California | 7389 | 77-0512121 | ||
(State or other jurisdiction
of
incorporation or organization) |
(Primary Standard Industrial
Classification Code Number) |
(I.R.S. Employer
Identification Number) |
Jodie Bourdet
David Peinsipp Cooley Godward Kronish LLP 101 California Street, 5 th Floor San Francisco, CA 94111 (415) 693-2000 |
Alan Denenberg
Davis Polk & Wardwell LLP 1600 El Camino Real Menlo Park, CA 94025 (650) 752-2000 |
Large accelerated
filer
o
|
Accelerated filer o | Non-accelerated filer þ | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
Proposed Maximum
|
Amount of
|
|||||||||
Title of Each Class of
|
Aggregate
|
Registration
|
||||||||
Securities to be Registered | Offering Price(1)(2) | Fee | ||||||||
Common Stock, $0.001 par value per share
|
$ | 250,000,000.00 | $ | 13,950.00 | ||||||
(1) | Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended. | |
(2) | Includes shares that the underwriters have the option to purchase to cover over-allotments, if any. |
The
information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these
securities and we are not soliciting offers to buy these
securities in any jurisdiction where the offer or sale is not
permitted.
|
Underwriting
|
||||||
Discounts and
|
||||||
Price to
|
Other
|
Proceeds,
Before
|
||||
Public | Commissions(1) | Expenses, to us | ||||
Per Share
|
$ | $ | $ | |||
Total
|
$ | $ | $ |
(1) | Includes fees payable to Qatalyst Partners LP for services as our financial advisor. Qatalyst Partners LP is not acting as an underwriter of this offering. |
Credit Suisse | BofA Merrill Lynch | J.P. Morgan |
Page
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27
28
28
29
31
33
36
55
65
72
90
93
97
101
103
106
110
110
110
111
EX-4.2
EX-10.1
EX-10.2
EX-10.3
EX-10.4
EX-10.11
EX-10.13
EX-10.14
EX-10.16
EX-21.1
EX-23.2
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We own or access targeted media.
We run advertisements or other forms of marketing messages and
programs in that media to create visitor responses or clicks
through to client offerings.
We match these responses or clicks to client offerings or brands
that meet visitor interests or needs, converting visitors into
qualified leads or clicks.
We optimize client matches and media yield such that we achieve
desired results for clients and a sound financial outcome for us.
Vertical focus and expertise
Measurable marketing experience and expertise
Targeted media
Proprietary technology
Client relationships
Client-driven online marketing approach
Acquisition strategy and success
Scale
Focus on generating sustainable revenues by providing measurable
value to our clients.
Build QuinStreet and our industry sustainably by behaving
ethically in all we do and by providing quality content and
website experiences to Internet visitors.
Remain vertically focused, choosing to grow through depth,
expertise and coverage in our current industry verticals; enter
new verticals selectively over time, organically and through
acquisitions.
Build a world class organization, with
best-in-class
capabilities for delivering measurable marketing results to
clients and high yields or returns on media costs.
Develop and evolve the best technologies and platform for
managing vertical marketing and media on the Internet; focus on
technologies that enhance media yield, improve client results
and achieve scale efficiencies.
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Build, buy and partner with vertical content websites that
provide the most relevant and highest quality visitor
experiences in the client and media verticals we serve.
Be a client-driven organization; develop a broad set of media
sources and capabilities to reliably meet client needs.
3
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Common stock offered by QuinStreet
shares
Common stock to be outstanding after this offering
shares
Over-allotment option
shares
Use of proceeds
We expect the net proceeds to us from this offering, after
deduction of the estimated underwriting discounts and
commissions and estimated offering expenses, to be approximately
$ million at an assumed
initial public offering price of $
per share. We intend to use a portion of the net proceeds of
this offering, or approximately $26.3 million, to repay the
outstanding balance of our five-year term loan, and the
remaining net proceeds from this offering for working capital,
capital expenditures and other general corporate purposes. We
may also use a portion of the net proceeds to repay additional
debt or to acquire other businesses, products or technologies.
See Use of Proceeds.
Dividend policy
We do not intend to pay cash dividends on our common stock for
the foreseeable future.
Risk factors
See Risk Factors beginning on page 9 and the
other information included in this prospectus for a discussion
of factors you should carefully consider before deciding whether
to purchase shares of our common stock.
Proposed symbol
QNST
an aggregate of 10,654,296 shares of common stock issuable
upon the exercise of outstanding stock options as of
September 30, 2009 pursuant to our 2008 Equity Incentive
Plan and having a weighted-average exercise price of $8.1717 per
share;
an aggregate of 1,726,814 additional shares of common stock
reserved for future issuance under our 2008 Equity Incentive
Plan as of September 30, 2009; provided, however, that
immediately upon the signing of the underwriting agreement for
this offering, our 2008 Equity Incentive Plan will terminate so
that no further awards may be granted under our 2008 Equity
Incentive Plan and the shares then remaining and reserved for
future issuance under our 2008 Equity Incentive Plan shall
become reserved for issuance under our 2010 Equity Incentive
Plan; and
the shares reserved for future issuance under our 2010 Equity
Incentive Plan and up to 300,000 additional shares of common
stock reserved for future issuance under our 2010 Non-Employee
Directors Stock Award Plan, as well as any automatic
increases in the number of shares of common stock reserved for
future issuance under each of these benefit plans, which will
become effective immediately upon the signing of the
underwriting agreement for this offering.
that our reincorporation in Delaware has been completed;
the automatic conversion of all outstanding shares of our
convertible preferred stock into an aggregate of
21,176,533 shares of common stock effective immediately
prior to the closing of this offering;
that our amended and restated certificate of incorporation,
which we will file in connection with the completion of this
offering, is in effect; and
no exercise of the underwriters over-allotment option to
purchase up to an
additional shares
of common stock.
