Document:

Exhibit 4.3

 

THIS WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE.  THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS IN ACCORDANCE WITH APPLICABLE REGISTRATION REQUIREMENTS OR AN EXEMPTION THEREFROM.  THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.  THIS WARRANT MUST BE SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A CONDITION PRECEDENT TO THE SALE, TRANSFER, PLEDGE OR HYPOTHECATION OF ANY INTEREST IN ANY OF THE SECURITIES REPRESENTED HEREBY.

 

WARRANT TO PURCHASE SHARES OF COMMON STOCK

of

TRUECAR, INC.

 

Dated as of February 25, 2011

Void after the date specified in Section 8

 

	
No.
    	
 
    	
Warrant to Purchase
    
	
 
    	
 
    	
up to 2,150,000 Shares of
    
	
 
    	
 
    	
Common Stock
    
	
 
    	
 
    	
(subject to adjustment)
    

 

THIS CERTIFIES THAT, for value received, GR Match, LLC, a Delaware limited liability company, or its registered assigns (the “Holder”), is entitled, subject to the provisions and upon the terms and conditions set forth herein, to purchase from TrueCar, Inc., a Delaware corporation (the “Company”), shares of the Company’s Common Stock, $0.0001 par value per share (the “Shares”), in the amounts, at such times and at the Exercise Price (as defined below) set forth in Section 1, subject to adjustment as provided below.  The term “Warrant” as used herein shall include this Warrant and any warrants delivered in substitution or exchange therefor as provided herein.  This Warrant is issued pursuant to Section 3.1 of that certain Media and Marketing Services Agreement, dated as of even date herewith, by and between the Holder and the Company, a copy of which is attached hereto as Exhibit D (the “Media Services Agreement”).

 

The following is a statement of the rights of the Holder and the conditions to which this Warrant is subject, and to which Holder, by acceptance of this Warrant, agrees:

 

1.                                      Number and Price of Shares; Exercise Period.

 

(a)                                 Number of Shares.  Subject to any previous exercise of the Warrant and Section 2(a) below, the Holder shall have the right to purchase up to Two Million One Hundred Fifty Thousand (2,150,000) Shares (subject to adjustment as provided herein) on or prior to the expiration of this Warrant as provided in Section 8.

 

(b)                                 Exercise Price.  The exercise at which this Warrant may be exercised shall be Four and 01/100 Dollars ($4.01 per Share), as may be adjusted from time to time pursuant to Section 6 hereof (the “Exercise Price”).

 

 

(c)                                  Exercise Period.  This Warrant shall be exercisable, in whole or in part, during the term commencing on the issue date hereof and ending prior to (or in connection with) the expiration of this Warrant as set forth in Section 8 and shall be void thereafter; provided, however, that any Shares which remain unvested as of the Termination Date (as defined in the Media Services Agreement) and do not automatically vest upon such Termination Date in accordance with Section 3.2 of the Media Services Agreement shall be void thereafter.

 

2.                                      Vesting and Exercise of the Warrant.

 

(a)                                 Exercisability.  This Warrant is not immediately exercisable, and will only become exercisable (“Vested”) in accordance with the vesting schedule set forth on Appendix “A” attached hereto.  Notwithstanding the foregoing, all unvested Shares shall become Vested in full in the event (i) GRM terminates the Media Services Agreement pursuant to Sections 4.2(i) or (ii) thereof, or (ii) Company terminates the Media Services Agreement pursuant to Section 4.2(iii) thereof after the filing of a registration statement on Form S-1 (or other equivalent form) in connection with a firm commitment underwritten public offering by TrueCar of its Shares (a “TrueCar IPO”) or following the closing of a TrueCar IPO (it being agreed that any termination of the Media Services Agreement by TrueCar pursuant to Section.4.2(iii) thereof within six (6) months prior to the filing of such registration statement shall be deemed to be a termination under this clause (ii)).

 

(b)                                 Exercise.  The purchase rights represented by this Warrant, to the extent Vested, may be exercised at the election of the Holder, in whole or in part (such number being subject to adjustment as provided in Section 6), in accordance with Section 1, by:

 

(i)                       the tender to the Company at its principal office (or such other office or agency as the Company may designate) of a notice of exercise in the form of Exhibit A (the “Notice of Exercise”), duly completed and executed by or on behalf of the Holder, together with the surrender of this Warrant; and

 

(ii)                    subject to Section 2(c), the payment to the Company of an amount equal to (x) the Exercise Price multiplied by (y) the number of Shares being purchased, by wire transfer or certified, cashier’s or other check acceptable to the Company and payable to the order of the Company.

 

(c)                                  Net Issue Exercise.  In lieu of exercising this Warrant for cash pursuant to Section 2(b)(ii), if the fair market value of one Share is greater than the Exercise Price (at the date of calculation as set forth below), the Holder may elect to receive a number of Shares equal to the value of this Warrant (or of any portion of this Warrant being canceled) by surrender of this Warrant at the principal office of the Company (or such other office or agency as the Company may designate) together with a properly completed and executed Notice of Exercise reflecting such election, in which event the Company shall issue to the Holder that number of Shares computed using the following formula:

 

	
 
    	
X       =
    	
Y (A – B)
    	
 
    
	
 
    	
A
    	
 
    

 

Where:

 

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X                     =                 The number of Shares to be issued to the Holder

 

Y                     =                 The number of Shares purchasable under this 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 (at the date of such calculation)

 

B                     =                 The Exercise Price (as adjusted to the date of such calculation)

 

For purposes of the calculation above, the fair market value of one Share shall be determined by the Board of Directors of the Company, acting in good faith; provided, however, that where there exists a public market for the Shares at the time of such exercise, the fair market value of one Share shall be the average closing price of the Shares quoted in the Over-The-Counter Market Summary or the last reported sale price of the Shares or the closing price quoted on the Nasdaq National Market or on any exchange on which the Shares are listed, whichever is applicable, as published by Bloomberg LP for the five (5) trading days prior to the date of determination of fair market value.

 

(d)                                 Stock Certificates.  The rights under this Warrant shall be deemed to have been exercised and the Shares issuable upon such exercise shall be deemed to have been issued immediately prior to the close of business on the date this Warrant is exercised in accordance with its terms, and the person entitled to receive the Shares issuable upon such exercise shall be treated for all purposes as the holder of record of such Shares as of the close of business on such date.  As promptly as reasonably practicable on or after such date, the Company shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates for that number of shares issuable upon such exercise.  In the event that the rights under this Warrant are exercised in part and have not expired, the Company shall execute and deliver a new Warrant reflecting the number of Shares that remain subject to this Warrant.

 

(e)                                  No Fractional Shares or Scrip.  No fractional shares or scrip representing fractional shares shall be issued upon the exercise of the rights under this Warrant.  In lieu of such fractional share to which the Holder would otherwise be entitled, the Company shall make a cash payment equal to the Exercise Price multiplied by such fraction.

 

(f)                                   Conditional Exercise.  The Holder may exercise this Warrant conditioned upon (and effective immediately prior to) consummation of any transaction that would cause the expiration of this Warrant pursuant to Section 8 by so indicating in the notice of exercise.

 

(g)                                  Reservation of Stock.  The Company agrees, during the term of this Warrant, to take all reasonable action to reserve and keep available from its authorized and unissued shares of common stock for the purpose of effecting the exercise of this Warrant such number of shares as shall from time to time be sufficient to effect the exercise of the rights under this Warrant; and if at any time the number of authorized but unissued shares of common stock shall not be sufficient for purposes of the exercise of this Warrant in accordance with its terms, without limitation of such other remedies as may be available to the Holder, the Company will use all commercially reasonable efforts to take such corporate action as may be necessary to increase its authorized and unissued shares of its common stock to a number of shares as shall be sufficient for such purposes.  The Company further covenants that all Shares that may be issued upon the exercise of rights represented by this Warrant and payment of the Exercise Price, all as set forth herein, will be duly and validly authorized and issued, fully paid and nonassessable and free from all taxes, liens and charges in

 

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respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously therewith).  The Company agrees that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for Shares upon the exercise of this Warrant and payment of the Exercise Price.

 

3.                                      Replacement of the Warrant.  Subject to the receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant, the Company at the expense of the Holder shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount.

