,
Guy, the Company or any officer or director of the Company, in each case after
reasonable due inquiry and reasonable comprehensive investigation.
"BOOKS AND RECORDS" of any Person means all files, documents,
instruments, papers, books and records relating to the business, operations or
condition of such Person.
"BUSINESS" means the Hoffman Valuation Data Services, which services
consists of obtaining sales information on real estate transactions,
documentation for the same (in electronic form and hard copy form) and the sale
of such information to the public in the form of any reports created, published
and distributed related to the Hoffman Valuation Data Services (the "Report")
and any other format (whether in electronic form or hard copy form), the
creation, publication and distribution of such information in the Report and in
any other format (whether in electronic form or hard copy form), and the assets
of the Business that Buyer is licensing to the Company pursuant to the License
Agreement required by Section 2.9; provided, however, Business shall not include
----------- -------- -------
any assets owned by the Company or the Company Principals and not listed in
Section 2.1 below.
- -----------
"BUSINESS DAY" means a day other than Saturday, Sunday or any day on
which banks located in the State of California are authorized or obligated to
close.
"CLOSING DATE" means January 7, 1999.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPANY INTELLECTUAL PROPERTY" means any Intellectual Property
relating, directly or indirectly, to the Business or the Purchased Assets that
is owned by or held by or on behalf of the Company and/or Hoffman, or
exclusively licensed to, the Company or Hoffman,
2
<PAGE>
including without limitation all of the Company Trademarks, all proprietary
techniques, procedures and routines developed to facilitate the monthly
publication of the Report or any other publications using the information
contained in the historical database of the Business; provided, however, that
-------- -------
Company Intellectual Property will not include (i) any software used to operate
the databases of the Business and (ii) any Intellectual Property owned by the
Company or the Company Principals that is not listed in Section 2.1.
-----------
"COMPANY TRADEMARKS" means Sellers' rights to the names "Hoffman
Valuation Data Services," and the "Hoffman Report" and all variations thereof,
provided the word "Hoffman" is included therein, and all trademarks, trade
names, service marks and goodwill associated therewith (excluding "AOBR" or the
"Austin Office Building Report").
"CONFIDENTIAL INFORMATION" means all of the following (whether or not
reduced to writing and whether or not patentable or protected by copyright): (i)
any and all trade secrets concerning the business and affairs of a Person,
product specifications, data, know-how, formulae, compositions, processes,
designs, sketches, photographs, graphs, drawings, samples, inventions and ideas,
past, current and planned research and development, current and planned
manufacturing and distribution methods and processes, customer lists, current
and anticipated customer requirements, price lists, market studies, business
plans, computer software and programs (including object code and source code),
computer software and database technologies, systems, structures and
architectures (and related processes, formulae, compositions, improvements,
derivatives, devices, know-how, inventions, discoveries, concepts, ideas,
designs, methods and information) of a Person and any other information,
however, documented, of a Person that is a trade secret within the meaning of
any and all applicable state and federal trade secret laws; (ii) any and all
information concerning the business and affairs of a Person (which includes
historical financial statements, financial projections and budgets, historical
and projected sales, capital spending budgets and plans, the names and
backgrounds of key personnel and personnel training and techniques and
materials), however documented; and (iii) any and all notes, analysis,
compilations, studies, summaries, and other material prepared by or for a Person
containing or based, in whole or in part, on any information included in the
foregoing.
"DISCLOSURE SCHEDULE" means the disclosure schedule attached hereto
which sets forth the exceptions to the representations and warranties contained
in Article 3 hereof and certain other information called for by this Agreement.
---------
"ENCUMBRANCE" means any mortgage, pledge, assessment, security
interest, deed of trust, lease, lien, adverse claim, levy, charge or other
encumbrance of any kind, or any conditional sale or title retention agreement or
other agreement to give any of the foregoing in the future.
"FINANCIAL STATEMENTS" means the balance sheets, related statements of
income and retained earnings and the general ledger of the Company related to
the Business for the period from June 15, 1998 to November 15, 1998.
"GOVERNMENTAL OR REGULATORY AUTHORITY" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States or other country, any state, county, city or other political
subdivision.
3
<PAGE>
"INTELLECTUAL PROPERTY" means any or all of the following and all
rights in, arising out of, or associated therewith: (i) all United States,
international and foreign patents and applications therefor and all reissues,
divisions, renewals, extensions, provisionals, continuations and continuations-
in-part thereof; (ii) registered trademarks, applications to register
trademarks, intent-to-use applications, or other registrations or applications
related to trademarks; (iii) registered copyrights and applications for
copyright registration; (iv) any other Intellectual Property that is the subject
of an application, certificate, filing, registration or other document issued,
filed with, or recorded by any Governmental or Regulatory Authority (items (i)
through (iv) shall also be referred to hereinafter as the "Registered
Intellectual Property"); (v) any and all trade secrets concerning the business
and affairs of a Person, product specifications, data, know-how, formulae,
compositions, processes, designs, sketches, photographs, graphs, drawings,
samples, inventions and ideas, past, current and planned research and
development, current and planned manufacturing and distribution methods and
processes, customer lists, current and anticipated customer requirements, price
lists, market studies, business plans, computer software and programs (including
object code and source code), computer software and database technologies,
systems, structures and architectures (and related processes, formulae,
compositions, improvements, devices, know-how, inventions, discoveries,
concepts, ideas, designs, methods and information) of a Person and any other
information, however, documented, of a Person that is a trade secret within the
meaning of any and all applicable state and federal trade secret laws; (vi) any
and all information concerning the business and affairs of a Person (which
includes historical financial statements, financial projections and budgets,
historical and projected sales, capital spending budgets and plans, the names
and backgrounds of key personnel and personnel training and techniques and
materials), however documented; (vii) any and all notes, analysis, compilations,
studies, summaries, and other material prepared by or for a Person containing or
based, in whole or in part, on any information included in the foregoing; (viii)
all industrial designs and any registrations and applications therefor
throughout the world; (ix) all databases and data collections and all rights
therein throughout the world; and (x) any similar or equivalent rights to any of
the foregoing anywhere in the world.
"LIABILITIES" means any liability (whether known or unknown, whether
asserted, or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including but not limited to any liability for Taxes.
"MATERIAL ADVERSE EFFECT" means, for any Person, a material adverse
effect whether individually or in the aggregate (i) on the business, operations,
financial condition, Assets and Properties, Liabilities or prospects of such
Person, or (ii) on the ability of such Person to consummate the transactions
contemplated hereby.
"ORDER" means any writ, judgment, decree, injunction or similar order
of any Governmental or Regulatory Authority (in each such case whether
preliminary or final).
"ORDINARY COURSE OF BUSINESS" means the action of a Person (as defined
below) that is consistent with the past practices of such Person and is taken in
the ordinary course of the normal day-to-day operations of such Person.
4
<PAGE>
"PERMITS" means all licenses, permits, certificates of authority,
authorizations, approvals, registrations and similar consents granted or issued
by any Governmental or Regulatory Authority.
"PERMITTED ENCUMBRANCE" means (i) any Encumbrance for taxes not yet
due or delinquent or being contested in good faith by appropriate proceedings
for which adequate reserves have been established and (ii) any minor
imperfection of title or similar Encumbrance which individually or in the
aggregate with other such Encumbrances does not impair the value of the property
subject to such Encumbrance or the use of such property in the conduct of the
Business.
"PERSON" means any natural person, corporation, general partnership,
limited partnership, limited liability company, proprietorship, other business
organization, trust, union, association or Governmental or Regulatory Authority.
"TAX" (and, with correlative meaning, "Taxes," "Taxable" and "Taxing")
means (i) any federal, state, local or foreign income, alternative or add-on
minimum tax, gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, license, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, property, environmental or windfall
profit tax, custom, duty or other tax, governmental fee or other like assessment
or charge of any kind whatsoever, together with any interest or any penalty,
addition to tax or additional amount imposed by any Governmental or Regulatory
Authority responsible for the imposition of any such tax (domestic or foreign),
(ii) any Liability for payment of any amounts of the type described in (i) as a
result of being a member of an affiliated, consolidated, combined, unitary or
other group for any Taxable period and (iii) any Liability for the payment of
any amounts of the type described in (i) or (ii) as a result of any express or
implied obligation to indemnify any other person.
"TAX RETURN" means any return, report, information return, schedule or
other document (including any related or supporting information) filed or
required to be filed with respect to any taxing authority with respect to Taxes.
1.2 CONSTRUCTION OF CERTAIN TERMS AND PHRASES. Unless the context of this
-----------------------------------------
Agreement otherwise requires, (a) words of any gender include each other gender;
(b) words using the singular or plural number also include the plural or
singular number, respectively; (c) the terms "hereof," "herein," "hereby" and
derivative or similar words refer to this entire Agreement; (d) the terms
"Article" or "Section" refer to the specified Article or Section of this
Agreement; (e) the term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or"; and (f) the term
"including" means "including without limitation." Whenever this Agreement refers
to a number of days, such number shall refer to calendar days unless Business
Days are specified. All accounting terms used herein and not expressly defined
herein shall have the meanings given to them under GAAP.
5
<PAGE>
ARTICLE 2
PURCHASE AND SALE OF PURCHASED ASSETS
-------------------------------------
2.1 PURCHASE AND SALE OF THE COMPANY'S ASSETS. Subject to the terms and
-----------------------------------------
conditions of this Agreement, at the Closing, Sellers agree to grant, sell,
convey, assign, transfer and deliver to Buyer, and Buyer agrees to purchase and
acquire from Sellers, free and clear of any Encumbrance or adverse claim of any
kind whatsoever, all of Sellers' right, title, and interest in and to the
assets, properties, rights, contracts and interests of Sellers, wherever
located, that are used in or pertain to the Business, as set forth below
(collectively, the "Purchased Assets"):
(a) the historical database of the Business, in electronic and
hard copy form, including, without limitation, the Report, plat maps,
photographs, and sales comparable data, owned or licensed by the Company and
used in the Business;
(b) all former, current and prospective customer lists, mailing
lists, telephone numbers, correspondence, vendor lists, list of billings and
receivables for former and current customer accounts of the Company related to
the Business set forth in Schedule 2.1(b) attached hereto (the "Business
---------------
Customer Lists");
(c) all the Books and Records of the Company relating to the
Business, including without limitation, operating data, the data collection
methodology, sales and other literatures, files and documents relating to the
Business (the "Business Records");
(d) all right, title and interest in and to all of the Company
Intellectual Property, including, without limitation, (i) all of the Company's
rights to the Company Trademarks; and (ii) the Company Intellectual Property set
forth on Schedule 2.1(d) attached hereto and all improvements, modifications and
---------------
other Intellectual Property derived therefrom;
(e) all licenses, permits, consents, approvals, orders,
certificates, authorizations, declarations and filings held by the Company,
including the fictitious business name statement or other similar document, if
any, filed with the Texas Secretary of State for the name "Hoffman Valuation
Data Services," necessary or incidental to the conduct of the Business as set
forth in Schedule 2.1(e) attached hereto (the "Business Permits"); and
--------------
(f) the goodwill and going concern value of the Business.
2.2 EXCLUDED ASSETS. Notwithstanding Section 2.1 hereof, the Purchased
--------------- -----------
Assets do not include the assets set forth on Schedule 2.2 attached hereto (the
------------
"Excluded Assets").
2.3 ASSUMED LIABILITIES. Buyer agrees to assume, satisfy and perform when
-------------------
due only those liabilities arising from the liabilities and obligations of the
Business under the Purchased Assets which arise in the Ordinary Course of
Business on or after the Closing Date (the "Assumed Liabilities"). Other than
the Assumed Liabilities, Buyer is not required to, and shall not assume, pay,
perform, defend, discharge or guarantee or be deemed to have assumed, paid,
performed, defended or discharged or guaranteed, or otherwise be responsible for
any Liability, obligation or claim of any nature of the Company or the Business,
including all payment obligations and any other obligations under the Report
Agreement, whether matured or
6
<PAGE>
unmatured, liquidated or unliquidated, fixed or contingent, known or unknown, or
whether arising out of acts or occurrences prior to, at or after the date
hereof. Without limiting the generality of the foregoing, Sellers shall remain
liable for the payment of all Liabilities, obligations or claims to personnel
employed by the Company (the "Company Employees") with respect to the notice and
continuation coverage requirement of Section 4980B(e) of the Code and
regulations thereunder for all Company Employees whose employment is terminated
for whatever reason prior to the Closing, for all the Company Employees who
terminated employment prior to the Closing, payroll, overtime, accrued vacation
time, holiday time, severance arrangements or worker's compensation of any
nature which are accrued but unpaid as of the Closing Date or which accrued as a
result of the consummation of the transactions contemplated herein.
2.4 PURCHASE PRICE. At the Closing, as consideration for the Purchased
--------------
Assets, Buyer agrees to pay, or cause to be paid, an aggregate purchase price in
cash of One Hundred Twenty Thousand Dollars ($120,000) (the "Purchase Price") as
follows:
(a) to AOBR, Sixty Thousand Six Hundred Twenty-Five Dollars
($60,625); and
(b) to Hoffman, Fifty-Nine Thousand Three Hundred Seventy-Five
Dollars ($59,375).
2.5 ALLOCATION OF AGGREGATE PURCHASE PRICE. The Purchase Price shall be
--------------------------------------
allocated among the Purchased Assets as set forth on Schedule 2.5 attached
------------
hereto which allocation shall be in compliance with Section 1060 of the Internal
Revenue Code and Regulations. Buyer and Sellers agree (i) to report the sale of
the Purchased Assets for federal and state Tax purposes in accordance with the
allocations set forth on Schedule 2.5 hereto and (ii) not to take any position
------------
inconsistent with such allocations on any of their respective tax returns.
2.6 SALES, USE AND OTHER TAXES. Sellers shall be responsible for all
--------------------------
sales and use taxes, if any, arising out of the sale of the Purchased Assets to
Buyer pursuant to this Agreement.
2.7 TITLE. Title to the Purchased Assets shall pass to Buyer at the
-----
Closing and the Purchased Assets shall be at the risk of the Sellers prior to
the Closing.
2.8 BULK SALES COMPLIANCE. Buyer hereby waives compliance by Sellers with
---------------------
the provisions of the bulk transfer laws of any state. Sellers and the Company
Principals warrant and agree to pay and discharge when due all claims of
creditors which could be asserted against Buyer by reason of such noncompliance.
Sellers and the Company Principals shall indemnify and hold Buyer harmless from,
against and in respect of (and shall on demand reimburse Buyer for) any Damages
suffered or incurred by Buyer by reason of the failure of Sellers to pay or
discharge such claims.
2.9 CLOSING.
-------
(a) TIME AND PLACE. The consummation of the purchase and sale of the
--------------
Purchased Assets under this Agreement (the "Closing") shall take place by
facsimile (with original signed documents to be delivered by overnight courier)
at 10:00 a.m. on the Closing Date, or at such time and in such manner as the
parties mutually agree.
7
<PAGE>
(b) CLOSING DELIVERIES BY BUYER. Buyer shall have delivered or caused
---------------------------
to be delivered to Sellers:
(i) the Purchase Price to Sellers by wire transfer in immediately
available funds to the accounts designated by Sellers;
(ii) a certificate of an officer of Buyer substantially in the form of
Exhibit A attached hereto to evidence compliance with Section 5.1
--------- -----------
hereof;
(iii) an Assignment and Assumption Agreement by and among Buyer and
Sellers substantially in the form of Exhibit B attached hereto (the
---------
"General Assignment"), duly executed by Buyer as of the Closing
Date;
(iv) a License Agreement by and between Buyer and the Company for the
licensing by Buyer to the Company of certain Purchased Assets
necessary for the AOBR operations of the Company, substantially in
the form of Exhibit C to be attached hereto (the "License
---------
Agreement"), duly executed by Buyer;
(v) an Independent Contractor Agreement by and between Buyer and Hoffman
for the transition of the Purchased Assets from the Company to Buyer
(the "Independent Contractor Agreement"), which Independent
Contractor Agreement shall be executed by Buyer and Hoffman by no
later than December 15, 1998;
(vi) (1) certified copies of the Certificate of Incorporation and Bylaws
of COMPS and (2) certificate of good standing for COMPS issued by
the appropriate governmental office of its state of incorporation
and each state in which it is qualified to do business;
(vii) such other documents as Sellers may reasonably request for the
purpose of facilitating the consummation of the transactions
contemplated herein.
(c) CLOSING DELIVERIES BY SELLERS. Sellers and the Company Principals
-----------------------------
shall have delivered or caused to be delivered to Buyer:
(i) possession of all of the Purchased Assets, together will all files,
Books and Records relating to the Purchased Assets;
(ii) Bill of Sale substantially in the form of Exhibit D attached hereto,
---------
conveying good and marketable title in all of the Purchased Assets
duly executed by Sellers;
(iii) the General Assignment, duly executed by Sellers;
(iv) the Non-Competition Agreements by and between Buyer and the Company,
Hoffman and each Company Principal substantially in the form of
Exhibit E attached hereto (the "Non-Competition Agreements"), duly
---------
8
<PAGE>
executed by the Company, Hoffman and each Company Principal,
respectively, as of the Closing Date (the "Non-Competition
Agreements");
(v) an Intellectual Property Assignment of all of the Company
Intellectual Property by and among Buyer and Sellers substantially
in the form of Exhibit F attached hereto (the "Intellectual Property
---------
Assignment"), duly executed by Buyer;
(vi) the Independent Contractor Agreement, duly executed by the Hoffman
and Buyer by no later than December 15, 1998;
(vii) the License Agreement, duly executed by the Company;
(viii) a certificate of an officer of the Company, Hoffman and each Company
Principal substantially in the form of Exhibit G attached hereto to
evidence compliance with Section 6.1 hereof; and
(ix) (1) certified copies of the Articles of Incorporation and Bylaws of
AOBR and (2) certificate(s) of good standing for AOBR issued by the
appropriate governmental office of its state of incorporation and
each state in which it is qualified to do business;
(x) such other documents as Buyer may reasonably request for the purpose
of facilitating the consummation of the transactions contemplated
herein.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLERS
-----------------------------------------
Each of the Company, Hoffman and the Company Principals, jointly and
severally, represent and warrant to Buyer as of the date hereof and as of the
Closing, except as set forth in the Disclosure Schedule furnished to Buyer,
specifically identifying the relevant Section hereof, which exceptions shall be
deemed to be representations and warranties as if made in this Article 3
(provided that the disclosure in such exceptions shall be true, complete and
correct), as follows:
3.1 ORGANIZATION AND OWNERSHIP OF THE COMPANY. The Company is a
-----------------------------------------
corporation duly organized, validly existing, and in good standing under the
laws of the State of Texas. The Company is duly authorized to conduct business
and is in good standing in each jurisdiction where such qualification is
required except for any jurisdiction where failure so to qualify would not have
a Material Adverse Effect upon the Company. Sellers have full power and
authority, and holds all Permits and authorizations necessary to carry on the
Business and to own and use the Assets and Properties owned and used by it
except where the failure to have such power and authority or to hold such Permit
or authorization would not have a Material Adverse Effect on the Company, the
Business or the Purchased Assets. Section 3.1(a) of the Disclosure Schedule
--------------
lists the officers and directors of the Company. The Company has delivered to
Buyer correct and complete copies of its Articles of Incorporation, bylaws, each
as amended to date.
9
<PAGE>
(b) The Company Principals are the sole shareholders of the Company.
All of the Company's issued and outstanding capital stock have been issued only
to the Company Principals and are duly authorized, validly issued, fully paid
and non-assessable, and issued in accordance with all federal and state
securities laws.
3.2 AUTHORITY OF SELLERS AND THE COMPANY PRINCIPALS. Each Seller and
-----------------------------------------------
Company Principal has all necessary power and authority and has taken all
actions necessary to own, lease and operate its Assets and Properties and the
Business as currently conducted and to enter into this Agreement, to consummate
the transactions contemplated hereby and to perform its obligations hereunder,
and no other proceedings on the part of Sellers or the Company Principals are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by each Seller and each Company Principal and constitutes a legal,
valid and binding obligation of each Seller and each Company Principal
enforceable against each Seller and each Company Principal in accordance with
its terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other
equitable remedies.
3.3 OWNERSHIP OF THE BUSINESS/PURCHASED ASSETS. Hoffman and the Company
------------------------------------------
each own a fifty percent (50%) interest in the Business and the Purchased Assets
free and clear of all Encumbrances. Entry into this Agreement and the
Consummation of the transactions contemplated hereby will not impair Sellers
ownership of the Business and the Purchased Assets prior to the Closing Date or
Buyer's ownership of the Business and the Purchased Assets after the Closing
Date. Except for COMPS, no Person has, or will have as a result of Sellers entry
into this Agreement or the consummation of the transactions contemplated hereby,
any rights to the Business or the Purchased Assets.
3.4 THE REPORT AGREEMENT. All payment obligations and any other
--------------------
obligations under the Report Agreement will terminate upon the Effective Date of
this Agreement.
3.5 NO CONFLICTS. The execution and delivery by Sellers of this Agreement
------------
does not, and the performance by Sellers of their respective obligations under
this Agreement and the consummation of the transactions contemplated hereby will
not (with or without the lapse of time):
(a) conflict with or result in a violation or breach of any of the
terms, conditions or provisions of the charter documents, other organizational
documents or other documents, of the Company;
(b) conflict with or result in a violation or breach of any term or
provision of any law, Order, license, statute, rule or regulation applicable to
any Seller or the Business or the Purchased Assets;
(c) result in a breach of, or default under (or give rise to a right
of termination, cancellation or acceleration under) any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, license, agreement, lease
or other similar instrument or obligation to which
10
<PAGE>
any of the Purchased Assets may be bound, except for such breaches or defaults
as set forth in the Disclosure Schedule as to which requisite waivers or
consents will have been obtained by Sellers by the Closing Date;
(d) conflict with or result in a breach of the Report Agreement or
the Jones Agreement; or
(e) result in an imposition of any Encumbrance on the Business or the
Purchased Assets.
3.6 GOVERNMENTAL APPROVALS AND FILINGS. No consent, approval or action
----------------------------------
of, filing with or notice to any or Regulatory Authority, or any other Person or
entity, on the part of any Seller is required in connection with the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby.
3.7 BOOKS AND RECORDS. The Business Records and all other Books and
-----------------
Records of the Company as made available by Sellers to Buyer are true, correct
and complete.
3.8 FINANCIAL STATEMENTS. Sellers have previously delivered to Buyer the
--------------------
Financial Statements. The Financial Statements (i) are true, correct and
complete, (ii) are in accordance with the Business Records, (iii) to the Best
Knowledge of Sellers or the Company Principals, have been prepared in a manner
that is not materially different from GAAP, and (iv) fairly present the
financial condition and results of operations of the Company as of the
respective dates thereof and for the periods covered thereby.
3.9 ABSENCE OF CHANGES. Since the date of the Letter of Intent by and
------------------
between Buyer and the Company (the "LOI Date"), and up to the Closing Date,
Sellers have conducted the Business only in the Ordinary Course of Business and
there has not been any adverse change in, or any event or development which,
individually or together with other such events, could reasonably be expected to
result in a Material Adverse Effect on the Business or any of the Purchased
Assets. Without limiting the generality of the foregoing, no event as described
below has occurred since the LOI Date:
(a) The Company has not sold, leased, transferred or assigned any of
the Purchased Assets, tangible or intangible.
(b) The Company has not entered into any agreement, contract, lease
or license (or series of related agreements, contracts, leases and licenses)
involving the Business or the Purchased Assets other than in the Ordinary Course
of Business and as described in Section 3.9(b) of the Disclosure Schedule.
(c) The Company has not granted any Encumbrance of any kind upon any
of the Purchased Assets, tangible or intangible.
(d) The Company has not granted any license or sublicense of any
rights under or with respect to any Company Intellectual Property.
11
<PAGE>
3.10 NO UNDISCLOSED LIABILITIES. Except as disclosed in the Financial
--------------------------
Statements, there are no Liabilities or claims, nor any basis for any
Liabilities or claims against, relating to or affecting the Business or the
Purchased Assets, other than Liabilities incurred in the Ordinary Course of
Business which have not had, and could not be expected to result, individually
or in the aggregate, in a Material Adverse Effect on the Business or the
Purchased Assets.
3.11 PURCHASED ASSETS. Section 3.11 of the Disclosure Schedule contains a
---------------- ------------
complete and accurate schedule specifying the location of all of the Purchased
Assets, where applicable, as of the Closing Date. The Company has good and
marketable title to, or a valid leasehold interest in all of the Purchased
Assets to be delivered to Buyer by Sellers, free and clear of all Encumbrances.
The Purchased Assets being transferred to Buyer pursuant to this Agreement
include all the Intellectual Property necessary for the ownership and operation
of the Business.
3.12 INTELLECTUAL PROPERTY RIGHTS.
----------------------------
(a) Schedule 2.1(d) lists (i) the federal registration number and
---------------
the date of registration of patents, trademarks and of other marks, trade names,
brand names or other trade rights currently used by Sellers, including the
Company Trademarks, in the conduct of the Business, (ii) all of the copyrights
and all federal applications, if any, for any of the foregoing, (iii) all other
Company Intellectual Property rights (including the Company Trademarks) and (iv)
all Intellectual Property rights owned by any third party which are not
generally commercially available and are currently used by Sellers in the
conduct of the Business and whether such use is or will be pursuant to license,
sublicense, agreement or permission.
(b) Sellers have delivered to Buyer complete and accurate copies of
each agreement, registration and other documents relating to the Company
Intellectual Property set forth in the Disclosure Schedule.
(c) Sellers own or possess adequate and enforceable licenses or other
rights to use (a) all of the Company Intellectual Property rights and (b) all
other patents, trademarks, service marks, brand names and tradenames, all
applications for any of the foregoing, all other trade secrets, designs, plans,
specifications and other Intellectual Property rights of every kind that are
used in, possessed by or necessary for the conduct of the Business by it. Entry
into this Agreement and consummation of the transactions contemplated hereby
will not impair Seller's ownership or use of the Company Intellectual Property.
No Person has a right to receive a royalty or similar payment in respect of any
item of Company Intellectual Property pursuant to any contractual arrangements
entered into by the Company. Sellers have not granted any license, sublicense or
other similar agreement relating in whole or in part to any Company Intellectual
Property. No Seller has received any notice that the Company's or Hoffman's or
any third party's use of any item of Intellectual Property is interfering with,
infringing upon or otherwise violating the rights of the Company, Hoffman or any
third party in or to such Intellectual Property, and no proceedings have been
instituted against or notices received by any Seller alleging that use or
proposed use of any item of the Intellectual Property by the Company, Hoffman or
any third party infringes upon or otherwise violates any rights of the Company,
Hoffman or a third party in or to such Intellectual Property.
12
<PAGE>
3.13 LITIGATION. There are no Actions or Proceedings pending or, to the
----------
Best Knowledge of Sellers or the Company Principals, threatened or anticipated
against, relating to or affecting (i) either Seller, the Purchased Assets or the
Business or (ii) the transactions contemplated by this Agreement, and there is
no basis for any such Action or Proceeding. Since the inception of the Report
and the Business (regardless of who owned or operated the Report or the
Business), there have been no Actions or Proceedings against, relating to or
affecting the Report, the Purchased Assets or the Business. No Seller is in
default with respect to any Order relating to the Company, Hoffman, the Business
or the Purchased Assets, and there are no unsatisfied judgments against any
Seller, the Business or the Purchased Assets.
3.14 COMPLIANCE WITH LAW. Sellers and the Company Principals are in
-------------------
compliance with all applicable laws, statutes, Orders, ordinances and
regulations, whether federal, state, local or foreign, except where the failure
to comply, in each instance and in the aggregate, would not be expected to
result in a Material Adverse Effect on the Business or the Purchased Assets.
Neither Sellers nor the Company Principals have not received any written notice
to the effect that, or otherwise have been advised that, any of them are not in
compliance with any of such laws, statutes, Orders, ordinances or regulations,
where the failure to comply would be expected to result in a Material Adverse
Effect on the Business or the Purchased Assets.
3.15 TAX MATTERS. All Taxes, including, without limitation, income,
-----------
property, sales, use, franchise, value added, employees, income withholding,
social security and other employee-related taxes, imposed by the United States,
by any state, municipality, other local government or other subdivision or
instrumentality of the United States, or by any foreign country or any state or
other government thereof, or by any other taxing authority, that are due and
payable by the Company or Hoffman and all interest and penalties thereon,
whether disputed or not, and which would result in the imposition of an
Encumbrance on the Purchased Assets, the Company, Hoffman or against Buyer,
other than Taxes which are not yet due and payable, have been paid in full or
contested in appropriate proceedings. All Tax Returns required to be filed in
connection therewith have been accurately prepared and duly and timely filed and
all deposits required by law to be made by the Company or Hoffman with respect
to the Company Employees' withholding or other taxes have been duly made.
Sellers are not delinquent in the payment of any tax, assessment or governmental
charge or deposits which would result in the imposition of an Encumbrance on the
Company, Hoffman or the Purchased Assets or against Buyer, and the Company and
Hoffman have no tax, deficiency or claim outstanding, proposed or assessed
against it, and there is no basis for any such deficiency or claim, which would
result in the imposition of any Encumbrances on the Company, Hoffman, the
Business, the Purchased Assets or against Buyer.
3.16 NO OTHER AGREEMENTS TO SELL THE BUSINESS OR THE PURCHASED ASSETS.
----------------------------------------------------------------
Neither the Company nor the Company Principals nor any affiliate or
representative of the Company has any obligation, absolute or contingent, to any
other person or firm to sell or encumber the Business, the Purchased Assets or
to effect any sale, consolidation or other reorganization of the Business or to
enter into any agreement with respect thereto, nor has any such party had any
discussion with any third party regarding any of the foregoing.
3.17 EXCLUSIVE DEALING. Sellers and the Company Principals represent and
-----------------
warrant that they are not entertaining any bids, inquiries or other offers
toward a transaction with any
13
<PAGE>
other entity that would affect the ownership of the Business or the Purchased
Assets, and that they will continue not to do and will not orally or in writing
agree to any such transaction until this Agreement has been terminated. Any such
offers or indications of interest received by Sellers or the Company Principals
will be promptly disclosed to Buyer.
3.18 [INTENTIONALLY LEFT BLANK].
--------------------------
3.19 CUSTOMERS.
---------
(a) The Company has previously provided to Buyer a true
and correct list of the Business' customers during the 1997 fiscal year and for
the eleven-month period ended November 15, 1998. Except as set forth in Section
-------
3.19 of the Disclosure Schedule, since November 13, 1998, no single customer or
- ----
group of affiliated customers contributing more than $250 per month to the gross
revenues of the Business has stopped doing business with the Company or Hoffman,
and to the Best Knowledge of Sellers and the Company Principals, no such
customer has an intention to discontinue doing business or reduce the level of
gross revenues from that in fiscal year 1997 with the Company or Hoffman.
(b) The Company has delivered to Buyer all of the billings/invoices
for the services of Business charged to the customers of the Business for the
period between April 1, 1998 and November 13, 1998 (the "Billings"). The
Billings are (i) true, correct and complete, (ii) in accordance with the
Business Records and (iii) fairly present billing information and related
operations of the Business.
3.20 THIRD PARTY CONSENTS. No consent, approval or authorization of any
third party on the part of any Seller or Company Principal is required in
connection with the consummation of the transactions contemplated hereunder
except as otherwise provided in Section 3.20 of the Disclosure Schedule.
------------
3.21 BROKERS. No Seller or Company Principal has retained any broker in
-------
connection with the transactions contemplated hereunder. Buyer does not have any
nor will have any obligation to pay any broker's, finder's, investment banker's,
financial advisor's or similar fee in connection with this Agreement or the
transactions contemplated hereby by reason of any action taken by or on behalf
of any Seller or Company Principal.