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6
7
Three Months
Fiscal Year Ended June 30,
Ended September 30,
2007
2008
2009
2008
2009
(In thousands, except per share data)
$
167,370
$
192,030
$
260,527
$
63,678
$
78,552
108,945
130,869
181,593
45,281
55,047
58,425
61,161
78,934
18,397
23,505
14,094
14,051
14,887
3,757
4,470
8,487
12,409
16,154
4,259
3,625
11,440
13,371
13,172
3,736
3,441
34,021
39,831
44,213
11,752
11,536
24,404
21,330
34,721
6,645
11,969
1,034
413
(3,538
)
(622
)
(619
)
25,438
21,743
31,183
6,023
11,350
(9,828
)
(8,876
)
(13,909
)
(2,719
)
(4,837
)
$
15,610
$
12,867
$
17,274
$
3,304
$
6,513
(3,276
)
(3,276
)
(3,276
)
(819
)
(819
)
(7,690
)
(5,925
)
(8,599
)
(1,527
)
(3,487
)
$
4,644
$
3,666
$
5,399
$
958
$
2,207
$
4,644
$
3,666
$
5,399
$
958
$
2,207
522
360
399
77
188
$
5,166
$
4,026
$
5,798
$
1,035
$
2,395
$
0.36
$
0.28
$
0.41
$
0.07
$
0.16
$
0.34
$
0.26
$
0.39
$
0.07
$
0.16
12,789
13,104
13,294
13,279
13,405
15,263
15,325
14,971
15,131
15,381
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Three Months
Fiscal Year Ended June 30,
Ended September 30,
2007
2008
2009
2008
2009
(In thousands, except per share data)
$
0.50
$
0.19
$
0.48
$
0.18
34,471
34,582
36,148
36,558
(1)
Includes stock-based compensation expense as follows:
$
416
$
1,112
$
1,916
$
470
$
728
75
443
669
161
253
226
581
1,761
416
507
1,354
1,086
1,827
351
741
September 30, 2009
Pro Forma as
Actual
Adjusted(1)
(In thousands)
$
28,095
$
19,942
235,410
110,284
66,177
81,723
(1)
The pro forma as adjusted consolidated balance sheet data gives
effect to the conversion of all outstanding shares of
convertible preferred stock into shares of common stock
effective immediately prior to the closing of this offering, the
repayment of the outstanding balance of our five-year term loan
using a portion of the net proceeds of this offering and to the
sale
of shares
of our common stock in this offering at an assumed initial
public offering price of $ per
share, the midpoint of the range reflected on the cover page of
this prospectus, and after deducting the estimated underwriting
discounts and commissions and estimated offering expenses
payable by us. Each $1.00 increase (decrease) in the assumed
initial public offering price of $
per share would increase (decrease) each of cash and cash
equivalents, working capital, total assets and total
shareholders equity by $ ,
assuming that the number of shares offered by us, as set forth
on the cover page of this prospectus, remains the same, and
after deducting estimated underwriting discounts and commissions
and estimated offering expenses payable by us. We may also
increase or decrease the number of shares we are offering. Each
increase (decrease) of 1,000,000 shares in the number of
shares offered by us would increase (decrease) each of cash and
cash equivalents, working capital, total assets and total
shareholders equity by $ ,
assuming that the assumed initial public offering price remains
the same, and after deducting the estimated underwriting
discounts and commissions and estimated offering expenses
payable by us. The pro forma as adjusted information discussed
above is illustrative only and will adjust based on the actual
initial public offering price and other terms of this offering
determined at pricing.
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Three Months
Fiscal Year Ended June 30,
Ended September 30,
2007
2008
2009
2008
2009
(In thousands)
$
25,197
$
24,751
$
32,570
$
(261
)
$
11,808
9,637
11,727
15,978
4,114
3,952
2,030
2,177
1,347
504
443
Three Months
Fiscal Year Ended June 30,
Ended September 30,
2007
2008
2009
2008
2009
(In thousands)
$
36,112
$
36,279
$
56,872
$
12,157
$
18,150
(1)
We define Adjusted EBITDA as net income less interest income
plus interest expense, provision for taxes, depreciation
expense, amortization expense, stock-based compensation expense
and foreign-exchange (loss) gain. Please see
Adjusted EBITDA for more information and
for a reconciliation of Adjusted EBITDA to our net income
calculated in accordance with U.S. generally accepted
accounting principles, or GAAP.
Adjusted EBITDA does not reflect our cash expenditures for
capital equipment or other contractual commitments;
although depreciation and amortization are non-cash charges, the
assets being depreciated and amortized may have to be replaced
in the future, and Adjusted EBITDA does not reflect cash capital
expenditure requirements for such replacements;
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Adjusted EBITDA does not reflect changes in, or cash
requirements for, our working capital needs;
Adjusted EBITDA does not consider the potentially dilutive
impact of issuing equity-based compensation to our management
team and employees;
Adjusted EBITDA does not reflect the significant interest
expense or the cash requirements necessary to service interest
or principal payments on our indebtedness;
Adjusted EBITDA does not reflect certain tax payments that may
represent a reduction in cash available to us; and
other companies, including companies in our industry, may
calculate Adjusted EBITDA measures differently, which reduces
their usefulness as a comparative measure.