 

4.                                      Transfer of the Warrant.

 

(a)                                 Warrant Register.  The Company shall maintain a register (the “Warrant Register”) containing the name and address of the Holder or Holders.  Until this Warrant is transferred on the Warrant Register in accordance herewith, the Company may treat the Holder as shown on the Warrant Register as the absolute owner of this Warrant for all purposes, notwithstanding any notice to the contrary.  Any Holder of this Warrant (or of any portion of this Warrant) may change its address as shown on the Warrant Register by written notice to the Company requesting a change.  Any notice or written communication required or permitted to be given to the Holder may be delivered or given by mail to such Holder as shown on the Warrant Register and at the address shown on the Warrant Register.

 

(b)                                 Warrant Agent.  The Company may appoint an agent for the purpose of maintaining the Warrant Register referred to in Section 4(a), issuing the Shares or other securities then issuable upon the exercise of the rights under this Warrant, exchanging this Warrant, replacing this Warrant or conducting related activities (the “Warrant Agent”).  Thereafter, any such registration, issuance, exchange or replacement, as the case may be, shall be made at the office of the Warrant Agent.

 

(c)                                  Transferability of the Warrant.  Subject to the provisions of this Warrant with respect to compliance with the Securities Act of 1933, as amended (the “Securities Act”) and limitations on assignments and transfers, including, without limitation, compliance with the restrictions on transfer set forth in Section 5, title to this Warrant may be transferred by endorsement (by the transferor and the transferee executing the assignment form attached as Exhibit B (the “Assignment Form”)) and delivery in the same manner as a negotiable instrument transferable by endorsement and delivery.

 

(d)                                 Exchange of the Warrant upon a Transfer.  On surrender of this Warrant (and a properly endorsed Assignment Form) for exchange, subject to the provisions of this Warrant with respect to compliance with the Securities Act and limitations on assignments and transfers, the Company shall issue to or on the order of the Holder a new warrant or warrants of like tenor, in the name of the Holder or as the Holder (on payment by the Holder of any applicable transfer taxes) may direct, for the number of shares issuable upon exercise hereof, and the Company shall register any such transfer upon the Warrant Register.  This Warrant (and the securities issuable upon exercise of the rights under this Warrant) must be surrendered to the Company or its warrant or transfer agent, as applicable, as a condition precedent to the sale, pledge, hypothecation or other transfer of any interest in any of the securities represented hereby.

 

(e)                                  Minimum Transfer.  This Warrant may not be transferred in part unless such transfer is to a transferee who, pursuant to such transfer, receives the right to purchase at least three hundred fifty thousand (350,000) Shares hereunder (as adjusted from time to time in accordance with Section 6).

 

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(f)                                   Taxes.  In no event shall the Company be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of any certificate in a name other than that of the Holder, and the Company shall not be required to issue or deliver any such certificate unless and until the person or persons requesting the issue thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid or is not payable.

 

5.                                      Restrictions on Transfer of the Warrant and Shares; Compliance with Securities Laws.  By acceptance of this Warrant, the Holder agrees to comply with the following:

 

(a)                                 Restrictions on Transfers.  This Warrant may not be transferred or assigned in whole or in part only in compliance with this Section 5, and any attempt by Holder to transfer or assign any rights, duties or obligations that arise under this Warrant without such compliance shall be void. Any transfer of this Warrant or the Shares (the “Securities”) must be in compliance with all applicable federal and state securities laws.  The Holder agrees not to make any sale, assignment, transfer, pledge or other disposition of all or any portion of the Securities, or any beneficial interest therein, unless and until the transferee thereof has agreed in writing for the benefit of the Company to take and hold such Securities subject to, and to be bound by, the terms and conditions set forth in this Warrant to the same extent as if the transferee were the original Holder hereunder, and

 

(i)                       there is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement, or

 

(ii)                    (A) such Holder shall have given prior written notice to the Company of such Holder’s intention to make such disposition and shall have furnished the Company with a detailed description of the manner and circumstances of the proposed disposition, (B) the transferee shall have confirmed to the satisfaction of the Company in writing, substantially in the form of Exhibit A-1, that the Securities are being acquired (i) solely for the transferee’s own account and not as a nominee for any other party, (ii) for investment and (iii) not with a view toward distribution or resale, and shall have confirmed such other matters related thereto as may be reasonably requested by the Company, and (C) such Holder shall have furnished the Company, at the Holder’s expense, with an opinion of counsel, reasonably satisfactory to the Company, to the effect that such disposition will not require registration of such Securities under the Securities Act, whereupon such Holder shall be entitled to transfer such Securities in accordance with the terms of the notice delivered by the Holder to the Company.

 

(b)                                 Permitted Transfers.  Permitted transfers include (i) a transfer not involving a change in beneficial ownership, or (ii) transactions involving the distribution without consideration of Securities by any Holder to an entity which controls, is controlled by, or is under common control with such Holder; provided, in each case, that the Holder shall give written notice to the Company of the Holder’s intention to effect such disposition and shall have furnished the Company with a detailed description of the manner and circumstances of the proposed disposition.  For purposes of this Section 5(b), the term “control” means the possession, directly or indirectly, of the power to direct or to cause the direction of the management and policies of an entity, whether through ownership of voting securities, by contract or otherwise.

 

(c)                                  Investment Representation Statement.  Unless the rights under this Warrant are exercised pursuant to an effective registration statement under the Securities Act that includes the Shares with respect to which the Warrant was exercised, it shall be a condition to any exercise of the rights under this Warrant that the Holder shall have confirmed to the satisfaction of the Company in writing, substantially

 

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in the form of Exhibit A-1, that the Shares so purchased are being acquired solely for the Holder’s own account and not as a nominee for any other party, for investment and not with a view toward distribution or resale and that the Holder shall have confirmed such other matters related thereto as may be reasonably requested by the Company.

 

(d)                                 Securities Law Legend.  The Securities shall (unless otherwise permitted by the provisions of this Warrant) be stamped or imprinted with a legend substantially similar to the following (in addition to any legend required by state securities laws):

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES.  THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS IN ACCORDANCE WITH APPLICABLE REGISTRATION REQUIREMENTS OR AN EXEMPTION THEREFROM.  THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.  THIS CERTIFICATE MUST BE SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A CONDITION PRECEDENT TO THE SALE, TRANSFER, PLEDGE OR HYPOTHECATION OF ANY INTEREST IN ANY OF THE SECURITIES REPRESENTED HEREBY.

 

(e)                                  Market Stand-off Legend.  The Shares issued upon exercise hereof shall also be stamped or imprinted with a legend in substantially the following form:

 

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE, INCLUDING A LOCK-UP PERIOD IN THE EVENT OF A PUBLIC OFFERING, AS SET FORTH IN THE WARRANT PURSUANT TO WHICH THESE SHARES WERE ISSUED, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE COMPANY.

 

(f)                                   Instructions Regarding Transfer Restrictions.  The Holder consents to the Company making a notation on its records and giving instructions to any transfer agent in order to implement the restrictions on transfer established in this Section 5.

 

(g)                                  Removal of Legend.  The legend referring to federal and state securities laws identified in Section 5(d) stamped on a certificate evidencing the Shares and the stock transfer instructions and record notations with respect to such securities shall be removed and the Company shall issue a certificate without such legend to the holder of such securities if (i) such securities are registered under the Securities Act, or (ii) such holder provides the Company with an opinion of counsel reasonably acceptable to the Company to the effect that a sale or transfer of such securities may be made without registration or qualification.

 

6.                                      Adjustments.  Subject to the expiration of this Warrant pursuant to Section 8, the number and kind of shares purchasable hereunder and the Exercise Price therefor are subject to adjustment from time to time, as follows:

 

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(a)                                 Merger or Reorganization.  If at any time while this Warrant is outstanding there shall be any (i) reorganization, recapitalization, merger or consolidation (a “Reorganization”) involving the Company (other than as otherwise provided for herein) in which shares of the Company’s stock are converted into or exchanged for securities, cash or other property, or (ii) a sale or transfer of all or substantially all of the Company’s properties and assets to any other corporation or other entity (an “Asset Sale”) then, as a part of such Reorganization or Asset Sale, lawful provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of this Warrant, the kind and amount of securities, cash or other property of the successor corporation or other entity resulting from such Reorganization or Asset Sale, equivalent in value to that which a holder of the Shares deliverable upon exercise of this Warrant would have been entitled in such Reorganization or Asset Sale if the right to purchase the Shares hereunder had been exercised immediately prior to such Reorganization or Asset Sale.  The foregoing provision of this Section 6(a) shall similarly apply to successive Reorganizations or Asset Sales and to the stock or securities of any other corporation or other entity that are at the time receivable upon the exercise of this Warrant.  If the per-share consideration payable to the Holder for shares in connection with any such transaction is in a form other than cash or marketable securities, then the value of such consideration shall be determined in good faith by the Company’s Board of Directors.  In any such case, appropriate adjustment (as determined in good faith by the Board of Directors of the successor corporation (or, in the case of an Asset Sale, the Company’s Board of Directors)) shall be made in the application of the provisions of this Warrant with respect to the rights and interests of the Holder after such Reorganization to the end that the provisions of this Warrant shall be applicable after the event, as near as reasonably may be, in relation to any shares or other securities deliverable after that event upon the exercise of this Warrant.