3.22 DISCLOSURE. The representations and warranties by Sellers and the
----------
Company Principals in this Agreement and the statements contained in the
Disclosure Schedule, the other schedules, certificates, exhibits and other
writings furnished and to be furnished by Sellers or Company Principals to Buyer
pursuant to this Agreement do not and will not contain any untrue statement of
material fact and do not and will not omit to state any material fact necessary
to make the statements herein or therein not misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer represents and warrants to Sellers, as of the date hereof and as
of the Closing, as follows:
14
<PAGE>
4.1 ORGANIZATION OF BUYER. Buyer is a corporation duly organized, validly
---------------------
existing, and in good standing under the laws of the State of Delaware. Buyer is
duly authorized to conduct business and is in good standing under the laws of
each jurisdiction where such qualification is required except for any
jurisdiction where failure so to qualify would not have a Material Adverse
Effect upon Buyer. Buyer has full power and authority, and holds all Permits and
authorizations necessary, to carry on the business in which it is engaged and to
own and use the properties owned and used by it except where the failure to have
such power and authority or to hold such license, permit or authorization would
not have a Material Adverse Effect on Buyer.
4.2 AUTHORITY OF BUYER. Buyer has all necessary corporate power and
------------------
corporate authority and has taken all corporate actions necessary to enter into
this Agreement, to consummate the transactions contemplated hereby and to
perform its obligations hereunder and no other proceedings on the part of Buyer
are necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Buyer and constitutes a legal, valid and binding obligation of
Buyer enforceable against Buyer in accordance with its terms except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors' rights
generally and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.
4.3 LITIGATION. There are no Actions or Proceedings pending, or to the
----------
knowledge of Buyer, threatened or anticipated against, relating to or affecting
Buyer's ability to consummate the transactions contemplated by this Agreement
and perform any of its obligations under this Agreement, and to the knowledge of
Buyer, there is no basis for any such Action or Proceedings. Buyer is not in
default with respect to any Order, and there are no unsatisfied judgments
against Buyer.
4.4 GOVERNMENTAL APPROVALS AND FILINGS. No consent, approval or action
----------------------------------
of, filing with or notice to any Governmental or Regulatory Authority on the
part of Buyer is required in connection with the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby.
4.5 NO UNDISCLOSED LIABILITIES. There are no Liabilities or claims, nor
--------------------------
any basis for any material Liabilities or claims against Buyer, its officers or
directors, other than Liabilities incurred in the Ordinary Course of Business
which have not had, and, to the knowledge of Buyer, could not be expected to
result, individually or in the aggregate, in an Adverse Effect on Buyer.
4.6 BROKERS. Buyer has not retained any broker in connection with the
-------
transactions contemplated hereunder. Sellers have no and will have no obligation
to pay any broker's, finder's, investment banker's, financial advisor's or
similar fee in connection with this Agreement or the transactions contemplated
hereby by reason of any action taken by or on behalf of Buyer.
4.7 THIRD PARTY CONSENTS. No consent, approval or authorization of any
--------------------
third party on the part of Buyer is required in connection with the consummation
of the transactions contemplated hereunder.
15
<PAGE>
ARTICLE 5
CONDITIONS TO THE OBLIGATIONS OF SELLERS
----------------------------------------
The obligations of Sellers to effect the transactions contemplated
hereby are subject to the satisfaction, at or before the Closing, of each of the
following conditions:
5.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. All representations and
-----------------------------------------
warranties of Buyer contained in this Agreement shall be true and correct on and
as of the Closing Date and Buyer shall have performed all agreements and
covenants required to be performed by them prior to or on the Closing Date.
5.2 NO ACTIONS OR PROCEEDINGS. No Actions or Proceedings shall have been
-------------------------
instituted or threatened which question the validity or legality of the
transactions contemplated hereby.
5.3 CONSENTS. All Permits, authorizations, consents, approvals and
--------
waivers from third parties and Governmental or Regulatory Authorities and other
Persons necessary or appropriate to permit Buyer to perform its obligations
hereunder and to consummate the transactions contemplated hereby shall have been
obtained.
5.4 PERFORMANCE OF AGREEMENT. All covenants, conditions and other
------------------------
obligations under this Agreement which are to be performed or complied with by
Buyer shall have been fully performed and complied with, or waived by Sellers at
or prior to the Closing.
5.5 APPROVAL OF DOCUMENTATION. The form and substance of all
-------------------------
certificates, instruments, exhibits, schedules and other documents delivered to
or to be delivered to Sellers under this Agreement shall be reasonably
satisfactory to Sellers and their counsel.
5.6 CLOSING DELIVERIES. Buyer shall have executed and delivered the
------------------
documents required to be executed and delivered by Buyer pursuant to Section
-------
2.9(b) above.
- ------
ARTICLE 6
CONDITIONS TO THE OBLIGATIONS OF BUYER
--------------------------------------
The obligation of Buyer to effect the transactions contemplated hereby
is subject to the satisfaction, at or before the Closing, of each of the
following conditions:
6.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. All representations and
-----------------------------------------
warranties of Sellers and the Company Principals contained in this Agreement
shall be true and correct on and as of the Closing Date and Sellers and the
Company Principals shall have performed all agreements and covenants required to
be performed by them prior to or on the Closing Date.
6.2 NO ACTIONS OR PROCEEDINGS. No Actions or Proceedings shall have been
-------------------------
instituted or threatened which question the validity or legality of the
transactions contemplated hereby.
16
<PAGE>
6.3 DUE DILIGENCE. The results of an investigation of the Company, the
-------------
Business and the Purchased Assets by Buyer, its counsel and other advisors shall
have been received and completed by Buyer.
6.4 MATERIAL ADVERSE EFFECT. Sellers and the Company Principals shall not
-----------------------
have acted or caused any Person to have acted in any manner which has created or
could reasonably create any Material Adverse Effect on the Company, Hoffman, the
Business or the Purchased Assets, nor shall there be any event or development
which, individually or together with other such events, could reasonably be
expected to result in an Material Adverse Effect on the Company, Hoffman, the
Business or the Purchased Assets.
6.5 CONSENTS. All Permits, authorizations, consents, approvals and
--------
waivers from third parties (including without limitation required consents set
forth on Section 3.20 of the Disclosure Schedule) and Governmental or Regulatory
Authorities and other Persons necessary or appropriate to permit Sellers to
perform their obligations hereunder and to consummate the transactions
contemplated hereby shall have been obtained.
6.6 BOARD APPROVAL. Buyer shall have received the approval of this
--------------
Agreement and the terms and conditions herein by its Board of Directors.
6.7 COMPANY BOARD AND SHAREHOLDER APPROVAL. The Company shall have
--------------------------------------
received the approval of this Agreement and the terms and conditions herein by
its Board of Directors and a majority of its shareholders.
6.8 PERFORMANCE OF AGREEMENT. All covenants, conditions and other
------------------------
obligations under this Agreement which are to be performed or complied with by
Sellers shall have been fully performed and complied with at or prior to the
Closing.
6.9 APPROVAL OF DOCUMENTATION. The form and substance of all
-------------------------
certificates, instruments, exhibits, schedules and other documents delivered to
or to be delivered to Buyer under this Agreement shall be reasonably
satisfactory to Buyer and its counsel.
6.10 POSSIBLE INFRINGEMENT CLAIMS. All matters which, in the discretion
----------------------------
of Buyer, may result in a litigation matter related to the Business or the
Purchased Assets shall have been resolved in a manner satisfactory to Buyer.
6.11 CLOSING DELIVERIES. Sellers shall have executed and delivered the
------------------
documents required to be executed and delivered by Sellers pursuant to Section
-------
2.9(c) above.
- ------
ARTICLE 7
COVENANTS OF THE PARTIES
------------------------
7.1 COVENANTS BY SELLERS AND BUYER. Prior to the Closing Date, Sellers
------------------------------
and Buyer covenant to act as follows:
(a) NOTIFICATION OF CERTAIN MATTERS. Each of the parties shall
-------------------------------
give prompt notice to the other party, of (i) the discovery of a fact or facts
of which the notifying party has actual
17
<PAGE>
knowledge which cause any of the representations, warranties or statements made
by it or him or in an any exhibit, schedule or other document delivered pursuant
to this Agreement, to be false or misleading or omit any facts necessary in
order to make such representations, warranties or statements not false or
misleading; (ii) the occurrence, or failure to occur, of any event which
occurrence or failure would be likely to cause any representation or warranty
made by them in this Agreement to be untrue or inaccurate any time from the date
of this Agreement to the Closing Date; and (iii) any failure of the notifying
party to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it or him hereunder. Each party hereto shall use
all reasonable efforts to remedy any failure on its or his part to comply with
or satisfy any covenant, condition or agreement to be complied with or satisfied
by it or him/her hereunder. During the period from the date of this Agreement to
the Closing Date, Sellers will promptly notify Buyer of any material change in,
or outside of, the Ordinary Course of Business of the Company, the Business or
the Purchased Assets and of any Governmental or Regulatory Authority complaints,
investigative hearings, or the institution, threat (to the extent Sellers has or
should have Knowledge of such threat) or settlement of litigation, in each case
involving an amount in excess of $5,000 and relating to the Company, the
Business or the Purchased Assets, and shall keep Buyer fully informed in
reasonable detail of such events. Sellers shall not enter into any settlements
over $5,000 in connection with any such litigation without the prior written
consent of Buyer.
(b) REASONABLE COMMERCIAL EFFORTS. Subject to the terms and
-----------------------------
conditions of this Agreement, each of the parties hereto will use its reasonable
commercial efforts to take, or cause to be taken, all action, or to do, or cause
to be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement, including, without limitation, obtaining all consents and
approvals of all Persons and Governmental or Regulatory Authorities and removing
any injunctions or other impairments or delays or otherwise which are necessary
to the consummation of the transactions contemplated by this Agreement.
(c) CONFIDENTIALITY.
---------------
(i) Except as and to the extent required by law, the parties
hereto will not disclose or use, and will direct their
respective representatives not to disclose or use to the
detriment of the other parties, any Confidential Information
with respect to such other party furnished, or to be
furnished, by such other party or its representatives to the
disclosing party or its representatives at any time or in
any manner other than in connection with the transaction
contemplated in this Agreement. Notwithstanding the
foregoing, Confidential Information shall not include any
information which is generally known to the public or to
companies in businesses similar to the Business, or which
later, through no act of the disclosing party, becomes
generally known.
(ii) Upon consummation of this Agreement, Sellers shall (a)
return to Buyer, or shall destroy in a manner satisfactory
to Buyer, all tangible forms of such Confidential
Information, including any and all copies thereof, and those
portions of any documents, memoranda, notes, studies and
analyses
18
<PAGE>
prepared by or on behalf of Sellers or any of its directors,
officers, employees, advisors or representatives that
incorporate or are derived from such Confidential
Information, and (b) immediately cease, and shall cause its
directors, officers, employees, partners, advisors and
representatives to cease, use of such Confidential
Information as well as any information or materials that
incorporate or are derived from such Confidential
Information.
(iii) In the event this Agreement is terminated prior to the
consummation of the transaction contemplated hereunder, the
party receiving any such Confidential Information shall (a)
return to the party disclosing the same, or shall destroy in
a manner satisfactory to such disclosing party, all tangible
forms of such Confidential Information, including any and
all copies thereof, and those portions of any documents,
memoranda, notes, studies and analyses prepared by or on
behalf of the receiving party or any of its directors,
officers, employees, advisors or representatives that
incorporate or are derived from such Confidential
Information, and (b) immediately cease, and shall cause its
directors, officers, employees, partners, advisors and
representatives to cease, use of such Confidential
Information as well as any information or materials that
incorporate or are derived from such Confidential
Information.
(d) PUBLIC ANNOUNCEMENTS. Sellers, the Company Principals and Buyer
--------------------
shall not issue any press release or make any public announcement with respect
to this Agreement and the transactions contemplated hereby without obtaining the
prior consent of the other parties, except as may be required by applicable law
upon the advice of counsel, and any such press release issued by Sellers, the
Company Principals or Buyer shall not disclose any information regarding the
terms or the Purchase Price of the transactions contemplated by this Agreement.
7.2 COVENANTS OF SELLERS. Prior to the Closing Date, Sellers covenant to
--------------------
act as follows:
(a) MAINTENANCE OF BUSINESS PRIOR TO CLOSING. Except as otherwise
----------------------------------------
contemplated by this Agreement, during the period from the Effective Date to the
Closing Date, Sellers have conducted and will continue to conduct the Business
in accordance with its Ordinary Course of Business and seek to preserve its
current relationships with the customers and other persons with whom it has
business relations to the extent consistent with its Ordinary Course of
Business. Without limiting the generality of the foregoing and, except as
otherwise expressly provided in this Agreement, prior to the Closing Date,
without the prior written consent of Buyer, Sellers will not, and the Company
Principals will cause Sellers not to, with respect to the Business and the
Purchased Assets:
(i) (A) sell, transfer or otherwise dispose of, or agree to sell,
transfer or otherwise dispose of the Business or any Purchased
Assets or (B) permit any Encumbrance on the Business or any
Purchased Assets;
(ii) make any changes to the accounting methods, principles or
practices applicable to the Company;
19
<PAGE>
(iii) permit any damage, destruction or casualty loss, whether covered
by insurance or not, material to the Business taken as a whole, or
to any Purchased Assets;
(iv) take or omit to take any action in violation or contravention of
any provision of Section 3.9 above or any other representation or
-----------
warranty hereunder;
(v) agree, whether in writing or orally, whether formally or
informally, to engage in any of the actions described in clauses
-------
(i) through (iv) of this Section 7.2(a).
--- ---- --------------
(b) INVESTIGATION BY BUYER. Sellers shall allow Buyer, at its
----------------------
own expense during regular business hours, or otherwise with the consent of
Sellers (which consent shall not be unreasonably withheld), to make such
inspection of the Company and the Business and to inspect (and, if applicable,
make copies of) Books and Records, offices and other facilities of the Company
as requested by Buyer and reasonably necessary for or reasonably related to the
operation of the Business, including historical financial information,
concerning the Business; provided, however, that any information obtained from
-------- -------
the Sellers is subject to the obligations imposed by Section 7.1(c) above.
--------------
(c) CONSENTS. As soon as practicable, Sellers will commence all
--------
reasonable action required hereunder to obtain all applicable Permits, consents,
approvals and agreements of, and to give all notices and make all filings with,
any third parties as may be necessary to authorize, approve or permit the full
and complete consummation of the transactions contemplated hereby by the Closing
Date.
(d) TRANSITION PERIOD. From the Effective Date until all of the
-----------------
Purchased Assets are transferred to Buyer in a manner satisfactory to Buyer (the
"Transfer Period"), Sellers and the Company Principals shall use their best
efforts to completely transfer the Purchased Assets to Buyer, including without
limitation facilitating the transfer of customers to Buyer, the development of
press releases or any other actions the Buyer deems necessary, so that Buyer
shall have full use of the Purchased Assets in the same manner and to the same
extent that the Company used the Purchased Assets on the Effective Date.
Notwithstanding the foregoing, all costs, expenses and revenues arising from the
Purchased Assets during the period from the Effective Date to the Closing Date
shall belong to the Company.
(e) CESSATION OF USE OF THE COMPANY TRADEMARKS AND PURCHASED
--------------------------------------------------------
ASSETS. On the Closing Date, Sellers and the Company Principals shall cease
- ------
using (i) the Company Trademarks and any variations thereof in any capacity and
(ii) subject to the terms of the License Agreement, all Purchased Assets
including without limitation all databases for the Business, and will assign to
Buyer all rights in and to the Company Trademarks and the Purchased Assets.
7.3 COVENANT OF BUYER. As soon as practicable after the Effective Date
-----------------
and prior to the Closing Date, Buyer covenants to act as follows: Buyer will
commence all reasonable action required hereunder to obtain all applicable
Permits, consents, approvals and agreements of, and to give all notices and make
all filings with, any third parties as may be necessary to authorize,
20
<PAGE>
approve or permit the full and complete consummation of the transactions
contemplated hereby by the Closing Date.
ARTICLE 8
ACTIONS BY THE PARTIES AFTER THE CLOSING
----------------------------------------
8.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES, ETC. The representations,
--------------------------------------------
warranties and covenants contained in or made pursuant to this Agreement or any
certificate, document or instrument delivered pursuant to or in connection with
this Agreement in the transactions contemplated hereby shall survive the
execution and delivery of this Agreement and the Closing hereunder
notwithstanding any investigation, analysis or evaluation by Buyer or its
designees of the Purchased Assets, Business, operations or condition (financial
or otherwise) of the Company and the Purchased Assets and thereafter the
representations and warranties of Sellers shall continue to survive in full
force and effect for a period of two (2) years after the Closing Date.
8.2 INDEMNIFICATION.
---------------
(a) BY HOFFMAN AND COMPANY PRINCIPALS. Subject to the
---------------------------------
limitations set forth in Section 8.2(d) below, Hoffman and the Company
--------------
Principals shall jointly and severally, indemnify, defend and hold harmless
Buyer, and its officers, directors, employees, agents, successors and assigns
(collectively the "BUYER GROUP") from and against any and all costs, losses
(including, without limitation, diminution in value), Liabilities, damages,
lawsuits, deficiencies, claims and expenses, including without limitation,
interest, penalties, costs of mitigation, lost profits and other losses
resulting from any shutdown or curtailment of operations, attorneys' fees and
all amounts paid in investigation, defense or settlement of any of the foregoing
(collectively, the "DAMAGES"), incurred in connection with, arising out of,
resulting from or incident to (i) any breach of any covenant, representation,
warranty or agreement or the inaccuracy of any representation, made by Sellers
in or pursuant to this Agreement, (ii) Actions or Proceedings set forth in the
Disclosure Schedule or (iii) any Liabilities of Sellers which relates to the
Business and arises out of transactions entered into or events occurring prior
to the Closing; however, such indemnification shall exclude any loss in revenue
due to any customers of the Business prior to the Closing Date not remaining
customers of the Business after the Closing Date.
(b) BY BUYER. Buyer shall indemnify, defend and hold harmless
--------
Sellers and the Company's officers, employees, agents, successors and assigns
from and against any and all costs, losses (including, without limitation,
diminution in value), Liabilities, damages, lawsuits, deficiencies, claims and
expenses, including without limitation, interest, penalties, costs of
mitigation, lost profits and other losses resulting from any shutdown or
curtailment of operations, attorneys' fees and all amounts paid in
investigation, defense or settlement of any of the foregoing, incurred in
connection with, arising out of, resulting from or incident to any breach of any
covenant, representation, warranty or agreement or the inaccuracy of any
representation, made by Buyer in or pursuant to this Agreement.
(c) DEFENSE OF CLAIMS. If any Action or Proceeding is filed or
initiated against any party entitled to the benefit of indemnity hereunder,
written notice thereof shall be given to
21
<PAGE>
the indemnifying party as promptly as practicable (and in any event within ten
(10) days after the service of the citation or summons); provided, however, that
-------- -------
the failure of any indemnified party to give timely notice shall not affect
rights to indemnification hereunder except to the extent that the indemnifying
party demonstrates actual damage caused by such failure. After such notice, if
the indemnifying party shall acknowledge in writing to the indemnified party
that the indemnifying party shall be obligated under the terms of its indemnity
hereunder in connection with such Action or Proceeding, then the indemnifying
party shall be entitled, if it so elects, to take control of the defense and
investigation of such Action or Proceeding and to employ and engage attorneys of
its own choice to handle and defend the same, such attorneys to be reasonably
satisfactory to the indemnified party, at the indemnifying party's cost, risk
and expense (unless (i) the indemnifying party has failed to assume the defense
of such Action or Proceeding or (ii) the named parties to such Action or
Proceeding include both of the indemnifying party and the indemnified party, and
the indemnified party and its counsel determine in good faith that there may be
one or more legal defenses available to such indemnified party that are
different from or additional to those available to the indemnifying party and
that joint representation would be inappropriate), and to compromise or settle
such Action or Proceeding, which compromise or settlement shall be made only
with the written consent of the indemnified party, such consent not to be
unreasonably withheld. The indemnified party may withhold such consent if such
compromise or settlement would adversely affect the conduct of business or
requires less than an unconditional release to be obtained. If (i) the
indemnifying party fails to assume the defense of such Action or Proceeding
within fifteen (15) days after receipt of notice thereof pursuant to this
Section 8.2, or (ii) the named parties to such Action or Proceeding include both
- -----------
the indemnifying party and the indemnified party and the indemnified party and
its counsel determine in good faith that there may be one or more legal defenses
available to such indemnified party that are different from or additional to
those available to the indemnifying party and that joint representation would be
inappropriate, the indemnified party against which such Action or Proceeding has
been filed or initiated will (upon delivering notice to such effect to the
indemnifying party) have the right to undertake, at the indemnifying party's
cost and expense, the defense, compromise or settlement of such Action or
Proceeding on behalf of and for the account and risk of the indemnifying party;
provided, however, that such Action or Proceeding shall not be compromised or
- -------- -------
settled without the written consent of the indemnifying party, which consent
shall not be unreasonably withheld. In the event the indemnified party assumes
defense of the Action or Proceeding, the indemnified party will keep the
indemnifying party reasonably informed of the progress of any such defense,
compromise or settlement and will consult with, when appropriate, and consider
any reasonable advice from, the indemnifying party of any such defense,
compromise or settlement. The indemnifying party shall be liable for any
settlement of any action effected pursuant to and in accordance with this
Section 8.2 and for any final judgment (subject to any right of appeal), and the
- -----------
indemnifying party agrees to indemnify and hold harmless the indemnified party
from and against any Damages by reason of such settlement or judgment.
Subject to the limitations set forth in Section 8.2(d) below,
--------------
regardless of whether the indemnifying party or the indemnified party takes up
the defense, the indemnifying party will pay reasonable costs and expenses in
connection with the defense, compromise or settlement for any Action or
Proceeding under this Section 8.2.
-----------
22
<PAGE>
The indemnified party shall cooperate in all reasonable respects
with the indemnifying party and such attorneys in the investigation, trial and
defense of such Action or Proceeding and any appeal arising therefrom; provided,
--------
however, that the indemnified party may, at its own cost, participate in the
- -------
investigation, trial and defense of such Action or Proceeding and any appeal
arising therefrom. The indemnifying party shall pay all expenses due under this
Section 8.2 as such expenses become due. In the event such expenses are not so
- -----------
paid, the indemnified party shall be entitled to settle any Action or Proceeding
under this Section 8.2 without the consent of the indemnifying party and without
-----------
waiving any rights the indemnified party may have against the indemnifying
party.
(d) LIMITATION ON INDEMNIFICATION.
-----------------------------
(i) Hoffman and the Company Principal shall not have liability for
amounts payable to any member of the Buyer Group pursuant to
her or its indemnification obligations in this Article 8 until
---------
the total of all Damages of the Buyer exceeds Ten Thousand
Dollars ($10,000) in the aggregate (the "Threshold Amount"),
after which the indemnification obligations of Hoffman and the
Company Principals shall include all such Damages as if this
Section 8.2(d)(i) were not part of this Agreement.
-----------------
(ii) Buyer shall not have liability for amounts payable to any
Seller or Company Principal pursuant to its indemnification
obligations in this Article 8 until the total of all Damages
---------
of the Sellers and the Company Principals exceeds Ten Thousand
Dollars ($10,000) in the aggregate (the "Threshold Amount"),
after which the indemnification obligations of Buyer shall
include all such Damages as if this Section 8.2(d)(i) were not
-----------------
part of this Agreement.
(iii) Hoffman and the Company Principal shall not have liability to
any member of the Buyer Group pursuant to his or her
indemnification obligations in this Article 8 to the extent
---------
that the total of all Damages paid by Hoffman and the Company
Principals in the aggregate to members of the Buyer Group
pursuant to such indemnification obligations exceeds One
Hundred Twenty Thousand Dollars ($120,000). Buyer shall not
have liability to any Seller or Company Principal pursuant to
its indemnification obligations in this Article 8 to the
---------
extent that the total of all Damages paid by Buyer in the
aggregate to Sellers and the Company Principals pursuant to
such indemnification obligations exceeds One Hundred Twenty
Thousand Dollars ($120,000). Hoffman shall not have liability
to any member of the Buyer Group pursuant to her
indemnification obligations in this Article 8 to the extent
---------
the total of all Damages paid to members of the Buyer Group by
Hoffman exceeds Sixty Thousand Dollars ($60,000), and each of
the Company Principals shall not have liability to any member
of the Buyer Group pursuant to such Company Principal's
liability obligation in this Article 8 to the extent the total
---------
of all damages paid to the member of the Buyer Group by such
Company Principal exceeds Thirty Thousand Dollars ($30,000).
Notwithstanding the foregoing, this clause (iii) shall
------------
23
<PAGE>
not apply to any intentional breach by any Seller or Company
Principal of any representation, warranty, covenant or
agreement of such Seller or Company Principal.
ARTICLE 9
MISCELLANEOUS
-------------
9.1 TERMINATION. This Agreement may be terminated at any time prior to
-----------
Closing:
(a) by mutual consent of the parties hereto;
(b) by Sellers, if (i) any condition precedent to Sellers'
obligations hereunder is not satisfied and such condition is not waived by
Sellers at or prior to the Closing Date or (ii) there has been a material
violation or breach by Buyer of any covenant, agreement, representation or
warranty contained in this Agreement and such violation or breach has not been
waived in writing by Sellers; or
(c) by Buyer if (i) any condition precedent to Buyer's obligations
hereunder is not satisfied and such condition is not waived by Buyer at or prior
to the Closing Date or (ii) there has been a material violation or breach by
Sellers of any covenant, agreement, representation or warranty contained in this
Agreement and such violation or breach has not been waived in writing by Buyer;
(d) In the event that a condition precedent to its obligations is
not satisfied, nothing contained herein shall be deemed to require any party to
terminate this Agreement, rather than to waive such condition precedent and
proceed with the Closing.
(e) In the event of termination of this Agreement as provided in
this Section 9.1, this Agreement shall forthwith become void and there shall be
-----------
no liability or obligations on the part of Buyer or Sellers; provided, however,
-------- -------
that (i) each party shall remain liable for any breaches of this Agreement prior
to its termination and (ii) the provisions of Section 7.1(c) and Article 9 of
-------------- ---------
this Agreement shall remain in full force and effect and survive any termination
of this Agreement.
9.2 NOTICES. All notices, requests and other communications hereunder
-------
must be in writing and will be deemed to have been duly given only if delivered
personally against written receipt or by facsimile transmission with answer back
confirmation or mailed (postage prepaid by certified or registered mail, return
receipt requested) or by overnight courier to the parties at the following
addresses or facsimile numbers:
IF TO SELLERS OR THE COMPANY PRINCIPALS:
AOBR, Inc.
8303 North Mopac, Suite B-325
Austin, TX 78759
Facsimile No: (512) 346-4873
Attention: Linda Hoffman and Guy Goodwin
24
<PAGE>
IF TO BUYER, TO:
Comps InfoSystems, Inc.
9888 Carroll Centre Road, Suite 100
San Diego, CA 92126-4580
Facsimile No: (619) 684-3292
Attention: Christopher Crane
with copies to:
Brobeck, Phleger & Harrison LLP
550 West "C" Street
Suite 1300
San Diego, CA 92101
Facsimile No.: (619) 234-1966
Attention: Craig S. Andrews, Esq.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section 9.2, be deemed given upon
-----------
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section 9.2, be deemed given upon receipt, and (iii) if
-----------
delivered by mail in the manner described above to the address as provided in
this Section 9.2, be deemed given upon receipt (in each case regardless of
-----------
whether such notice, request or other communication is received by any other
Person to whom a copy of such notice, request or other communication is to be
delivered pursuant to this Section). Any party from time to time may change its
address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other parties hereto.
9.3 ENTIRE AGREEMENT. This Agreement (and all Exhibits and Schedules
----------------
attached hereto, all other documents delivered in connection herewith)
supersedes all prior discussions and agreements among the parties with respect
to the subject matter hereof and contains the sole and entire agreement among
the parties hereto with respect thereto.
9.4 WAIVER. Any term or condition of this Agreement may be waived at any
------
time by the party that is entitled to the benefit thereof, but no such waiver
shall be effective unless set forth in a written instrument duly executed by or
on behalf of the party waiving such term or condition. No waiver by any party
hereto of any term or condition of this Agreement, in any one or more instances,
shall be deemed to be or construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion. All remedies, either under
this Agreement or by law or otherwise afforded, will be cumulative and not
alternative.
9.5 AMENDMENT. This Agreement may be amended, supplemented or modified
---------
only by a written instrument duly executed by or on behalf of each party hereto.
9.6 NO THIRD PARTY BENEFICIARY. The terms and provisions of this
--------------------------
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other Person other
than any Person entitled to indemnity under Section 8.2.
-----------
25
<PAGE>
9.7 NO ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any right,
-----------------------------
interest or obligation hereunder may be assigned by any party hereto without the
prior written consent of the other parties hereto and any attempt to do so will
be void, except that any party's rights to indemnification under Article 8 may
---------
be freely assigned. This Agreement is binding upon, inures to the benefit of and
is enforceable by the parties hereto and their respective successors and
assigns.
9.8 HEADINGS. The headings used in this Agreement have been inserted for
--------
convenience of reference only and do not define or limit the provisions hereof.
9.9 SEVERABILITY. If any provision of this Agreement is held to be
------------
illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (a) such provision will be fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, (c) the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible and mutually acceptable to
the parties herein.
9.10 GOVERNING LAW. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of California applicable to contracts
executed and performed in such State, without giving effect to conflicts of laws
principles.
9.11 ARBITRATION AND VENUE. Any controversy or claim arising out of or
---------------------
relating to this Agreement or the making, performance or interpretation thereof
shall be submitted to arbitration in Travis County, Texas, pursuant to the rules
and procedures of the American Arbitration Association before a panel of three
arbitrators. The ruling of the arbitrator shall be final, and judgment thereon
may be entered in any court having jurisdiction. If any question is submitted to
a court of law for resolution, then the Superior Court of Travis County, Texas,
or the United States District Court having jurisdiction in Travis County, Texas
shall be the exclusive court of competent jurisdiction for the resolution of
such question. Each party will bear one half of the cost of the arbitration
filing and hearing fees, and the cost of the arbitrator. Each party will bear
its own attorneys' fees, unless otherwise decided by the arbitrator. The parties
understand and agree that the arbitration shall be instead of any civil
litigation and that the arbitrator's decision shall be final and binding to the
fullest extent permitted by law and enforceable by any court having jurisdiction
thereof. Each party shall be entitled to pre-hearing discovery as provided in
California Code of Civil Procedure Section 1283.05
9.12 EXPENSE. Except as otherwise provided in this Agreement, the Sellers
-------
and Buyer shall pay the expenses and costs of Sellers and Buyer, respectively,
incidental to the preparation of this Agreement and to the consummation of the
transactions contemplated hereby.
9.13 CONSTRUCTION. No provision of this Agreement shall be construed in
------------
favor of or against any party on the ground that such party or its counsel
drafted the provision. Any remedies provided for herein are not exclusive of any
other lawful remedies which may be
26
<PAGE>
available to either party. This Agreement shall at all times be construed so as
to carry out the purposes stated herein.
9.14 COUNTERPARTS. This Agreement may be executed in any number of
------------
counterparts and by facsimile, each of which will be deemed an original, but all
of which together will constitute one and the same instrument.
[SIGNATURE PAGE TO FOLLOW]
27
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the parties hereto as of the date first above written.