Three Months
Fiscal Year Ended June 30,
Ended September 30,
2007
2008
2009
2008
2009
(In thousands)
$
15,610
$
12,867
$
17,274
$
3,304
$
6,513
(1,034
)
(413
)
3,538
622
619
9,828
8,876
13,909
2,719
4,837
9,637
11,727
15,978
4,114
3,952
2,071
3,222
6,173
1,398
2,229
$
36,112
$
36,279
$
56,872
$
12,157
$
18,150
8
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maintain and expand client relationships;
sustain and increase the number of visitors to our websites;
sustain and grow relationships with third-party website
publishers and other sources of web visitors;
manage our expanding operations and implement and improve our
operational, financial and management controls;
raise capital at attractive costs, or at all;
acquire and integrate websites and other businesses;
successfully expand our footprint in our existing client
verticals and enter new client verticals;
respond effectively to competition and potential negative
effects of competition on profit margins;
attract and retain qualified management, employees and
independent service providers;
successfully introduce new processes and technologies and
upgrade our existing technologies and services;
protect our proprietary technology and intellectual property
rights; and
respond to government regulations relating to the Internet,
personal data protection, email, software technologies and other
aspects of our business.
9
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successfully scale our technology to accommodate a larger
business and integrate acquisitions;
maintain our standing with key vendors, including Internet
search companies and third-party website publishers;
maintain our client service standards; and
develop and improve our operational, financial and management
controls and maintain adequate reporting systems and procedures.
10
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diversion of management time and potential business disruptions;
expenses, distractions and potential claims resulting from
acquisitions, whether or not they are completed;
retaining and integrating employees from any businesses we may
acquire;
issuance of dilutive equity securities, incurrence of debt or
reduction in cash balances;
integrating various accounting, management, information, human
resource and other systems to permit effective management;
incurring possible impairment charges, contingent liabilities,
amortization expense or write-offs of goodwill;
difficulties integrating and supporting acquired products or
technologies;
unexpected capital expenditure requirements;
insufficient revenue to offset increased expenses associated
with acquisitions;
underperformance problems associated with acquisitions; and
becoming involved in acquisition-related litigation.
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we may not have sufficient liquidity to respond to business
opportunities, competitive developments and adverse economic
conditions;
we may not have sufficient liquidity to fund all of these costs
if our revenue declines or costs increase; and
we may not have sufficient funds to repay the principal balance
of our debt when due.
13
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changes in demand and pricing for our services;
changes in our pricing policies, the pricing policies of our
competitors, or the pricing of Internet advertising or media;
the addition of new clients or the loss of existing clients;
changes in our clients advertising agencies or the
marketing strategies our clients or their advertising agencies
employ;
changes in the economic prospects of our clients or the economy
generally, which could alter current or prospective
clients spending priorities, or could increase the time or
costs required to complete sales with clients;
changes in the availability of Internet advertising or the cost
to reach Internet visitors;
changes in the placement of our websites on search engines;
the introduction of new product or service offerings by our
competitors; and
costs related to acquisitions of businesses or technologies.
14
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online marketing or media services providers such as Monster
Worldwide in the education vertical and Bankrate in financial
services;
offline and online advertising agencies;
major Internet portals and search engine companies with
advertising networks such as Google, Yahoo!, MSN, and AOL;
other online marketing service providers, including online
affiliate advertising networks and industry-specific portals or
lead generation companies;
website publishers with their own sales forces that sell their
online marketing services directly to clients;
in-house marketing groups at current or potential clients;
offline direct marketing agencies; and
television, radio and print companies.
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the adaptation of technologies and services to foreign
clients preferences and customs;
application of foreign laws and regulations to us, including
marketing and privacy regulations;
changes in foreign political and economic conditions;
tariffs and other trade barriers, fluctuations in currency
exchange rates and potentially adverse tax consequences;
language barriers or cultural differences;
reduced or limited protection for intellectual property rights
in foreign jurisdictions;
difficulties and costs in staffing and managing or overseeing
foreign operations; and
education of potential clients who may not be familiar with
online marketing.
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22
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changes in earnings estimates or recommendations by securities
analysts;
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announcements by us or our competitors of new services,
significant contracts, commercial relationships, acquisitions or
capital commitments;
developments with respect to intellectual property rights;
our ability to develop and market new and enhanced products on a
timely basis;
our commencement of, or involvement in, litigation;
changes in governmental regulations or in the status of our
regulatory approvals; and
a slowdown in our industry or the general economy.
delaying, deferring or preventing a change in corporate control;
impeding a merger, consolidation, takeover or other business
combination involving us; or
discouraging a potential acquirer from making a tender offer or
otherwise attempting to obtain control of us.
24
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a classified board of directors with three-year staggered terms,
which may delay the ability of stockholders to change the
membership of a majority of our board of directors;
no cumulative voting in the election of directors, which limits
the ability of minority stockholders to elect director
candidates;
25
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the exclusive right of our board of directors to elect a
director to fill a vacancy created by the expansion of the board
of directors or the resignation, death or removal of a director,
which prevents stockholders from being able to fill vacancies on
our board of directors;
the ability of our board of directors to determine to issue
shares of preferred stock and to determine the price and other
terms of those shares, including preferences and voting rights,
without stockholder approval, which could be used to
significantly dilute the ownership of a hostile acquirer;
a prohibition on stockholder action by written consent, which
forces stockholder action to be taken at an annual or special
meeting of our stockholders;
the requirement that a special meeting of stockholders may be
called only by the chairman of the board of directors, the chief
executive officer or the board of directors, which may delay the
ability of our stockholders to force consideration of a proposal
or to take action, including the removal of directors; and
advance notice procedures that stockholders must comply with in
order to nominate candidates to our board of directors or to
propose matters to be acted upon at a stockholders
meeting, which may discourage or deter a potential acquiror from
conducting a solicitation of proxies to elect the
acquirors own slate of directors or otherwise attempting
to obtain control of us.