 

(b)                                 Reclassification of Shares.  If the securities issuable upon exercise of this Warrant are changed into the same or a different number of securities of any other class or classes by reclassification, capital reorganization or otherwise (other than as otherwise provided for herein) (a “Reclassification”), then, in any such event, in lieu of the number of Shares which the Holder would otherwise have been entitled to receive, the Holder shall have the right thereafter to exercise this Warrant for a number of shares of such other class or classes of stock that a holder of the number of securities deliverable upon exercise of this Warrant immediately before that change would have been entitled to receive in such Reclassification, all subject to further adjustment as provided herein with respect to such other shares.

 

(c)                                  Subdivisions and Combinations.  In the event that the outstanding shares of common stock are subdivided (by stock split, by payment of a stock dividend or otherwise) into a greater number of shares of such securities, the number of Shares issuable upon exercise of the rights under this Warrant immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision, be proportionately increased, and the Exercise Price shall be proportionately decreased, and in the event that the outstanding shares of common stock are combined (by reclassification or otherwise) into a lesser number of shares of such securities, the number of Shares issuable upon exercise of the rights under this Warrant immediately prior to such combination shall, concurrently with the effectiveness of such combination, be proportionately decreased, and the Exercise Price shall be proportionately increased.

 

(d)                                 Notice of Adjustments.  Upon any adjustment in accordance with this Section 6, the Company shall give notice thereof to the Holder, which notice shall state the event giving rise to the adjustment, the Exercise Price as adjusted and the number of securities or other property purchasable upon the exercise of the rights under this Warrant, setting forth in reasonable detail the method of calculation of each.  The Company shall, upon the written request of any Holder, furnish or cause to be furnished to such Holder a certificate setting forth (i) such adjustments, (ii) the

 

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Exercise Price at the time in effect, and (iii) the number of securities and the amount, if any, of other property that at the time would be received upon exercise of this Warrant.

 

7.                                      Notification of Certain Events.  Prior to the expiration of this Warrant pursuant to Section 8, in the event that the Company shall authorize:

 

(a)                                 the issuance of any dividend or other distribution on the capital stock of the Company (other than (i) dividends or distributions otherwise provided for in Section 6, (ii) repurchases of common stock issued to or held by employees, officers, directors or consultants of the Company or its subsidiaries upon termination of their employment or services pursuant to agreements providing for the right of said repurchase; (iii) repurchases of common stock issued to or held by employees, officers, directors or consultants of the Company or its subsidiaries pursuant to rights of first refusal or first offer contained in agreements providing for such rights; or (iv) repurchases of capital stock of the Company in connection with the settlement of disputes with any stockholder), whether in cash, property, stock or other securities;

 

(b)                                 a Liquidation Event (as defined in Section 3(d) of Article IV of the Company’s Fifth Amended and Restated Certificate of Incorporation);

 

(c)                                  the voluntary liquidation, dissolution or winding up of the Company; or

 

the Company shall send to the Holder of this Warrant at least ten (10) days prior written notice of the date on which a record shall be taken for any such dividend or distribution specified in clause (a) or the expected effective date or termination date, as applicable, of any such other event specified in clauses (b) or (c), as applicable.  The notice provisions set forth in this section may be shortened or waived prospectively or retrospectively by the consent of the Holder of this Warrant.

 

8.                                      Expiration of the Warrant.  This Warrant shall expire and shall no longer be exercisable as of 5:00 p.m., Pacific time, on the date that is eight (8) years after the date this Warrant is first issued.

 

9.                                      No Rights as a Stockholder.  Nothing contained herein shall entitle the Holder to any rights as a stockholder of the Company or to be deemed the holder of any securities that may at any time be issuable on the exercise of the rights hereunder for any purpose nor shall anything contained herein be construed to confer upon the Holder, as such, any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value or change of stock to no par value, consolidation, merger, conveyance or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or any other rights of a stockholder of the Company until the rights under the Warrant shall have been exercised and the Shares purchasable upon exercise of the rights hereunder shall have become deliverable as provided herein.

 

10.                               Market Stand-off.  The Holder of this Warrant hereby agrees that such Holder shall not sell or otherwise transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, of any common stock (or other securities) of the Company held by the Holder (other than those included in the registration) during the one hundred eighty (180) day period following the effective date of the registration statement for the Company’s initial public offering filed under the Securities Act (or such other period as may be requested by the Company or an underwriter to accommodate regulatory restrictions on (i) the publication or other distribution of research reports and (ii) analyst recommendations and opinions, including, but not limited to, the restrictions contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments

 

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thereto), provided that all officers and directors of the Company and holders of at least three percent (3%) of the Company’s voting securities are bound by and have entered into similar agreements.  The obligations described in this section shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a transaction on Form S-4 or similar forms that may be promulgated in the future.  The Company may impose stop-transfer instructions and may stamp each certificate with a legend as substantially set forth in Section 5(e) with respect to the shares of common stock (or other securities) subject to the foregoing restriction until the end of such one hundred eighty (180) day (or other) period.  The Holder agrees to execute a market stand-off agreement with the underwriters in the offering in customary form consistent with the provision of this section.

 

11.                               Representations and Warranties of the Holder.  By acceptance of this Warrant, the Holder represents and warrants to the Company as follows:

 

(a)                                 No Registration.  The Holder understands that the Securities have not been, and will not be, registered under the Securities Act by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Holder’s representations as expressed herein or otherwise made pursuant hereto.

 

(b)                                 Investment Intent.  The Holder is acquiring the Securities for investment for its own account, not as a nominee or agent, and not with a view to, or for resale in connection with, any distribution thereof.  The Holder has no present intention of selling, granting any participation in, or otherwise distributing the Securities, nor does it have any contract, undertaking, agreement or arrangement for the same.

 

(c)                                  Investment Experience.  The Holder has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company, and has such knowledge and experience in financial or business matters so that it is capable of evaluating the merits and risks of its investment in the Company and protecting its own interests.

 

(d)                                 Speculative Nature of Investment.  The Holder understands and acknowledges that its investment in the Company is highly speculative and involves substantial risks, The Holder can bear the economic risk of its investment and is able, without impairing its financial condition, to hold the Securities for an indefinite period of time and to suffer a complete loss of its investment.

 

(e)                                  Access to Data.  The Holder has had an opportunity to ask questions of officers of the Company, which questions were answered to its satisfaction.  The Holder believes that it has received all the information that it considers necessary or appropriate for deciding whether to acquire the Securities.  The Holder understands that any such discussions, as well as any information issued by the Company, were intended to describe certain aspects of the Company’s business and prospects, but were not necessarily a thorough or exhaustive description.  The Holder acknowledges that any business plans prepared by the Company have been, and continue to be, subject to change and that any projections included in such business plans or otherwise are necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the projections will not materialize or will vary significantly from actual results.

 

(f)                                   Accredited Investor.  The Holder is an “accredited investor” within the meaning of Regulation D, Rule 501(a), promulgated by the Securities and Exchange Commission and agrees to submit to the Company such further assurances of such status as may be reasonably requested by the Company.

 

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(g)                                  Residency.  The residency of the Holder (or, in the case of a partnership or corporation, such entity’s principal place of business) is correctly set forth on the signature page hereto.