"BUYER"
COMPS INFOSYSTEMS, INC.,
a Delaware corporation
By: /s/ Chris Fenton
-----------------------------------------
Name: Chris Fenton
---------------------------------------
Title: Vice President, Corporate Development
--------------------------------------
"SELLERS"
AOBR, INC.,
a Texas corporation
By: /s/ Guy Goodwin
-----------------------------------------
Name: Guy Goodwin
---------------------------------------
Title: President
--------------------------------------
/s/ Linda Hoffman
---------------------------------------------
Linda Hoffman
"COMPANY PRINCIPALS"
/s/ Guy Goodwin
---------------------------------------------
Guy Goodwin
/s/ Don Guy
---------------------------------------------
Don Guy
28
<PAGE>
EXHIBIT A
FORM OF COMPS OFFICER CERTIFICATE
CERTIFICATE OF OFFICER
COMPS INFOSYSTEMS, INC.
This Certificate is delivered pursuant to Section 2.9(b)(ii) of that
certain Asset Purchase Agreement (the "Agreement"), dated as of December 4,
1998, by and among COMPS InfoSystems, Inc., AOBR, Inc., Linda Hoffman, Guy
Goodwin and Don Guy. Capitalized terms used herein without definition shall
have the same meaning as set forth in the Agreement.
I, Christopher A. Crane, do hereby certify that I am the duly elected,
qualified and acting President of Buyer and as such, am authorized to execute
this Certificate on its behalf, and I further certify that:
1. All representations and warranties of Buyer contained in the
Agreement are true and correct on and as of the date hereof and Buyer has
performed all agreements and covenants in a timely manner required to be
performed by it prior to or on the date hereof.
2. No Actions or Proceedings have been instituted or threatened which
question the validity or legality of the transactions contemplated by the
Agreement.
3. All Permits, authorizations, consents, approvals and waivers from
third parties and Governmental or Regulatory Authorities and other Persons
necessary or appropriate to permit Buyer to perform its obligations hereunder
and to consummate the transactions contemplated by the Agreement have been
obtained.
IN WITNESS WHEREOF, I have executed this Certificate as of the Closing
Date, this ____ day of January, 1999.
By:
---------------------------------------
Christopher A. Crane
President
A-2
<PAGE>
EXHIBIT B
FORM OF GENERAL ASSIGNMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement ("Assignment") is entered
into this ___ day of __________, 199__, by and among AOBR, Inc., a Texas
corporation, Linda Hoffman, an individual, (collectively, "Assignors"), and
COMPS InfoSystems, Inc., a Delaware corporation ("Assignee").
RECITALS
--------
WHEREAS, Assignors and Assignee have entered into that certain Asset
Purchase Agreement dated _____________, 1998 (the "Purchase Agreement") by and
among Assignors Guy Goodwin, Don Guy and Assignee, for the sale by Assignors of
the Purchased Assets (as defined in Section 2.1 of the Purchase Agreement)
-----------
(initially capitalized terms used herein and not otherwise defined herein shall
have the meanings given to such terms in the Purchase Agreement);
WHEREAS, the execution and delivery of this Agreement is a condition
precedent to the closing of the Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and promises
set forth herein, and for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. Assignment and Assumption. Assignors hereby agree that,
-------------------------
effective as of the Closing, they shall grant, sell, convey, assign, transfer
and deliver unto Assignee, and Assignee hereby agrees to accept and assume, free
and clear of any Encumbrance or adverse claim of any kind whatsoever, all of
Assignors' right, title and interest in and to all the Purchased Assets (as such
assets are defined and described in the Purchase Agreement and the schedules
relating thereto). Assignors hereby assigns, and Assignee hereby assumes and
agrees to satisfy and perform when due those liabilities and obligations arising
from the Assumed Liabilities on and after the Closing Date.
2. Assignors Covenant. Assignors hereby covenant that they will, at
------------------
any time and from time to time, upon written request therefor, execute and
deliver to Assignee, its successors and assigns, any new or confirmatory
instruments which may be reasonably necessary in order to protect or fully
assign and transfer to and vest in Assignee, or its successors and assigns, all
of Assignors' right, title and interest in and to the Purchased Assets.
3. Retained Liabilities. The parties acknowledge and agree that,
--------------------
except for the Assumed Liabilities, Assignors shall retain and be responsible
for all obligations, liabilities, and claims of any nature, accruing, arising
out of, or relating to Assignors and the Company's business, whether actual or
contingent, matured or unmatured, liquidated or unliquidated, or know or unknown
(the "Retained Liabilities"). Pursuant to the terms of the Purchase Agreement,
B-2
<PAGE>
Assignors shall indemnify and hold Assignee harmless from, against and in
respect to (and shall reimburse Assignee for) any loss, liability, cost or
expenses, including, without limitation, reasonable attorneys' fees, suffered or
incurred by Assignee by reason of or resulting from the Retained Liabilities.
4. Entire Agreement. This Assignment, together with the Purchase
----------------
Agreement and all documents executed in connection with the Purchase Agreement,
constitutes the entire agreement and understanding between and among the parties
hereto with respect to the matters set forth herein, and supersedes and replaces
any prior agreements and understandings, whether oral or written, between and
among them with respect to such matters. Notwithstanding any other provisions
of this Assignment to the contrary, nothing contained in this Assignment shall
in any way superseded, modify, replace, amend, change, rescind, waive, exceed,
expand, enlarge or in any way affect the provisions, including warranties,
covenants, agreements, conditions, representations, or in general any of the
rights and remedies, and any of the obligations and indemnifications of
Assignors or Assignee set forth in the Purchase Agreement nor shall this
Assignment expand or enlarge any remedies under the Purchase Agreement including
without limitation any limits on indemnification specified therein. This
Assignment is intended only to effect the transfer of certain property
transferred pursuant to the Purchase Agreement and shall be governed entirely in
accordance with the terms and conditions of the Purchase Agreement.
5. Governing Law. This Assignment shall in all respects be
-------------
construed in accordance with and governed by the laws of the State of California
without giving effect to its conflicts-of-laws principles (other than any
provisions thereof validating the choice of the laws of the State of California
in the governing law).
6. Counterparts. This Agreement may be executed in any number of
------------
counter parts and by facsimile and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute but one and the same agreement.
[SIGNATURE PAGE TO FOLLOW]
B-3
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Assignment as of
the day and year first written above.
COMPS InfoSystems, Inc., AOBR, INC.
a Delaware corporation a Texas corporation
By: By:
------------------------------ --------------------------------
Christopher A. Crane
President and Chief Executive Officer Name:
------------------------------
Title:
------------------------------
-----------------------------------
Linda Hoffman
[SIGNATURE PAGE TO THE ASSIGNMENT AND ASSUMPTION AGREEMENT]
B-4
<PAGE>
EXHIBIT C
LICENSE AGREEMENT
<PAGE>
[LOGO] COMPS InfoSystems, Inc. Customer # ___________________
Subscription Licensing Agreement Contract # ___________________
Page 1 of 6 Purchase Order # _____________
Exhibit "C"
<TABLE>
<CAPTION>
====================================================================================================================================
<S> <C>
Name: Goodwin Partners Name:
--------------------------------------------------------- ---------------------------------------------------------
Bill-to Contact: Don Guy Ship-to Contact:
------------------------------------------------ ----------------------------------------------
Address: 8303 Mopac, Suite 3325 Address: SAME
-------------------------------------------------------- -----------------------------------------------------
City: Austin State: TX ZIP: 78759 City: State: ZIP:
-------------------------- ----- ----------- ------------------- ------ -----------------
County: Travis E-Mail: [email protected] County: E-Mail:
------------------------- --------------------- ------------------ ----------------------------
Telephone: 512-917-7056 Fax: 512-502-4905 Telephone: Fax:
----------------------- ------------------------ --------------- ------------------------------
</TABLE>
<TABLE>
<CAPTION>
====================================================================================================================================
<S> <C> <C> <C>
SUBCRIPTION TERM BILLING CYCLE (circle one) COMPSLINK WINDOWS VERSION DELIVERY FORMAT
Start: 1/99 End: 12/00 Semi-Yr [Yrly] Mthly Qtrly (circle one) 100 200 300 [400] [X] FTP (N/C)
No. of Mos: 24 Enterprise_____ [_] Diskette ($1.95
Renewal Date: 12/00 USER STATUS month per item)
HARDWARE CONFIGURATION [_] Sole Proprietor [_] CD ($5.00/month
HISTORICAL REPORTS [X] Stand alone [X] Standard per region)
From: 1/92 Thru: 12/98 [X] Network - LAN CONCURRENT USERS (circle one)
No. of Mos.: 72 [_] Network - WAN # locations: 1 2-3 4-5 6-10 Other:_______________
</TABLE>
<TABLE>
<CAPTION>
====================================================================================================================================
LINE #/Sets COUNTY PROPERTY TYPE HISTORIAL REPORTS SUBSCRIPTION TOTAL
# Same / Diff. (Other) Amount Credit Subtotal (Initial (Initial
Location Term) Term)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 1 AUSTIN [C&I] [Apt/Res Lnd] 3495 $3495 (3495) $ -0- $ $ 3495
2 Travis/Williamson C&I Apt/Res Lnd $ $ $ $
3 DALLAS METRO C&I Apt/Res Lnd $ $ $ $
4 Dallas C&I Apt/Res Lnd $ $ $ $
5 Tarrant C&I Apt/Res Lnd $ $ $ $
6 Collin C&I Apt/Res Lnd $ $ $ $
7 Denton C&I Apt/Res Lnd $ $ $ $
8 DENVER METRO C&I Apt/Res Lnd $ $ $ $
9 Denver C&I Apt/Res Lnd $ $ $ $
10 El Paso C&I Apt/Res Lnd $ $ $ $
====================================================================================================================================
Subscription fee waived as term of Acquisition Agreement for Hoffman Valuation Data Services $ $ 3495
for documentation.
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OTHER CHARGES: Duplicate Sets $______ WAN $______ Billing Cycle $______ User Level $______ Other $______ Total: $_____
CREDITS: Sole Proprietor $______ Volume $______ Multi-Year $______ EDS $______ Conversion $______ Other $______ Total: ($3495)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Agreement allows Goodwin Partners to export sales price data to the Office
Building Report for the term of this Agreement or so long as Goodwin owns and
publishes the Report. 2 additional copies to be shipped in short term with
allowance to convert to 4-5 multi-task @ their discretion.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Ordered By: Don Guy Department: Date: 12/7/98 Subtotal $ -0-
------------------ ----------- ---------- --------
Sales Tax ____% $_______
Materials/C.P.R. $_______
Set-Up Fee $_______
GRAND TOTAL $ -0-
--------
</TABLE>
This Subscription Licensing Agreement between the above-named Customer and COMPS
InfoSystems, Inc. ("COMPS") establishes the terms an d conditions under which
COMPS will provide the services (the "Services") as set forth in this Agreement.
Attached to and incorporate d into this Subscrption Licensing Agreement are the
COMPS InfoSystems, Inc. General Terms and Conditions, which are an integral part
of the agreement being formed hereby.
Each person executing this Agreement on behalf of COMPS or Customer represents
and warrants that he or she has been authorized to do so, and that all necessary
actions (if any) required for the execution have been taken.
<TABLE>
<CAPTION>
<S> <C> <C>
TOTAL YEAR 2 $
----------
Customer: Goodwin Partners COMPS Infosystems, Inc. TOTAL YEAR 3 $
------------------------------------ ----------
By: X /s/ Don Guy By: /s/ MICHAEL ARABE Business Code: 84
------------------------------------------ ----------------------------------- ----------
Name (print): Don Guy Name (print): MICHAEL ARABE Source Code:
--------------------------------- ----------------------------------- ----------
Title: PARTNER Date: 12/7/98 Title: SVP OF SALES Date: 12/7/98 Sales Rep: NDA / ___
----------------------- ---------- ----------------- --------- ----------
====================================================================================================================================
</TABLE>
<PAGE>
SUBSCRIPTION LICENSING AGREEMENT
1. TERMS OF AGREEMENT. Attached to this Agreement and incorporated into
this Agreement in its entirety are COMPS' General Terms and Conditions. The
word "Agreement" will apply to all terms and conditions of the parties
---------
whether contained in this Subscription Licensing Agreement or the General
Terms and Conditions. Customer should carefully read all terms of the
Agreement to become thoroughly familiar with all rights granted and duties
imposed by Customer's use of COMPS materials.
2. SUBSCRIPTION. Subject to the terms and conditions of this Agreement,
COMPS will provide to Customer, and Customer accepts, the COMPS services
indicated on the cover page of this Agreement. The materials, documentation,
software and information provided in any medium are collectively referred to
as the "Subscription Materials." Customer may load and use any retrieval
software provided to Customer by COMPS ("Software") on such computer systems
and for such users as are set forth on the cover page of this Agreement.
Customer will be responsible for all telephone charges, Internet service
provider charges, and hardware/software necessary to access the Subscription
Materials.
3. OWNERSHIP. All right, title and interest in Subscription Materials and
any modifications, elaborations, derivatives or updates thereof, regardless
of the authorship of such derivative works, in all languages, formats and
media throughout the world, including all copyrights, are and will continue
to be the exclusive property of COMPS. Customer acknowledges that Customer
is licensing and leasing the use of the Subscription Materials and the
Software, not buying Subscription Materials, Software or information
contained within them.
4. TERM. The initial term of this Agreement, as set forth on the signature
page hereto, extends from the Start Service Date to such End of Initial Term
Date as Customer and COMPS agree to, plus, it so agreed by Customer and
COMPS, an additional period of 12, 24 or 36 months, as indicated on the
order page of the Agreement. The first day of the month following the End of
Initial Term Date or (if applicable) following the agreed-upon additional
period is the "Renewal Date." If no Renewal Date or End of Initial Term Date
appears on the order page of the Agreement, then the term of the Agreement
will be deemed to be 24 months from the Start Service Date. After the End
Date or (if applicable) the Renewal Date, this Agreement, unless terminated
pursuant to Section 5, will automatically renew for successive 12-month
periods.
5. TERMINATION. COMPS may terminate this Agreement or suspend Services
pursuant to this Agreement at any time in its own discretion effective upon
receipt of the notice of termination and at any time effective immediately
upon: (a) any failure of Customer to pay any amounts as required in this
Agreement; (b) any breach by Customer of any provision of this Agreement
related to Customer's use of the Subscription Materials; (c) any insolvency,
bankruptcy, assignment for the benefit of creditors, appointment of a
trustee or receiver or similar event with respect to Customer; (d) any
governmental prohibition or required alteration of services or any violation
of applicable law, rule or regulation or (e) any breach of or other reason
set forth on the attached General Terms and Conditions. Customer may only
terminate this Agreement effective on the Renewal Date or on each successive
anniversary thereof or, if no Renewal Date has been agreed to, on the End of
Initial Term Date or on each successive anniversary thereof by providing
written notice, by certified mail, to COMPS at least 30 days prior to such
applicable Renewal Date, End of Initial Term Date or anniversary of such
date.
6. EFFECT OF TERMINATION. Any termination will not relieve Customer of its
obligation to pay any charges incurred pursuant to this Agreement prior to
such termination. In the event that Customer terminates this Agreement prior
to the Renewal Date: (a) Customer will immediately pay any and all of the
amounts due under this Agreement, (b) any credits, bonuses, or incentives
provided to Customer by COMPS will be due and payable by Customer and (c)
Customer will, upon demand, immediately return all Subscription Materials
and Software to COMPS.
7. CANCELLATION FEES. COMPS will have the right to assess a reasonable
cancellation fee, including a fee for administrative expenses and an amount
equal to COMPS' estimate of lost revenue, in case of any cancellation of
this Agreement: (a) by Customer prior to the next occurring Renewal Date or
anniversary thereof or (b) by COMPS in case of a breach by Customer.
Customer will pay the cancellation fee in addition to any remaining contract
obligations.
8. AUTHORIZED USERS. All terms and conditions of this Agreement are
applicable to all Customer's employees (as this term is defined in Section 3
of the General Terms and Conditions). Customer agrees to assume sole
responsibility for all employees' compliance with this Agreement, for all
charges incurred by each employee and for maintaining the security
respecting any passwords issued to such employees.
9. SUCCESSORS. The rights granted under this Agreement may be transferred to
a successor entity only if (a) such successor entity is approved by COMPS,
(b) the successor entity executes a new Subscription Licensing Agreement and
(c) the successor entity pays COMPS a transfer fee of ten percent (10%) of
the cumulative fees for the Subscription Materials. COMPS expressly reserves
the right to deny, in its sole and absolute discretion, transfer of the
rights granted under this Agreement or the Subscription Materials, and in
the event of such denial, neither Customer nor any employee of Customer may
take the Subscription Materials to another company or other entity.
SUBSCRIPTION LICENSING AGREEMENT (76008.1) Only Page
<PAGE>
COMPS INFOSYSTEMS, INC.
GENERAL TERMS AND CONDITIONS
FOR LICENSED USE OF REPORTS AND SOFTWARE
1. APPLICABILITY OF TERMS AND CONDITIONS. CUSTOMER SHOULD CAREFULLY READ THESE
TERMS AND CONDITIONS. These terms and conditions apply to all products,
services, software, documentation and information that COMPS Infosystems,
Inc. ("COMPS") provides (or has previously provided) to Customer in whatever
media or form, including, but not limited to, paper, diskettes, CD-ROM,
Internet or on-line and any publications and software, produced, published
and/or distributed by COMPS.
2. LIMITED LICENSE. Subject to these terms and conditions, COMPS hereby grants
a revocable, non-transferable, non-exclusive license to use the Reports and
Software provided by COMPS to Customer solely for the Permitted Uses (as
defined below). "Reports" means the information that COMPS provides under
-------
these terms and conditions, including the Internet and on-line services,
data, photographs and maps on diskette or CD-ROM or on any other medium and
all subscription materials and printed reports, whether in electronic or
paper form. and any subsets, annotations, alterations, modifications or
updates thereof. "Software" means any software, including new versions and
--------
the accompanying user documentation, provided by COMPS to Customer to allow
or facilitate Customers access to, retrieval of or use of the Reports.
Customer will not accept copies of the Reports from any person or entity
other than COMPS.
3. PERMITTED ACCESS. For purposes of this Agreement, an "employee" of Customer
is any person who would be deemed such by the Internal Revenue Service and
who performs at least twenty (20) hours of work per week for Customer.
Customer acknowledges that only users who license the Reports or Software
directly from COMPS, or those users' employees, are authorized to access the
Reports or Software. Customer will ensure that access to and use of the
Reports and Software is available only to employees needing such access, and
that such use is conducted in a proper and legal manner. EXCEPT AS PERMITTED
BY COMPS OR THIS AGREEMENT, CUSTOMER WILL NOT ALLOW NON EMPLOYEES ACCESS TO
THE REPORTS OR SOFTWARE FOR ANY REASON.
4. PERMITTED USES. "Permitted Uses" means use of the Reports or Software by
--------------
Customer in the course of Customer's business solely for the purpose of
either supporting Customer's opinion of a property valuation or supporting a
listing of Customer for sale or management of real property, including use
in: (1) working papers or word processing or spreadsheet programs underlying
a report prepared by Customer, (2) the final report prepared by Customer,
(3) appraisals, (4) listing proposals, (5) presentations to financial
institutions for asset valuation and review purposes, and (6) marketing
packages. Customer is permitted to reproduce single Reports where used by
Customer to support the valuation of a specific property. Permission to
reproduce such Reports is limited to reproductions that are contained in
actual final reports and proposals that are submitted to a Customer's client
and to working papers therefor, and such reproductions will in no event
exceed a reasonable number without the express written permission of COMPS.
The permission granted to reproduce paper Reports is strictly limited to the
circumstances described in this paragraph. "Permitted Uses" does not include
use by or duplication for employees of Customer other than at the specific
address to which the Reports are delivered.
5. PROHIBITED USES. Notwithstanding whether Customer obtains COMPS' Reports or
Software from COMPS or any third party, Customer will not copy, annotate,
alter, publish, broadcast, enhance, modify, sell, upload, download or in any
other way reproduce the Reports or the Software except as expressly provided
for in these terms and conditions or unless COMPS gives Customer its prior,
written consent. Customer will not use, key, scan or type any part of the
Reports or enter data contained within the Reports for the purpose of
compiling databases or similar compilations to give, sell, rent or provide
access to anyone, and Customer will not compete with COMPS. Customer will
refer to COMPS anyone seeking to create derivative works from the Reports.
The systematic accumulation of Reports or any part thereof retrieved by
Customer from COMPS for storage in or export to any archival database for
the purpose of future retrieval or re-use not related to the original
purpose or job for which Reports were obtained, is specifically prohibited.
Notwithstanding any provision to the contrary in Section 4 above, Customer
is expressly prohibited from storing, copying, exporting or transferring the
Reports or any part or derivative thereof into any contact management
program, automated valuation programs, statistical analysis program or
searchable database in Customer's own computer or any other electronic or
other device. Customer may not resell the Reports or Software or any part or
derivative thereof. Customer may not adapt, translate, export, decompile,
disassemble or create derivative works of
GENERAL TERMS AND CONDITIONS (76009.1) Page 1 of 4
<PAGE>
the Reports or Software or any part thereof. Customer may not export
Reports or any part thereof into any software other than word processing or
spreadsheet programs, nor further export Reports or any part thereof out of
such software. Customer is specifically prohibited from including COMPS'
Reports or Software in any "data library" or other data-sharing arrangement
accessible to anyone other than Customer's employees. Customer may not
under any circumstances post the Reports or any portion thereof on any
Internet site. The provisions of this Section will survive any termination
or expiration of this Agreement.
6. SATELLITE OFFICES. The license for use of the Reports and the Software
granted to Customer will only include Customer's employees located at the
Customer's address or other address for which the Reports are licensed. If
Customer operates offices at locations other than such address ("Satellite
---------
offices") and if Customer has employees who will use the Reports or
-------
Software at such Satellite Offices then Customer will pay an additional
user fee for those Reports or Software used in the Satellite Offices.
CUSTOMER MAY NOT DUPLICATE THE REPORTS FOR USE IN THE SATELLITE OFFICES OR
OTHERWISE ALLOW ELECTRONIC, NETWORK, ON-LINE OR OTHER ACCESS TO THE REPORTS
OR SOFTWARE FROM SUCH SATELLITE OFFICES.
7. OWNERSHIP. All right, title and interest in reports and Software and any
modifications, elaborations or derivatives thereof, regardless of the
authorship of such derivative works, in all languages, formats and media
throughout the world, including all copyrights, are and will continue to be
the exclusive property of COMPS. Customer acknowledges that Customer is
licensing and leasing the use of the Reports and the Software, not buying
Reports, Software or information contained within them.
8. COPYRIGHTS. COMPS' Reports, Software and databases are copyrighted and are
protected by the copyright laws of the United States and the Universal
Copyright Convention. Customer acknowledges that the Reports and Software
are proprietary to COMPS - and comprise: (a) works of original authorship
including compiled Reports containing COMPS' copyrightable selection,
arrangement and coordination and expression of such Reports or material it
has created, gathered or assembled; (b) confidential and trade secret
information; and (c) work product that has been created. developed and
maintained by COMPS at great expense of time and money such that
misappropriation or unauthorized use by others for commercial gain would
unfairly and irreparably harm COMPS. Customer will not commit or permit any
act omission that would impair COMPS' copyright and other intellectual
property rights in the Reports and Software. COMPS has the sole right to
annotate, alter, or modify any Reports or Software or, except as permitted
by this Agreement, integrate or incorporate the Reports or Software into
another database. contract management, automated valuation or statistical
analysis program or other work. Any Reports or Software that are
reformatted, incorporated into another work, annotated, altered, or
modified by Customer will be derivative works that remain the sole property
of COMPS. Except for the limited license provided, COMPS reserves all
rights in and to Reports, Software and all underlying data compilations and
information maintained by COMPS, including but not limited to the exclusive
rights under copyright and the right to grant further licenses.
9. TRADEMARKS. Customer will not use any trademark, service mark or trade
name of COMPS or any of its affiliated companies without COMPS' prior
written consent. The parties agree that COMPS' copyright and trademark
notices will at all times remain on all Reports and Software. and Customer
will not remove or alter such copyright and trademark notices. Customer
acknowledges that no right has been granted by, COMPS to reproduce or use
in any way COMPS' trademarks.
10. CONFIDENTIALITY. Customer will treat the Reports in any form as
confidential and will not divulge them to any person except as permitted by
these terms and conditions. Customer will instruct its employees who have
access to the Reports to keep them confidential.
11. LIMITED WARRANTY. COMPS warrants that (a) COMPS has obtained the
information contained in the Reports from sources that COMPS believes to be
reliable and (b) the media on which the information contained in the
Reports is delivered is free from defects in material and workmanship for a
period if' 90 days from delivery to Customer. If any media containing any
Reports or Software is defective, COMPS will at COMPS' sole option, either
repair or replace it. In either case, Customer will return to COMPS all
defective media containing Reports or Software along with an explanation of
the nature of the defect. Any replacement media will be warranted for the
remainder of the original warranty period. Customer understands that COMPS
does not and cannot for the fees charged guarantee or warrant the
correctness, completeness, currentness, merchantability or fitness for a
particular purpose of its Reports. Accordingly, the data and information
GENERAL TERMS AND CONDITIONS (76009.1) Page 3 of 4
<PAGE>
contained in the Reports and Software is delivered AS IS, and COMPS does
not warrant, represent, or guaranty its correctness, accuracy or
completeness. Customer acknowledges and agrees that the provisions of this
limited warranty constitute the sole and exclusive remedy available to it
with regard to the Reports and Software.
12. WARRANTY DISCLAIMER. COMPS DISCLAIMS ANY AND ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES
OF NON-INFRINGEMENT OF THIRD-PARTY RIGHTS, MERCHANTABILITY AND FITNESS FOR
A PARTICULAR PURPOSE.
13. RISK ALLOCATION. Customer also acknowledges that (a) every business
decision to some degree represents an assumption of risk, (b) the prices
that COMPS charges its Customers for Reports are based, in part, upon
COMPS' expectation that the risk of any loss that might be incurred by
Customer in reliance upon the Reports will be borne by Customer, and COMPS
in furnishing information does not assume Customer's risks, (c) certain
information provided in connection with COMPS' Reports is received from
third parties and COMPS has undertaken such inquiry as COMPS, in its
discretion, deems appropriate to determine the qualifications of each such
third party, but COMPS does not in any way guaranty or warrant the accuracy
of any information provided by such third party. COMPS will not be liable
for any loss, injury, claim, liability or damage of any kind resulting in
any way from (1) any errors in or omissions from the Reports, (2) the
unavailability of Reports or an interruption in the delivery of Reports,
(3) Customer's use of the Reports or the Software, (4) COMPS' negligent or
other acts or omissions in procuring, compiling, collecting, interpreting,
reporting, communicating or delivering Reports or (5) any termination or
non-renewal of this Agreement. Customer will defend, indemnify and hold
harmless COMPS from and against any and all claims, losses or damages to
persons or property resulting indirectly or directly from Customer's use of
the Reports, products and services provided under these terms and
conditions.
14. LIMITATION OF LIABILITY. COMPS' AGGREGATE LIABILITY UNDER THESE TERMS AND
CONDITIONS OR IN CONNECTION WITH ANY OTHER CLAIM ARISING OUT OF OR RELATING
TO THE REPORTS OR SOFTWARE WILL NOT EXCEED THE ANNUAL AMOUNT ACTUALLY
RECEIVED BY COMPS FROM CUSTOMER PURSUANT TO THIS AGREEMENT. NEITHER COMPS
NOR ANY RELATED PARTY WILL BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL.
OR CONSEQUENTIAL DAMAGES OF ANY KIND WHATSOEVER REGARDLESS OF ANY
NEGLIGENCE OF COMPS OR ANY RELATED PARTY AND EVEN IF ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES, COMPS, ITS AFFILIATES, AGENTS OR LICENSORS
WILL NOT BE LIABLE TO CUSTOMER OR ANYONE ELSE FOR ANY DECISION MADE OR
ACTION TAKEN BY CUSTOMER IN RELIANCE ON COMPS' REPORTS.
15. COMPLIANCE. When Reports or Software are provided subject to restrictions
on frequency of use or on the total number of users. Customer will comply
with those restrictions. Customer will permit COMPS to inspect Customer's
offices or facilities during regular business hours the point or points at
which Reports and Software are used and to furnish whatever assistance is
reasonably necessary to permit COMPS to determine Customer's compliance or
the extent of Customer's noncompliance. Customer authorizes COMPS to send
notices of non-compliance or delinquent account status by means of the most
expedient method available, including without limitation telex, telegram,
facsimile, electronic mail or letter as determined by COMPS. The failure of
Customer strictly to comply with these terms and conditions will constitute
irrevocable default and will lead immediately to the termination of the
right of Customer to use the Reports and Software and, upon COMPS'
election, of any other agreement between Customer and COMPS.
16. EXPIRATION OR TERMINATION. In the event of any expiration or termination
of this Agreement: (a) Customer's continuing right to access or use COMPS'
Reports or any other COMPS products or services, granted at COMPS' sole
discretion, is limited to the Reports and Software that Customer has
licensed from COMPS in the past; (b) Customer has no right to access or use
any other COMPS Reports accessed or obtained from any source other than
COMPS; and (c) Customer will, if COMPS so demands, within seven (7) days
return to COMPS all Reports, Software and any other materials in Customer's
possession containing COMPS' information and will deliver to COMPS a
written certification of Customer's .compliance with the foregoing. Upon
any termination or expiration of this Agreement, COMPS may send a
representative to Customer's location to retrieve COMPS' Reports, Software
and other information belonging to COMPS, which Customer agrees to deliver
to such representative upon demand at that time.
GENERAL TERMS AND CONDITIONS (76009.1) Page 4 of 4
<PAGE>
17. REMEDIES. All of the remedies set forth in these terms and conditions are
in addition to any that may be available under applicable law and are
cumulative and not alternative.
18. PRICES. Unless otherwise specified in writing, COMPS' published prices
will apply to any Reports or Software or other services provided by COMPS
to Customer and are exclusive of taxes, use, excise or other similar taxes
and any such present or future applicable taxes on the sale of Reports or
Software services and/or products will be paid by the Customer. Requested
expedited handling will be subject to an additional charge. COMPS reserves
the right to revise its prices in connection with its adoption of a new
price schedule or modification of existing schedules that are generally
applicable to the Reports and Software. Unless otherwise specified in
writing, such revised prices will be applicable to all Reports and Software
delivered on and after the effective date of the price change.
19. PAYMENT TERMS. Customer will pay the price for the Reports, materials,
Software or services delivered to Customer, as specified on the invoice
therefor delivered to Customer by COMPS. When COMPS has extended credit to
Customer, the terms of payment will be net 30 days from the date of invoice
unless different terms are agreed to in writing. The amount of credit or
terms of payment may be changed or credit withdrawn by COMPS at any time.
Payment will be made without any deduction or offset by reason of any
alleged counterclaim. COMPS' most recent written invoice, change order or
statement of account will constitute presumptive evidence of all amounts
due and owing from Customer unless disputed by Customer in writing within
ten business days or COMPS' mailing or transmittal to Customer of such
invoice, change order or statement of account. All payments received after
the due date will incur a late payment charge in an amount equal to 1-1/2%
per month (18% per year) until paid or at such lesser interest rate as is
required by any applicable law Customer will pay to COMPS fifteen dollars
($15.00) for each check delivered to COMPS that is returned for
insufficient funds. If any suit or arbitration is brought to collect any
amounts owing by Customer, COMPS will be entitled to recover its costs and
attorneys' fees incurred in connection with collecting such amounts owed.
COMPS may withhold delivery of any Reports or Software under this Agreement
if Customer does not pay any amount when due under this Agreement.
20. INJUNCTIVE RELIEF. In the event of a breach of these terms and conditions
by Customer, COMPS will suffer irreparable harm and will be entitled to
injunctive relief as well as all other remedies available at law or equity,
without the necessity of posting a bond.