26
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our immature industry and relatively new business model;
our ability to manage our growth effectively;
our dependence on Internet search companies to attract Internet
visitors;
our ability to successfully manage any future acquisitions;
our dependence on a small number of large clients and our
dependence on a small number of client verticals for a majority
of our revenue;
our ability to attract and retain qualified employees and key
personnel;
our ability to accurately forecast our operating results and
appropriately plan our expenses;
our ability to compete in our industry;
our ability to enhance and maintain our client and vendor
relationships;
our ability to develop new services and enhancements and
features to meet new demands from our clients;
our ability to raise additional capital in the future, if needed;
general economic conditions in our domestic and potential future
international markets;
our ability to protect our intellectual property rights; and
our expectations regarding the use of proceeds from this
offering.
27
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| approximately $26.3 million of the net proceeds from this offering to repay the outstanding balance of our term loan. The interest rate under our term loan varies dependent upon the ratio of funded debt to adjusted EBITDA and ranges from LIBOR + 2.25% to 3.0% or Prime + 0.75% to 1.25%. The term loan expires in September 2013. | |
| the remaining net proceeds from this offering for working capital, capital expenditures and other general corporate purposes. |
28
on an actual basis;
on a pro forma basis after giving effect to the conversion of
all outstanding shares of our convertible preferred stock into
21,176,533 shares of common stock effective immediately
prior to the closing of this offering; and
on a pro forma as adjusted basis to reflect, in addition, the
application of the estimated net proceeds, as set forth in
Use of Proceeds, of
$ million from our sale
of shares
of common stock that we are offering at an assumed public
offering price of $ per share,
which is the midpoint of the range listed on the cover page of
this prospectus, after deducting estimated underwriting
discounts and commissions and estimated offering expenses
payable by us.
As of September 30, 2009
Pro Forma as
Actual
Pro Forma
Adjusted(1)
(In thousands, except share data)
$
28,095
$
28,095
$
$
13,182
$
10,182
$
52,995
$
28,245
43,403
15,627
59,030
3
3
66,093
66,093
81,723
125,126
$
178,121
$
153,371
$
(1)
Each $1.00 increase (decrease) in the assumed public offering
price of $ per share, the midpoint
of the range reflected on the cover page of this prospectus,
would increase (decrease) each of cash and cash equivalents,
additional paid-in capital, total stockholders equity and
total capitalization by approximately
29
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$ , assuming that the number of
shares offered by us, as set forth on the cover page of this
prospectus, remains the same, and after deducting estimated
underwriting discounts and commissions and estimated offering
expenses payable by us. We may also increase or decrease the
number of shares we are offering. Each increase (decrease) of
1,000,000 shares in the number of shares offered by us
would increase (decrease) each of cash and cash equivalents,
additional paid-in capital, total shareholders equity and
total capitalization by approximately
$ , assuming that the assumed
initial public offering price remains the same, and after
deducting the estimated underwriting discounts and commissions
and estimated offering expenses payable by us. The as adjusted
information discussed above is illustrative only and will adjust
based on the actual initial public offering price and other
terms of this offering determined at pricing.
an aggregate of 10,654,296 shares of common stock issuable
upon the exercise of outstanding stock options as of
September 30, 2009 pursuant to our 2008 Equity Incentive
Plan and having a weighted-average exercise price of $8.1717 per
share;
an aggregate of 1,726,814 additional shares of common stock
reserved for future issuance under our 2008 Equity Incentive
Plan as of September 30, 2009; provided, however, that
immediately upon the signing of the underwriting agreement for
this offering, our 2008 Equity Incentive Plan will terminate so
that no further awards may be granted under our 2008 Equity
Incentive Plan, and the shares then remaining and reserved for
future issuance under our 2008 Equity Incentive Plan shall
become available for future issuance under our 2010 Non-Employee
Directors Stock Award Plan; and
the shares reserved for future issuance under our 2010 Equity
Incentive Plan and up to 300,000 additional shares of common
stock reserved for future issuance under our 2010 Non-Employee
Directors Stock Award Plan, as well as any automatic
increases in the number of shares of common stock reserved for
future issuance under each of these benefit plans, which will
become effective immediately upon the signing of the
underwriting agreement for this offering.
30
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$
$
$
the total number of shares of common stock purchased from us by
our existing stockholders and by new investors purchasing shares
in this offering;
31
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the total consideration paid to us by our existing stockholders
and by new investors purchasing shares in this offering,
assuming an initial public offering price of
$ per share (before deducting the
estimated underwriting discounts and commissions and estimated
offering expenses payable by us in connection with this
offering); and
the average price per share paid by existing stockholders and by
new investors purchasing shares in this offering.