 

(h)                                 Restrictions on Resales.  The Holder acknowledges that the Securities must be held indefinitely unless subsequently registered under the Securities Act or an exemption from such registration is available.  The Holder is aware of the provisions of Rule 144 promulgated under the Securities Act, which permit resale of shares purchased in a private placement subject to the satisfaction of certain conditions, which may include, among other things, the availability of certain current public information about the Company; the resale occurring not less than a specified period after a party has purchased and paid for the security to be sold; the number of shares being sold during any three-month period not exceeding specified limitations; the sale being effected through a “broker’s transaction,” a transaction directly with a “market maker” or a “riskless principal transaction” (as those terms are defined in the Securities Act or the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder); and the filing of a Form 144 notice, if applicable.  The Holder acknowledges and understands that the Company may not be satisfying the current public information requirement of Rule 144 at the time the Holder wishes to sell the Securities and that, in such event, the Holder may be precluded from selling the Securities under Rule 144 even if the other applicable requirements of Rule 144 have been satisfied.  The Holder acknowledges that, in the event the applicable requirements of Rule 144 are not met, registration under the Securities Act or an exemption from registration will be required for any disposition of the Securities.  The Holder understands that, although Rule 144 is not exclusive, the Securities and Exchange Commission has expressed its opinion that persons proposing to sell restricted securities received in a private offering other than in a registered offering or pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales and that such persons and the brokers who participate in the transactions do so at their own risk.

 

(i)                                     No Public Market.  The Holder understands and acknowledges that no public market now exists for any of the securities issued by the Company and that the Company has made no assurances that a public market will ever exist for the Company’s securities.

 

(j)                                    Brokers and Finders.  The Holder has not engaged any brokers, finders or agents in connection with the Securities, and the Company has not incurred nor will incur, directly or indirectly, as a result of any action taken by the Holder, any liability for brokerage or finders’ fees or agents’ commissions or any similar charges in connection with the Securities.

 

(k)                                 Legal Counsel.  The Holder has had the opportunity to review this Warrant, the exhibits and schedules attached hereto and the transactions contemplated by this Warrant with its own legal counsel.  The Holder is not relying on any statements or representations of the Company or its agents for legal advice with respect to this investment or the transactions contemplated by this Warrant.

 

(l)                                     Tax Advisors.  The Holder has reviewed with its own tax advisors the U.S. federal, state and local and non-U.S. tax consequences of this investment and the transactions contemplated by this Warrant.  With respect to such matters, the Holder relies solely on any such advisors and not on any statements or representations of the Company or any of its agents, written or oral.  The Holder understands that it (and not the Company) shall be responsible for its own tax liability that may arise as a result of this investment and the transactions contemplated by this Warrant.

 

12.                               Registration Rights.  The registration rights of the Holder of this Warrant with respect to the Shares shall be the same as granted in the Company’s Amended and Restated Investors’ Rights Agreement, as amended, and in existence as of the date hereof (the “Investors’ Rights Agreement”), with

 

10

 

respect to the “Registrable Securities” (as defined in the Investors’ Rights Agreement).  Upon exercise, in whole or in part, of this Warrant, such Holder shall become a signatory to the Investors’ Rights Agreement (as may be further amended) or, in the event such agreement is no longer in existence, a substantially similar agreement conferring, in all material respects, the same rights and obligations.

 

13.                               Miscellaneous.

 

(a)                                 Amendments.  Except as expressly provided herein, neither this Warrant nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument referencing this Warrant and signed by the Company and the Holder.  Any amendment, waiver, discharge or termination effected in accordance with this Section 13(a) shall be binding upon the Holder, each future holder of such Common Warrant and the Company.

 

(b)                                 Waivers.  No waiver of any single breach or default shall be deemed a waiver of any other breach or default theretofore or thereafter occurring.

 

(c)                                  Notices.  All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid, sent by facsimile or electronic mail if to the Holder) or otherwise delivered by hand, messenger or courier service addressed:

 

(i)                       if to the Holder, to the Holder at the Holder’s address, facsimile number or electronic mail address as shown in the Company’s records, as may be updated in accordance with the provisions hereof, or until any such Holder so furnishes an address, facsimile number or electronic mail address to the Company, then to and at the address, facsimile number or electronic mail address of the last holder of this Warrant for which the Company has contact information in its records; or

 

(ii)                    if to the Company, to the attention of the President of the Company at the Company’s address as shown on the signature page hereto (Facsimile: (310) 496-0948), or at such other address as the Company shall have furnished to the Holder, with a copy to Troy Foster, Wilson Sonsini Goodrich & Rosati, P.C., 650 Page Mill Road, Palo Alto, California 94304 (Facsimile: (650) 493-9311).

 

Each such notice or other communication shall for all purposes of this Warrant be treated as effective or having been given (i) if delivered by hand, messenger or courier service, when delivered, or (ii) if sent by mail, at the earlier of its receipt or 72 hours after the same has been deposited in a regularly maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid, or (iii) if sent by facsimile, upon confirmation of facsimile transfer or, if sent by electronic mail, upon confirmation of delivery when directed to the relevant electronic mail address.  In the event of any conflict between the Company’s books and records and this Warrant or any notice delivered hereunder, the Company’s books and records will control absent fraud or error.

 

(d)                                 Governing Law.  This Warrant and all actions arising out of or in connection with this Warrant shall be governed by and construed in accordance with the laws of the State of California, without regard to the conflicts of law provisions of the State of California, or of any other state.

 

(e)                                  Jurisdiction and Venue.  Each of the Holder and the Company irrevocably consents to the exclusive jurisdiction and venue of any court within Los Angeles County, State of California, in connection with any matter based upon or arising out of this Warrant or the matters contemplated herein, and

 

11

 

agrees that process may be served upon them in any manner authorized by the laws of the State of California for such persons.

 

(f)                                   Titles and Subtitles.  The titles and subtitles used in this Warrant are used for convenience only and are not to be considered in construing or interpreting this Warrant.  All references in this Warrant to sections, paragraphs and exhibits shall, unless otherwise provided, refer to sections and paragraphs hereof and exhibits attached hereto.

 

(g)                                  Severability.  If any provision of this Warrant becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Warrant, and such illegal, unenforceable or void provision shall be replaced with a valid and enforceable provision that will achieve, to the extent possible, the same economic, business and other purposes of the illegal, unenforceable or void provision.  The balance of this Warrant shall be enforceable in accordance with its terms.

 

(h)                                 Waiver of July Trial.  EACH OF THE HOLDER AND THE COMPANY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATED TO THIS WARRANT. If the waiver of jury trial set forth in this paragraph is not enforceable, then any claim or cause of action arising out of or relating to this Warrant shall be settled by judicial reference pursuant to California Code of Civil Procedure Section 638 et seq. before a referee sitting without a jury, such referee to be mutually acceptable to the parties or, if no agreement is reached, by a referee appointed by the Presiding Judge of the California Superior Court for Santa Clara County.  This paragraph shall not restrict the Holder or the Company from exercising remedies under the Uniform Commercial Code or from exercising pre-judgment remedies under applicable law.

 

(i)                                     California Corporate Securities Law.  THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS WARRANT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF THE CALIFORNIA CORPORATIONS CODE.  THE RIGHTS OF ALL PARTIES TO THIS WARRANT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

 

(j)                                    Saturdays, Sundays and Holidays.  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall be a Saturday, Sunday or U.S. federal holiday, then such action may be taken or such right may be exercised on the next succeeding day that is not a Saturday, Sunday or U.S. federal holiday.

 

(k)                                 Rights and Obligations Survive Exercise of the Warrant.  Except as otherwise provided herein, the rights and obligations of the Company and the Holder under this Warrant shall survive exercise of this Warrant.

 

(l)                                     Entire Agreement.  Except as expressly set forth herein, this Warrant (including the exhibits attached hereto) constitutes the entire agreement and understanding of the Company and the Holder with respect to the subject matter hereof and supersede all prior agreements and understandings relating to the subject matter hereof.

 

12

 

(signature page follows)

 

13

 

The Company and the Holder sign this Warrant as of the date stated on the first page.