21. LIQUIDATED DAMAGES. Customer acknowledges and agrees that COMPS' actual
damages for Customer's breach of this Agreement cannot be precisely
estimated in advance. COMPS may elect to recover liquidated damages for
each breach by Customer of any provision of this Agreement related to
COMPS' copyrights in the Subscription Materials. If COMPS elects to do so,
Customer agrees to pay COMPS, for each such breach, liquidated damages of
three times the amount charged Customer by COMPS for the use of
Subscription Materials in the twelve months preceding such breach. Customer
agrees that these liquidated damages are fair and equitable and in no way
punitive.
22. RIGHT OF OFFSET. If COMPS has reason to believe that Customer is in breach
of any provision of this Agreement related to COMPS' copyrights in the
Subscription Materials, Customer agrees that COMPS may retain any or all of
Customer's advance payment(s) for Reports or Software or subscription fees
as a partial or complete offset against any damages amount to which COMPS
may ultimately be entitled for Customer's breach(es). COMPS will not apply
the offset to the total damages amount owed COMPS by Customer for breach
until that amount has been fixed through litigation. arbitration or
agreement.
23. DISPUTES. These terms and conditions will be governed by and construed
under the laws of the State of California without regard to the
application of the principles of conflict of laws, and, subject to the
arbitration provisions set forth below, the Customer and COMPS (the
"Parties") will submit all disputes arising out of or related to these
terms and conditions or to the performance, breach or termination,
thereof, to binding arbitration pursuant to the Expedited Procedures of
the Commercial Arbitration Rules ("Rules") of the American Arbitration
Association ("AAA"). The arbitration will take place in San Diego,
California. The dispute will be resolved by a single arbitrator appointed
by the AAA in accordance with the list procedure described in Paragraph 13
of the Rules, except that the AAA will transmit the list within ten days
of the filing of the Demand for Arbitration, and the Parties will have
five days to return the list to the AAA with their objections and
preferences. Discovery will be limited to no more than two depositions by
each side and written document requests, requesting the production of
specific documents. The Parties will voluntarily produce any and all
documents that they intend to use at the hearing before the close of
GENERAL TERMS AND CONDITIONS (76009.1) Page 5 of 4
<PAGE>
discovery, subject to supplementation for purposes of rebuttal or good
cause shown. The period for taking discovery will be 60 days, commencing
upon the day that the answer is due under the Rules. The arbitrator will
hold a pre-hearing conference within three days of the close of discovery
and will schedule the hearing within 30 days of the close of discovery.
Prior to the selection of the arbitration, nothing in this Agreement will
prevent the Parties from applying to a court that would otherwise have
jurisdiction for provisional or interim injunctive other equitable
measures. After the arbitral panel is selected, it will have sole
jurisdiction to hear such applications, except that any measure ordered by
the arbitrator may be immediately and specifically enforced by a court
otherwise having jurisdiction over the Parties. Each party will pay its
own fees and costs associated with the Arbitration. Each party will pay
one-half the estimated arbitrator's fees up front and if either party
fails to do so a default will be entered against such party. The Parties
submit to the exclusive jurisdiction of any court sitting in the County of
San Diego, State of California, for the resolution of any dispute or
enforcement of any right arising out of or relating to this Section 23,
----------
and waive any objection to the venue or personal jurisdiction of said
courts. The Parties agree that the arbitrator will be entitled to award to
COMPS, for each breach by Customer of any provisions of this Agreement,
actual damages according to proof, liquidated damages in accordance with
Section 21, or statutory damages for copyright infringement in accordance
----------
with the U.S. Copyright Act, at COMPS' election.
24. ENTIRE AGREEMENT. These terms and conditions (and any Subscription
Licensing Agreement, if applicable) constitute the entire agreement
between the parties and supersede all prior agreements, whether oral or
written, which have been entered into before execution of these terms and
conditions.
25. REQUIREMENT OF A WRITING. Copies and facsimiles of signed originals of
these terms and conditions and of orders will be as binding on Customer as
originals. Orders Placed by Customer regardless of communication method
and accepted by COMPS will be binding on Customer.
26. CONSTRUCTION RULES. If any term or provision of these terms and
conditions is held to be to extent invalid or otherwise unenforceable by
any court of' competent jurisdiction, such provision will be construed as
if it were written so as to effectuate to the greatest possible extent the
parties' expressed intent, and in every case the remainder of these terms
and conditions will not be affected thereby and will remain valid and
enforceable. Typographical and clerical errors are subject to correction.
27. NOTICES. Any notice or communication provided for pursuant to these terms
and conditions will be in writing and will be deemed given and received
(a) upon delivery, if personally delivered or by facsimile transmission
with receipt acknowledged, (b) one business day after having been
deposited for overnight delivery with a well-recognized overnight courier
or (c) three business days after deposit in U.S. mail when sent by
registered or certified mail, postage prepaid, with proof of delivery at
the address for such party previously provided to the other party by such
party.
28. FORCE MAJEURE. COMPS' performance under these terms and conditions will
be suspended and excused to the extent that COMPS is hindered or prevented
from performance for causes beyond COMPS' control including, but not
limited to, events of force majeure.
29. AMENDMENTS & WAIVERS. No modification or waiver of these terms and
conditions will be binding on either party unless in writing and executed
by the duly authorized officer of COMPS and by a duly authorized
representative of Customer. The waiver by any party of any specific breach
will not operate or be construed as a waiver of any preceding,
contemporaneous or succeeding breach or as a continuing waiver. No failure
or delay by a party in exercising any right, power, or privilege under
these terms and conditions or other conduct by a party will operate as a
waiver, and no single or partial exercise thereof will preclude the full
exercise or further exercise of any right, power, or privilege.
30. BINDING AGREEMENT. These terms and conditions will only be effective and
enforceable against COMPS when executed by a duly authorized
representative of COMPS if unmodified or by the Chairman or President of
COMPS if modified at COMPS' principal offices in San Diego, California.
These terms and conditions are binding on the Customer and all successors,
permitted assigns, agents, representatives, and employees of Customer.
31. SURVIVAL. The parties' rights and obligations which by their nature would
extend beyond the termination, cancellation, or expiration of any
agreement between the parties or these terms and conditions, will survive
such termination, cancellation or expiration.
32. ASSIGNMENT. Customer will not assign any benefit under any agreement with
COMPS or these terms and conditions without COMPS' written consent, which
will, if given, be on such terms as COMPS deems to be appropriate.
GENERAL TERMS AND CONDITIONS (76009.1) Page 6 of 4
<PAGE>
EXHIBIT D
FORM OF BILL OF SALE
THIS BILL OF SALE dated as of _______________, 199__, is being
executed and delivered by AOBR, Inc., a Texas corporation, and Linda Hoffman
(collectively, "Sellers") pursuant to that certain Asset Purchase Agreement
dated as of ______________, 199__ (the "Purchase Agreement"), by and among
Sellers, Guy Goodwin, Don Guy and COMPS InfoSystems, Inc., a Delaware
corporation ("Buyer"). The execution and delivery of this Bill of Sale is a
condition to Buyer's obligations under the Purchase Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Sellers hereby agree as follows:
1. Capitalized terms used herein but not defined herein shall have
the meanings assigned such terms in the Purchase Agreement.
Subject to the terms and conditions set forth in the Purchase
Agreement, Sellers hereby grant, sell, convey, assign, transfer and deliver to
Buyer, and Buyer hereby purchases and acquires from Sellers, free and clear of
any Encumbrance or adverse claim of any kind whatsoever, all of Sellers' right,
title, and interest in and to all assets, properties, rights, contracts and
interests of Sellers, wherever located, that are used in or pertain to the
Business, as set forth below (collectively, the "Purchased Assets").
(a) the historical database of the Business, in electronic and hard
copy form, including, without limitation, the Report, plat maps, photographs,
and sales comparable data, owned or licensed by the Company and used in the
Business;
(b) all former, current and prospective customer lists, mailing lists,
telephone numbers, correspondence, vendor lists, list of billings and
receivables for former and current customer accounts of the Company related to
the Business set forth in Schedule 2.1(b) to the Purchase Agreement (the
---------------
"Business Customer Lists");
(c) all the Books and Records of the Company relating to the Business,
including without limitation, operating data, the data collection methodology,
sales and other literatures, files and documents relating to the Business (the
"Business Records");
(d) all right, title and interest in and to all of the Company
Intellectual Property, including, without limitation, (i) all of the Company's
rights to the Company Trademarks; and (ii) the Company Intellectual Property set
forth on Schedule 2.1(d) to the Purchase Agreement and all improvements,
---------------
modifications and other Intellectual Property derived therefrom;
(e) all licenses, permits, consents, approvals, orders, certificates,
authorizations, declarations and filings held by the Company, including the
fictitious business name statement or other similar document filed with the
Texas Secretary of State for the name "Hoffman Valuation Data Services,"
necessary or incidental to the conduct of the Business as set forth in Schedule
--------
2.1(e) to the Purchase Agreement (the "Business Permits"); and
- ------
D-2
<PAGE>
(f) the goodwill and going concern value of the Business.
2. Buyer hereby waives compliance by Sellers with the provisions of
the bulk transfer laws of any state. Sellers warrant and agree to pay and
discharge when due all claims of creditors which could be asserted against Buyer
by reason of such noncompliance. Pursuant to the terms of the Purchase
Agreement, Sellers shall indemnify and hold Buyer harmless from, against and in
respect of (and shall on demand reimburse Buyer for) any Damages suffered or
incurred by Buyer by reason of the failure of Sellers to pay or discharge such
claims.
3. From time to time after the date hereof, Sellers will execute and
deliver, or cause their affiliates to execute and deliver, to Buyer such
instruments of sale, transfer, conveyance, assignment and delivery, and such
consents, assurances, powers of attorney and other instruments as may be
reasonably requested by Buyer or its counsel in order to vest in the Company all
right, title and interest of Sellers in and to the Purchased Assets and
otherwise in order to carry out the purpose and intent of this Bill of Sale.
4. Notwithstanding any other provisions of this Bill of Sale to the
contrary, nothing contained in this Bill of Sale shall in any way supersede,
modify, replace, amend, change, rescind, waive, exceed, expand, enlarge or in
any way affect the provisions, including warranties, covenants, agreements,
conditions, representations or, in general any of rights and remedies, and any
of the obligations and indemnifications of Sellers or Buyer set forth in the
Purchase Agreement nor shall this Bill of Sale expand or enlarge any remedies
under the Purchase Agreement including without limitation any limits on
indemnification specified therein. This Bill of Sale is intended only to effect
the transfer of certain property transferred pursuant to the Purchase Agreement
and shall be governed entirely in accordance with the terms and conditions of
the Purchase Agreement.
5. This Bill of Sale shall in all respects be construed in
accordance with and governed by the laws of the State of California without
giving effect to its conflicts-of-laws principles (other than any provisions
thereof validating the choice of the laws of the State of California in the
governing law).
6. This Bill of Sale may be executed by the parties herein in
separate counterparts and by facsimile, each of which when so executed and
delivered shall be an original, but all such counterparts and facsimile shall
together shall constitute one and the same instrument.
[SIGNATURE PAGE TO FOLLOW]
D-3
<PAGE>
IN WITNESS WHEREOF, Sellers have caused this Bill of Sale to be
executed and delivered on the date and year first written above.
AOBR, INC.,
a Texas corporation
By:
--------------------------------------
Name:
------------------------------------
Its:
-------------------------------------
--------------------------------------
Linda Hoffman
[SIGNATURE PAGE TO THE BILL OF SALE]
D-4
<PAGE>
EXHIBIT E
FORM OF NON-COMPETITION AGREEMENT
See Exhibit 10.19 to Registration Statement on Form S-1
E-1
<PAGE>
EXHIBIT F
FORM OF INTELLECTUAL PROPERTY ASSIGNMENT
Intellectual Property Assignment is entered into this ___ day of
_____________, 199__ by and among AOBR, Inc., a Texas corporation, Linda Hoffman
(together, "Assignors"), and COMPS InfoSystems, Inc., a Delaware corporation
("Assignee").
WHEREAS, Assignee and Assignors are parties to that certain Asset
Purchase Agreement dated ________________, (the "Purchase Agreement") (initially
capitalized terms used herein and not otherwise defined herein shall have the
meanings given to such terms in the Purchase Agreement);
WHEREAS, the execution and delivery of this Intellectual Property
Assignment is a condition precedent to Assignee's obligations under the Purchase
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Assignors assign to Assignee, and Assignee hereby accepts such
assignment of, Assignors' entire right, title and interest in and to all of the
Company Intellectual Property (as such intellectual property is defined and
described in the Purchase Agreement and the schedules relating thereto),
including, without limitation, the names "Hoffman Valuation Data Services" and
the "Hoffman Report," and all variations thereof, and all rights to damages and
payments for past, present or future infringements or misappropriations thereof
in all countries and the goodwill of the Business and operations of the Company
associated with the Intellectual Property.
2. The rights, title and interest assigned under Section 1 above shall be
---------
for Assignee's own use and enjoyment, and for the use and enjoyment of
Assignee's successors, assigns or other legal representatives, as fully and
entirely as the same would have been held and enjoyed by the Assignors if this
assignment and sale had not been made.
3. Where appropriate, Assignors authorize and request the Commissioner of
Patents and Trademarks of the United States, and an official of any country or
countries foreign to the United States, whose duty it is to register patents,
trademarks or copyrights, to record Assignee as the assignee and owner of the
Intellectual Property.
4. Concurrently with the execution of this Intellectual Property
Assignment, Assignors shall deliver the original papers, applications, and other
official documents relating to all patents and trademarks, and other
Intellectual Property, assigned under Section 1 above.
---------
5. Assignors hereby represent and warrant that all rights, title, and
interest assigned under Section 1 above are free and clear of Encumbrances and
---------
that Assignors have not executed and will not execute any agreement or other
instrument in conflict herewith.
F-2
<PAGE>
6. Assignors hereby covenant and agree that they shall cease and refrain
from all use of all rights, title, and interests assigned under Section 1 above
---------
in all countries of the world as of the date hereof.
7. With respect to the Company Intellectual Property, Assignors will,
from and after the Closing (i) use their best efforts to keep such Company
Intellectual Property confidential, including continuing to protect the
confidential nature of such Company Intellectual Property as if the sale
provided for in the Purchase Agreement had not occurred, (ii) not disclose the
Company Intellectual Property to any third party and (iii) not use the Company
Intellectual Property.
8. From time to time after the date hereof, Assignors will execute and
deliver, or cause their affiliates to execute and deliver, to Assignee such
instruments of sale, transfer, conveyance, assignment and delivery, and such
consents, assurances, powers of attorney and other instruments as may be
reasonably requested by Assignee or its counsel in order to vest in Assignee all
right, title and interest of Assignors in and to the Purchased Assets and
otherwise in order to carry out the purpose and intent of this Intellectual
Property Assignment.
9. This Intellectual Property Assignment, together with the Purchase
Agreement and all documents executed in connection with the Purchase Agreement,
constitutes the entire agreement and understanding between and among the parties
hereto with respect to the matters set forth herein, and supersedes and replaces
any prior agreements and understandings, whether oral or written, between and
among them with respect to such matters. Notwithstanding any other provisions
of this Intellectual Property Assignment to the contrary, nothing contained in
this Intellectual Property Assignment shall in any way superseded, modify,
replace, amend, change, rescind, waive, exceed, expand, enlarge or in any way
affect the provisions, including warranties, covenants, agreements, conditions,
representations, or in general any of the rights and remedies, and any of the
obligations and indemnifications of Assignors or Assignee set forth in the
Purchase Agreement nor shall this Intellectual Property Assignment expand or
enlarge any remedies under the Purchase Agreement including without limitation
any limits on indemnification specified therein. This Intellectual Property
Assignment is intended only to effect the transfer of certain property
transferred pursuant to the Purchase Agreement and shall be governed entirely in
accordance with the terms and conditions of the Purchase Agreement.
10. This Intellectual Property Assignment shall in all respects be
construed in accordance with and governed by the laws of the State of California
without giving effect to its conflicts-of-laws principles (other than any
provisions thereof validating the choice of the laws of the State of California
in the governing law).
11. This Intellectual Property Assignment may be executed by the parties
herein in separate counterparts and by facsimile, each of which when so executed
and delivered shall be an original, but all such counterparts and facsimile
shall together shall constitute one and the same instrument.
[SIGNATURE PAGE TO FOLLOW]
F-3
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
COMPS InfoSystems, Inc., AOBR, INC.,
a Delaware corporation a Texas corporation
By: By:
-------------------------------- --------------------------------
Christopher A. Crane
President and Chief Executive Officer Name:
-----------------------------
Title:
----------------------------
----------------------------------
Linda Hoffman
[SIGNATURE PAGE TO THE INTELLECTUAL PROPERTY ASSIGNMENT]
F-4
<PAGE>
ACKNOWLEDGMENT
STATE OF TEXAS )
) ss.
COUNTY OF _________________ )
On this ______ day of November, in the year 1998, before me, the
undersigned Notary Public, duly commissioned and sworn, personally appeared
______________________ and Linda Hoffman, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the persons whose names are
subscribed to the within instrument and acknowledged to me that they
respectively executed the same in their authorized capacities, and that by their
signature on the instrument the persons executed the instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate above written.
[SEAL]
______________________________
Notary Public in and for the
aforesaid County and State
F-5
<PAGE>
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) ss.
COUNTY OF SAN DIEGO )
On this ______ day of November, in the year 1998, before me, the
undersigned Notary Public, duly commissioned and sworn, personally appeared
Christopher A. Crane, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the persons whose names are subscribed to the
within instrument and acknowledged to me that they respectively executed the
same in their authorized capacities, and that by their signature on the
instrument the persons executed the instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate above written.
[SEAL]
______________________________
Notary Public in and for the
aforesaid County and State
F-6
<PAGE>
EXHIBIT G
FORM OF CERTIFICATES OF COMPANY OFFICER, HOFFMAN, GUY AND GOODWIN
CERTIFICATE OF OFFICER
AOBR, INC.
This Certificate is delivered pursuant to Section 2.9(c)(viii) of that
certain Asset Purchase Agreement (the "Agreement"), dated as of December 4,
1998, by and among COMPS InfoSystems, Inc., AOBR, Inc., Linda Hoffman, Guy
Goodwin and Don Guy. Capitalized terms used herein without definition shall
have the same meaning as set forth in the Agreement.
I, ________________________, do hereby certify that I am the duly
elected, qualified and acting ______________________ of the Company and as such,
am authorized to execute this Certificate on its behalf, and I further certify
that:
1. All representations and warranties of the Sellers and the Company
Principals contained in the Agreement are true and correct on and as of the date
hereof and the Sellers and the Company Principals have performed all agreements
and covenants in a timely manner required to be performed by them prior to or on
the date hereof.
2. No Actions or Proceedings have been instituted or threatened which
question the validity or legality of the transactions contemplated by the
Agreement.
3. Sellers and the Company Principals have not acted or caused any
Person to act in any manner which has created or could reasonably create any
Material Adverse Effect on the Company, Hoffman, the Business or the Purchased
Assets, nor has there been any event or development which, individually or
together with other such events, could reasonably be expected to result in a
Material Adverse Effect on the Company, Hoffman, the Business or the Purchased
Assets.
4. All Permits, authorizations, consents, approvals and waivers from
third parties (including without limitation required consents set forth on
Section 3.20 of the Disclosure Schedule to the Agreement) and Governmental or
- ------------
Regulatory Authorities and other Persons necessary or appropriate to permit
Sellers and the Company Principals to perform their respective obligations
hereunder and to consummate the transactions contemplated by the Agreement have
been obtained.
IN WITNESS WHEREOF, I have executed this Certificate as of the Closing
Date, this ____ day of ___________, 199__.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
G-2
<PAGE>
CERTIFICATE OF LINDA HOFFMAN
This Certificate is delivered pursuant to Section 2.9(c)(viii) of that
certain Asset Purchase Agreement (the "Agreement"), dated as of _______________,
199__, by and among COMPS InfoSystems, Inc., AOBR, Inc., Linda Hoffman, Guy
Goodwin and Don Guy. Capitalized terms used herein without definition shall
have the same meaning as set forth in the Agreement.
I, Linda Hoffman, do hereby certify that:
1. All representations and warranties of the Sellers and the Company
Principals contained in the Agreement are true and correct on and as of the date
hereof and the Sellers and the Company Principals have performed all agreements
and covenants in a timely manner required to be performed by them prior to or on
the date hereof.
2. No Actions or Proceedings have been instituted or threatened which
question the validity or legality of the transactions contemplated by the
Agreement.
3. Sellers and the Company Principals have not acted or caused any
Person to act in any manner which has created or could reasonably create any
Material Adverse Effect on the Company, Hoffman, the Business or the Purchased
Assets, nor has there been any event or development which, individually or
together with other such events, could reasonably be expected to result in a
Material Adverse Effect on the Company, Hoffman, the Business or the Purchased
Assets.
4. All Permits, authorizations, consents, approvals and waivers from
third parties (including without limitation required consents set forth on
Section 3.20 of the Disclosure Schedule to the Agreement) and Governmental or
- ------------
Regulatory Authorities and other Persons necessary or appropriate to permit
Sellers and the Company Principals to perform their respective obligations
hereunder and to consummate the transactions contemplated by the Agreement have
been obtained.
IN WITNESS WHEREOF, I have executed this Certificate as of the Closing
Date, this ____ day of ____________, 199__.
------------------------------
Linda Hoffman
G-3
<PAGE>
CERTIFICATE OF DON GUY
This Certificate is delivered pursuant to Section 2.9(c)(viii) of that
certain Asset Purchase Agreement (the "Agreement"), dated as of _____________,
199__, by and among COMPS InfoSystems, Inc., AOBR, Inc., Linda Hoffman, Guy
Goodwin and Don Guy. Capitalized terms used herein without definition shall
have the same meaning as set forth in the Agreement.
I, Don Guy, do hereby certify that:
1. All representations and warranties of the Sellers and the Company
Principals contained in the Agreement are true and correct on and as of the date
hereof and the Sellers and the Company Principals have performed all agreements
and covenants in a timely manner required to be performed by them prior to or on
the date hereof.
2. No Actions or Proceedings have been instituted or threatened which
question the validity or legality of the transactions contemplated by the
Agreement.
3. Sellers and the Company Principals have not acted or caused any
Person to act in any manner which has created or could reasonably create any
Material Adverse Effect on the Company, Hoffman, the Business or the Purchased
Assets, nor has there been any event or development which, individually or
together with other such events, could reasonably be expected to result in a
Material Adverse Effect on the Company, Hoffman, the Business or the Purchased
Assets.
4. All Permits, authorizations, consents, approvals and waivers from
third parties (including without limitation required consents set forth on
Section 3.20 of the Disclosure Schedule to the Agreement) and Governmental or
- ------------
Regulatory Authorities and other Persons necessary or appropriate to permit
Sellers and the Company Principals to perform their respective obligations
hereunder and to consummate the transactions contemplated by the Agreement have
been obtained.
IN WITNESS WHEREOF, I have executed this Certificate as of the Closing
Date, this ____ day of ____________, 199__.
---------------------------
Don Guy
G-4
<PAGE>
CERTIFICATE OF GUY GOODWIN
This Certificate is delivered pursuant to Section 2.9(c)(viii) of that
certain Asset Purchase Agreement (the "Agreement"), dated as of
_________________, 199__, by and among COMPS InfoSystems, Inc., AOBR, Inc.,
Linda Hoffman, Guy Goodwin and Don Guy. Capitalized terms used herein without
definition shall have the same meaning as set forth in the Agreement.
I, Guy Goodwin, do hereby certify that:
1. All representations and warranties of the Sellers and the Company
Principals contained in the Agreement are true and correct on and as of the date
hereof and the Sellers and the Company Principals have performed all agreements
and covenants in a timely manner required to be performed by them prior to or on
the date hereof.
2. No Actions or Proceedings have been instituted or threatened which
question the validity or legality of the transactions contemplated by the
Agreement.
3. Sellers and the Company Principals have not acted or caused any
Person to act in any manner which has created or could reasonably create any
Material Adverse Effect on the Company, Hoffman, the Business or the Purchased
Assets, nor has there been any event or development which, individually or
together with other such events, could reasonably be expected to result in a
Material Adverse Effect on the Company, Hoffman, the Business or the Purchased
Assets.
4. All Permits, authorizations, consents, approvals and waivers from
third parties (including without limitation required consents set forth on
Section 3.20 of the Disclosure Schedule to the Agreement) and Governmental or
- ------------
Regulatory Authorities and other Persons necessary or appropriate to permit
Sellers and the Company Principals to perform their respective obligations
hereunder and to consummate the transactions contemplated by the Agreement have
been obtained.
IN WITNESS WHEREOF, I have executed this Certificate as of the Closing
Date, this ____ day of _______________, 199__.
---------------------------
Guy Goodwin
G-5
<PAGE>
SCHEDULE 2.1(b)
BUSINESS CUSTOMER LIST
* * *
*** = Certain information in this exhibit has been ommited and filed separately
with the commission. Confidential treatment has been requested with
respect to the omitted portions.
<PAGE>
SCHEDULE 2.1(D)
COMPANY INTELLECTUAL PROPERTY
1. The Company Trademarks as defined in the Agreement
2. The method of ascertaining which properties sold during a given period
of time and determining which of those properties are of such significance that
they deserve confirmation of sales data, the preparation of a data sheet on each
property to be confined, and the contacting of buyers, sellers, and brokers to
obtain sales data. A detailed description of such methodology is described in
Annex 2. 1 (d) attached hereto.
<PAGE>
ANNEX 2.1(d)
HVDS REPORT
LAST WEEK OF THE MONTH
- ----------------------
1. Order TCAD Run (Report name 801J) by date-range search. Paper report
produced by TCAD. This report lists all the transactions within a specific
date range. The property types are identified by structure code.
2. From the 801J report, properties are targeted for research. Transactions
are entered into the "Comps -- Add Comps" database.
FIRST WEEK OF THE MONTH
- -----------------------
1. Go to TCAD Working in "Add Comp" (on laptop computer), each transaction
is pulled up and additional information about the property/transaction is
entered. This task can take from 4-8 hours depending on the number of
transactions.
2. Back at office, (a) export comps into their corresponding databases, (b)
Enter Mapsco pages & grids, zip codes, sectors (quadrant), (c) print
worksheets.
3. Compile phone numbers for each of the new transactions. Resources used:
phone books, contact lists, Cole Director, Secretary of State, Co. Clerk,
directory assistance. This typically takes a little less than a day.
FIRST, SECOND & THIRD WEEKS OF THE MONTH
- ----------------------------------------
1. The calls begin. Confirmations typically run 2-1/2 to 3 weeks. We aim for
a minimum of 60 sales per month.
2. Plats & zoning are pulled on weekly basis.
3. Sales info entered in databases.
FINAL WEEK OF MONTH
- -------------------
1. Complete any input, boilerplate info, etc.
2. Final check is done to make sure that all sales have been entered.
3. Generate photo list and print Takephoto.
4. One-two days to take pictures.
5. After pictures, input any construction details lacking.
6. Generate delivery list, fax to Corporate Express.
7. Generate invoices.
8. Generate master report index. Generate indexes for index-only clients.
9. Print and proof report. Make any corrections. Print final master copy.
10. Make copies of report -- 3-hold paper.
11. Generate diskettes. (Client disks & comptroller disk).
12. Bind report -- 3-hold binders. Insert invoices & diskettes. Place in
envelopes -- place for pickup by courier.
13. Mail out-of-town reports & indexes.
<PAGE>
SCHEDULE 2.1(e)
BUSINESS PERMITS
None.
<PAGE>
SCHEDULE 2.2
EXCLUDED ASSETS
Excluded assets are all assets of the Business, the Company, Hoffman and the
Company Principals that are not included in Article 2.1 of the Agreement.
<PAGE>
COMPS INFOSYSTEMS, INC.
HOFFMAN VALUATION DATA SERVICES
ALLOCATION OF PURCHASE PRICE
SCHEDULE 2.5
Assets purchased:
Value assigned to intangible assets purchased
Goodwill 25,000
Research and Development Expense* 95,000
--------
Total value of assets purchased $120,000
========
Purchase Price:
Cash paid at purchase $120,000
--------
Total purchase price $120,000
========
* Cost of assets purchased to be used for research and development of Austin
market. Database to be used for purposes of historical information; no value
assigned to sale or offer of historical information.
<PAGE>
DISCLOSURE SCHEDULES
Section 3.1 (a). Officers and Directors of AOBR, Inc. -- Guy Goodwin,
President, Director, 50% shareholder; Don Guy, Secretary, Director, 50%
shareholder.
Section 3.11. All purchased assets are located at 8303 North Mopac, Suite B325,
Austin, TX 98759
Section 3.19. The billings/invoices provided to the Buyer is as of the
commencement of operations of the Business under AOBR, Inc., subsequent to its
purchase of the 50% interest of the Business from Hoffman up to date of delivery
of same to Buyer on 11/18/98. The billings/invoices do not cover any part of
1997. Invoice prior to 4/98 have been discarded. There is a verbal agreement
with Robin Davis, Austin Investor Interests, to provide her with quarterly
multi-family sales data in return for her multi-family guide which is used by
the business as a resource for data on multi-family properties. There are also
verbal agreements with TCAD and WCAD to supply them with the monthly report in
return for sales transaction data reports. There is a verbal agreement with
Roger Holmes with the State of Texas Comptrollers office to provide him a
monthly report in exchange for his confirmation of sales which is compiled from
a questionnaire sent directly to buyers by the Comptrollers office.
<PAGE>
EXHIBIT 10.46
LOAN AND SECURITY AGREEMENT
Dated as of February 12, 1999
between
COMPS.COM, Inc.
a Delaware corporation
as "Borrower",
and
VENTURE LENDING & LEASING II, INC.,
a Maryland corporation
as "Lender"
<PAGE>
LOAN AND SECURITY AGREEMENT
The Borrower and Lender identified on the cover page of this document
have entered or anticipate entering into one or more transactions pursuant to
which Lender agrees to make available to Borrower a loan facility governed by
the terms and conditions set forth in this document and that certain Supplement
executed by Borrower and Lender and of even date herewith which incorporates
this document by reference (the "Supplement"). The Supplement constitutes a
supplement to and forms part of this document, and shall be read and construed
as one with this document, so that this document and the Supplement constitute a
single agreement between the parties (collectively referred to as this
"Agreement").
Accordingly, the parties agree as follows:
ARTICLE 1 - INTERPRETATION
1.1 DEFINITIONS. The terms defined in Article 10 and in the Supplement will
have the meanings therein specified for purposes of this Agreement.
1.2 INCONSISTENCY. In the event of any inconsistency between the provisions
of any Supplement and this document, the provisions of the Supplement shall
govern.
ARTICLE 2 - THE COMMITMENT AND LOANS
2.1 THE COMMITMENT. Subject to the terms and conditions of this Agreement,
Lender agrees to make Loans to Borrower from time to time from the Closing Date
and to, but not including, the Termination Date in an aggregate principal amount
not exceeding the Commitment. The Commitment is not a revolving credit
commitment, and Borrower does not have the right to repay and reborrow
hereunder. Each Loan requested by Borrower to be made on a single Business Day
shall be for a minimum principal amount set forth in the Supplement, except to
the extent the remaining Commitment is a lesser amount.
2.2 NOTES EVIDENCING LOANS; REPAYMENT. Each Loan shall be evidenced by a
separate Note payable to the order of Lender, in the total principal amount of
the Loan. Principal and interest of each Loan shall be payable at the times and
in the manner set forth in the Note.