Average
Shares Purchased
Total Consideration
Price per
Number
Percent
Amount
Percent
Share
34,631,876
%
$
59,030,000
%
$
1.70
100.0
%
$
100.0
%
an aggregate of 10,654,296 shares of common stock issuable
upon the exercise of outstanding stock options as of
September 30, 2009 pursuant to our 2008 Equity Incentive
Plan and having a weighted-average exercise price of $8.1717 per
share;
an aggregate of 1,726,814 additional shares of common stock
reserved for future issuance under our 2008 Equity Incentive
Plan as of September 30, 2009; provided, however, that
immediately upon the signing of the underwriting agreement for
this offering, our 2008 Equity Incentive Plan will terminate so
that no further awards may be granted under our 2008 Equity
Incentive Plan, and the shares then remaining and reserved for
future issuance under our 2008 Equity Incentive Plan shall
become available for future issuance under our 2010 Non-Employee
Directors Stock Award Plan; and
the shares reserved for future issuance under our 2010 Equity
Incentive Plan and up to 300,000 additional shares of common
stock reserved for future issuance under our 2010 Non-Employee
Directors Stock Award Plan, as well as any automatic
increases in the number of shares of common stock reserved for
future issuance under each of these benefit plans, which will
become effective immediately upon the signing of the
underwriting agreement for this offering.
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34
35
Three Months Ended
Fiscal Year Ended June 30,
September 30,
2005
2006
2007
2008
2009
2008
2009
(In thousands, except per share data)
$
109,556
$
142,408
$
167,370
$
192,030
$
260,527
$
63,678
$
78,552
65,653
85,820
108,945
130,869
181,593
45,281
55,047
43,903
56,588
58,425
61,161
78,934
18,397
23,505
12,644
17,265
14,094
14,051
14,887
3,757
4,470
5,734
7,166
8,487
12,409
16,154
4,259
3,625
4,842
6,835
11,440
13,371
13,172
3,736
3,441
23,220
31,266
34,021
39,831
44,213
11,752
11,536
20,683
25,322
24,404
21,330
34,721
6,645
11,969
553
1,341
1,905
1,482
245
90
9
(9
)
(427
)
(732
)
(1,214
)
(3,544
)
(763
)
(748
)
(31
)
(874
)
(139
)
145
(239
)
51
120
513
40
1,034
413
(3,538
)
(622
)
(619
)
21,196
25,362
25,438
21,743
31,183
6,023
11,350
(8,136
)
(9,773
)
(9,828
)
(8,876
)
(13,909
)
(2,719
)
(4,837
)
13,060
15,589
15,610
12,867
17,274
3,304
6,513
(1,820
)
$
13,060
$
13,769
$
15,610
$
12,867
$
17,274
$
3,304
$
6,513
(3,218
)
(3,276
)
(3,276
)
(3,276
)
(3,276
)
(819
)
(819
)
(6,240
)
(6,591
)
(7,690
)
(5,925
)
(8,599
)
(1,527
)
(3,487
)
$
3,602
$
3,902
$
4,644
$
3,666
$
5,399
$
958
$
2,207
33
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Three Months Ended
Fiscal Year Ended June 30,
September 30,
2005
2006
2007
2008
2009
2008
2009
(In thousands, except per share data)
$
3,602
$
3,902
$
4,644
$
3,666
$
5,399
$
958
$
2,207
436
525
522
360
399
77
188
$
4,038
$
4,427
$
5,166
$
4,026
$
5,798
$
1,035
$
2,395
$
0.30
$
0.31
$
0.36
$
0.28
$
0.41
$
0.07
$
0.16
$
0.28
$
0.29
$
0.34
$
0.26
$
0.39
$
0.07
$
0.16
12,069
12,411
12,789
13,104
13,294
13,279
13,405
14,543
15,295
15,263
15,325
14,971
15,131
15,381
$
0.50
$
0.19
$
0.48
$
0.18
34,471
34,582
36,148
36,558
(1)
Includes stock-based compensation expense as follows:
Three Months Ended
Fiscal Year Ended June 30,
September 30,
2005
2006
2007
2008
2009
2008
2009
(In thousands)
$
48
$
66
$
416
$
1,112
$
1,916
$
470
$
728
3
(7
)
75
443
669
161
253
43
10
226
581
1,761
416
507
47
20
1,354
1,086
1,827
351
741
(2)
See Note 4 to our consolidated financial statements
included in this prospectus for an explanation of the method
used to calculate basic and diluted net loss per share and pro
forma basic and diluted net loss per share of common stock.
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June 30,
September 30,
2005
2006
2007
2008
2009
2009
(In thousands)
$
19,418
$
30,593
$
26,765
$
24,953
$
25,182
$
28,095
39,859
36,294
42,769
17,022
16,426
19,942
71,350
101,203
118,536
179,746
212,878
235,410
26,657
39,567
37,831
86,032
96,289
110,284
9,216
10,250
51,654
57,240
66,177
4,246
18,350
37,312
50,311
73,186
81,723
Three Months Ended
Fiscal Year Ended June 30,
September 30,
2005
2006
2007
2008
2009
2008
2009
(In thousands)
$
23,200
$
21,659
$
25,197
$
24,751
$
32,570
$
(261
)
$
11,808
3,466
7,208
9,637
11,727
15,978
4,114
3,952
5,671
1,104
2,030
2,177
1,347
504
443
Three Months Ended
Fiscal Year Ended June 30,
September 30,
2005
2006
2007
2008
2009
2008
2009
(In thousands)
$
24,290
$
32,619
$
36,112
$
36,279
$
56,872
$
12,157
$
18,150
(1)
We define Adjusted EBITDA as net income less interest income
plus interest expense, provision for taxes, depreciation
expense, amortization expense, stock-based compensation expense
and foreign-exchange (loss) gain. Please see Summary
Consolidated Financial Data Adjusted EBITDA
for more information and for a reconciliation of Adjusted EBITDA
to our net income calculated in accordance with U.S. generally
accepted accounting principles.