 

	
 
    	
TRUECAR, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Bernard Brennar
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Bernard   Brennar
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Chief   Strategy Officer
    
	
 
    	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
 
    
	
 
    	
225   Santa Monica Blvd, 12th Floor
    
	
 
    	
Santa   Monica, California 90401
    
	
 
    	
 
    
	
AGREED   AND ACKNOWLEDGED,
    	
 
    
	
 
    	
 
    
	
GR   MATCH, LLC
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Bennet van de Bunt
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Bennet   van de Bunt
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Manager
    	
 
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    
	
 
    	
 
    
	
3340   Ocean Park Boulevard, Suite 3000
    	
 
    
	
Santa   Monica, CA 90405
    	
 
    
	
Attn:   General Counsel
    	
 
    
	
Fax   number: (310) 581-3443
    	
 
    
	
 
    	
 
    
	
Email   address: sblackman@guthy-renker.com
    	
 
    

 

 

APPENDIX A

 

VESTING SCHEDULE

 

Capitalized terms used but not defined in this Appendix A shall have the meanings ascribed to them in the Media Services Agreement.

 

For every Eighteen and 60/100 Dollars ($18.60) of Media Placement Costs expended by Holder (or any of Holder’s Affiliates or Holder’s permitted successors or assigns as provided under the Media Services Agreement) on behalf of Company and pursuant to the terms and conditions of the Media Services Agreement, this Warrant will become Vested as to one single Share, up to the total number of Shares exercisable under this Warrant; provided, however, the foregoing vesting schedule is subject to acceleration pursuant to Sections 3.2 and 4.4 of the Media Services Agreement and Section 2(a) of this Warrant.

 

 

EXHIBIT A

 

NOTICE OF EXERCISE

 

TO:                                                                         TrueCar, Inc. (the “Company”)

 

Attention:                                        President

 

(1)                                 Exercise.  The undersigned elects to purchase the following pursuant to the terms of the attached warrant:

 

	
Number   of shares:
    	
 
    
	
 
    	
 
    
	
Type   of security:
    	
 
    

 

(2)                                 Method of Exercise.  The undersigned elects to exercise the attached warrant pursuant to:

 

o                                    A cash payment and tenders herewith payment of the purchase price for such shares, together with all applicable transfer taxes, if any.

 

o                                    The net issue exercise provisions of Section 2(c) of the attached warrant.

 

(3)                                 Conditional Exercise.  Is this a conditional exercise pursuant to Section 2(f):

 

o                                    Yes                                                    o                                    No

 

If “Yes,” indicate the applicable condition:

	
 
    

 

(4)                                 Stock Certificate.  Please issue a certificate or certificates representing the shares in the name of:

 

o                                    The undersigned

 

	
o                                    Other—Name:
    	
 
    
	
 
    	
 
    
	
 
    	
Address:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

(5)                                 Unexercised Portion of the Warrant.  Please issue a new warrant for the unexercised portion of the attached warrant in the name of:

 

o                                    The undersigned

 

	
o                                    Other—Name:
    	
 
    
	
 
    	
 
    
	
 
    	
Address:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

o                                    Not applicable

 

 

(6)                                 Investment Intent.  The undersigned represents and warrants that the aforesaid shares are being acquired for investment for its own account, not as a nominee or agent, and not with a view to, or for resale in connection with, the distribution thereof, and that the undersigned has no present intention of selling, granting any participation in, or otherwise distributing the shares, nor does it have any contract, undertaking, agreement or arrangement for the same, and all representations and warranties of the undersigned set forth in Section 11 of the attached warrant are true and correct as of the date hereof.

 

(7)                                 Investment Representation Statement and Market Stand-Off Agreement.  The undersigned has executed, and delivers herewith, an Investment Representation Statement and Market Stand-Off Agreement in a form substantially similar to the form attached to the warrant as Exhibit A-1.

 

(8)                                 Consent to Receipt of Electronic Notice.  Subject to the limitations set forth in Delaware General Corporation Law §232(e), the undersigned consents to the delivery of any notice to stockholders given by the Company under the Delaware General Corporation Law or the Company’s certificate of incorporation or bylaws by (i) facsimile telecommunication to the facsimile number provided below (or to any other facsimile number for the undersigned in the Company’s records), (ii) electronic mail to the electronic mail address provided below (or to any other electronic mail address for the undersigned in the Company’s records), (iii) posting on an electronic network together with separate notice to the undersigned of such specific posting or (iv) any other form of electronic transmission (as defined in the Delaware General Corporation Law) directed to the undersigned.  This consent may be revoked by the undersigned by written notice to the Company and may be deemed revoked in the circumstances specified in Delaware General Corporation Law §232.

 

	
 
    	
 
    
	
 
    	
(Print name of the warrant holder)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Signature)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Name and title of signatory, if applicable)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Date)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Fax number)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Email address)
    

 

2

 

EXHIBIT A-1

 

INVESTMENT REPRESENTATION STATEMENT

AND

MARKET STAND-OFF AGREEMENT

 

INVESTOR:                                                                            GR MATCH, LLC

 

COMPANY:                                                                            TRUECAR, INC.

 

SECURITIES:                                                                 THE WARRANT ISSUED ON FEBRUARY 25, 2011 (THE “WARRANT”) AND THE SECURITIES ISSUED OR ISSUABLE UPON EXERCISE THEREOF

 

	
DATE:
    	
 
    	
 
    

 

In connection with the purchase or acquisition of the above-listed Securities, the undersigned Investor represents and warrants to, and agrees with, the Company as follows:

 

1.                                      No Registration.  The Investor understands that the Securities have not been, and will not be, registered under the Securities Act of 1933, as amended (the “Securities Act”), by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Investor’s representations as expressed herein or otherwise made pursuant hereto.

 

2.                                      Investment Intent.  The Investor is acquiring the Securities for investment for its own account, not as a nominee or agent, and not with a view to, or for resale in connection with, any distribution thereof.  The Investor has no present intention of selling, granting any participation in, or otherwise distributing the Securities, nor does it have any contract, undertaking, agreement or arrangement for the same.

 

3.                                      Investment Experience.  The Investor has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company, and has such knowledge and experience in financial or business matters so that it is capable of evaluating the merits and risks of its investment in the Company and protecting its own interests.

 

4.                                      Speculative Nature of Investment.  The Investor understands and acknowledges that its investment in the Company is highly speculative and involves substantial risks.  The Investor can bear the economic risk of its investment and is able, without impairing its financial condition, to hold the Securities for an indefinite period of time and to suffer a complete loss of its investment.

 

5.                                      Access to Data.  The Investor has had an opportunity to ask questions of officers of the Company, which questions were answered to its satisfaction.  The Investor believes that it has received all the information that it considers necessary or appropriate for deciding whether to acquire the Securities.  The Investor understands that any such discussions, as well as any information issued by the Company, were intended to describe certain aspects of the Company’s business and prospects, but were not necessarily a thorough or exhaustive description.  The Investor acknowledges that any business plans prepared by the Company have been, and continue to be, subject to change and that any projections included in such business

 

 

plans or otherwise are necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the projections will not materialize or will vary significantly from actual results.

 

6.                                      Accredited Investor.  The Investor is an “accredited investor” within the meaning of Regulation D, Rule 501(a), promulgated by the Securities and Exchange Commission and agrees to submit to the Company such further assurances of such status as may be reasonably requested by the Company.

 

7.                                      Residency.  The residency of the Investor (or, in the case of a partnership or corporation, such entity’s principal place of business) is correctly set forth on the signature page hereto.

 

8.                                      Restrictions on Resales.  The Investor acknowledges that the Securities must be held indefinitely unless subsequently registered under the Securities Act or an exemption from such registration is available.  The investor is aware of the provisions of Rule 144 promulgated under the Securities Act, which permit resale of shares purchased in a private placement subject to the satisfaction of certain conditions, which may include, among other things, the availability of certain current public information about the Company; the resale occurring not less than a specified period after a party has purchased and paid for the security to be sold; the number of shares being sold during any three-month period not exceeding specified limitations; the sale being effected through a “broker’s transaction,” a transaction directly with a “market maker” or a “riskless principal transaction” (as those terms are defined in the Securities Act or the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder); and the filing of a Form 144 notice, if applicable.  The Investor acknowledges and understands that the Company may not be satisfying the current public information requirement of Rule 144 at the time the Investor wishes to sell the Securities and that, in such event, the Investor may be precluded from selling the Securities under Rule 144 even if the other applicable requirements of Rule 144 have been satisfied.  The Investor understands and acknowledges that, in the event the applicable requirements of Rule 144 are not met, registration under the Securities Act or an exemption from registration will be required for any disposition of the Securities.  The Investor understands that, although Rule 144 is not exclusive, the Securities and Exchange Commission has expressed its opinion that persons proposing to sell restricted securities received in a private offering other than in a registered offering or pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registration is available for those offers or sales and that those persons and the brokers who participate in the transactions do so at their own risk.