2.3 PROCEDURES FOR BORROWING.
(a) Borrower shall give Lender, at least five (5) Business Days' prior to a
proposed Borrowing Date, written notice of any request for borrowing hereunder
(a "Borrowing Request"). Each Borrowing Request shall be in substantially the
form of Exhibit "B" to the Supplement, shall be executed by a responsible
-----------
executive or financial officer of Borrower, and shall state the loan type(s) and
amount(s) requested, and shall be accompanied by such other information and
documentation as Lender may reasonably request.
(b) No later than 1:00 p.m. Pacific Standard Time on the Borrowing Date, if
Borrower has satisfied the conditions precedent in Article 4, Lender shall make
the Loan available to Borrower in immediately available funds, less the amount
of the broker's fee described in Section (2)D. of the Supplement.
2.4 INTEREST. Basic Interest on the outstanding principal balance of the
each Loan shall accrue daily at the Designated Rate from the Borrowing Date
until the Maturity Date.
2.5 TERMINAL PAYMENT. Borrower shall pay the Terminal Payment with respect
to each Loan on the Maturity Date of such Loan.
2.6 INTEREST RATE CALCULATION. Basic Interest, along with charges and fees
under this Agreement and any Loan Document, shall be calculated for actual days
elapsed on the basis of a 360-day year, which results in higher interest, charge
or fee payments than if a 365-day year were used. In no event shall Borrower be
obligated to pay Lender interest, charges or fees at a rate in excess of the
highest rate permitted by applicable law from time to time in effect.
2.7 DEFAULT INTEREST. Any unpaid payments of principal or interest or the
Terminal Payment with respect to any Loan shall bear interest from their
respective maturities, whether scheduled or accelerated, at the Designated Rate
for such Loan plus five percent (5.00%) per annum, until paid in full, whether
----
before or after judgment (the "Default Rate"). Borrower shall pay such interest
on demand.
1
<PAGE>
2.8 INTENTIONALLY OMITTED
2.9 LENDER'S RECORDS. Principal, Basic Interest, Terminal Payments and all
other sums owed under any Loan Document shall be evidenced by entries in records
maintained by Lender for such purpose. Each payment on and any other credits
with respect to principal, Basic Interest, Terminal Payments and all other sums
outstanding under any Loan Document shall be evidenced by entries in such
records. Absent manifest error, Lender's records shall be conclusive evidence
thereof.
2.10 GRANT OF SECURITY INTERESTS. To secure the timely payment and performance
of all of Borrower's Obligations to Lender, Borrower hereby grants to Lender
continuing security interests in all of the Collateral to the Closing Date. If
upon payment in full of all Obligations in respect of the Term Loan there remain
outstanding Obligations in respect of any Equipment Loans, and if no Event of
Default then exists, then Lender shall release its security interests in all
Collateral except Equipment and Proceeds and Records relating solely to
------
Equipment. If upon payment in full of all Obligations in respect of all
Equipment Loans there remain outstanding Obligations in respect of the Term
Loan, and if no Event of Default then exists, then Lender shall release its
security interests in all Collateral comprising Equipment and Proceeds and
----------
Records relating solely to Equipment.
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants that, except as set forth in the Supplement
or any schedule of exceptions executed by the parties, as of the Closing Date
and each Borrowing Date:
3.1 DUE ORGANIZATION. Borrower is a corporation duly organized and validly
existing in good standing under the laws of the jurisdiction of its
incorporation, and is duly qualified to conduct business and is in good standing
in each other jurisdiction in which its business is conducted or its properties
are located, except where the failure to be so qualified would not reasonably be
expected to have a Material Adverse Effect.
3.2 AUTHORIZATION, VALIDITY AND ENFORCEABILITY. The execution, delivery and
performance of all Loan Documents executed by Borrower are within Borrower's
powers, have been duly authorized, and are not in conflict with Borrower's
articles or certificate of incorporation or by-laws, or the terms of any charter
or other organizational document of Borrower, as amended from time to time; and
all such Loan Documents constitute valid and binding obligations of Borrower,
enforceable in accordance with their terms (except as may be limited by
bankruptcy, insolvency and similar laws affecting the enforcement of creditors'
rights in general, and subject to general principles of equity).
3.3 COMPLIANCE WITH APPLICABLE LAWS. Borrower has complied with all
licensing, permit and fictitious name requirements necessary to lawfully conduct
the business in which it is engaged, and to any sales, leases or the furnishing
of services by Borrower, including without limitation those requiring consumer
or other disclosures, the noncompliance with which would have a Material Adverse
Effect.
3.4 NO CONFLICT. The execution, delivery, and performance by Borrower of all
Loan Documents are not in conflict with any law, rule, regulation, order or
directive, or any indenture, agreement, or undertaking to which Borrower is a
party or by which Borrower may be bound or affected except where such conflict
would not reasonably be expected to have a Material Adverse Effect.
3.5 NO LITIGATION, CLAIMS OR PROCEEDINGS. There is no litigation, tax claim,
proceeding or dispute pending, or, to the knowledge of Borrower, threatened
against or affecting Borrower or its property that would reasonably be expected
to have a Material Adverse Effect.
3.6 CORRECTNESS OF FINANCIAL STATEMENTS. Borrower's financial statements
which have been delivered to Lender have been prepared in accordance with GAAP;
and, since that date there has been no Material Adverse Change.
3.7 NO SUBSIDIARIES. Borrower is not a majority owner of or in a control
relationship with any other business entity.
3.8 ENVIRONMENTAL MATTERS. Borrower has reviewed, or caused to be reviewed
on its behalf, all Environmental Laws applicable to its business operations and
materials handled therein, and as a result thereof has reasonably concluded that
Borrower is in compliance with such Environmental Laws, except to the extent a
failure to be in such compliance
2
<PAGE>
would not reasonably be expected to have a Material Adverse Effect on Borrower's
operations, properties or financial condition.
3.9 NO EVENT OF DEFAULT. No Default or Event of Default has occurred and is
continuing.
3.10 FULL DISCLOSURE. None of the representations or warranties made by
Borrower in the Loan Documents as of the date such representations and
warranties are made or deemed made, and none of the statements contained in any
exhibit, report, statement or certificate furnished by or on behalf of Borrower
in connection with the Loan Documents (including disclosure materials delivered
by or on behalf of Borrower to Lender prior to the Closing Date), contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when made
or delivered.
3.11 SPECIFIC REPRESENTATIONS REGARDING COLLATERAL.
(a) TITLE. Except for the security interests created by this Agreement and
Permitted Liens, (i) Borrower is and will be the unconditional legal and
beneficial owner of the Collateral, and (ii) the Collateral is genuine and
subject to no Liens, rights or defenses of others. There exist no prior
assignments or encumbrances of record with the U.S. Patent and Trademark Office
affecting any Collateral in favor of any third party other than Lender.
(b) RIGHTS TO PAYMENT. The names of the obligors, amount owing to Borrower,
due dates and all other information with respect to the Rights to Payment are
and will be correctly stated in all material respects in all Records relating to
such Rights to Payment. Borrower further represents and warrants, to its
knowledge, that each Person appearing to be obligated on such a Right to Payment
has authority and capacity to contract and is bound as it appears to be.
(c) LOCATION OF COLLATERAL. Borrower's chief executive office, Inventory,
Records, Equipment, and any other offices or places of business are located at
the address(es) shown on the Supplement.
(d) BUSINESS NAMES. Other than its full corporate name, Borrower has not
conducted business using any trade names or fictitious business names except as
shown on the Supplement.
3.12 COPYRIGHTS, PATENTS, TRADEMARKS AND LICENSES.
(a) Borrower owns or is licensed or otherwise has the right to use all of the
patents, trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations and other similar rights that are reasonably
necessary for the operation of its business, without conflict with the rights of
any other Person.
(b) To Borrower's knowledge, no slogan or other advertising device, product,
process, method, substance, part or other material now employed, or now
contemplated to be employed, by Borrower infringes upon any rights held by any
other Person.
(c) No claim or litigation regarding any of the foregoing is pending or, to
Borrower's knowledge, threatened, and no patent, invention, device, application,
principle or any statute, law, rule, regulation, standard or code is pending or
proposed which, in either case, would reasonably be expected to have a Material
Adverse Effect.
ARTICLE 4 - CONDITIONS PRECEDENT
4.1 CONDITIONS TO FIRST LOAN. The obligation of Lender to make its first
Loan hereunder is, in addition to the conditions precedent specified in Section
-------
4.2, subject to the fulfillment of the following conditions and to the receipt
- ---
by Lender of the documents described below, duly executed and in form and
substance satisfactory to Lender and its counsel:
(a) RESOLUTIONS. A certified copy of the resolutions of the Board of
Directors of Borrower authorizing the execution, delivery and performance by
Borrower of the Loan Documents.
(b) INCUMBENCY AND SIGNATURES. A certificate of the secretary of Borrower
certifying the names of the officer or officers of Borrower authorized to sign
the Loan Documents, together with a sample of the true signature of each such
officer.
(c) LEGAL OPINION. The opinion of legal counsel for Borrower as to such
matters as Lender may reasonably request, including the matters covered by
Sections 3.1, 3.2, 3.4 and 3.5 hereof.
(d) ARTICLES AND BY-LAWS. Certified copies of the Articles or Certificate of
Incorporation and
3
<PAGE>
By-Laws of Borrower, as amended through the Closing Date.
(e) THIS AGREEMENT. A counterpart of this Agreement and the Supplement, with
all schedules completed and attached thereto, and disclosing such information as
is acceptable to Lender.
(f) FINANCING STATEMENTS. Filing copies (or other evidenced of filing
satisfactory to Lender and its counsel) of such Uniform Commercial Code
financing statements, collateral assignments and termination statements, with
respect to the Collateral as Lender shall request.
(g) PATENT AND TRADEMARK ASSIGNMENTS. If required by the Supplement, patent
and trademark collateral assignments executed by Borrower.
(h) LIEN SEARCHES. Uniform Commercial Code lien, judgment, bankruptcy and tax
lien searches of Borrower from such jurisdictions or offices as Lender may
reasonably request, all as of a date reasonably satisfactory to Lender and its
counsel.
(i) GOOD STANDING CERTIFICATE. A Certificate of status or good standing of
Borrower as of a date acceptable to Lender from the jurisdiction of Borrower's
organization and any foreign jurisdictions where a failure to be so qualified
would reasonably be expected to have a Material Adverse Effect.
(j) WARRANT. A warrant issued by Borrower to Lender exercisable for such
number, type and class of shares of Borrower's capital stock, and for an initial
exercise price as is specified in the Supplement.
4.2 CONDITIONS TO ALL LOANS. The obligation of Lender to make its initial
Loan and each subsequent Loan is subject to the following further conditions
precedent that:
(a) NO DEFAULT. No Default or Event of Default has occurred and is continuing
or will result from the making of any such Loan, and the representations and
warranties of Borrower contained in Article 3 of this Agreement are true and
correct in all material respects as of the Borrowing Date of such Loan.
(b) NO MATERIAL ADVERSE CHANGE. No Material Adverse Change shall have
occurred since the date of the most recent financial statements submitted to
Lender.
(c) BORROWING REQUEST. Borrower shall have delivered to Lender a Borrowing
Request for such Loan.
(d) NOTE. Borrower shall have delivered an executed Note evidencing such
Loan, in form and substance satisfactory to Lender.
(e) SUPPLEMENTAL LIEN FILINGS. Borrower shall have executed and delivered
such amendments or supplements to this Agreement and such financing statements
as Lender may reasonably request in connection with the proposed Loan, in order
to create or perfect or to maintain the perfection of Lender's Liens on the
Collateral.
(f) VCOC LIMITATION. Lender shall not be obligated to make any Loan under its
Commitment if at the time of or after giving effect to the proposed Loan Lender
would no longer qualify as: (A) a "venture capital operating company" under U.S.
Department of Labor Regulations Section 2510.3-101(d), Title 29 of the Code of
Federal Regulations, as amended; and (B) a "business development company" under
the provisions of federal Investment Company Act of 1940, as amended; and (C) a
"regulated investment company" under the provisions of the Internal Revenue Code
of 1986, as amended.
ARTICLE 5 - AFFIRMATIVE COVENANTS
During the term of this Agreement and until its performance of all obligations
to Lender, Borrower will:
5.1 NOTICE TO LENDER. Promptly give written notice to Lender of:
(a) Any litigation or administrative or regulatory proceeding affecting
Borrower where the amount claimed against Borrower is at the Threshold Amount or
more, or where the granting of the relief requested would have a Material
Adverse Effect.
(b) Any substantial dispute which may exist between Borrower or any
governmental or regulatory authority, where such dispute would reasonably be
expected to have a Material Adverse Effect.
(c) The occurrence of any Event of Default or any event which with the giving
of notice, the passage of time, or both, would constitute an Event of Default.
4
<PAGE>
(d) Any change in the location of any of Borrower's places of business or
Collateral at least thirty (30) days in advance of such change, or of the
establishment of any new, or the discontinuance of any existing, place of
business.
(e) Any dispute or default by Borrower or any other party under any joint
venture, partnering, distribution, cross-licensing, strategic alliance,
collaborative research or manufacturing, license or similar agreement which
could reasonably be expected to have a Material Adverse Effect.
(f) Any other matter which has resulted or might reasonably result in a
Material Adverse Change.
5.2 FINANCIAL STATEMENTS. Deliver to each Lender or cause to be delivered to
Lender, in form and detail satisfactory to Lender the following financial
information, which Borrower warrants shall be accurate and complete in all
material respects:
(a) MONTHLY FINANCIAL STATEMENTS. As soon as available but no later than
thirty (30) days after the end of each month, Borrower's balance sheet as of the
end of such period, and Borrower's income statement for such period and for that
portion of Borrower's financial reporting year ending with such period, prepared
and attested by a responsible financial officer of Borrower as being complete
and correct and fairly presenting Borrower's financial condition and the results
of Borrower's operations. After a Qualified Public Offering, the foregoing
interim financial statements shall be delivered no later than 45 days after each
fiscal quarter and for the quarter-annual fiscal period then ended.
(b) YEAR-END FINANCIAL STATEMENTS. As soon as available but no later than one
hundred twenty (120) days after and as of the end of each financial reporting
year, a complete copy of Borrower's audit report, which shall include balance
sheet, income statement, statement of changes in equity and statement of cash
flows for such year, prepared and certified by an independent certified public
accountant selected by Borrower and satisfactory to Lender (the "Accountant").
The Accountant's certification shall not be qualified or limited due to a
restricted or limited examination by the Accountant of any material portion of
Borrower's records or otherwise.
(c) COMPLIANCE CERTIFICATES. Simultaneously with the delivery of each set of
financial statements referred to in paragraphs (a) and (b) above, a certificate
of the chief financial officer of Borrower substantially in the form of Exhibit
"C" to the Supplement (i) setting forth in reasonable detail any calculations
required to establish whether Borrower is in compliance with any financial
covenants or tests set forth in the Supplement, and (ii) stating whether any
Default or Event of Default exists on the date of such certificate, and if so,
setting forth the details thereof and the action which Borrower is taking or
proposes to take with respect thereto.
(d) GOVERNMENT REQUIRED REPORTS; PRESS RELEASES. Promptly after sending,
issuing, making available, or filing, copies of all statements released to any
news media for publication, all reports, proxy statements, and financial
statements that Borrower sends or makes available to its stockholders, and, not
later than five (5) days after actual filing or the date such filing was first
due, all registration statements and reports that Borrower files or is required
to file with the Securities and Exchange Commission, or any other governmental
or regulatory authority.
(e) OTHER INFORMATION. Such other statements, lists of property and accounts,
budgets, forecasts, reports, or other information as Lender may from time to
time reasonably request.
5.3 MANAGERIAL ASSISTANCE FROM LENDER. Permit Lender, as a "venture capital
operating company" to participate in, and influence the conduct of management of
Borrower through the exercise of "management rights," as such terms are defined
in 29 C.F.R. (S) 2510.3-101(d), and:
(a) Permit Lender to make available to Borrower, at no cost to Borrower,
"significant managerial assistance", as defined in Section 2(a)(47) of the
Investment Company Act of 1940, as amended, either in the form of: (i)
consulting arrangements with Lender or any of its officers, directors, employees
or affiliates, (ii) Borrower's allowing Lender to provide recommendations of
prospective candidates for election to Borrower's Board of Directors, or (iii)
Lender, at Borrower's request, seeking the services of third-party consultants
to aid Borrower with respect to its management and operations;
(b) Permit Lender to make available consulting and advisory services to
officers of Borrower regarding Borrower's equipment acquisition and financing
plans, and such other matters affecting the business, financial
5
<PAGE>
condition and prospects of Borrower as Lender shall reasonably deem relevant;
and
(c) If Lender reasonably believes that financial or other developments
affecting Borrower have impaired or are likely to impair Borrower's ability to
perform its obligations under this Agreement, permit Lender reasonable access to
Borrower's management and/or Board of Directors and opportunity to present
Lender's views with respect to such developments.
5.4 EXISTENCE. Maintain and preserve Borrower's existence, present form of
business, and all rights and privileges necessary or desirable in the normal
course of its business; and keep all Borrower's property in good working order
and condition, ordinary wear and tear excepted.
5.5 INSURANCE. Maintain and keep in force insurance with an insurance
carrier having a policyholder rating of not less than "A" and financial category
rating of Class VII in "Best's Insurance Guide," unless otherwise approved by
Lender and in such amounts and types as is usual in the business carried on by
Borrower. Such insurance policies must be in form and substance satisfactory to
Lender, and shall list Lender as an additional insured or loss payee, as
applicable, on endorsement(s) in form reasonably acceptable to Lender. Borrower
shall furnish to Lender such endorsements, and upon Lender's request, copies of
any or all such policies.
5.6 ACCOUNTING RECORDS. Maintain adequate books, accounts and records, and
prepare all financial statements in accordance with GAAP, and in compliance with
the regulations of any governmental or regulatory authority having jurisdiction
over Borrower or Borrower's business; and permit employees or agents of Lender
at such reasonable times as Lender may request, at Borrower's expense, to
inspect Borrower's properties, and to examine, and make copies and memoranda of
Borrower's books, accounts and records.
5.7 COMPLIANCE WITH LAWS. Comply with all laws (including Environmental
Laws), rules, regulations applicable to, and all orders and directives of any
governmental or regulatory authority having jurisdiction over, Borrower or
Borrower's business, and with all material agreements to which Borrower is a
party, except where the failure to so comply would not have a Material Adverse
Effect.
5.8 TAXES AND OTHER LIABILITIES. Pay all Borrower's obligations when due;
pay all taxes and other governmental or regulatory assessments before
delinquency or before any penalty attaches thereto, except as may be contested
in good faith by the appropriate procedures and for which Borrower shall
maintain appropriate reserves; and timely file all required tax returns.
5.9 SPECIAL COLLATERAL COVENANTS.
(a) MAINTENANCE OF COLLATERAL; INSPECTION. Do all things reasonably necessary
to maintain, preserve, protect and keep all Collateral in good working order and
salable condition, ordinary wear and tear excepted, deal with the Collateral in
all ways as are considered good practice by owners of like property, and use the
Collateral lawfully and, to the extent applicable, only as permitted by
Borrower's insurance policies. Maintain, or cause to be maintained, complete and
accurate Records relating to the Collateral. Upon reasonable prior notice at
reasonable times during normal business hours, Borrower hereby authorizes
Lender's officers, employees, representatives and agents to inspect the
Collateral and to discuss the Collateral and the Records relating thereto with
Borrower's officers and employees, and, in the case of any Right to Payment,
with any Person which is or may be obligated thereon.
(b) FINANCING STATEMENTS AND OTHER ACTIONS. Execute and deliver to Lender
all financing statements, notices and other documents (including, without
limitation, any filings with the United States Patent and Trademark Office) from
time to time reasonably requested by Lender to maintain a first perfected
security interest in the Collateral in favor of Lender; perform such other acts,
and execute and deliver to Lender such additional conveyances, assignments,
agreements and instruments, as Lender may at any time request in connection with
the administration and enforcement of this Agreement or Lender's rights, powers
and remedies hereunder.
(c) LIENS. Not create, incur, assume or permit to exist any Lien or grant
any other Person a negative pledge on any Collateral, except Permitted Liens.
(d) DOCUMENTS OF TITLE. Not sign or authorize the signing of any financing
statement or other document naming Borrower as debtor or obligor, or acquiesce
or cooperate in the issuance of any bill of lading, warehouse receipt or other
document or instrument of title with respect to any Collateral,
6
<PAGE>
except those negotiated to Lender, or those naming Lender as secured party.
(e) DISPOSITION OF COLLATERAL. Not sell, transfer, lease or otherwise
dispose of any Equipment; or dispose of any other Collateral except for fair
consideration and in the ordinary course of its business.
(f) CHANGE IN LOCATION OR NAME. Without at least 30 days' prior written
notice to Lender: (a) not relocate any Collateral or Records, its chief
executive office, or establish a place of business at a location other than as
specified in the Supplement; and (b) not change its name, mailing address,
location of Collateral, or its legal structure.
(g) DECALS, MARKINGS. At the request of Lender, firmly affix a decal,
stencil or other marking to designated items of Equipment, indicating thereon
the security interest of Lender.
(h) AGREEMENT WITH REAL PROPERTY OWNER/LANDLORD. Obtain and maintain such
acknowledgments, consents, waivers and agreements from the owner, lienholder,
mortgagee and landlord with respect to any real property on which Equipment is
located as Lender may from time to time reasonably require, all in form and
substance reasonably satisfactory to Lender.
(i) CERTAIN AGREEMENTS ON RIGHTS TO PAYMENT. Other than in the ordinary
course of business, not make any material discount, credit, rebate or other
reduction in the original amount owing on a Right to Payment or accept in
satisfaction of such a Right to Payment less than the original amount thereof.
ARTICLE 6 - NEGATIVE COVENANTS
During the term of this Agreement and until the performance of all obligations
to Lender, Borrower will not (without Lender's prior written consent):
6.1 INDEBTEDNESS. Be indebted for borrowed money, the deferred purchase
price of property, or leases which would be capitalized in accordance with GAAP;
or become liable as a surety, guarantor, accommodation party or otherwise for or
upon the obligation of any other Person, except:
(a) Indebtedness incurred for the acquisition of supplies or inventory on
normal trade credit; unsecured indebtedness for money borrowed for working
capital or general corporate purposes from a commercial bank or institutional
lender up to $500,000.00 in aggregate principal amount outstanding at any time;
and other indebtedness incurred pursuant to one or more transactions permitted
under Section 6.4;
-----------
(b) Indebtedness not to exceed Two Hundred Fifty Thousand Dollars ($250,000)
in aggregate principal amount outstanding at any time secured by purchase money
security interests;
(c) Indebtedness of Borrower under this Agreement or toVenture Lending &
Leasing, Inc.;
(d) Up to $750,000 of Indebtedness, singly or in the aggregate, in connection
with one or more business acquisitions permitted hereunder; and
(e) Any Indebtedness approved by Lender prior to the Closing Date.
6.2 LIENS. Create, incur, assume or permit to exist any Lien, or grant any
other Person a negative pledge, on any of Borrower's property, except Permitted
Liens. Borrower and Lender agree that this covenant is not intended to
constitute a lien, deed of trust, equitable mortgage, or security interest of
any kind on any of Borrower's real property, and this Agreement shall not be
recorded or recordable. Notwithstanding the foregoing, however, violation of
this covenant by Borrower shall constitute an Event of Default.
6.3 DIVIDENDS. Except after a Qualified Public Offering, pay any dividends
or purchase, redeem or otherwise acquire or make any other distribution with
respect to any of Borrower's capital stock, except (a) dividends or other
distributions solely of capital stock of Borrower, and (b) repurchases of stock
from employees upon termination of employment under reverse vesting or similar
repurchase plans and except for dividend rights of Summit Ventures III, L.P.
under that certain Investor Rights Agreement dated as of October 14, 1994.
6.4 CHANGES/MERGERS. Without the prior written consent of Lender (which
consent shall not be unreasonably withheld and shall be deemed given if Lender
shall have failed to notify Borrower of its withholding of consent for 30 or
more days after Borrower's request therefor), liquidate or dissolve, or enter
into any consolidation, merger, partnership, joint
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venture or other combination except for joint ventures, strategic alliances,
------
licensing and similar arrangements customary in Borrower's industry for
businesses in the development stage of Borrower and which do not require
Borrower to assume or otherwise become liable for the obligations of any third
party not directly related to or arising out of such arrangement or, without the
prior written consent of Lender, require Borrower to transfer ownership of
assets to such joint venture or other entity; prepay any subordinated debt, debt
for borrowed money, or debt secured by any Permitted Lien, or enter into or
modify any agreement as a result of which the terms of payment of any such debt
are accelerated.
6.5 SALES OF ASSETS. Sell, transfer, lease or otherwise dispose of any of
Borrower's assets except for fair consideration and in the ordinary course of
its business or obsolete or worn assets.
6.6 LOANS/INVESTMENTS. Make or suffer to exist any loans, guaranties,
advances, or investments, except:
(a) Accounts receivable in the ordinary course of Borrower's business;
(b) Investments in domestic certificates of deposit issued by, and other
domestic investments with, financial institutions organized under the laws of
the United States or a state thereof, having One Hundred Million Dollars
($100,000,000) in capital and a rating of at least "investment grade" or "A" by
Moody's or any successor rating agency;"
(c) Investments in marketable obligations of the United States of America and
in open market commercial paper given the highest credit rating by a national
credit agency and maturing not more than one year from the creation thereof;
(d) Temporary advances to cover incidental expenses to be incurred in the
ordinary course of business;
(e) Loans to a Person or guaranties of Indebtedness of a Person not to exceed
Two Hundred Fifty Thousand Dollars ($250,000) for any one Person and One Million
Dollars ($1,000,000) in aggregate with respect to all Persons, outstanding at
any time.
6.7 TRANSACTIONS WITH RELATED PERSONS. Directly or indirectly enter into any
transaction with or for the benefit of a Related Person on terms more favorable
to the Related Person than would have been obtainable in an "arms' length"
dealing.
6.8 OTHER BUSINESS. Engage in any material line of business other than the
business Borrower conducts as of the Closing Date.
ARTICLE 7 - EVENTS OF DEFAULT
7.1 EVENTS OF DEFAULT; ACCELERATION. Upon the occurrence and during the
continuation of any Default, the obligation of Lender to make any additional
Loans shall be suspended. The occurrence of any of the following (each, an
"Event of Default") shall terminate any obligation of Lender to make any
additional Loan and shall, at the option of Lender (1) make all sums of Basic
Interest and principal, all Terminal Payments, and any Obligations and other
amounts owing under any Loan Documents immediately due and payable without
notice of default, presentment or demand for payment, protest or notice of
nonpayment or dishonor or any other notices or demands, and (2) give Lender the
right to exercise any other right or remedy provided by contract or applicable
law:
(a) Borrower shall fail to pay any principal, interest or Terminal Payment
under this Agreement, or fail to pay any fees or other charges when due under
any Loan Document, and such failure continues for three (3) Business Days or
more after the same first becomes due; or an Event of Default as defined in any
other Loan Document shall have occurred.
(b) Any representation or warranty made, or financial statement, certificate
or other document provided, by Borrower under any Loan Document shall prove to
have been false or misleading in any material respect when made or deemed made
herein.
(c) Borrower shall fail to pay its debts generally as they become due or
shall commence any Insolvency Proceeding with respect to itself; an involuntary
Insolvency Proceeding shall be filed against Borrower, or a custodian, receiver,
trustee, assignee for the benefit of creditors, or other similar official, shall
be appointed to take possession, custody or control of the properties of
Borrower, and such involuntary Insolvency Proceeding, petition or appointment is
acquiesced to by Borrower or is not dismissed within sixty (60) days; or the
dissolution or termination of the business of Borrower.
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(d) Borrower shall be in default beyond any applicable period of grace or
cure under any other agreement involving the borrowing of money, the purchase of
property, the advance of credit or any other monetary liability of any kind to
Lender or to any Person which results in the acceleration of payment of such
obligation in an amount in excess of the Threshold Amount.
(e) Any governmental or regulatory authority shall take any judicial or
administrative action, or any defined benefit pension plan maintained by
Borrower shall have any unfunded liabilities, any of which, in the reasonable
judgment of Lender, would have a Material Adverse Effect.
(f) Any sale, transfer or other disposition of all or a substantial or
material part of the assets of Borrower, including without limitation to any
trust or similar entity, shall occur.
(g) Any judgment(s) singly or in the aggregate in excess of the Threshold
Amount shall be entered against Borrower which remain unsatisfied, unvacated or
unstayed pending appeal for thirty (30) or more days after entry thereof.
(h) Any Person or two or more Persons acting in concert shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission) of forty percent (40%) or more of the outstanding shares of
voting stock of Borrower.
(i) Borrower shall fail to perform or observe any covenant contained in
Article 6 of this Agreement.
(j) Borrower shall fail to perform or observe any covenant contained in this
Agreement or any other Loan Document (other than a covenant which is dealt with
specifically elsewhere in this Article 7) and the breach of such covenant is not
cured within 30 days after the sooner to occur of Borrower's receipt of notice
of such breach from Lender or the date on which such breach first becomes known
to any officer of Borrower; provided, however that if such breach is not capable
-------- -------
of being cured within such 30-day period and Borrower timely notifies Lender of
such fact and Borrower diligently pursues such cure, then the cure period shall
be extended to the date requested in Borrower's notice but in no event more than
90 days from the initial breach; provided, further, that such additional 60-day
-------- -------
opportunity to cure shall not apply in the case of any failure to perform or
observe any covenant which has been the subject of a prior failure within the
preceding 180 days or which is a willful and knowing breach by Borrower.
7.2 REMEDIES UPON DEFAULT. Upon the occurrence and during the continuance of
an Event of Default, Lender shall be entitled to, at its option, exercise any or
all of the rights and remedies available to a secured party under the Uniform
Commercial Code or any other applicable law, and exercise any or all of its
rights and remedies provided for in this Agreement and in any other Loan
Document. The obligations of Borrower under this Agreement shall continue to be
effective or be reinstated, as the case may be, if at any time any payment of
any Obligations is rescinded or must otherwise be returned by Lender upon, on
account of, or in connection with, the insolvency, bankruptcy or reorganization
of Borrower or otherwise, all as though such payment had not been made.
7.3 SALE OF COLLATERAL. Upon the occurrence and during the continuance of an
Event of Default, Lender may sell all or any part of the Collateral, at public
or private sales, to itself, a wholesaler, retailer or investor, for cash, upon
credit or for future delivery, and at such price or prices as could reasonably
be deemed commercially reasonable under the circumstances. To the extent
permitted by law, Borrower hereby specifically waives all rights of redemption
and any rights of stay or appraisal which it has or may have under any
applicable law in effect from time to time. Any such public or private sales
shall be held at such times and at such place(s) as Lender may determine. In
case of the sale of all or any part of the Collateral on credit or for future
delivery, the Collateral so sold may be retained by Lender until the selling
price is paid by the purchaser, but Lender shall not incur any liability in case
of the failure of such purchaser to pay for the Collateral and, in case of any
such failure, such Collateral may be resold. Lender may, instead of exercising
its power of sale, proceed to enforce its security interest in the Collateral by
seeking a judgment or decree of a court of competent jurisdiction. Without
limiting the generality of the foregoing, if an Event of Default is in effect,
(1) Subject to the rights of any third parties, Lender may license, or
sublicense, whether general, special or otherwise, and whether on an exclusive
or non-exclusive basis, any Patents or Trademarks included in the Collateral
throughout the world for such term or terms, on such conditions and in such
manner as Lender shall in its sole discretion determine;
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(2) Lender may (without assuming any obligations or liability thereunder), at
any time and from time to time, enforce (and shall have the exclusive right to
enforce) against any licensee or sublicensee all rights and remedies of Borrower
in, to and under any Patent Licenses or Trademark Licenses and take or refrain
from taking any action under any thereof, and Borrower hereby releases Lender
from, and agrees to hold Lender free and harmless from and against any claims
arising out of, any lawful action so taken or omitted to be taken with respect
thereto other than claims arising out of Lender's gross negligence or willful
misconduct; and
(3) Upon request by Lender, Borrower will execute and deliver to Lender a
power of attorney, in form and substance reasonably satisfactory to Lender for
the implementation of any lease, assignment, license, sublicense, grant of
option, sale or other disposition of a Patent or Trademark. In the event of any
such disposition pursuant to this clause 3, Borrower shall supply its know-how
--------
and expertise relating to the products or services made or rendered in
connection with Patents, the manufacture and sale of the products bearing
Trademarks, and its customer lists and other records relating to such Patents or
Trademarks and to the distribution of said products, to Lender.