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We own or access targeted media;
We run advertisements or other forms of marketing messages and
programs in that media to create visitor responses or clicks
through to client offerings;
We match these responses or clicks to client offerings or brands
that meet visitor interests or needs, converting visitors into
qualified leads or clicks; and
We optimize client matches and media yield such that we achieve
desired results for clients and a sound financial outcome for us.
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Fiscal Year Ended June 30,
Three Months Ended September 30,
2007
2008
2009
2008
2009
(In thousands)
$
416
$
1,112
$
1,916
$
470
$
728
75
443
669
161
253
226
581
1,761
416
507
1,354
1,086
1,827
351
741
$
2,071
$
3,222
$
6,173
$
1,398
$
2,229
Three Months Ended
Fiscal Year Ended June 30,
September 30,
2007
2008
2009
2008
2009
48%
52%
62%
61%
73%
4.6 - 6.1
4.6
4.6
4.6
4.6
4.6% - 4.9%
2.8% - 4.5%
1.8% - 3.1%
3.1%
2.5%
41
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Common Stock Fair
Intrinsic Fair
Value per Share
Value per Share
Number of Shares
for Financial
for Financial
Underlying Options
Exercise Price
Reporting Purposes at
Reporting Purposes at
Granted
per Share
Grant Date
Grant Date
88,100
$
9.01
$
9.01
$
133,794
9.40
9.40
713,000
9.40
9.40
165,000
9.40
9.40
81,500
10.34
9.40
35,100
9.40
9.40
1,161,400
10.28
10.28
116,700
10.28
10.28
729,200
10.28
10.28
469,500
10.28
10.28
1,695,600
10.28
10.28
85,000
11.31
10.28
277,900
10.28
10.28
331,800
9.01
9.01
184,800
9.01
9.01
1,875,050
9.01
13.93
4.92
87,705
9.91
13.93
4.02
220,600
11.08
16.88
5.80
1,080,500
19.00
19.00
(1)
Options granted with an exercise price per share equal to 110%
of the fair market value of one share of our common stock, as
determined by our board of directors on the date of grant.
company performance, our growth rate and financial condition at
the approximate time of the option grant;
42
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the value of companies that we consider peers based on a number
of factors including, but not limited to, similarity to us with
respect to industry, business model, stage of growth, financial
risk or other factors;
changes in the company and our prospects since the last option
grants and determination of fair value;
amounts recently paid by investors in arms-length
transactions for our common stock and convertible preferred
stock;
the rights, preference and privileges of preferred stock
relative to those of our common stock;
future financial projections; and
valuations completed in conjunction with, and at the time of,
each option grant.
initial public offering;
strategic merger or sale;
dissolution/no value to common stockholders; and
remaining a private company.
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Three Months
Fiscal Year Ended June 30,
Ended September 30,
2007
2008
2009
2008
2009
(In thousands)
$
167,370
100.0
%
$
192,030
100.0
%
$
260,527
100.0
%
$
63,678
100.0
%
$
78,552
100.0
%
108,945
65.1
130,869
68.2
181,593
69.7
45,281
71.1
55,047
70.1
58,425
34.9
61,161
31.8
78,934
30.3
18,397
28.9
23,505
29.9
14,094
8.4
14,051
7.3
14,887
5.7
3,757
5.9
4,470
5.7
8,487
5.1
12,409
6.5
16,154
6.2
4,259
6.7
3,625
4.6
11,440
6.8
13,371
7.0
13,172
5.1
3,736
5.9
3,441
4.4
24,404
14.6
21,330
11.1
34,721
13.3
6,645
10.4
11,969
15.2
1,905
1.1
1,482
0.8
245
0.1
90
0.1
9
(732
)
(0.4
)
(1,214
)
(0.6
)
(3,544
)
(1.4
)
(763
)
(1.2
)
(748
)
(1.0
)
(139
)
(0.1
)
145
0.1
(239
)
(0.1
)
51
0.1
120
0.2
25,438
15.2
21,743
11.3
31,183
12.0
6,023
9.5
11,350
14.4
(9,828
)
(5.9
)
(8,876
)
(4.6
)
(13,909
)
(5.3
)
(2,719
)
(4.3
)
(4,837
)
(6.2
)
$
15,610
9.3
%
$
12,867
6.7
%
$
17,274
6.6
%
$
3,304
5.2
%
$
6,513
8.3
%
(1)
Includes stock-based compensation expense as follows:
$
416
0.2
%
$
1,112
0.6
%
$
1,916
0.7
%
$
470
0.7
%
$
728
0.9
%
75
0.0
443
0.2
669
0.3
161
0.3
253
0.3
226
0.1
581
0.3
1,761
0.7
416
0.7
507
0.6
1,354
0.8
1,086
0.6
1,827
0.7
351
0.6
741
0.9
Three Months Ended
September 30,
2008-2009
2008
2009
% Change
(In thousands)
$
63,678
$
78,552
23
%
45,281
55,047
22
%
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Three Months Ended
September 30,
2008-2009%
2008
2009
Change
(In thousands)
$
3,757
$
4,470
19
%
4,259
3,625
(15
)%
3,736
3,441
(8
)%
$
11,752
$
11,536
(2
)%
Three Months Ended
September 30,
2008-2009%
2008
2009
Change
(In thousands)
$
90
$
9
(90
)%
(763
)
(748
)
(2
)%
51
120
135
%
$
(622
)
$
(619
)
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Three Months Ended
September 30,
2008
2009
(In thousands)
$
2,719
$
4,837
45.1
%
42.6
%
Fiscal Year Ended June 30,
2007-2008
2008-2009
2007
2008
2009
% Change
% Change
(In thousands)
$
167,370
$
192,030
$
260,527
15
%
36
%
108,945
130,869
181,593
20
%
39
%
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Fiscal Year Ended June 30,
2007-2008
2008-2009
2007
2008
2009
% Change
% Change
(In thousands)
$
14,094
$
14,051
$
14,887
6
%
8,487
12,409
16,154
46
%
30
%
11,440
13,371
13,172
17
%
(1
)%
$
34,021
$
39,831
$
44,213
17
%
11
%
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Fiscal Year Ended June 30,
2007-2008
2008-2009
2007
2008
2009
% Change
% Change
(In thousands)
$
1,905
$
1,482
$
245
(22
)%
(83
)%
(732
)
(1,214
)
(3,544
)
66
%
192
%
(139
)
145
(239
)
(204
)%
(265
)%
$
1,034
$
413
$
(3,538
)
(60
)%
(957
)%
Fiscal Year Ended June 30,
2007
2008
2009
(In thousands)