 

9.                                      No Public Market.  The Holder understands and acknowledges that no public market now exists for any of the securities issued by the Company and that the Company has made no assurances that a public market will ever exist for the Company’s securities.

 

10.                               Brokers and Finders.  The Investor has not engaged any brokers, finders or agents in connection with the Securities, and the Company has not incurred nor will incur, directly or indirectly, as a result of any action taken by the Investor, any liability for brokerage or finders’ fees or agents’ commissions or any similar charges in connection with the Securities.

 

11.                               Legal Counsel.  The investor has had the opportunity to review the Warrant, the exhibits and schedules attached thereto and the transactions contemplated by the Warrant with its own legal counsel.  The investor is not relying on any statements or representations of the Company or its agents for legal advice with respect to this investment or the transactions contemplated by the Warrant.

 

12.                               Tax Advisors.  The Investor has reviewed with its own tax advisors the U.S. federal, state and local and non-U.S. tax consequences of this investment and the transactions contemplated by the Warrant.  With respect to such matters, the Investor relies solely on such advisors and not on any statements

 

2

 

or representations of the Company or any of its agents, written or oral.  The Investor understands that it (and not the Company) shall be responsible for its own tax liability that may arise as a result of this investment or the transactions contemplated by the Warrant.

 

13.                               Market Stand-off.  The Investor agrees that the Investor shall not sell or otherwise transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, of any common stock (or other securities) of the Company held by the Investor (other than those included in the registration) during the one hundred eighty (180) day period following the effective date of the registration statement for the Company’s initial public offering filed under the Securities Act (or such other period as may be requested by the Company or an underwriter to accommodate regulatory restrictions on (i) the publication or other distribution of research reports and (ii) analyst recommendations and opinions, including, but not limited to, the restrictions contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments thereto), provided that all officers and directors of the Company and holders of at least three percent (3%) of the Company’s voting securities are bound by and have entered into similar agreements.  The obligations described in this section shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a transaction on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions and may stamp each certificate with a legend with respect to the shares of common stock (or other securities) subject to the foregoing restriction until the end of such one hundred eighty (180) day (or other) period.  The Investor agrees to execute a market stand-off agreement with the relevant underwriters in customary form consistent with the provisions of this section.

 

(signature page follows)

 

3

 

The investor is signing this Investment Representation Statement and Market Stand-Off Agreement on the date first written above.

 

	
 
    	
INVESTOR
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Print name of the investor)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Signature)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Name and title of signatory, if applicable)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Street address)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(City, state and ZIP)
    

 

4

 

EXHIBIT B

 

ASSIGNMENT FORM

 

	
ASSIGNOR:
    	
 
    
	
 
    	
 
    
	
COMPANY:
    	
TRUECAR, INC.
    
	
 
    	
 
    
	
WARRANT:
    	
THE   WARRANT TO PURCHASE SHARES OF COMMON STOCK ISSUED ON FEBRUARY 25, 2011 (THE “WARRANT”)
    
	
 
    	
 
    
	
DATE:
    	
 
    	
 
    

 

 

(9)                                 Assignment.  The undersigned registered holder of the Warrant (“Assignor”) assigns and transfers to the assignee named below (“Assignee”) all of the rights of Assignor under the Warrant, with respect to the number of shares set forth below:

 

	
Name   of Assignee:
    	
 
    
	
 
    	
 
    
	
Address   of Assignee:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Number   of Shares Assigned:
    	
 
    
				

 

and does irrevocably constitute and appoint                                     as attorney to make such transfer on the books of TrueCar, Inc., maintained for the purpose, with full power of substitution in the premises.

 

(10)                          Obligations of Assignee.  Assignee agrees to take and hold the Warrant and any shares of stock to be issued upon exercise of the rights thereunder (the “Securities”) subject to, and to be bound by, the terms and conditions set forth in the Warrant to the same extent as if Assignee were the original holder thereof.

 

(11)                          Investment Intent.  Assignee represents and warrants that the Securities are being acquired for investment for its own account, not as a nominee or agent, and not with a view to, or for resale in connection with, the distribution thereof, and that Assignee has no present intention of selling, granting any participation in, or otherwise distributing the shares, nor does it have any contract, undertaking, agreement or arrangement for the same, and all representations and warranties set forth in Section 11 of the Warrant are true and correct as to Assignee as of the date hereof.

 

(12)                          Investment Representation Statement and Market Stand-Off Agreement.  Assignee has executed, and delivers herewith, an Investment Representation Statement and Market Stand-Off Agreement in a form substantially similar to the form attached to the Warrant as Exhibit A-1.

 

 

 

Assignor and Assignee are signing this Assignment Form on the date first set forth above.

 

	
ASSIGNOR
    	
ASSIGNEE
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Print name of Assignor)
    	
 
    	
(Print name of Assignee)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Signature of Assignor)
    	
 
    	
(Signature of Assignee)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Print name of signatory, if applicable)
    	
 
    	
(Print name of signatory, if applicable)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Print title of signatory, if applicable)
    	
 
    	
(Print title of signatory, if applicable)
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
Address:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

2Exhibit 4.4

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED.

 

Void after

 

September 25, 2014

 

ZAG.COM INC.

 

WARRANT TO PURCHASE SHARES

 

This Warrant is issued to Greenridge Capital LLC by Zag.com Inc., a Delaware corporation (the “Company”), pursuant to the terms of that certain Settlement and Release Agreement (“Release”) dated as of September 25, 2007.

 

1.             Purchase of Shares. Subject to the terms and conditions hereinafter set forth, the holder of this Warrant is entitled, upon surrender of this Warrant at the principal office of the Company (or at such other place as the Company shall notify the holder hereof in writing), to purchase from the Company up to Forty-Eight Thousand Three Hundred Thirty-Three (48,333) fully paid and nonassessable Shares.

 

2.             Definitions.

 

(a)           Exercise Price. The exercise price for the Shares shall be $1.02 per share.

 

(b)           Exercise Period. This Warrant shall be exercisable, in whole or in part, during the term commencing on the date hereof and ending on the expiration of this Warrant pursuant to Section 13 hereof.

 

(c)           The Shares. The term “Shares” shall mean shares of the Company’s new Series B Preferred Stock.

 

3.             Method of Exercise. While this Warrant remains outstanding and exercisable in accordance with Section 2 above, the holder may exercise, in whole or in part, the purchase rights evidenced hereby in either of the methods described below.

 

(a)           In a cash exercise:

 

 

(i)    the surrender of the Warrant (or an affidavit of lost warrant certificate), together with a notice of exercise to the Secretary of the Company at its principal offices; and

 

(ii)   the payment to the Company of an amount equal to the aggregate Exercise Price for the number of Shares being purchased.

 

(b)           In lieu of exercising this Warrant for cash, the holder of the Warrant may elect to receive shares equal to the value of this Warrant (or the portion thereof being exercised) by surrender of this Warrant at the principal office of the Company together with notice of such election (a “Net Exercise”).  The Company shall issue to such Holder a number of Shares computed using the following formula:

 

X=           Y * (A - B) / A

 

Where

 

X =          The number of Shares to be issued to the Holder.

 

Y =          The number of Shares purchasable under this Warrant or, if only a portion of the Warrant is being exercised, the number of the Shares being exercised (at the date of such calculation).

 

A =          The fair market value of one (1) Share (at the date of such calculation).

 

B =          The Exercise Price (as adjusted to the date of such calculations).

 

For purposes of this Section, the fair market value of a Share shall mean the average of the closing bid and asked prices of Shares quoted in the over-the-counter market in which the Shares are traded or the closing price quoted on any exchange on which the Shares are listed, whichever is applicable, as published in the Western Edition of The Wall Street Journal for the ten (10) trading days prior to the date of determination of fair market value (or such shorter period of time during which such stock was traded over-the-counter or on such exchange).  If the Shares are not traded on the over-the-counter market or on an exchange, the fair market value shall be the price per Share that the Company could obtain from a willing buyer for Shares sold by the Company from authorized but unissued Shares, as such price shall be determined in good faith by the Company’s Board of Directors.