7.4 BORROWER'S OBLIGATIONS UPON DEFAULT. Upon the request of Lender after
the occurrence and during the continuance of an Event of Default, Borrower will:
(A) Assemble and make available to Lender the Collateral at such place(s) as
Lender shall reasonably designate, segregating all Collateral so that each item
is capable of identification; and
(B) Subject to the rights of any lessor, permit Lender, by Lender's officers,
employees, agents and representatives, to enter any premises where any
Collateral is located, to take possession of the Collateral, to complete the
processing, manufacture or repair of any Collateral, and to remove the
Collateral, or to conduct any public or private sale of the Collateral, all
without any liability of Lender for rent or other compensation for the use of
Borrower's premises.
ARTICLE 8 - SPECIAL COLLATERAL PROVISIONS
8.1 COMPROMISE AND COLLECTION. Borrower and Lender recognize that setoffs,
counterclaims, defenses and other claims may be asserted by obligors with
respect to certain of the Rights to Payment; that certain of the Rights to
Payment may be or become uncollectible in whole or in part; and that the expense
and probability of success of litigating a disputed Right to Payment may exceed
the amount that reasonably may be expected to be recovered with respect to such
Right to Payment. Borrower hereby authorizes Lender, after and during the
continuance of an Event of Default, to compromise with the obligor, accept in
full payment of any Right to Payment such amount as Lender shall negotiate with
the obligor, or abandon any Right to Payment. Any such action by Lender shall
be considered commercially reasonable so long as Lender acts in good faith based
on information known to it at the time it takes any such action.
8.2 PERFORMANCE OF BORROWER'S OBLIGATIONS. Upon the occurrence and during the
continuance of an Event of Default, without having any obligation to do so, upon
reasonable prior notice to Borrower, Lender may perform or pay any obligation
which Borrower has agreed to perform or pay under this Agreement, including,
without limitation, the payment or discharge of taxes or Liens levied or placed
on or threatened against the Collateral. In so performing or paying, Lender
shall determine the action to be taken and the amount necessary to discharge
such obligations. Borrower shall reimburse Lender on demand for any amounts
paid by Lender pursuant to this Section, which amounts shall constitute
Obligations secured by the Collateral and shall bear interest.
8.3 POWER OF ATTORNEY. For the purpose of protecting and preserving the
Collateral and Lender's rights under this Agreement, Borrower hereby irrevocably
appoints Lender, with full power of substitution, as its attorney-in-fact with
full power and authority, after the occurrence and during the continuance of an
Event of Default, to do any act which Borrower is obligated to do hereunder; to
exercise such rights with respect to the Collateral as Borrower might exercise;
to use such Inventory, Equipment, Fixtures or other property as Borrower might
use; to enter Borrower's premises; to give notice of Lender's security interest
in, and to collect the Collateral; and to execute and file in Borrower's name
any financing statements, amendments and
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continuation statements necessary or desirable to perfect or continue the
perfection of Lender's security interests in the Collateral. Borrower hereby
ratifies all that Lender shall lawfully do or cause to be done by virtue of this
appointment.
8.4 AUTHORIZATION FOR LENDER TO TAKE CERTAIN ACTION. The power of attorney
created in Section 8.3 is a power coupled with an interest and shall be
irrevocable. The powers conferred on Lender hereunder are solely to protect its
interests in the Collateral and shall not impose any duty upon Lender to
exercise such powers. Lender shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers and in no event
shall Lender or any of its directors, officers, employees, agents or
representatives be responsible to Borrower for any act or failure to act, except
for gross negligence or willful misconduct. After the occurrence and during the
continuance of an Event of Default, Lender may exercise this power of attorney
without notice to or assent of Borrower, in the name of Borrower, or in Lender's
own name, from time to time in Lender's sole discretion and at Borrower's
expense. To further carry out the terms of this Agreement, after the occurrence
and during the continuance of an Event of Default, Lender may:
(A) Execute any statements or documents or take possession of, and endorse and
collect and receive delivery or payment of, any checks, drafts, notes,
acceptances or other instruments and documents constituting Collateral, or
constituting the payment of amounts due and to become due or any performance to
be rendered with respect to the Collateral.
(B) Sign and endorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts; drafts, certificates and statements under any
commercial or standby letter of credit relating to Collateral; assignments,
verifications and notices in connection with Accounts; or any other documents
relating to the Collateral, including without limitation the Records.
(C) Use or operate Collateral or any other property of Borrower for the
purpose of preserving or liquidating Collateral.
(D) File any claim or take any other action or proceeding in any court of law
or equity or as otherwise deemed appropriate by Lender for the purpose of
collecting any and all monies due or securing any performance to be rendered
with respect to the Collateral.
(E) Commence, prosecute or defend any suits, actions or proceedings or as
otherwise deemed appropriate by Lender for the purpose of protecting or
collecting the Collateral. In furtherance of this right, upon the occurrence
and during the continuance of an Event of Default, Lender may apply for the
appointment of a receiver or similar official to operate Borrower's business.
(F) Prepare, adjust, execute, deliver and receive payment under insurance
claims, and collect and receive payment of and endorse any instrument in payment
of loss or returned premiums or any other insurance refund or return, and apply
such amounts at Lender's sole discretion, toward repayment of the Obligations or
replacement of the Collateral.
8.5 APPLICATION OF PROCEEDS. Any Proceeds and other monies or property
received by Lender pursuant to the terms of this Agreement or any Loan Document
may be applied by Lender first to the payment of expenses of collection,
including without limitation reasonable attorneys' fees, and then to the payment
of the Obligations in such order of application as Lender may elect.
8.6 DEFICIENCY. If the Proceeds of any disposition of the Collateral are
insufficient to cover all costs and expenses of such sale and the payment in
full of all the Obligations, plus all other sums required to be expended or
distributed by Lender, then Borrower shall be liable for any such deficiency.
8.7 LENDER TRANSFER. Upon the transfer of all or any part of the
Obligations, Lender may transfer all or part of the Collateral and shall be
fully discharged thereafter from all liability and responsibility with respect
to such Collateral so transferred, and the transferee shall be vested with all
the rights and powers of Lender hereunder with respect to such Collateral so
transferred, but with respect to any Collateral not so transferred, Lender shall
retain all rights and powers hereby given.
8.8 LENDER'S DUTIES.
(A) Lender shall use reasonable care in the custody and preservation of any
Collateral in its possession. Without limitation on other conduct which may be
considered the exercise of reasonable care, Lender shall be deemed to have
exercised reasonable
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care in the custody and preservation of such Collateral if such Collateral is
accorded treatment substantially equal to that which Lender accords its own
property, it being understood that Lender shall not have any responsibility for
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, declining value, tenders or other matters relative to any
Collateral, regardless of whether Lender has or is deemed to have knowledge of
such matters; or taking any necessary steps to preserve any rights against any
Person with respect to any Collateral. Under no circumstances shall Lender be
responsible for any injury or loss to the Collateral, or any part thereof,
arising from any cause beyond the reasonable control of Lender.
(B) Lender may at any time deliver the Collateral or any part thereof to
Borrower and the receipt of Borrower shall be a complete and full acquittance
for the Collateral so delivered, and Lender shall thereafter be discharged from
any liability or responsibility therefor.
(C) Neither Lender, nor any of its directors, officers, employees, agents,
attorneys or any other person affiliated with or representing Lender shall be
liable for any claims, demands, losses or damages, of any kind whatsoever, made,
claimed, incurred or suffered by Borrower or any other party through the
ordinary negligence of Lender, or any of its directors, officers, employees,
agents, attorneys or any other person affiliated with or representing Lender.
8.9 TERMINATION OF SECURITY INTERESTS. Upon the payment in full of the
Obligations and if Lender has no further obligations under its Commitment, the
security interest granted hereby shall terminate and all rights to the
Collateral shall revert to Borrower. Upon any such termination, the Lender
shall, at Borrower's expense, execute and deliver to Borrower such documents as
Borrower shall reasonably request to evidence such termination.
ARTICLE 9 - GENERAL PROVISIONS
9.1 NOTICES. Any notice given by any party under any Loan Document shall be
in writing and personally delivered, sent by overnight courier, or United States
mail, postage prepaid, or sent by facsimile, or other authenticated message,
charges prepaid, to the other party's or parties' addresses shown on the
Supplement. Each party may change the address or facsimile number to which
notices, requests and other communications are to be sent by giving written
notice of such change to each other party. Notice given by hand delivery shall
be deemed received on the date delivered; if sent by overnight courier, on the
next business day after delivery to the courier service; if by first class mail,
on the third business day after deposit in the U.S. Mail; and if by facsimile,
on the date of transmission.
9.2 BINDING EFFECT. The Loan Documents shall be binding upon and inure to
the benefit of Borrower and Lender and their respective successors and assigns;
provided, however, that Borrower may not assign or transfer Borrower's rights or
obligations under any Loan Document without Lender's prior written consent.
Lender reserves the right to sell, assign, transfer, negotiate or grant
participations in all or any part of, or any interest in, Lender's rights and
obligations under the Loan Documents. In connection with any of the foregoing,
Lender may disclose all documents and information which Lender now or hereafter
may have relating to the Loans, Borrower, or its business; provided that any
person who receives such information shall have agreed in writing in advance to
maintain the confidentiality of such information on terms reasonably acceptable
to Borrower.
9.3 NO WAIVER. Any waiver, consent or approval by Lender of any Event of
Default or breach of any provision, condition, or covenant of any Loan Document
must be in writing and shall be effective only to the extent set forth in
writing. No waiver of any breach or default shall be deemed a waiver of any
later breach or default of the same or any other provision of any Loan Document.
No failure or delay on the part of Lender in exercising any power, right, or
privilege under any Loan Document shall operate as a waiver thereof, and no
single or partial exercise of any such power, right, or privilege shall preclude
any further exercise thereof or the exercise of any other power, right or
privilege. Lender has the right at its sole option to continue to accept
interest and/or principal payments due under the Loan Documents after default,
and such acceptance shall not constitute a waiver of said default or an
extension of the Maturity Date unless Lender agrees otherwise in writing.
9.4 RIGHTS CUMULATIVE. All rights and remedies existing under the Loan
Documents are cumulative to, and not exclusive of, any other rights or remedies
available under contract or applicable law.
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9.5 UNENFORCEABLE PROVISIONS. Any provision of any Loan Document executed by
Borrower which is prohibited or unenforceable in any jurisdiction, shall be so
only as to such jurisdiction and only to the extent of such prohibition or
unenforceability, but all the remaining provisions of any such Loan Document
shall remain valid and enforceable.
9.6 ACCOUNTING TERMS. Except as otherwise provided in this Agreement,
accounting terms and financial covenants and information shall be determined and
prepared in accordance with GAAP.
9.7 INDEMNIFICATION; EXCULPATION. Borrower shall pay and protect, defend and
indemnify Lender and Lender's employees, officers, directors, shareholders,
affiliates, correspondents, agents and representatives (other than Lender,
collectively "Agents") against, and hold Lender and each such Agent harmless
from, all claims, actions, proceedings, liabilities, damages, losses, expenses
(including, without limitation, attorneys' fees and costs) and other amounts
incurred by Lender and each such Agent, arising from (i) the matters
contemplated by this Agreement or any other Loan Documents or (ii) any
contention that Borrower has failed to comply with any law, rule, regulation,
order or directive applicable to Borrower's business; PROVIDED, HOWEVER, that
this indemnification shall not apply to any of the foregoing incurred solely as
the result of Lender's or any Agent's gross negligence or willful misconduct.
This indemnification shall survive the payment and satisfaction of all of
Borrower's Obligations to Lender.
9.8 REIMBURSEMENT. Borrower shall reimburse Lender for all costs and
expenses, including without limitation reasonable attorneys' fees and
disbursements expended or incurred by Lender in any arbitration, mediation,
judicial reference, legal action or otherwise in connection with (a) the
preparation and negotiation of the Loan Documents, (b) the amendment and
enforcement of the Loan Documents, including without limitation during any
workout, attempted workout, and/or in connection with the rendering of legal
advice as to Lender's rights, remedies and obligations under the Loan Documents,
(c) collecting any sum which becomes due Lender under any Loan Document, (d) any
proceeding for declaratory relief, any counterclaim to any proceeding, or any
appeal, or (e) the protection, preservation or enforcement of any rights of
Lender. For the purposes of this section, attorneys' fees shall include,
without limitation, fees incurred in connection with the following: (1)
contempt proceedings; (2) discovery; (3) any motion, proceeding or other
activity of any kind in connection with an Insolvency Proceeding; (4)
garnishment, levy, and debtor and third party examinations; and (5)
postjudgment motions and proceedings of any kind, including without limitation
any activity taken to collect or enforce any judgment. All of the foregoing
costs and expenses shall be payable upon demand by Lender, and if not paid
within forty-five (45) days of presentation of invoices shall bear interest at
the highest applicable Default Rate.
9.9 EXECUTION IN COUNTERPARTS. This Agreement may be executed in any number
of counterparts which, when taken together, shall constitute but one agreement.
9.10 ENTIRE AGREEMENT. The Loan Documents are intended by the parties as
the final expression of their agreement and therefore contain the entire
agreement between the parties and supersede all prior understandings or
agreements concerning the subject matter hereof. This Agreement may be amended
only in a writing signed by Borrower and Lender.
9.11 GOVERNING LAW AND JURISDICTION.
(a) THIS AGREEMENT AND THE LOAN DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA OR
OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF CALIFORNIA, AND BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH OF BORROWER AND LENDER CONSENTS, FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE
COURTS. EACH OF BORROWER AND LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. BORROWER AND LENDER EACH
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WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE
MADE BY ANY OTHER MEANS PERMITTED BY CALIFORNIA LAW.
9.12 WAIVER OF JURY TRIAL. BORROWER AND LENDER EACH WAIVES ITS RESPECTIVE
RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR
ANY PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT
CLAIMS, OR OTHERWISE. BORROWER AND LENDER EACH AGREES THAT ANY SUCH CLAIM OR
CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT
LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO
A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEMS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR
ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
ARTICLE 10 - DEFINITIONS
The definitions appearing in this Agreement or any Supplement shall be
applicable to both the singular and plural forms of the defined terms:
"ACCOUNT DEBTOR" means the Person obligated upon an Account.
"ACCOUNTS" means (i) all rights to the payment of money now owned or hereafter
acquired by Borrower, whether due or to become due and whether or not earned by
performance, including but not limited to, accounts, chattel paper, instruments,
and general intangibles; and (ii) for purposes of this Agreement amounts to
become payable by existing subscribers to Borrower's database services with
respect to subscriptions which are eligible or scheduled for renewal within
ninety (90) days after any date of determination of Eligible Accounts.
"AFFILIATE" means any Person which directly or indirectly controls, is
controlled by, or is under common control with Borrower. "Control," "controlled
by" and "under common control with" mean direct or indirect possession of the
power to direct or cause the direction of management or policies (whether
through ownership of voting securities, by contract or otherwise); provided,
that control shall be conclusively presumed when any Person or affiliated group
directly or indirectly owns five percent (5%) or more of the securities having
ordinary voting power for the election of directors of a corporation.
"AGREEMENT" means this Loan and Security Agreement and each Supplement thereto,
as each may be amended or supplemented from time to time.
"BANKRUPTCY CODE" means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C.
(S)101, et seq.), as amended.
-- ---
"BASIC INTEREST" means the fixed rate of interest payable on the outstanding
balance of each Loan at the applicable Designated Rate.
"BORROWING DATE" means the Business Day on which the proceeds of a Loan are
disbursed by Lender.
"BORROWING REQUEST" means a written request from Borrower in substantially the
form of Exhibit "B" to the Supplement, requesting the funding of one or more
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Loans on a particular Borrowing Date.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day on which
commercial banks in New York City or San Francisco are authorized or required by
law to close.
"CLOSING DATE" means the date of this Agreement.
"COLLATERAL" means all Debtor's Accounts, Deposit Accounts, Equipment, Fixtures,
General Intangibles, Goods, Inventory, Rights to Payment, and securities now
owned or hereafter acquired, wherever located, and whether held by Debtor or any
third party, and all royalties, proceeds and products thereof, including all
insurance and condemnation proceeds ("Proceeds"), and all Records.
14
<PAGE>
"COMMITMENT" means the obligation of Lender to make Loans to Borrower up to the
aggregate principal amount set forth in the Supplement.
"DEFAULT" means an event which with the giving of notice, passage of time, or
both would constitute an Event of Default.
"DEFAULT RATE" is defined in Section 2.7.
"DEPOSIT ACCOUNTS" means all Borrower's demand, time, savings, passbook or
similar accounts maintained with a financial institution or credit union.
"DESIGNATED RATE" means the rate of interest per annum described in the
Supplement as being applicable to an outstanding Loan from time to time.
"ELIGIBLE ACCOUNT" shall mean an Account:
(A) Arising from the sale or lease of goods, or the licensing of data, or the
performance of services by Borrower in the ordinary course of Borrower's
business;
(B) Against which is asserted no defense, counterclaim, discount, or setoff;
(C) That is an accurate statement of the indebtedness incurred by the Account
Debtor;
(D) Owned by Borrower free and clear of all liens, rights, claims, and
interests of others except security interests in favor of Lender;
(E) That does not arise from a sale or lease to or performance of services for
an individual or entity employed by or having common ownership with
Borrower;
F) That is not in default. An Account shall be deemed in default upon the
occurrence of any of the following:
(I) The Account is not paid or payable within a ninety (90)-day period
starting from the original invoice date;
(II) The Account Debtor suspends business, becomes insolvent, or fails to
pay its debts generally as they come due; or
(III) Any petition is filed by or against the Account Debtor under the
Bankruptcy Reform Act, Title 11 of the United States Code or under any
other law relating to bankruptcy, insolvency, reorganization or other
relief for debtors.
(G) That is not the obligation of an Account Debtor that is the federal
government, any state or political subdivision thereof, unless Borrower has
complied in form and substance satisfactory to Lender with the Assignment
of Claims Act(s) or any successor thereof in effect from time to time, or
other applicable law(s) or regulation(s);
(H) That is not the obligation of an Account Debtor located in a foreign
country, unless Lender consents in writing and the Account is insured by
the Foreign Credit Insurance Association or covered by a letter of credit
issued or confirmed by a bank located in the United States of America
acceptable to Lender, each such insurance policy or letter of credit being
in form and substance satisfactory to Lender; and
(I) That is otherwise acceptable to Lender.
"ENVIRONMENTAL LAWS" means all federal, state or local laws, statutes, common
law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any governmental authorities, in each case
relating to environmental, health, or safety matters.
"EQUIPMENT" means all of Borrower's equipment now owned or hereafter acquired,
including but not limited to machinery, machine parts, furniture, furnishings
and all tangible personal property used in the business of Borrower and all such
property which is or is to become fixtures on real property, and all
improvements, replacements, accessions and additions thereto, wherever located,
and all proceeds thereof arising from the sale, lease, rental or other use or
disposition of any such property, including all rights to payment with respect
to insurance or condemnation, returned premiums, or any cause of action relating
to any of the foregoing.
"EVENT OF DEFAULT" means any event described in Section 7.1.
15
<PAGE>
"FIXTURES" means all items of personal property of Borrower that are so related
to the real property upon which they are located that an interest in them arises
under real property law, and improvements, replacements, parts, accessions and
additions thereto, and substitutions therefor.
"GAAP" means generally accepted accounting principles and practices consistent
with those principles and practices promulgated or adopted by the Financial
Accounting Standards Board and the Board of the American Institute of Certified
Public Accountants, their respective predecessors and successors. Each
accounting term used but not otherwise expressly defined herein shall have the
meaning given it by GAAP.
"GENERAL INTANGIBLES" means all personal property of Borrower, other than Goods,
not otherwise defined as Collateral, including without limitation all interests
or claims in insurance policies; literary property; trade names, trade name
rights; Trademarks, Trademark rights, copyrights, Patents, and all applications
therefor; licenses, permits, franchises and like privileges or rights issued by
any governmental or regulatory authority; income tax refunds; customer lists;
claims and causes of action (whether in contract, tort or otherwise), judgments
and all guaranty claims, leasehold interests in personal property, security
interests or other security held by or guaranteed to the Borrower to secure the
payment by an account debtor of any of the Accounts.
"GOODS" means all money and other personal property of Borrower, other than
General Intangibles, not otherwise defined as Collateral.
"INDEBTEDNESS" of any Person means at any date, without duplication and without
regard to whether matured or unmatured, absolute or contingent: (i) all
Obligations of such Person for borrowed money; (ii) all Obligations of such
Person evidenced by bonds, debentures, notes, or other similar instruments;
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business; (iv) all obligations of such Person as lessee under capital
leases; (v) all obligations of such Person to reimburse or prepay any bank or
other Person in respect of amounts paid under a letter of credit, banker's
acceptance, or similar instrument, whether drawn or undrawn; (vi) all
obligations of such Person to purchase securities which arise out of or in
connection with the sale of the same or substantially similar securities; (vii)
all obligations of such Person to purchase, redeem, exchange, convert or
otherwise acquire for cash on a present or deferred basis any capital stock of
such Person or any warrants, rights or options to acquire such capital stock,
now or hereafter outstanding, except to the extent that such obligations remain
performable solely at the option of such Person; (viii) all obligations to
repurchase assets previously sold (including any obligation to repurchase any
accounts or chattel paper under any factoring, receivables purchase, or similar
arrangement); (ix) obligations of such Person under interest rate swap, cap,
collar or similar hedging arrangements; and (x) all obligations of others of any
type described in clause (i) through clause (ix) above guaranteed by such
Person.
"INSOLVENCY PROCEEDING" means (a) any case, action or proceeding before any
court or other governmental authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshalling of assets for creditors, or other, similar arrangement
in respect of its creditors generally or any substantial portion of its
creditors, undertaken under U.S. Federal, state or foreign law, including the
Bankruptcy Code.
"INVENTORY" means all Borrower's raw materials, advertising, packaging and
shipping materials, work in process, finished goods and goods held for sale or
lease or furnished under contracts of service, and all returned and repossessed
goods, and all goods covered by documents of title, including warehouse
receipts, bills of lading and all other documents of every type covering all or
any part of the Collateral.
"LIEN" means any voluntary or involuntary security interest, mortgage, pledge,
claim, charge, encumbrance, title retention agreement, or third party interest,
covering all or any part of the property of Borrower or any other Person.
"LOAN" means any Term Loan or Equipment Loan.
"LOAN DOCUMENTS" means, individually and collectively, this Loan and Security
Agreement, the Supplement, each Note, and any other security or pledge
agreement(s), any Warrants issued by Borrower in connection with this Agreement,
and all other contracts, instruments, addenda and documents executed in
connection with this Agreement or the
16
<PAGE>
extensions of credit which are the subject of this Agreement.
"MATERIAL ADVERSE EFFECT" or "MATERIAL ADVERSE CHANGE" means (a) a material
adverse change in, or a material adverse effect upon, the operations, business,
properties, or condition (financial or otherwise) of Borrower; (b) a material
impairment of the ability of Borrower to perform under any Loan Document; or (c)
a material adverse effect upon the legality, validity, binding effect or
enforceability against Borrower of any Loan Document.
"MATURITY DATE" means, with regard to a Loan, the earlier of (i) its maturity by
reason of acceleration, or (ii) its stated maturity date; and is the date on
which payment of all outstanding principal, accrued interest, and the Terminal
Payment with respect to such Loan is due.
"NOTE" means a promissory note substantially in the form attached to the
Supplement as Exhibit "A", executed by Borrower evidencing each Loan.
-----------
"OBLIGATIONS" means all debts, obligations and liabilities of Borrower to Lender
currently existing or now or hereafter made, incurred or created under, pursuant
to or in connection with this Agreement, whether voluntary or involuntary and
however arising or evidenced, whether direct or acquired by Lender by assignment
or succession, whether due or not due, absolute or contingent, liquidated or
unliquidated, determined or undetermined, and whether Borrower may be liable
individually or jointly, or whether recovery upon such debt may be or become
barred by any statute of limitations or otherwise unenforceable; and all
renewals, extensions and modifications thereof; and all attorneys' fees and
costs incurred by Lender in connection with the collection and enforcement
thereof as provided for in any Loan Document.
"PATENT LICENSE" means any written agreement now or hereafter in existence
granting to Borrower any right to make, use, sell or practice any invention on
which a Patent is in existence.
"PATENTS" means all of the following: (i) all letters patent of the United
States or any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or any other country,
including, without limitation, registrations, recordings and applications in the
United States Patent and Trademark Office or in any similar office or agency of
the United States, any state thereof or any other country or any political
subdivision thereof, and (ii) all reissues, divisions, continuations,
continuations-in-part, renewals or extensions thereof.
"PATENT COLLATERAL ASSIGNMENT" means any Patent Collateral Assignment executed
and delivered by Borrower in favor of Lender, as the same may be amended from
time to time.
"PERMITTED LIEN" means
(A) Involuntary Liens which, in the aggregate, would not have a Material
Adverse Effect and which in any event would not the Threshold Amount;
(B) Liens for current taxes or other governmental or regulatory assessments
which are not delinquent, or which are contested in good faith by the
appropriate procedures and for which appropriate reserves are maintained;
(C) security interests on any property held or acquired by Borrower in the
ordinary course of business securing Indebtedness incurred or assumed for the
purpose of financing all or any part of the cost of acquiring such property;
provided, that such Lien attaches solely to the property acquired with such
- --------
Indebtedness and that the principal amount of such Indebtedness does not exceed
one hundred percent (100%) of the cost of such property; and further provided,
------- --------
that such property is not equipment with respect to which a Loan has been made
hereunder.
(D) Liens in favor of Lender or Venture Lending & Leasing, Inc.;
(E) bankers' liens, rights of setoff and similar Liens incurred on deposits
made in the ordinary course of business;
(F) materialmen's, mechanics', repairmen's, employees' or other like Liens
arising in the ordinary course of business and which are not delinquent for more
than 45 days or are being contested in good faith by appropriate proceedings;
(G) any judgment, attachment or similar Lien, unless the judgment it secures
has not been discharged or execution thereof effectively stayed and bonded
against pending appeal within 30 days of the entry thereof;
(H) licenses or sublicenses of Patents, Patent Licenses, Trademarks or
Trademark Licenses
17
<PAGE>
permitted under the Trademark Collateral Assignment or the Patent Collateral
Assignment; and.
(I) Liens which have been approved by Lender in writing prior to the Closing
Date.
"PERSON" means any individual or entity.
"QUALIFIED PUBLIC OFFERING" means the closing of a firmly underwritten public
offering of Borrower's common stock with aggregate proceeds of not less than
$10,000,000 (prior to underwriting expenses and commissions).
"RECORDS" means all Borrower's computer programs, software, hardware, source
codes and data processing information, all written documents, books, invoices,
ledger sheets, financial information and statements, and all other writings
concerning Borrower's business.
"RELATED PERSON" means any Affiliate of Borrower, or any officer, employee,
director or equity security holder of Borrower or any Affiliate.
"RIGHTS TO PAYMENT" means all Borrower's accounts, instruments, contract rights,
documents, chattel paper and all other rights to payment, including, without
limitation, the Accounts, all negotiable certificates of deposit and all rights
to payment under any Patent License, any Trademark License, or any commercial or
standby letter of credit.
"TERMINAL PAYMENT" means, with respect to each Loan, an amount payable on the
Maturity Date of such Loan in an amount equal to that percentage of the original
principal amount of such Loan specified in the Supplement.
"TERMINATION DATE" has the meaning specified in the Supplement.
"THRESHOLD AMOUNT" has the meaning specified in the Supplement.
"TRADEMARK LICENSE" means any written agreement now or hereafter in existence
granting to Borrower any right to use any Trademark.
"TRADEMARKS" means all of the following: (i) all trademarks, trade names,
corporate names, company names, business names, fictitious business names, trade
styles, service marks, logos, other source or business identifiers, prints and
labels on which any of the foregoing have appeared or will appear, designs and
general intangibles of like nature, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in
connection therewith, including, without limitation, registrations, recordings
and applications in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any state thereof or any other
country or any political subdivision thereof, and (ii) all reissues, divisions,
continuations, continuations-in-part, renewals or extensions thereof.
"TRADEMARK COLLATERAL ASSIGNMENT" means any Trademark Collateral Assignment
executed and delivered by Borrower in favor of Lender, as the same may be
amended from time to time.
"UCC" means the Uniform Commercial Code as enacted in the applicable
jurisdiction, in effect on the Closing Date and as amended from time to time.
18
<PAGE>
SUPPLEMENT
TO THE
LOAN AND SECURITY AGREEMENT
DATED AS OF FEBRUARY 12, 1999
BETWEEN
COMPS.COM, INC. ("BORROWER")
AND
VENTURE LENDING & LEASING II, INC. ("LENDER")
- --------------------------------------------------------------------------------
This is a Supplement identified in the document entitled Loan and
Security Agreement dated as of February 12, 1999 between Borrower and Lender.
All capitalized terms used in this Supplement and not otherwise defined in this
Supplement have the meanings ascribed to them in Section 10 of the Loan and
Security Agreement, which is incorporated in its entirety into this Supplement.
In the event of any inconsistency between the provisions of that document and
this Supplement, this Supplement is controlling. Execution of this Supplement by
the Lender and Borrower shall constitute execution of the Loan and Security
Agreement.
In addition to the provisions of the Loan and Security Agreement, the
parties agree as follows:
1) - ADDITIONAL DEFINITIONS:
-------------------------
"BORROWING BASE" means, with respect to any Term Loan as of date of
determination, an amount at all times equal the lesser of (a) $1,800,000 minus
any Equipment Loans funded hereunder; or (b) eighty percent (80%) of Borrower's
Eligible Accounts.
"COLLATERAL COVERAGE RATIO" means, as of any date of determination,
the ratio of (i) Borrower's total Obligations to Lender then outstanding, to
(ii) the sum of (a) 80% of Eligible Accounts.
"COMMITMENT": Lender commits to make Term Loans or Equipment Loans to
---------- ---------------
Borrower up to the aggregate, original principal amount of One Million Eight
Hundred Thousand Dollars ($1,800,000.00). Subject to the limitations set forth
in this Supplement and the Loan and Security Agreement, a Loan may be advanced
as an Equipment Loan, the proceeds of which shall be used to finance Borrower's
acquisition or carrying of computer, research and development and general
purpose office equipment; up to fifty percent (50%) of the original principal
amount of Equipment Loans advanced may be used to finance software or for tenant
improvements at premises leased by Borrower. A Loan may also be advanced as a
Term Loan, the proceeds of which shall be used by Borrower for general working
capital purposes. Except to the extent the remaining Commitment is a lesser
amount, each Equipment Loan requested by Borrower to be made on a single
Business Day shall be for a minimum principal amount of $100,000, and each Term
Loan requested by Borrower to be made on a single Business Day shall be for a
minimum principal amount of $100,000 or a multiple thereof.