$
9,828
$
8,876
$
13,909
38.6
%
40.8
%
44.6
%
49
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50
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Payments Due by Period
Total
Less Than 1 Year
1 to 3 Years
3 to 5 Years
More Than 5 Years
(In thousands)
$
34,757
$
3,000
$
11,250
$
20,507
$
25,069
10,214
12,005
2,850
1,368
1,104
264
$
61,194
$
14,318
$
23,519
$
23,357
$
51
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Quick ratio: ratio of (a) the sum of unrestricted cash and
cash equivalents and trade receivables less than 90 days
from invoice date to (b) current liabilities and face
amount of any letters of credit less the current portion of
deferred revenue.
Fixed charge coverage: ratio of (a) trailing 12 months
of adjusted EBITDA to (b) the sum of capital expenditures,
net cash interest expense, cash taxes, cash dividends and
trailing 12 months payments of indebtedness. Payment of
unsecured indebtedness is excluded to the degree that sufficient
unused revolving credit facility exists such that the relevant
debt payment could have been made from the credit facility.
Funded debt to adjusted EBITDA: ratio of (a) the sum of all
obligations owing to lending institutions, the face amount of
any letters of credit, indebtedness owing in connection with
seller notes and indebtedness owing in connection with capital
lease obligations to (b) trailing 12-month adjusted EBITDA.
52
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We own or access targeted media.
We run advertisements or other forms of marketing messages and
programs in that media to create visitor responses or clicks
through to client offerings.
We match these responses or clicks to client offerings or brands
that meet visitor interests or needs, converting visitors into
qualified leads or clicks.
We optimize client matches and media yield such that we achieve
desired results for clients and a sound financial outcome for us.
websites owned and operated by us, with content and offerings
that are relevant to our clients target customers;
visitors acquired from PPC advertisements purchased on major
search engines and sent to our websites;
revenue sharing agreements with third-party websites with whom
we have a relationship and whose content is relevant to our
clients target customers;
email lists owned by third parties and warranted to us by their
owners to comply with the CAN-SPAM Act;
email lists owned by us, and generated on an
opt-in
basis
from Internet visitors to our websites; and
display ads run through online advertising networks or directly
with major websites or portals.
57
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58
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an ad server for tracking the placement and performance of
content, creative messaging, and offerings on our websites and
on those of publishers with whom we work;
database-driven applications for dynamically matching content,
offers or brands to Internet visitors expressed needs or
interests;
a platform for measuring and managing the performance of tens of
thousands of PPC search engine advertising campaigns;
dashboards or reporting tools for displaying operating and
financial metrics for thousands of ongoing marketing campaigns;
and,
a compliance tool capable of cataloging and filtering content
from the thousands of websites on which our marketing programs
appear to ensure adherence to client branding guidelines and to
regulatory requirements.
our close, often direct, relationships with most of our large
clients;
our ability to deliver measurable and attractive return on
investment, or ROI, on clients marketing spending;
our ownership of, or exclusive access to large amounts of,
targeted media inventory and associated Internet visitors in the
industry verticals on which we focus; and,
our ability to consistently and reliably deliver large
quantities of qualified leads or clicks.
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Our ability to monetize Internet media, coupled with client
demand for our services, provides us with a particular advantage
in acquiring targeted online media properties in the verticals
on which we focus.
Our capabilities in online media can allow us to generate a
greater volume of leads or clicks, and therefore create more
value, than other owners of marketing services companies that
have aggregated client budgets or relationships.
We can often apply technologies across our business volume to
create more value than previous owners of the technology.
Focus on generating sustainable revenues by providing
measurable value to our clients.
Build QuinStreet and our industry sustainably by behaving
ethically in all we do and by providing quality content and
website experiences to Internet visitors.
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Remain vertically focused, choosing to grow through depth,
expertise and coverage in our current industry verticals; enter
new verticals selectively over time, organically and through
acquisitions.
Build a world class organization, with
best-in-class
capabilities for delivering measurable marketing results to
clients and high yields or returns on media costs.
Develop and evolve the best technologies and platform for
managing vertical marketing and media on the Internet; focus on
technologies that enhance media yield, improve client results
and achieve scale efficiencies.