 

4.             Certificates for Shares.  Upon the exercise of the purchase rights evidenced by this Warrant and the execution by the Holder of the applicable investment documents with respect to stockholder rights and obligations, one or more certificates for the number of Shares so purchased shall be issued to the holder of the Warrant as soon as practicable thereafter, and in any event within thirty (30) days of the delivery of the subscription notice.  In case such exercise is in part only, a new warrant or warrants (dated the date hereof) of like tenor shall be issued as soon as practicable thereafter, and in any event within thirty (30) days of the delivery of the subscription notice and the payment in full of the applicable exercise price as described in Section 3 above, calling in the aggregate on the face or faces thereof for the number of Shares equal to the number of such Shares called for on the face of this Warrant minus the number of Shares purchased by the holder upon all

 

2

 

exercises made in accordance with Section 3 above; provided however, that partial exercises shall be subject to a minimum exercise condition equal to the lesser of 5,000 Shares (as adjusted for stock splits and similar transactions) or all of the shares subject to Warrant.

 

5.             Issuance of Shares. The Company covenants that the Shares, when issued pursuant to the exercise of this Warrant, will be duly and validly issued, fully paid and nonassessable and free from all taxes, liens, and charges with respect to the issuance thereof, except (1) as required under applicable law or (2) as the holder of this Warrant may otherwise agree to in writing with the Company.

 

6.             Adjustment of Exercise Price and Number of Shares. The number of and kind of securities purchasable upon exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time as follows:

 

(a)           Subdivisions, Combinations and Other Issuances. If the Company shall at any time prior to the expiration of this Warrant subdivide the Shares, by split-up or otherwise, or combine its Shares, or issue additional shares of its Shares as a dividend, the number of Shares issuable on the exercise of this Warrant shall forthwith be proportionately increased in the case of a subdivision or stock dividend, or proportionately decreased in the case of a combination.  Appropriate adjustments shall also be made to the purchase price payable per share, but the aggregate purchase price payable for the total number of Shares purchasable under this Warrant (as adjusted) shall remain the same.  Any adjustment under this Section 6(a) shall become effective at the close of business on the date the subdivision or combination becomes effective, or as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend.

 

(b)           Reclassification, Reorganization and Consolidation. In case of any  reclassification, capital reorganization, or change in the capital stock of the Company (other than as a result of a subdivision, combination, or stock dividend provided for in Section 6(a) above), then the Company shall make appropriate provision so that the holder of this Warrant shall have the right at any time 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 as were purchasable by the holder of 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 interest 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 or other securities or property thereafter purchasable upon exercise of this Warrant.

 

3

 

7.             No Fractional Shares or Scrip.  No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional shares the Company shall make a cash payment therefor on the basis of the Exercise Price then in effect.

 

8.             Representations and Covenants of the Company.

 

(a)           The Company represents that all corporate actions on the part of the Company, its officers, directors and stockholders necessary for the sale and issuance of this Warrant have been taken.

 

(b)           In the event of any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend which is the same as cash dividends paid in previous quarters or a stock dividend) or other distribution, the Company shall mail to the holder, at least ten (10) Business Days prior to such record date, a notice specifying the date on which any such record is to be taken for the purpose of such dividend or distribution.

 

(c)           The Company further covenants and agrees that the Company will at all times during the Exercise Period have authorized and reserved, free from preemptive rights, a sufficient number of Shares to provide for the exercise of the rights represented by this Warrant.  If at any time during the Exercise Period the number of authorized but unissued Shares shall not be sufficient to permit exercise of this Warrant, the Company will use reasonable best efforts to take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of shares to such number as shall be sufficient for such purposes.

 

(d)           Except and to the extent waived or consented to by the holder, or as otherwise permitted under the terms hereof, the Company will not avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may be reasonably necessary or appropriate in order to protect the exercise rights of the holder against substantial impairment.

 

9.             Representations by the Holder.  The Holder represents to the Company as follows:

 

(a)           This Warrant and the Shares issuable upon exercise thereof are being acquired for its own account, 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 of 1933, as amended (the “Act”).  Upon exercise of this Warrant, the Holder shall, if so requested by the Company, confirm in writing, in a form satisfactory to the Company, that the securities issuable upon exercise of this Warrant are being acquired for investment and not with a view toward distribution or resale.

 

(b)           The Holder understands that the Warrant and the Shares have not been registered under the Act by reason of their issuance in a transaction exempt from the registration and prospectus delivery requirements of the Act pursuant to Section 4(2) thereof, and that they must be held by the Holder indefinitely, and that the Holder must therefore bear the economic risk of such investment indefinitely, unless a subsequent disposition thereof is registered under the Act or is

 

4

 

exempted from such registration.  The Holder further understands that the Warrant and the Shares have not been qualified under the California Securities Law of 1968 (the “California Law”) by reason of their issuance in a transaction exempt from the qualification requirements of the California Law pursuant to Section 25102(f) thereof, which exemption depends upon, among other things, the bona fide nature of the Holder’s investment intent expressed above.

 

(c)           The Holder has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the purchase of this Warrant and the Shares purchasable pursuant to the terms of this Warrant and of protecting its interests in connection therewith.

 

(d)           The Holder is able to bear the economic risk of the purchase of the Shares pursuant to the terms of this Warrant and a complete loss of its investment therein.

 

(e)           The Holder is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated under the Act.

 

10.          Restrictive Legend.

 

The Shares (Unless registered under the Act) shall be stamped or imprinted with a legend in substantially the following form:

 

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.  COPIES OF THE AGREEMENT COVERING THE PURCHASE OF THESE SHARES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY.

 

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS PURSUANT TO AN AGREEMENT BETWEEN THE HOLDER AND THE COMPANY, WHICH AGREEMENT WILL BE MADE AVAILABLE UPON REQUEST TO THE COMPANY.

 

11.          Warrants Transferable.  Subject to compliance with the terms and conditions of this Section 11 and that certain Right of First Refusal Agreement by and between the Company and certain of its investors, if applicable, this Warrant and all rights hereunder are transferable, in whole or in part, without charge to the holder hereof (except for transfer taxes), upon surrender of this Warrant properly endorsed or accompanied by written instructions of transfer, provided that any transferee shall first agree in writing to be bound by all the terms hereof to the same extent as if a

 

5

 

signatory hereto.  With respect to any offer, sale or other disposition of this Warrant or any Shares acquired pursuant to the exercise of this Warrant prior to registration of such Warrant or Shares, the holder hereof agrees to give written notice to the Company prior thereto, describing briefly the manner thereof, together with a written opinion of such holder’s counsel, or other evidence, if requested by the Company, to the effect that such offer, sale or other disposition may be effected without registration or qualification (under the Act as then in effect or any federal or state securities law then in effect) of this Warrant or the Shares and indicating whether or not under the Act certificates for this Warrant or the Shares to be sold or otherwise disposed of require any restrictive legend as to applicable restrictions on transferability in order to ensure compliance with such law.  Upon receiving such written notice and reasonably satisfactory opinion or other evidence, if so requested, the Company, as promptly as practicable, shall notify such holder that such holder may sell or otherwise dispose of this Warrant or such Shares, all in accordance with the terms of the notice delivered to the Company.  If a determination has been made pursuant to this Section 11 that the opinion of counsel for the holder or other evidence is not reasonably satisfactory to the Company, the Company shall so notify the holder promptly with details thereof after such determination has been made.  Each certificate representing this Warrant or the Shares transferred in accordance with this Section 11 shall bear a legend as to the applicable restrictions on transferability in order to ensure compliance with such laws, unless in the aforesaid opinion of counsel for the holder, such legend is not required in order to ensure compliance with such laws.  The Company may issue stop transfer instructions to its transfer agent in connection with such restrictions.

 

12.          Rights of Stockholders.  No holder of this Warrant shall be entitled, as a Warrant holder, to vote or receive dividends or be deemed the holder of the Shares or any other securities of the Company which may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the holder of this Warrant, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification  of stock, change of par value, consolidation, merger, conveyance, or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised and the Shares purchasable upon the exercise hereof shall have become deliverable, as provided herein.

 

13.          Expiration of Warrant; Notice of Certain Events Terminating This Warrant.

 

(a)           This Warrant shall expire and shall no longer be exercisable upon the earliest to occur of:

 

(i)        5:00 p.m., California local time, on September 25, 2014; or

 

(b)           Any Change of Control.  “Change of Control” for purposes of this Section 13 shall mean (1) any consolidation or merger involving the Company pursuant to which the Company’s stockholders immediately prior to such consolidation or merger own, immediately after such consolidation or merger, less than 50% of the voting securities of the surviving entity, (ii) any transaction or series of related transactions in which 50% or more of the Company’s voting power is transferred to persons other than the Company’s stockholders immediately prior to such transaction

 

6

 

or series of transactions (excluding sales of equity securities primarily for capital raising purposes), or (iii) the sale of all or substantially all of the assets of the Company.