"DESIGNATED RATE": The Designated Rate is Eight and 75/100 percent
(8.75%) per annum.
"TERMINAL PAYMENT": Each Terminal Payment shall be an amount equal to
Fifteen percent (15%) of the original principal amount of the associated Loan.
"TERMINATION DATE": The Termination Date is the earlier of (a) the
date Lender may terminate making Loans or extending other credit pursuant to the
rights of Lender under Article 7 of the Agreement, or (b) March 31, 2000.
"THRESHOLD AMOUNT": One Hundred Thousand Dollars ($100,000.00).
Page 1
<PAGE>
2) - ADDITIONAL TERMS AND CONDITIONS:
----------------------------------
A. ISSUANCE OF WARRANT TO LENDER. As additional consideration for the
making of the Loans under the Agreement, upon the making of, and as a condition
to, the initial Loan, Lender shall be entitled to receive a warrant to purchase
a number of shares of Class B common stock of Borrower ("Warrant Shares") with
an aggregate initial exercise price of $225,000.00 and a per share exercise
price that is halfway between the last ($1.8031) and the next round of equity
financing. If there is no new equity financing done within the next 18 months of
the date of the Loan agreement then the warrant exercise price will equal $2.70.
The warrant issued under this Agreement shall be in substantially the form
attached hereto as Exhibit "D"; shall be transferable by Lender, subject to
-----------
compliance with applicable securities laws; shall expire not earlier than seven
years from the date of issue and shall include piggy-back registration rights,
"net issuance" provisions, and anti-dilution protections reasonably satisfactory
to Lender and its counsel.
B. LIMITATION ON REIMBURSEMENT OF DOCUMENTATION COSTS. Notwithstanding
anything to the contrary in Section 9.8 of the Loan and Security Agreement,
Borrower's obligation to reimburse Lender its attorneys' fees and costs of
documenting this transaction shall not exceed $2,000.00 .
C. LIMITATION ON EQUIPMENT LOANS. Each Loan shall be in an amount not to
exceed one hundred percent (100%) of the amount paid or payable by Borrower to a
non-affiliated manufacturer, vendor or dealer for an item of equipment as shown
on an invoice therefor (excluding any commissions and any portion of the payment
which relates to the servicing of the equipment and sales taxes payable by
Borrower upon acquisition, and delivery charges). Lender has the right to
approve individual items of Equipment for funding.
D. BROKER FEE. Borrower authorizes and directs Lender, and Lender
agrees, to remit directly to Mr. Doug Wall on each Borrowing Date two percent
(2%) of the proceeds of each Loan, as a broker's fee for the Facilities.
E. PREPAYMENT OF LOANS
(A) MANDATORY PREPAYMENTS OF TERM LOAN. Borrower agrees that if the
aggregate outstanding principal balance of all Term Loans then outstanding on
any date exceeds the Borrowing Base on such date, then Borrower if requested by
Lender will immediately prepay Term Loans in an amount equal to the excess.
(B) MANDATORY PREPAYMENTS OF EQUIPMENT LOANS. Borrower shall be
required to prepay any Equipment Loan from the net proceeds of any insurance or
condemnation awards paid in respect of the items of equipment financed with the
proceeds of such Loan; provided, that such prepayment shall not be required, so
--------
long as no Event of Default otherwise exists, (i) if Borrower uses such net
proceeds to purchase replacements of equipment lost through casualty or
condemnation and such replacement equipment is subject to no Liens other than
Lender's, or (ii) with respect to losses of equipment which in aggregate during
any consecutive twelve-month period has a fair market value or book value,
whichever is more, of $75,000 or less.
(C) PREPAYMENTS GENERALLY. No Loan may be voluntarily prepaid except
as provided in this subsection (c). Borrower may prepay any Loan, in whole or
in part in minimum payments of $50,000 at any time after the first anniversary
of the Borrowing Date for such Loan; provided that any prepayment, whether
--------
voluntary or involuntary as a result of acceleration or otherwise, must be
accompanied by payment of: (i) a premium equal to 2.00% of the amount of
principal so prepaid if such prepayment is made during the 12-month period
between the first and second anniversaries, or a 1.00% premium if such
prepayment is made during the 12-month period between the second and third
anniversaries (there being no premium or penalty payable after the third
anniversary of the Borrowing Date of such Loan); (ii) accrued Basic Interest to
the date of such prepayment; and (iii) all the Terminal Payment on the Loan so
prepaid (or a ratable portion of such Terminal Payment, if less than all of the
Page 2
<PAGE>
Loan is prepaid). Unless otherwise agreed by Lender, any partial prepayment of a
Loan shall be applied in inverse order of maturity to the most remote principal
installment then unpaid on such Loan. No premium or penalty shall be required in
the case of a prepayment of all Loans following Lender's refusal to fund any
portion of the Commitment pursuant to Section 4.2(b) or Section 4.2(f).
F. COMMITMENT FEE. In consideration of Lender's commitments hereunder,
--------------
Borrower shall pay Lender a fee (the "Commitment Fee") in the amount of $12,000.
Lender acknowledges prior receipt of the Commitment Fee.
G. REDUCTION OF WARRANT AND FEE If Lender has not made Loans in the
----------------------------
aggregate principal amount equal to the aggregate Commitment by March 31, 2000,
solely as a result of either the limitation on Lender under Section 4.2(b) or
Lender's determination that the condition precedent in Section 4.2(f) has not
been satisfied, then the maximum number of shares issuable under the Warrant
shall be reduced proportionately based on the ratio of the aggregate principal
amount of Loans actually funded over the aggregate Commitment; and Lender shall
refund to Borrower a proportionate amount of the Commitment Fee.
H. Fundings above $800,000 from this facility will be subject to
Borrower's raising an additional $2,000,000 of equity financing from a venture
capital firm acceptable to Lender or sign a Letter of Intent to do an IPO or a
Mezzanine financing with Venture Capitalist or an Investment Banker acceptable
to Lender.
3) - ADDITIONAL REPRESENTATIONS:
-----------------------------
Borrower represents and warrants that as of the Closing Date:
Its chief executive office is located at: 9888 Carroll Center Rd.
San Diego, CA 92126-4580
Its Inventory is located at: same
Its Equipment is located at: same
Its Records are located at: same
In addition to its chief executive office, Borrower maintains offices
or operates its business at the following locations:
Other than its full corporate name, Debtor has conducted business using
the following trade names or fictitious business names:
Comps Infosystems, Inc.
4) - ADDITIONAL LOAN DOCUMENTS:
----------------------------
Form of Note Exhibit "A"
Form of Borrowing Request Exhibit "B"
Form of Compliance Certificate Exhibit "C"
Patent Collateral Assignment Exhibit "D"
Trademark Collateral Assignment Exhibit "E"
Form of Warrant Exhibit "F"
Page 3
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Supplement as of the
date first above written.
<TABLE>
<S> <C> <C>
BORROWER: LENDER:
COMPS.COM, INC. VENTURE LENDING & LEASING II INC.
By: /s/ C A CRANE By: /s/ SALVADOR O. GUTIERREZ
------------------------- -----------------------------
Name: C A Crane Name: Salvador O. Gutierrez
----------------------- ---------------------------
Title: President and CEO Title: President
---------------------- --------------------------
Address for Notices: Attn: Chief Financial Officer Attn: Chief Financial Officer
9888 Carroll Center Rd. 2010 North First Street, Suite 310
San Diego, CA 92126-4580 San Jose, CA, 95131
Fax # (619) 684-3292 Fax # (408)436-8625
</TABLE>
Page 4
<PAGE>
EXHIBIT "A"
-----------
[Note No. X-XXX]
FORM OF PROMISSORY NOTE
$____________________, _____________________, 199___
San Jose, California
The undersigned ("Borrower") promises to pay to the order of VENTURE
LENDING & LEASING II, INC., a Maryland corporation ("Lender") at its office at
2010 North First Street, Suite 310, San Jose, California 95131, or at such other
place as Lender may designate in writing, in lawful money of the United States
of America, the principal sum of _____________________________________ Dollars
($__________), with Basic Interest thereon from the date hereof until maturity,
whether scheduled or accelerated, at a fixed rate per annum of ____________
percent (___%), and with a Terminal Payment in the sum of __________[15% of face
------------
amount]__________ Dollars ($__________) payable on the Maturity Date.
- -------
This Note is one of the Notes referred to in, and is entitled to all the
benefits of, a Loan Agreement dated as of February __, 1999, between Borrower
and Lender. Each capitalized term not otherwise defined herein shall have the
meaning set forth in the Loan Agreement. The Loan Agreement contains provisions
for the acceleration of the maturity of this Note upon the happening of certain
stated events.
Principal of and interest on this Note shall be payable as follows: (Actual
Notes will be for either a Term Loan or an Equipment Loan)
TERM LOANS
On the Borrowing Date, Borrower shall pay (i) Basic Interest, in advance,
on the outstanding principal balance of this Note at the Designated Rate for the
period from the Borrowing Date through ___[THE LAST DAY OF THE SAME MONTH]___;
--------------------------------
(ii) a first (1st) amortization installment of principal and Basic Interest in
the amount of $_________________, in advance for the month of [ first full month
-----------------
after Borrowing Date ]; and (iii) a 36th amortization installment of principal
- ---------------------- ----
and Basic Interest in the amount of $_________________ in advance for the month
of [36th full month after the Borrowing Date].
----------------------------------------
Commencing on the first day of the second full month after the Borrowing
Date, and continuing on the first day of each consecutive month thereafter,
principal and Basic Interest shall be payable, in advance, in thirty-three (33)
-----------------
equal consecutive installments of ________________________________________
Dollars ($__________) each, with a 34th installment equal to the entire unpaid
----
principal balance and accrued Basic Interest on _______________, 20__. The
Terminal Payment amount shall be payable on [first day of 36th full month after
----------------------------------
Borrowing Date].
- --------------
EQUIPMENT LOANS
On the Borrowing Date, Borrower shall pay (i) Basic Interest, in advance,
on the outstanding principal balance of this Note at the Designated Rate for the
period from the Borrowing Date through ___[THE LAST DAY OF THE SAME MONTH]___;
--------------------------------
(ii) a first (1st) amortization installment of principal and Basic Interest in
the amount of $_________________, in advance for the month of [ first full month
-----------------
after Borrowing Date ]; and (iii) a 48th amortization installment of principal
- ---------------------- ----
and Basic Interest in the amount of $_________________ in advance for the month
of [48th full month after the Borrowing Date].
----------------------------------------
<PAGE>
Commencing on the first day of the second full month after the Borrowing
Date, and continuing on the first day of each consecutive month thereafter,
principal and Basic Interest shall be payable, in advance, in forty-five (45)
---------------
equal consecutive installments of ________________________________________
Dollars ($__________) each, with a 46th installment equal to the entire unpaid
----
principal balance and accrued Basic Interest on _______________, 20__. The
Terminal Payment amount shall be payable on [first day of 48th full month after
----------------------------------
Borrowing Date].
- --------------
Any unpaid payments of principal or interest on this Note shall bear
interest from their respective maturities, whether scheduled or accelerated, at
a rate per annum equal to the Default Rate. Borrower shall pay such interest on
demand.
Interest, charges and fees shall be calculated for actual days elapsed on
the basis of a 360-day year, which results in higher interest, charge or fee
payments than if a 365-day year were used. In no event shall Borrower be
obligated to pay interest, charges or fees at a rate in excess of the highest
rate permitted by applicable law from time to time in effect.
This Note shall be governed by, and construed in accordance with, the laws
of the State of California.
COMPS.COM, INC.
By:________________________________
Name: _____________________________
Its:_______________________________
<PAGE>
EXHIBIT B
BORROWING REQUEST
________________, ____
Venture Lending & Leasing II, Inc.
2010 North First Street, Suite 310
San Jose, CA 95131
Re: COMPS.COM, INC.
Gentlemen:
Reference is made to the Loan and Security Agreement dated as of
February 12, 1999 (as the same have been and may be amended from time to time,
the "Loan Agreement", the capitalized terms used herein as defined therein),
between Venture Lending & Leasing II, Inc. on one hand and COMPS.COM, INC. (the
"Company") on the other.
The undersigned is an Officer of the Company, authorized to borrow
under The Loan Agreement, and hereby requests Loan under the Loan Agreement, and
in that connection certifies as follows:
1. The aggregate amount of the proposed Loan is $____________. The
Business Day of the proposed Loan is _____ , 1997.
2. Type of Loan requested is ________________________________.
3. As of this date, no Default or Event of Default has occurred and
is continuing, or will result from the making of the proposed Loan, and the
representations and warranties of the Company contained in the Loan Agreement
are true and correct in all material respects.
4. No Material Adverse Change has occurred since the date of the
most recent financial statements submitted to you by the Company.
The Company agrees to notify you promptly before the funding of the
Loan if any of the matters to which I have certified above shall not be true and
correct on the Borrowing Date.
Very Truly Yours,
By:________________________________
Name: _____________________________
Its:_______________________________
<PAGE>
EXHIBIT C
COMPLIANCE CERTIFICATE
Venture Lending & Leasing II, Inc.
2010 North First Street, Suite 310
San Jose, CA 95131
Re: COMPS.COM, INC.
Gentlemen:
Reference is made to the two Loan and Security Agreement dated as of February
12, 1999 (as the same have been and may be amended from time to time, the "Loan
Agreement", the capitalized terms used herein as defined therein), between
Venture Lending & Leasing II, Inc. on one hand and COMPS.COM, INC. (the
"Company") on the other.
The undersigned authorized representative of the Company hereby certifies that
in accordance with the terms and conditions of the Loan Agreement, the Company
is in complete compliance for the period ending ___________ with all required
conditions and terms except as noted below. Attached herewith are the required
documents supporting the above certification. The representative further
certifies that these are prepared in accordance with Generally Accepted
Accounting Principles and are consistent from one period to the next except as
explained below.
Indicate compliance status by circling Yes/No under "Complies"
<TABLE>
<CAPTION>
REPORTING REQUIREMENT REQUIRED COMPLIES
- --------------------- -------- --------
<S> <C> <C>
Interim Financial Statements Monthly within 45 days YES / NO
Audited Financial Statements FYE within 120 days YES / NO
FINANCIAL COVENANTS REQUIRED COMPLIES
- ------------------- -------- --------
Collateral Coverage 80% of Eligible Accounts Receivable YES / NO
REQUIRED EXPLANATIONS:
- ---------------------
</TABLE>
________________________________________________________________________________
________________________________________________________________________________
Very Truly Yours,
By: ______________________________
Name: ____________________________
Its:______________________________
<PAGE>
EXHIBIT D
See Exhibit 10.47 to Registration Statement on Form S-1
<PAGE>
EXHIBIT E
See Exhibit 10.48 to Registration Statement on Form S-1
<PAGE>
EXHIBIT F
See Exhibit 10.49 to Registration Statement on Form S-1
<PAGE>
EXHIBIT 10.47
PATENT COLLATERAL ASSIGNMENT
----------------------------
This Agreement is made on the 12th day of February, 1999, between COMPS.COM,
Inc. a Delaware corporation, having a mailing address at 9888 Carroll Center
Rd., San Diego, CA 92126-4580 ("Assignor"), and Venture Lending & Leasing II,
Inc. ("Assignee"). Assignee's address is 2010 North First Street, Suite 310, San
Jose, California 95131.
RECITALS
--------
A. Assignor owns the Patents and Patent applications listed on Schedule 1
----------
hereto, and is a party to the Patent Licenses listed on Schedule 1 hereto;
----------
B. Assignor and Assignee are parties to a Loan and Security Agreement of even
date herewith (as the same may be amended from time to time, the "Loan
Agreement");
C. Pursuant to the terms of the Loan Agreement of even date herewith Assignor
has granted to Assignee a security interest in certain personal property assets
of Assignor, including all right, title and interest of Assignor in, to and
under all of Assignor's Patents (as defined in the Loan Agreement), all of
Assignor's Patent applications and all of Assignor's Patent Licenses (as defined
in the Loan Agreement), whether presently existing or hereafter arising or
acquired, and all products and proceeds thereof, including, without limitation,
any and all causes of action which may exist by reason of infringement thereof
for the full term of the Patents, to secure the payment of the Obligations (as
defined in the Loan Agreement);
C. Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Loan and Security Agreement.
NOW, THEREFORE, in consideration of the premises, Assignor hereby agrees with
Assignee as follows:
1. To secure the complete and timely satisfaction of all Obligations,
Assignor hereby grants, assigns and conveys to Assignee a continuing security
interest in and lien on all of Assignor's entire right, title and interest in
and to the Patents, Patent applications and Patent Licenses listed on Schedule 1
----------
hereto (as the same may be amended pursuant hereto from time to time),
including, without limitation, all proceeds thereof (such as, by way of example,
license royalties and proceeds of infringements, all rights corresponding
thereto throughout the world and all reissues, divisions, continuations,
renewals, extensions and continuations-in-part thereof (collectively called the
"Patents").
2. Assignor covenants and warrants that:
a) The Patents are subsisting and have not been adjudged
invalid or unenforceable, in whole or in part;
b) To the best of Assignor's knowledge, each of the Patents is
valid and enforceable and Assignor has notified Assignee in writing of all prior
art (including public uses and sales) of which it is aware;
c) Assignor is the sole and exclusive owner of the entire and
unencumbered right, title and interest in and to each of the Patents, free and
clear of any liens, charges and encumbrances, including, without limitation,
pledges, assignments, licenses, shop rights and covenants by Assignor not to sue
third persons, except (i) Permitted Liens; and (ii) any license disclosed in
------
Schedule 1; and
- ----------
<PAGE>
d) Assignor has the unqualified right to enter into this
Agreement and perform its terms.
3. Assignor agrees that, until all of the Obligations shall have been
satisfied in full, it will not enter into any agreement (for example, a license
agreement) which is inconsistent with Assignor's obligations under this
Agreement, without Assignee's prior written consent; provided, that so long as
--------
no Default or Event of Default (as defined in the Loan Agreement) shall have
occurred and be continuing, Assignor may grant licenses to third parties to use
the Patents in the ordinary course of business of both Assignor and such third
party on arm's length and customary business terms.
4. If, before the Obligations shall have been satisfied in full,
Assignor shall obtain rights to any new patentable inventions, or become
entitled to the benefit of any Patent application or Patent for any reissue,
division, continuation, renewal, extension, or continuation-in-part of any
Patent or any improvement on any Patent, the provisions of paragraph 1 shall
automatically apply thereto and Assignor shall give to Assignee prompt notice
thereof in writing.
5. Assignor authorizes Assignee unilaterally to modify this Agreement
by amending Schedule 1 to include any future Patents and Patent applications
----------
which are Patents under paragraph 1 or paragraph 4 hereof.
6. If any Event of Default (as defined in the Loan Agreement) shall
have occurred and be continuing, Assignee shall have, in addition to all other
rights and remedies given it by this Agreement or any other Loan Document (as
defined in the Loan Agreement), those allowed by law and the rights and remedies
of a secured party under the Uniform Commercial Code as enacted in any
jurisdiction in which the Patents may be located and, without limiting the
generality of the foregoing, Assignee may immediately, without demand of
performance and without other notice (except as set forth below) or demand
whatsoever to Assignor, all of which are hereby expressly waived, and without
advertisement, sell at public or private sale or otherwise realize upon, the
whole or from time to time any part of the Patents, or any interest which the
Assignor may have therein, and after deducting from the proceeds of sale or
other disposition of the Patents all expenses (including reasonable expenses for
brokers' fees and legal services), shall apply the residue of such proceeds
toward the payment of the Obligations. Any remainder of the proceeds after
payment in full of the Obligations shall be paid over to Assignor. Notice of
any sale or other disposition of the Patents shall be given to Assignor at least
ten (10) days before the time of any intended public or private sale or other
disposition of the Patents is to be made, which Assignor hereby agrees shall be
reasonable notice of such sale or other disposition. At any such sale or other
disposition Assignee may, to the extent permissible under applicable law,
purchase the whole or any part of the Patents sold, free from any right of
redemption on the part of Assignor, which right is hereby waived and released.
7. Assignor hereby authorizes and empowers Assignee to make,
constitute and appoint any officer or agent of Assignee, as Assignee may select
in its exclusive discretion, as Assignor's true and lawful attorney-in-fact,
with the power, after and during the continuance of an Event of Default, to
endorse Assignor's name on all applications, documents, papers and instruments
necessary for Assignee to use the Patents, or to grant or issue any exclusive or
nonexclusive license under the Patents to any third person, or necessary for
Assignee to assign, pledge, convey or otherwise transfer title in or dispose of
the Patents to any third person as a part of Assignee's realization on such
collateral upon acceleration of the Obligations following an Event of Default.
Assignor hereby ratifies all that such attorney shall lawfully do or cause to be
done by virtue hereof. This power of attorney being coupled with an interest
shall be irrevocable for the life of this Agreement.
8. At such time as Assignor shall completely satisfy all of the
Obligations, this Agreement shall terminate and Assignee shall execute and
deliver to Assignor all assignments, reconveyances or other instruments as may
be reasonably requested by Assignor to re-vest in Assignor full title to the
Patents, subject to any disposition thereof which may have been made by Assignee
pursuant hereto.
<PAGE>
9. Any and all fees, costs and expenses, of whatever kind or nature,
including the reasonable attorneys' fees and legal expenses incurred by Assignee
in connection with the preparation of this Agreement and all other documents
relating hereto and the consummation of this transaction, the filing or
recording of any documents (including all taxes in connection therewith) in
public offices, the payment or discharge of any taxes, counsel fees, maintenance
fees, encumbrances or otherwise protecting, maintaining or preserving the
Patents, or in defending or prosecuting any actions or proceedings arising out
of or related to the Patents, shall be borne and paid by Assignor on demand by
Assignee and until so paid shall be added to the principal amount of the
Obligations and shall bear interest at the highest applicable Default Rate (as
defined in the Loan Agreement).
10. Assignor shall have the duty, through counsel reasonably
acceptable to Assignee, to prosecute diligently any Patent applications pending
as of the date of this Agreement or thereafter until the Obligations shall have
been paid in full, to make application on unpatented but patentable inventions
and to preserve and maintain all rights in Patent applications and Patents,
including, without limitation, the payment of all maintenance fees. Any
expenses incurred in connection with such an application shall be borne by
Assignor. The Assignor shall not abandon any right to file a Patent
application, or any pending Patent application or Patent without the consent of
Assignee, which consent shall not be unreasonably withheld.
11. Assignor shall have the right, with the consent of Assignee,
which shall not be unreasonably withheld, to bring suit in its own name, and to
join Assignee, if necessary, as a party to such suit so long as Assignee is
satisfied that such joinder will not subject it to any risk of liability, to
enforce the Patents. Assignor shall promptly, upon demand, reimburse and
indemnify Assignee for all damages, costs and expenses, including reasonable
attorneys' fees incurred by Assignee, in accordance with the Loan Agreement.
12. No course of dealing between Assignor and Assignee, nor any
failure to exercise, nor any delay in exercising, on the part of Assignee, any
right, power or privilege hereunder or under the Loan Agreement shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder or thereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
13. All of Assignee's rights and remedies with respect to the
Patents, whether established hereby or by the Loan & SecurityAgreement,
Agreement or any other agreements or by law shall be cumulative and may be
exercised singularly or concurrently.
14. The provisions of this Agreement are severable, and if any clause
or provision shall be held invalid and unenforceable in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall affect only such
clause or provision, or part thereof, in such jurisdiction, and shall not in any
manner affect such clause or provision in any other jurisdiction, or any clause
or provision of this Agreement in any jurisdiction.
15. This Agreement is subject to modification only by a writing
signed by both parties, except as provided in paragraph 5.
16. This Agreement shall be binding upon Assignor and Assignee and
their respective permitted successors and assigns, and shall inure to the
benefit of Assignor, Assignee and the respective permitted successors and
assigns of Assignor and Assignee.
17. The validity and interpretation of this Agreement and the rights
and obligations of the parties shall be governed by the laws of the State of
California.
<PAGE>
WITNESS the execution hereof under seal as of the day and year first above
written.
COMPS.COM, INC.
By: /s/ C A CRANE
--------------------------
Name: C A Crane
------------------------
Title: CEO
-----------------------
VENTURE LENDING & LEASING II, INC
By: /s/ SALVADOR O. GUTIERREZ
--------------------------
Name: Salvador O. Gutierrez
------------------------
Title: President
-----------------------
<PAGE>
SCHEDULE 1 TO
PATENT COLLATERAL ASSIGNMENT
A. PATENTS AND PATENT APPLICATIONS:
Application Issue or Expiration
or Patent No. Filing Date Date Title
- ------------- ----------- ---- -----
B. PATENT LICENSES:
Corresponding Date License Termination
Patent No. Granted Licensee Date
- ------------- ------- -------- ----
<PAGE>
EXHIBIT 10.48
TRADEMARK COLLATERAL ASSIGNMENT
-------------------------------
THIS AGREEMENT is made on the 12th day of February, 1999, between
COMPS.COM, Inc. a Delaware corporation, having a mailing address at 9888 Carroll
Center Rd., San Diego, CA 92126-4580 ("Assignor"), and Venture Lending & Leasing
II, Inc., ("Assignee"). Assignee's address is 2010 North First Street, Suite
310, San Jose, California 95131.
RECITALS
--------
A. Assignor owns the Trademarks, Trademark registrations and Trademark
applications listed on Schedule 1 hereto, and is a party to the Trademark
----------
Licenses listed on Schedule 1 hereto:
----------
B. Assignor and Assignee are parties to a Loan and Security Agreement of
even date herewith (as the same may be amended from time to time, the "Loan
Agreement");
C. Pursuant to the terms of the Loan Agreement, Assignor has granted to
Assignee a security interest in certain personal property assets of Assignor,
including all right, title and interest of Assignor in, to and under all
Assignor's Trademarks (as defined in the Loan Agreement), Trademark
registrations, Trademark applications and Trademark Licenses (as defined in the
Loan Agreement), whether presently existing or hereafter arising or acquired,
together with the goodwill of the business symbolized by the Trademarks and the
applications therefor and the registrations thereof, and all products and
proceeds thereof, including, without limitation, any and all causes of action
which may exist by reason of infringement or dilution thereof or injury to the
associated goodwill, to secure the payment of all amounts owing under the Loan
Agreement.
D. Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Loan Agreement.
NOW, THEREFORE, in consideration of the premises, Assignor hereby agrees
with Assignee as follows:
1. To secure the complete and timely satisfaction of all Obligations
(as defined in the Loan Agreement), Assignor hereby grants, assigns and conveys
to Assignee a continuing security interest in and lien on all of Assignor's
right, title and interest in and to the Trademarks, Trademark applications and
Trademark Licenses listed on Schedule 1 hereto (as the same may be amended
----------
pursuant hereto from time to time), including, without limitation, all renewals
thereof, all proceeds of infringement suits, the right to sue for past, present
and future infringements and all rights corresponding thereto throughout the
world (all of the foregoing are collectively called the "Trademarks"), and the
goodwill of the business to which each of the Trademarks relates.
2. Assignor covenants and warrants that:
a) The Trademarks are subsisting and have not been adjudged
invalid or unenforceable;
b) To the best of Assignor's knowledge, each of the Trademarks
is valid and enforceable;
c) No claim has been made that the use of any of the Trademarks
does or may violate the rights of any third person;
d) Assignor is the sole and exclusive owner of the entire and
unencumbered right, title and interest in and to each of the Trademarks, free
and clear of any liens, charges and encumbrances, including, without limitation,
pledges, assignments, licenses, registered user agreements and covenants by
Assignor not to sue third persons, except (i) Permitted Liens; and (ii) any
license disclosed in Schedule 1;
----------
<PAGE>
e) Assignor has the unqualified right to enter into this
Agreement and perform its terms;
f) Assignor has used, and will continue to use for the duration
of this Agreement, proper statutory notice in connection with its use of the
Trademarks; and
g) Assignor has used, and will continue to use for the duration
of this Agreement, consistent standards of quality in its manufacture of
products sold under the Trademarks.
3. Assignor hereby grants to Assignee and its employees and Assignee
the right to visit Assignor's plants and facilities which manufacture, inspect
or store products sold under any of the Trademarks, and to inspect the products
and quality control records relating thereto at reasonable times during regular
business hours. Assignor shall do any and all acts required by Assignee to
ensure Assignor's compliance with paragraph 2(g).
4. Assignor agrees that, until all of the Obligations shall have been
satisfied in full, it will not enter into any agreement (for example, a license
agreement) which is inconsistent with Assignor's obligations under this
Agreement, without Assignee's prior written consent; provided, that so long as
--------
no Default or Event of Default (as defined in the Loan Agreement) shall have
occurred and be continuing, Assignor may grant licenses to third parties to use
the Trademarks in the ordinary course of business of both Assignor and such
third party on arm's length and customary business terms.
5. If, before the Obligations shall have been satisfied in full,
Assignor shall obtain rights to any new Trademarks, the provisions of paragraph
1 shall automatically apply thereto and Assignor shall give Assignee prompt
written notice thereof.
6. Assignor authorizes Assignee unilaterally to modify this Agreement
by amending Schedule 1 to include any future Trademarks and Trademark
----------
applications covered by paragraphs 1 and 5 hereof.
7. If any Event of Default (as defined in the Loan Agreement) shall
have occurred and be continuing, Assignee shall have, in addition to all other
rights and remedies given it by this Agreement or any other Loan Document (as
defined in the Loan Agreement), those allowed by law and the rights and remedies
of a secured party under the Uniform Commercial Code as enacted in any
jurisdiction in which the Trademarks may be located and, without limiting the
generality of the foregoing, the Assignee may immediately, without demand of
performance and without other notice (except as set forth below) or demand
whatsoever to Assignor, all of which are hereby expressly waived, and without
advertisement, sell at public or private sale or otherwise realize upon, all or
from time to time any of the Trademarks, or any interest which the Assignor may
have therein, and after deducting from the proceeds of sale or other disposition
of the Trademarks all expenses (including all reasonable expenses for brokers'
fees and legal services), shall apply the residue of such proceeds toward the
payment of the Obligations. Any remainder of the proceeds after payment in full
of the Obligations shall be paid over to Assignor. Notice of any sale or other
disposition of the Trademarks shall be given to Assignor at least ten (10) days
before the time of any intended public or private sale or other disposition of
the Trademarks is to be made, which Assignor hereby agrees shall be reasonable
notice of such sale or other disposition. At any such sale or other disposition
Assignee or its assignee may, to the extent permissible under applicable law,
purchase the whole or any part of the Trademarks sold, free from any right of
redemption on the part of Assignor, which right is hereby waived and released.
8. At such time as Assignor shall completely satisfy all of the
Obligations, this Agreement shall terminate and Assignee shall execute and
deliver to Assignor all assignments, reconveyances or other instruments as may
be necessary or proper to re-vest in Assignor full title to the Trademarks,
subject to any disposition thereof which may have been made by Assignee pursuant
hereto.
9. Any and all fees, costs and expenses, of whatever kind or nature,
including the reasonable attorneys' fees and legal expenses incurred by Assignee
in connection with the preparation of this Agreement and all other documents
relating hereto and the consummation of this transaction, the filing or
recording of any documents (including all taxes in connection therewith) in
public offices, the payment or discharge of any taxes, counsel fees,
<PAGE>
maintenance fees, encumbrances or otherwise protecting, maintaining or
preserving the Trademarks, or in defending or prosecuting any actions or
proceedings arising out of or related to the Trademarks, shall be borne and paid
by Assignor on demand by Assignee and until so paid shall be added to the
principal amount of the Obligations and shall bear interest at the highest
applicable Default Rate (as defined in the Loan Agreement).
10. Assignor shall have the duty, through counsel reasonably
acceptable to Assignee, to prosecute diligently any Trademark applications
pending as of the date of this Agreement or thereafter until the Obligations
shall have been paid in full, to make federal application on registrable but
unregistered Trademarks, to file and prosecute opposition and cancellation
proceedings and to do any and all acts which are necessary or desirable to
preserve and maintain all rights in the Trademarks. Any expenses incurred in
connection with the Trademarks shall be borne by Assignor. The Assignor shall
not abandon any Trademark without the consent of Assignee, which consent shall
not be unreasonably withheld.
11. Assignor shall have the right, with the prior written consent of
Assignee, which will not be unreasonably withheld, to bring any opposition
proceedings, cancellation proceedings or lawsuit in its own name to enforce or
protect the Trademarks, in which event Assignee may, if necessary, be joined as
a nominal party to such suit if Assignee shall have been satisfied that it is
not thereby incurring any risk of liability because of such joinder. Assignor
shall promptly, upon demand, reimburse and indemnify Assignee for all damages,
costs and expenses, including reasonable attorneys' fees incurred by Assignee,
in accordance with the Loan Agreement.
12. Assignor hereby authorizes and empowers Assignee to make,
constitute and appoint any officer or Assignee of Assignee as Assignee may
select, in its exclusive discretion, as Assignor's true and lawful attorney-in-
fact, with the power, after and during the continuance of an Event of Default,
to endorse Assignor's name on all applications, documents, papers and
instruments necessary for Assignee to use the Trademarks, or to grant or issue
any exclusive or nonexclusive license under the Trademarks to anyone else, or
necessary for Assignee to assign, pledge, convey or otherwise transfer title in
or dispose of the Trademarks to any third person as a part of Assignee's
realization on such collateral upon acceleration of the Obligations following an
Event of Default. Assignor hereby ratifies all that such attorney shall
lawfully do or cause to be done by virtue hereof. This power of attorney being
coupled with an interest shall be irrevocable for the life of this Agreement.
13. If Assignor fails to comply with any of its obligations
hereunder, Assignee may do so in Assignor's name or in Assignee's name, but at
Assignor's expense, and Assignor hereby agrees to reimburse Assignee in full for
all expenses, including reasonable attorneys' fees, incurred by Assignee in
protecting, defending and maintaining the Trademarks.
14. No course of dealing between Assignor and Assignee, nor any
failure to exercise, nor any delay in exercising, on the part of Assignee, any
right, power or privilege hereunder or under the Loan Agreement shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder or thereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
15. All of Assignee's rights and remedies with respect to the
Trademarks, whether established hereby or by the Security Agreement, the Loan
Agreement or any other agreements or by law, shall be cumulative and may be
exercised singularly or concurrently.
16. The provisions of this Agreement are severable, and if any clause
or provision shall be held invalid and unenforceable in whole or in part in any
jurisdiction, then such invalidity or unenforceability shall affect only such
clause or provision, or part thereof, in such jurisdiction, and shall not in any
manner affect such clause or provision in any other jurisdiction, or any other
clause or provision of this Agreement in any jurisdiction.
17. This Agreement is subject to modification only by a writing
signed by both parties, except as provided in paragraph 6.
<PAGE>
18. This Agreement shall be binding upon Assignor and Assignee and
their respective permitted successors and assigns, and shall inure to the
benefit of Assignor, Assignee and the respective permitted successors and
assigns, of Assignee and Assignor.
19. The validity and interpretation of this Agreement and the rights
and obligations of the parties shall be governed by the laws of the State of
California.
WITNESS the execution hereof under seal as of the day and year first
above written.
COMPS.COM, INC.
By: /s/ C CRANE
---------------------------
Name: C A Crane
-------------------------
Title: President and CEO
------------------------
VENTURE LENDING & LEASING II, INC.
By: /s/ SALVADOR GUTIERREZ
---------------------------
Name: Salvador Gutierrez
-------------------------
Title: President
------------------------
<PAGE>
SCHEDULE 1 TO
TRADEMARK COLLATERAL ASSIGNMENT
A. TRADEMARK AND TRADEMARK APPLICATIONS:
Application Issue or Expiration
or Trademark No. Filing Date Date Title
- ---------------- ----------- ---------- -----
B. TRADEMARK LICENSES:
Corresponding Date License Termination
Trademark No. Granted Licensee Date
- ------------- ------------ -------- ----
<PAGE>
EXHIBIT 10.49
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 TO PURCHASE
SHARES OF CLASS B COMMON STOCK OF
COMPS.COM, INC.
(Void after February 11, 2006)
This certifies that VENTURE LENDING & LEASING II, INC., a Maryland corporation,
or assigns (the "Holder"), for value received, is entitled to purchase from
Comps InfoSystems, Inc., a Delaware corporation (the "Company"), A number of
fully paid and nonassessable shares of the Company's Non-Voting Class B Common
Stock ("Common Stock") with an aggregate initial exercise price of $225,000.00
and a per share exercise price that is halfway between the last($1.8031) and the
next round of equity financing. If there is no new equity financing done within
the next 18 months of the date of the Loan agreement then the warrant exercise
price will equal $2.70 (the "Stock Purchase Price") at any time or from time to
time up to and including 5:00 p.m. (Pacific time) on February 11, 2006 (the
"Expiration Date"), upon surrender to the Company at its principal office at
9888 Carroll Center Rd., San Diego, CA 92126, (or at such other location as the
Company may advise Holder in writing) of this Warrant properly endorsed with the
Form of Subscription attached hereto duly filled in and signed and upon payment
in cash or by check of the aggregate Stock Purchase Price for the number of
shares for which this Warrant is being exercised determined in accordance with
the provisions hereof. The Stock Purchase Price and the number of shares
purchasable hereunder are subject to adjustment as provided in Section 4 of this
Warrant.
This Warrant is subject to the following terms and conditions:
1. Exercise; Issuance of Certificates; Payment for Shares.
-------------------------------------------------------
(a) Unless an election is made pursuant to clause (b) of this Section
1, this Warrant shall be exercisable at the option of the Holder, at any time or
from time to time, on or before the Expiration Date for all or any portion of
the shares of Common Stock (but not for a fraction of a share) which may be
purchased hereunder for the Stock Purchase Price multiplied by the number of
shares to be purchased. The Company agrees that the shares of Common Stock
purchased under this Warrant shall be and are deemed to be issued to the holder
hereof as the record owner of such shares as of the close of business on the
date on which the form of subscription shall have been delivered and payment
made for such shares. Subject to the provisions of Section 2, certificates for
the shares of Common Stock so purchased, together with any other securities or
property to which the Holder hereof is entitled upon such exercise, shall be
delivered to the Holder hereof by the Company at the Company's expense within a
reasonable time after the rights represented by this Warrant have been so
exercised. Except as provided in clause (b) of this Section 1, in case of a
purchase of less than all the shares which may be purchased under this Warrant,
the Company shall cancel this Warrant and execute and deliver a new Warrant or
Warrants of like tenor for the balance of the shares purchasable under the
Warrant surrendered upon such purchase to the Holder hereof within a reasonable
time. Each stock certificate so delivered shall be in such denominations of
Stock as may be requested by the Holder hereof and shall be registered in the
name of such Holder or such other name as shall be designated by such Holder,
subject to the limitations contained in Section 2.
<PAGE>
(b) The Holder, in lieu of exercising this Warrant by the payment of
the Stock Purchase Price pursuant to clause (a) of this Section 1, may elect, at
any time on or before the Expiration Date, to receive that number of shares of
Stock equal to the quotient of: (i) the difference between (A) the Per Share
Price (as hereinafter defined) of the Stock, less (B) the Stock Purchase Price
then in effect, multiplied by the number of shares of Stock the Holder would
otherwise have been entitled to purchase hereunder pursuant to clause (a) of
this Section 1 (or such lesser number of shares as the Holder may designate in
the case of a partial exercise of this Warrant); over (ii) the Per Share Price.
Election to exercise under this section (b) may be made by delivering a signed
form of subscription to the Company via facsimile, to be followed by delivery of
the warrant.
(c) For purposes of clause (b) of this Section 1, "Per Share Price"
means: the greater of (A) the closing price of the Company's Common Stock as
quoted by NASDAQ or listed on any exchange, whichever is applicable, as
published in the Western Edition of The Wall Street Journal for the trading day
-----------------------
immediately prior to the date of the Holder's election hereunder or, (B) if
applicable at the time of or in connection with the exercise under clause (b) of
this Section 1, the gross sales price of one share of the Company's Common Stock
pursuant to a registered public offering or that amount which shareholders of
the Company will receive for each share of Common Stock pursuant to a merger,
reorganization or sale of assets. If the Company's Common Stock is not quoted by
NASDAQ or listed on an exchange, the Per Share Price of the Common Stock shall
be the price per share which the Company would obtain from a willing buyer for
shares sold by the Company from authorized but unissued shares as such price
shall be agreed upon by the Holder and the Company or, if agreement cannot be
reached within ten (10) business days of the Holder's election hereunder, as
such price shall be determined by a panel of three (3) appraisers, one (1) to be
chosen by the Company, one (1) to be chosen by the Holder and the third to be
chosen by the first two (2) appraisers. If the appraisers cannot reach agreement
within 30 days of the Holder's election hereunder, then each appraiser shall
deliver its appraisal and the appraisal which is neither the highest nor the
lowest shall constitute the Per Share Price. In the event either party fails to
choose an appraiser within 30 days of the Holder's election hereunder, then the
appraisal of the sole appraiser shall constitute the Per Share Price. Each party
shall bear the cost of the appraiser selected by such party and the cost of the
third appraiser shall be borne one-half by each party. In the event either party
fails to choose an appraiser, the cost of the sole appraiser shall be borne one-
half by each party.
(a) 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 Stock Purchase Price shall be immediately adjusted
to equal the quotient obtained by dividing (x) the aggregate Stock Purchase
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 Class A
Common Stock.
2. Limitation on Transfer.
-----------------------
(a) The Warrant and the Common Stock shall not be transferable except
upon the conditions specified in this Section 2, which conditions are intended
to insure compliance with the provisions of the Securities Act. Each holder of
this Warrant or the Stock issuable hereunder will cause any proposed transferee
of the Warrant or Stock to agree to take and hold such securities subject to the
provisions and upon the conditions specified in this Section 2.
(b) Each certificate representing (i) this Warrant, (ii) the Common
Stock, and (iii) any other securities issued in respect to the Common Stock
issued upon any stock split, stock dividend, recapitalization, merger,
consolidation or similar event, shall (unless otherwise permitted by the
provisions of this Section 2 or unless such securities have been registered
under the Securities Act or sold under Rule 144) be stamped or otherwise
imprinted with a legend substantially in the form set forth on the face of this
Warrant
2
<PAGE>
(c) The Holder of this Warrant and each person to whom this Warrant
is subsequently transferred represents and warrants to the Company (by
acceptance of such transfer) that it will not transfer the Warrant (or
securities issuable upon exercise hereof unless a registration statement under
the Securities Act was in effect with respect to such securities at the time of
issuance thereof) except pursuant to (i) an effective registration statement
under the Securities Act, (ii) Rule 144 under the Securities Act (or any similar
rule under the Securities Act relating to the disposition of securities), or
(iii) an opinion of counsel, reasonably satisfactory to counsel for the Company,
that an exemption from such registration is available.
3. Shares to be Fully Paid; Reservation of Shares. The Company covenants
----------------------------------------------
and agrees that all shares of Common Stock which may be issued upon the exercise
of the rights represented by this Warrant will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable and free from all
preemptive rights of any shareholder and free of all taxes, liens and charges
with respect to the issue thereof. The Company further covenants and agrees
that during the period within which the rights represented by this Warrant may
be exercised, the Company will at all times have authorized and reserved, for
the purpose of issue or transfer upon exercise of the subscription rights
evidenced by this Warrant, a sufficient number of shares of authorized but
unissued Common Stock, or other securities and property, when and as required to
provide for the exercise of the rights represented by this Warrant. The Company
will take all such action as may be necessary to assure that such shares of
Common Stock may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of any domestic securities
exchange upon which the Common Stock may be listed. The Company will not take
any action which would result in any adjustment of the Stock Purchase Price (as
defined in Section 4 hereof) if the total number of shares of Common Stock
issuable after such action upon the conversion of all such shares of Preferred
Stock together with all shares of Common Stock then outstanding and then
issuable upon exercise of all options and upon the conversion of all convertible
securities then outstanding would exceed the total number of shares of Common
Stock then authorized by the Company's Articles of Incorporation.
4. Adjustment of Stock Purchase Price Number of Shares. The Stock
---------------------------------------------------
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 4. Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the number
of shares obtained by multiplying the Stock Purchase Price in effect immediately
prior to such adjustment by the number of shares purchasable pursuant hereto
immediately prior to such adjustment, and dividing the product thereof by the
Stock Purchase Price resulting from such adjustment.
4.1 Subdivision or Combination of Stock. In case the Company shall
-----------------------------------
at any time subdivide its outstanding shares of Common Stock into a greater
number of shares, the Stock Purchase Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely, in case the
outstanding shares of Common Stock of the Company shall be combined into a
smaller number of shares, the Stock Purchase Price in effect immediately prior
to such combination shall be proportionately increased.
4.2 Dividends in Preferred Stock, Other Stock, Property,
----------------------------------------------------
Reclassification. If at any time or from time to time the holders of Preferred
- ----------------
Stock (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or become entitled to receive,
without payment therefor,
(a) Preferred Stock, or any shares of stock or other securities
whether or not such securities are at any time directly or indirectly
convertible into or exchangeable for Preferred Stock, or any rights or options
to subscribe for, purchase or otherwise acquire any of the foregoing by way of
dividend or other distribution, or
(b) any cash paid or payable otherwise than as a cash dividend,
or
(c) Preferred Stock or other or additional stock or other
securities or property (including cash) by way of spinoff, split-up,
reclassification, combination of shares or similar corporate rearrangement,
(other than shares of Preferred Stock issued as a stock split, adjustments in
respect of which shall be covered by the terms of Section 4.1 above),
3
<PAGE>
Then and in each such case, the Holder hereof shall, upon the exercise of this
Warrant, be entitled to receive, in addition to the number of shares of Stock
receivable thereupon, and without payment of any additional consideration
therefore, the amount of stock and other securities and property (including cash
in the cases referred to in clauses (b) and (c) above) which such Holder would
hold on the date of such exercise had he been the holder of record of such
Preferred Stock as of the date on which holders of Preferred Stock received or
became entitled to receive such shares and/or all other additional stock and
other securities and property.
4.3 Reorganization, Reclassification, Consolidation, Merger or Sale.
---------------------------------------------------------------
If any capital reorganization of the capital stock of the Company, or any
consolidation or merger of the Company with another corporation, or other
reorganization, or the sale of all or substantially all of its assets to another
corporation shall be effected in such a way that holders of Preferred Stock
shall be entitled to receive stock, securities or assets with respect to or in
exchange for Preferred Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provisions
shall be made whereby the holder hereof shall thereafter have the right to
purchase and receive(in lieu of the shares of the Common Stock of the Company
immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby) such shares of stock, securities or assets as may be
issued or payable with respect to or in exchange for a number of outstanding
shares of such Common Stock equal to the number of shares of such stock
immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby. In any such case, appropriate provision shall be made
with respect to the rights and interests of the holder of this Warrant to the
end that the provisions hereof (including, without limitation, provisions for
adjustments of the Stock Purchase Price and of the number of shares purchasable
and receivable upon the exercise of this Warrant) shall thereafter be
applicable, as nearly as may be possible, in relation to any shares of stock,
securities or assets thereafter deliverable upon the exercise hereof.
4.4 Intentionally omitted.
----------------------
4.5 Notice of Adjustment. Upon any adjustment of the Stock Purchase
--------------------
Price, and/or any increase or decrease in the number of shares purchasable upon
the exercise of this Warrant the Company shall give written notice thereof, by
first class mail, postage prepaid, addressed to the registered holder of this
Warrant at the address of such holder as shown on the books of the Company. The
notice, which may be substantially in the form of Exhibit "A" attached hereto,
shall be signed by the Company's chief financial officer and shall state the
Stock Purchase Price resulting from such adjustment and the increase or
decrease, if any, in the number of shares purchasable at such price upon the
exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
4.6 Other Notices. If at any time:
-------------
(a) the Company shall declare any cash dividend upon its
Preferred or Common Stock;
(b) the Company shall declare any dividend upon its Preferred or
Common Stock payable in stock or make any special dividend or other distribution
to the holders of its Preferred Stock;
(c) the Company shall offer for subscription pro rata to the
holders of its Stock any additional shares of stock of any class or other
rights;
(d) there shall be any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or merger
of the Company with, or sale of all or substantially all of its assets to,
another corporation;
(e) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company; or
4
<PAGE>
(f) the Company shall take or propose to take any other action,
notice of which is actually provided to holders of the Preferred or Common
Stock;
then, in any one or more of said cases, the Company shall give, by first class
mail, postage prepaid, addressed to the holder of this Warrant at the address of
such holder as shown on the books of the Company, (i) at least 5 business day's
prior written notice of the date on which the books of the Company shall close
or a record shall be taken for establishing the right to receive such dividend,
distribution or subscription rights and (ii) with respect to any other action,
notice of which is given to holders of the Common Stock, such notice as is
actually provided to such holders. The foregoing shall not apply with respect
to an Acquisition or Dissolution, notice of which shall be given in accordance
with Section 4.3 above. Any notice given in accordance with the foregoing
clause (i) shall also specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of stock shall be entitled
thereto. Any notice given in accordance with the foregoing clause (ii) shall,
if applicable, also specify the date on which the holders of Common Stock shall
be entitled to exchange their Common Stock for securities or other property
deliverable upon any reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding-up, or other action as the case may
be.
Notwithstanding the foregoing, with respect to any matter as to which the
consent of stockholders is solicited by the Company in lieu of a meeting in
accordance with Section 228 of the Delaware Corporation Law, the obligation of
the Company to provide notice to the holder of this Warrant shall be solely as
follows:
(a) if the Company solicits the written consent of all stockholders,
notice thereof shall be given to the holder of this Warrant at the same time
that such written consent is solicited from all stockholders, and
(b) if the Company does not solicit such written consent from all
stockholders, then notice of the taking of the corporate action without a
meeting shall be given to the holder of this Warrant no later than it is given
to those stockholders who have not consented in writing.
5. Issue Tax. The issuance of certificates for shares of Common Stock
---------
upon the exercise of the Warrant shall be made without charge to the Holder of
the Warrant for any issue tax in respect thereof; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any certificate in a name
other than that of the then Holder of the Warrant being exercised.
6. Closing of Books. The Company will at no time close its transfer
----------------
books against the transfer of any Warrant or of any shares of Common Stock
issued or issuable upon the exercise of any warrant in any manner which
interferes with the timely exercise of this Warrant.
7. No Voting or Dividend Rights; Limitation of Liability. Nothing
-----------------------------------------------------
contained in this Warrant shall be construed as conferring upon the Holder
hereof the right to vote or to consent as a shareholder in respect of meetings
of shareholders for the election of directors of the Company or any other
matters or any rights whatsoever as a shareholder of the Company. No dividends
or interest shall be payable or accrued in respect of this Warrant or the
interest represented hereby or the shares purchasable hereunder until, and only
to the extent that, this Warrant shall have been exercised. No provisions
hereof, in the absence of affirmative action by the holder to purchase shares of
Common Stock, and no mere enumeration herein of the rights or privileges of the
Holder hereof, shall give rise to any liability of such Holder for the Stock
Purchase Price or as a shareholder of the Company, whether such liability is
asserted by the Company or by its creditors.
8. Intentionally Omitted
---------------------
9. Registration Rights. The Company hereby grants to the Holder, with
-------------------
respect to the shares of Common Stock issuable hereunder, the piggyback
registration rights set forth in Section II.B. of that certain Amended and
Restated Investor Rights Agreement made and entered into as of February 9, 1998
by and among the Company, Summit Ventures III, L.P., Summit Investors II, L.P.,
Christopher A. Crane, Merrill Oster and Robert C.
5
<PAGE>
Beasley (the "Investor Rights Agreement"). For purposes of such Section II.B.,
the Holder shall be deemed a "Holder" of "Registrable Securities" as such terms
are defined in the Investor Rights Agreement.
10. Rights and Obligations Survive Exercise of Warrant. The rights and
---------------------------------------------------
obligations of the Company, of the Holder of this Warrant and of the holder of
shares of Common Stock issued upon exercise of this Warrant, contained in
Sections 6, 8 and 9 shall survive the exercise of this Warrant.
11. Modification and Waiver. This Warrant and any provision hereof may be
-----------------------
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
12. Notices. Any notice, request or other document required or permitted
-------
to be given or delivered to the holder hereof or the Company shall be deemed to
have been given (i) upon receipt if delivered personally or by courier (ii) upon
confirmation of receipt if by telecopy or (iii) three business days after
deposit in the US mail, with postage prepaid and certified or registered, to
each such holder at its address as shown on the books of the Company or to the
Company at the address indicated therefor in the first paragraph of this
Warrant.
13. Binding Effect on Successors. This Warrant shall be binding upon any
----------------------------
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets. All of the obligations of the
Company relating to the Common Stock issuable upon the exercise of this Warrant
shall survive the exercise and termination of this Warrant. All of the
covenants and agreements of the Company shall inure to the benefit of the
successors and assign of the holder hereof. The Company will, at the time of
the exercise of this Warrant, in whole or in part, upon request of the Holder
hereof but at the Company's expense, acknowledge in writing its continuing
obligation to the Holder hereof in respect of any rights (including, without
limitation, any right to registration of the shares of Common Stock) to which
the holder hereof shall continue to be entitled after such exercise in
accordance with this Warrant; provided, that the failure of the holder hereof to
make any such request shall not affect the continuing obligation of the Company
to the Holder hereof in respect of such rights.
14. Descriptive Headings and Governing Law. The descriptive headings of
--------------------------------------
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. This Warrant shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the laws of the State of California.
15. Lost Warrants or Stock Certificates. The Company represents and
-----------------------------------
warrants to the Holder hereof that upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
any Warrant or stock certificate and, in the case of any such loss, theft or
destruction, upon receipt of an indemnity reasonably satisfactory to the
Company, or in the case of any such mutilation upon surrender and cancellation
of such Warrant or stock certificate, the Company at its expense will make and
deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant or stock certificate.
16. Fractional Shares. No fractional shares shall be issued upon exercise
-----------------
of this Warrant. The Company shall, in lieu of issuing any fractional share,
pay the holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the then effective Stock Purchase Price.
17. Representations of Holder. With respect to this Warrant, Holder
--------------------------
represents and warrants to the Company as follows:
17.1 Experience. It is experienced in evaluating and investing in
-----------
companies engaged in businesses similar to that of the Company; it understands
that investment in the Warrant involves substantial risks; it has made detailed
inquiries concerning the Company, its business and services, its officers and
its personnel; the
6
<PAGE>
officers of the Company have made available to Holder any and all written
information it has requested; the officers of the Company have answered to
Holder's satisfaction all inquiries made by it; in making this investment it has
relied upon information made available to it by the Company; and it has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of investment in the Company and it is able to
bear the economic risk of that investment.
17.2 Investment. It is acquiring the Warrant for investment for its
-----------
own account and not with a view to, or for resale in connection with, any
distribution thereof. It understands that the Warrant, the shares of Common
Stock issuable upon exercise thereof, have not been registered under the
Securities Act of 1933, as amended, nor qualified under applicable state
securities laws.
17.3 Rule 144. It acknowledges that the Warrant and the Common Stock
---------
must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. It has been
advised or is aware of the provisions of Rule 144 promulgated under the
Securities Act.
17.4 Access to Data. It has had an opportunity to discuss the
---------------
Company's business, management and financial affairs with the Company's
management and has had the opportunity to inspect the Company's facilities.
18. Additional Representations and Covenants of the Company. The Company
--------------------------------------------------------
hereby represents, warrants and agrees as follows:
18.1 Corporate Power. The Company has all requisite corporate power
----------------
and corporate authority to issue this Warrant and to carry out and perform its
obligations hereunder.
18.2 Authorization. All corporate action on the part of the Company,
--------------
its directors and shareholders necessary for the authorization, execution,
delivery and performance by the Company of this has been taken. This Warrant is
a valid and binding obligation of the Company, enforceable in accordance with
its terms.
18.3 Offering. Subject in part to the truth and accuracy of Holder's
---------
representations set forth in Section 17 hereof, the offer, issuance and sale of
the Warrant is, and the issuance of Common Stock upon exercise of the Warrant
will be exempt from the registration requirements of the Securities Act, and are
exempt from the qualification requirements of any applicable state securities
laws; and neither the Company nor anyone acting on its behalf will take any
action hereafter that would cause the loss of such exemptions.
18.4 Stock Issuance. Upon exercise of the Warrant, the Company will
--------------
use its best efforts to cause stock certificates representing the shares of
Common Stock purchased pursuant to the exercise to be issued in the individual
names of Holder, its nominees or assignees, as appropriate at the time of such
exercise.
18.5 Articles and By-Laws. The Company has provided Holder with true
--------------------
and complete copies of the Company's Articles or Certificate of Incorporation,
By-Laws, and each Certificate of Determination or other charter document
setting, forth any rights, preferences and privileges of Company's capital
stock, each as amended and in effect on the date of issuance of this Warrant.
18.6 Conversion of Preferred Stock. As of the date hereof, each
-----------------------------
share of the Preferred Stock is convertible into one share of the Common Stock.
18.7 Financial and Other Reports. From time to time up to the
---------------------------
earlier of the Expiration Date or the complete exercise of this Warrant, the
Company shall furnish to Holder (i) within 90 days after the close of each
fiscal year of the Company an audited balance sheet and statement of changes in
financial position at and as of the end of such fiscal year, together with an
audited statement of income for such fiscal year; (ii) within 45 days after the
close of each fiscal quarter of the Company, an unaudited balance sheet and
statement of cash flows at and as of the end of such quarter, together with an
unaudited statement of income for such quarter; and (iii) promptly after
sending, making available, or filing, copies of all reports, proxy statements,
and financial statements that the
7
<PAGE>
Company sends or makes available to its shareholders and all registration
statements and reports that the Company files with the SEC or any other
governmental or regulatory authority.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
its officers, thereunto duly authorized this 15th day of February, 1999.
COMPS.COM, INC.
By: /s/ C CRANE
---------------------------------
Title: President and CEO
------------------------------
8
<PAGE>
FORM OF SUBSCRIPTION
(To be signed only upon exercise of Warrant)
To: _____________________________
The undersigned, the holder of the within Warrant, hereby irrevocably elects
to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, (1) See Below ________________ (_____)shares (the
"Shares:) of Stock of __________ and herewith makes payment of _____________
Dollars ($________) therefor, and requests that the certificates for such
shares be issued in the name of, and delivered to, _________, whose address
is ___________.
The undersigned hereby elects to convert ______ percent (__%) of the value
of the Warrant pursuant to the provisions of Section 1(b) of the Warrant.
The undersigned represents that it is acquiring such Common Stock for its own
account for investment and not with a view to or for sale in connection with any
distribution thereof (subject, however, to any requirement of law that the
disposition thereof shall at all times be within its control.
Dated ______________________
Holder: ______________________
By: ______________________
Its: ______________________
(Address)
__________________________
__________________________
(1) Insert here the number of shares called for on the face of the Warrant
(or, in the case of a partial exercise, the portion thereof as to which
the Warrant is being exercised), in either case without making any
adjustment for additional Common Stock or any other stock or other
securities or property or cash which, pursuant to the adjustment
provisions of the Warrant, may be deliverable upon exercise.
9
<PAGE>
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned, the holder of the within Warrant, hereby
sells, assigns and transfers all of the rights of the undersigned under the
within Warrant, with respect to the number of shares of Common Stock covered
thereby set forth hereinbelow, unto:
Name of Assignee Address No. of Shares
- --------------------------------------------------------------------------------
Dated ______________________
Holder: ______________________
By: ______________________
Its: ______________________
10
<PAGE>
EXHIBIT "A"
----------
[On letterhead of the Company]
------------------------------
Reference is hereby made to that certain Warrant dated February 15, 1999,
issued by COMPS.COM, INC., a Delaware corporation (the "Company"), to VENTURE
LENDING & LEASING II, INC., a Maryland corporation (the "Holder").
[IF APPLICABLE] The Warrant provides that the actual number of shares of
the Company's capital stock issuable upon exercise of the Warrant and the
initial exercise price per share are to be determined by reference to one or
more events or conditions subsequent to the issuance of the Warrant. Such events
or conditions have now occurred or lapsed, and the Company wishes to confirm the
actual number of shares issuable and the initial exercise price. The provisions
of this Supplement to Warrant are incorporated into the Warrant by this
reference, and shall control the interpretation and exercise of the Warrant.
[IF APPLICABLE] Notice is hereby given pursuant to Section 4.5 of the
Warrant that the following adjustment(s) have been made to the Warrant:
[describe adjustments, setting forth details regarding method of calculation and
facts upon which calculation is based].
This certifies that the Holder is entitled to purchase from the Company
__________________________ (____________) fully paid and nonassessable shares of
the Company's _________ Stock at a price of _________________________ Dollars
($__________) per share (the "Stock Purchase Price"). The Stock Purchase Price
and the number of shares purchasable under the Warrant remain subject to
adjustment as provided in Section 4 of the Warrant.
Executed this ___ day of ________________, 199___.
[COMPANY]
By: ________________________________
Name: ________________________________
Title: ________________________________
11
<PAGE>
EXHIBIT 23.1
Consent of Ernst & Young LLP, Independent Auditors
We consent to the reference to our firm under the captions "Selected
Financial Data" and "Experts" and to the use of our report on the COMPS.COM,
Inc. financial statements dated February 5, 1999 (except for Note 15, as to
which the date is February 22, 1999) and our report on the REALBID, LLC
financial statements dated February 17, 1999, in the Registration Statement
(Form S-1) and related Prospectus of COMPS.COM, Inc. dated February 24, 1999.
Our audits also included the financial statement schedule of COMPS.COM, Inc.
for the three years ended December 31, 1998 listed in Item 16(b). This schedule
is the responsibility of the Company's management. Our responsibility is to
express an opinion based on our audits. In our opinion, the financial statement
schedule referred to above, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.
/s/ Ernst & Young LLP
San Diego, California
February 23, 1999
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1998
<PERIOD-START> JAN-01-1997 JAN-01-1998
<PERIOD-END> DEC-31-1997 DEC-31-1998
<CASH> 351,621 377,803
<SECURITIES> 0 0
<RECEIVABLES> 2,298,167 3,165,817
<ALLOWANCES> 1,384,242 1,464,922
<INVENTORY> 0 0
<CURRENT-ASSETS> 2,796,151 3,728,140
<PP&E> 2,632,598 3,566,474
<DEPRECIATION> (1,428,848) (2,095,936)
<TOTAL-ASSETS> 4,090,836 7,397,277
<CURRENT-LIABILITIES> 5,849,123 8,081,927
<BONDS> 0 0
5,815,806 7,316,192
0 0
<COMMON> 29,219 29,654
<OTHER-SE> (9,534,545) (9,224,923)
<TOTAL-LIABILITY-AND-EQUITY> 4,090,836 7,397,277
<SALES> 10,449,936 12,805,761
<TOTAL-REVENUES> 10,449,936 12,805,761
<CGS> 5,053,998 5,746,180
<TOTAL-COSTS> 11,755,481 14,094,526
<OTHER-EXPENSES> 251,640 259,557
<LOSS-PROVISION> 39,491 167,858
<INTEREST-EXPENSE> 268,290 302,152
<INCOME-PRETAX> (1,557,185) (1,548,322)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (1,557,185) (1,548,322)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (1,856,109) (1,911,557)
<EPS-PRIMARY> (0.39) (.40)
<EPS-DILUTED> (0.39) (0.40)
</TABLE>