 

(c)           The Company shall provide at least ten (10) Business Days prior written notice of any event set forth in Section 13(a)(i) and (ii).

 

14.          Notices.  All notices and other communications required or permitted hereunder shall be in writing, shall be effective when given, and shall in any event be deemed to be given upon receipt or, if earlier, (a) five (5) days after deposit with the U.S. Postal Service or other applicable postal service, if delivered by first class mail, postage prepaid, (b) upon delivery, if delivered by hand, (c) one business day after the business day of deposit with Federal Express or similar overnight courier, freight prepaid or (d) one business day after the business day of facsimile transmission, if delivered by facsimile transmission with copy by first class mail, postage prepaid, and shall be addressed (i) if to the Holder, at the Holder’s address at 14 Greenridge Drive, Chappaqua, New York 10514, and (ii) if to the Company, at the address of its principal corporate offices (attention: President), with a copy to Troy Foster, Wilson Sonsini Goodrich & Rosati, P.C., 650 Page Mill Road, Palo Alto, California 94304 or at such other address as a party may designate by ten days advance written notice to the other party pursuant to the provisions above.

 

15.          “Market Stand-Off” Agreement.  Holder hereby agrees that, during the period of duration specified by the Company and an underwriter of common stock or other securities of the Company, following the effective date of a registration statement of the Company filed under the Act, it shall not, to the extent requested by the Company and such underwriter, directly or indirectly sell, offer to sell, contract to sell (including, without limitation, any short sale), grant any option to purchase or otherwise transfer or dispose of (other than to donees who agree to be similarly bound) any securities of the Company held by it at any time during such period except common stock included in such registration; provided, however, that:

 

(a)           all then-current officers and directors of the Company enter into similar agreements;

 

(b)           the Company obtains from persons who hold five percent (5%) or greater of the Company’s outstanding capital stock, a lock-up agreement similar to that set forth in this Section 15; and

 

(c)           such market stand-off time period shall not exceed one hundred eighty (180) days for the Company’s initial public offering, and ninety (90) days for any subsequent public offerings.

 

Holder agrees to provide to the other underwriters of any public offering such further agreements as such underwriter may reasonably request in connection with this market stand-off agreement, provided that the terms of such agreements are substantially consistent with the provisions of this Section 15.  In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to the Registrable Securities of each Holder (and the shares or securities of every other person subject to the foregoing restriction) until the end of such period.

 

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Notwithstanding the foregoing, the obligations described in this Section 15 shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms which may be promulgated in the future, or a registration relating solely to an SEC Rule 145 transaction.

 

16.          Governing Law.  This Warrant and all actions arising out of or in connection with this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law provisions of the State of Delaware or of any other state.

 

17.          Survival of Rights and Obligations.  Unless otherwise provided herein, the rights and obligations of the Company, of the holder of this Warrant and of the holder of the Shares issued upon exercise of this Warrant, shall survive the exercise of this Warrant.

 

18.          Severability.  If any provision of this Warrant is held to be unenforceable under applicable law, such provision shall be excluded from this Warrant and the balance of the Warrant shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

 

19.          Amendments and Waivers; Resolutions of Dispute.  The resolution of any controversy or claim arising out of or relating to this Warrant and the provision of notice shall be conducted pursuant to the terms of the Release.  Any term of this Warrant may be amended or terminated and the observance of any term of this Warrant may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Company and the Holder.  No waivers of or exceptions to any term, condition or provision of this Warrant, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.  Any waiver or amendment effected in accordance with this Section 19 shall be binding upon each holder of a Warrant at the time outstanding, each future holder of all such Warrants, and the Company.

 

Issued this 24th day of September 2007.

 

	
 
    	
ZAG.COM   INC.
    
	
 
    	
 
    
	
 
    	
/s/ Scott Painter
    
	
 
    	
Scott   Painter
    
	
 
    	
Chief   Executive Officer
    

 

8

 

EXHIBIT A

 

NOTICE OF EXERCISE

 

TO:                           ZAG.COM INC.

 

 

Attention: President

 

1.                                      The undersigned hereby elects to purchase                            Shares of                          for an Exercise Price of                          pursuant to the terms of the attached Warrant.

 

2.                                      Method of Exercise (Please initial the applicable blank):

 

o The undersigned elects to exercise the attached Warrant by means of a cash payment, and tenders herewith payment in full for the purchase price of the shares being purchased, together with all applicable transfer taxes, if any.

 

o The undersigned elects to exercise the attached Warrant by means of the net exercise provisions of Section 3(b) of the Warrant.

 

Please issue a certificate or certificates representing said Shares in the name of the undersigned or in such other name as is specified below:

 

	
 
    	
 
    	
 
    
	
 
    	
(Name)
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
(Address)
    	
 
    

 

3.             The undersigned hereby represents and warrants that the aforesaid Shares are being acquired for the account of the undersigned for investment and not with a view to, or for resale, in connection with the distribution thereof, and that the undersigned has no present intention of distributing or reselling such shares and all representations and warranties of the undersigned set forth in Section 9 of the attached Warrant (including Section 9 (e) thereof) are true and correct as of the date hereof.

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
(Signature)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(Name)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Date)
    	
 
    	
(Title)
    

 

 

EXHIBIT B

 

FORM OF TRANSFER

(To be signed only upon transfer of Warrant)

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto                                                                                              the right represented by the attached Warrant to purchase                                  shares of                                            of ZAG.COM INC. to which the attached Warrant relates, and appoints                      Attorney to transfer such right on                    the books of              , with full power of substitution in the premises.

 

	
Dated:
    	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Signature   must conform in all respects to name of Holder as specified on the face of   the Warrant)
    
	
 
    	
 
    	
 
    
	
 
    	
Address:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signed   in the presence of:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
						

 

 

WARRANT TRANSFER AGREEMENT

 

THIS WARRANT TRANSFER AGREEMENT (this “Agreement”) is made and entered into effective as of October 29th, 2010 (the “Effective Date”), by and between Greenridge Capital LLC (the “Transferor”) and Jonathan Heine (the “Transferee”).

 

WHEREAS, the Transferor has informed Zag.com Inc., a Delaware corporation (the “Company”), that the Transferor wishes to transfer record ownership of a stock purchase warrant (the “Warrant”) to purchase up to 48,333 shares of the Company’s Series 13 Preferred Stock (the “Securities”) to Transferee.

 

NOW TIIEREPORE, the parties agree as follows:

 

1.             Assignment by Transferor. The Transferor hereby assigns and transfers to the Transferee the Warrant.

 

2.             Investment Representations. Transferee represents to the Transferor and to the Company the following:

 

(a)           Transferee is acquiring these Securities for its own account for investment purposes only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”).

 

(b)           In consideration of the Company permitting the transfer of the Securities, the Transferee hereby agrees to be bound by and comply with all of the provisions and obligations applicable to the Transferor contained in the Warrant, including but not limited to Section 15 of the Warrant concerning the Lock Up Agreement, and to execute any further documentation necessary to carry out the intent hereof.

 

(c)           The Transferee is aware of the Company’s business affairs and financial condition, and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities.

 

(d)           Transferee understands that the Securities have not been registered under the Securities Act and that the contemplated transfer of the Securities is being effected in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of his investment intent as expressed herein.  In this connection, Transferee understands that, in the view of the Securities and Exchange Commission (the “SEC”), the statutory basis for such exemption may be unavailable if Transferee’s representation was predicated solely upon a present intention to hold the Securities for the minimum capital gains period specified under tax statutes, for a deferred sale, for or until an increase or decrease in the market price of the Securities, or for a period of one year or any other fixed period in the future.

 

(e)           Transferee further understands that the Securities must be held indefinitely unless subsequently registered under the Securities Act or unless an exemption from registration is otherwise available.  Moreover, Transferee understands that the Company is under no obligation to register the Securities.  In addition, Transferee understands that the certificate evidencing the Securities will be imprinted with a legend which prohibits the transfer of the Securities unless they are registered or such registration is nut required in the opinion of counsel for the Company.

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