Build, buy and partner with vertical content websites that
provide the most relevant and highest quality visitor
experiences in the client and media verticals we serve.
Be a client-driven organization; develop a broad set of media
sources and capabilities to reliably meet client needs.
1.
Performance.
We understand our business
objectives and apply a whatever it takes approach to
meeting them. We are driven to achieve. We are committed to our
own personal and professional development and to that of our
colleagues.
2.
High Standards.
We hold each other and
ourselves to the highest standards of performance,
professionalism and personal behavior. We act with the highest
of ethical standards. We tolerate and forgive mistakes, but not
patterns.
3.
Teamwork.
We deal with one another
openly, honestly and non-hierarchically in an atmosphere of
mutual trust and respect and in pursuit of common stretch goals.
We have an obligation to dissent in an effort to reach the best
answers. We smooth the way for effective, dynamic team
discussions by demonstrating care and concern for each
individual in all of our interactions. We support decisions,
once made.
4.
Customer Empathy.
We strive every day
to better understand and anticipate the needs of our customers,
including clients and publishers. We leverage our unique
insights into higher customer loyalty and competitive advantage.
5.
Prioritization.
We always work on what
is most important to achieving Company objectives first. If we
do not know, we ask or discuss competing demands.
6.
Urgency.
We know our goals and measure
our progress toward them daily.
7.
Progress.
We are pioneers. We make
decisions based on facts and analysis, as well as intuition, but
we expect to make mistakes in the pursuit of rapid progress. We
learn from mistakes on short cycle times and iterate our way to
success.
8.
Innovation and Flexibility.
We prize
creativity. We embrace new ideas and approaches as opportunities
to improve our performance or work environment. We resist pride
of authorship; it limits progress. We actively benchmark and
work to understand and employ best practices.
9.
Recognition.
We are a meritocracy.
Advancement and recognition are earned through contribution and
performance. Period. We celebrate each others victories
and efforts.
10.
Fun.
We believe that work, done well,
can and should be fun. We strive to create an upbeat, supportive
environment and try not to take ourselves too seriously. We do
not tolerate negativism, pessimism or nay saying...we dont
have time.
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94
F-13
II-3
50
Chief Executive Officer and Chairman
45
President and Chief Operating Officer
43
Chief Financial Officer
38
Executive Vice President
36
Executive Vice President
36
Chief Technology Officer
43
General Counsel
37
Senior Vice President
34
Senior Vice President
43
Senior Vice President
66
Director
72
Director
43
Director
46
Director
40
Director
41
Director
(1)
Member of the nominating and corporate governance committee.
(2)
Member of the compensation committee.
(3)
Member of the audit committee.
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Class I directors will be Messrs. Simons and Stalder,
and their terms will expire at the annual general meeting of
stockholders to be held in 2011;
Class II directors will be Professor McDonald and
Mr. Sands, and their terms will expire at the annual
general meeting of stockholders to be held in 2012; and
Class III directors will be Former Senator Bradley and
Messrs. Solomon and Valenti, and their terms will expire at
the annual general meeting of stockholders to be held in 2013.
reviewing and pre-approving the engagement of our independent
registered public accounting firm to perform audit services and
any permissible non-audit services;
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evaluating the performance of our independent registered public
accounting firm and deciding whether to retain their services;
reviewing our annual and quarterly financial statements and
reports and discussing the statements and reports with our
independent registered public accounting firm and management,
including a review of disclosures under Management
Discussion and Analysis of Financial Condition and Results of
Operations;
providing oversight with respect to related party transactions;
reviewing, with our independent registered public accounting
firm and management, significant issues that may arise regarding
accounting principles and financial statement presentation, as
well as matters concerning the scope, adequacy and effectiveness
of our financial controls;
reviewing reports from management and auditors regarding our
procedures to monitor and ensure compliance with our legal and
regulatory responsibilities, our code of business conduct and
ethics and our compliance with legal and regulatory
requirements; and
establishing procedures for the receipt, retention and treatment
of complaints received by us regarding financial controls,
accounting or auditing matters.
determining the compensation and other terms of employment of
our chief executive officer and our other executive officers and
reviewing and approving corporate performance goals and
objectives relevant to such compensation;
reviewing and approving the compensation of our directors;
evaluating and recommending to our board of directors the equity
incentive plans, compensation plans and similar programs
advisable for us, as well as modification or termination of
existing plans and programs;
establishing policies with respect to equity compensation
arrangements; and
reviewing with management our disclosures under the caption
Compensation Discussion and Analysis and
recommending to the full board its inclusion in our periodic
reports to be filed with the SEC.
reviewing periodically director performance on our board of
directors and its committees and performance of management, and
recommending to our board of directors and management areas of
improvement;
interviewing, evaluating, nominating and recommending
individuals for membership on our board of directors;
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evaluating nominations by stockholders of candidates for
election to our board of directors and establishing policies and
procedures for such nominations;
reviewing with our chief executive officer plans for succession
to the offices of chief executive officer or any other executive
officer, as it sees fit; and
reviewing and recommending to our board of directors changes
with respect to corporate governance practices and policies.
$ per year for service as a board
member;
$ per year for service as a member
of the audit committee, compensation committee or nominating and
corporate governance committee;
$ per year for service as a
chairperson of the audit committee, compensation committee or
nominating or corporate governance committee;
$ for each in-person board meeting
and $ for each telephonic board
meeting; and
$ for each in-person or telephonic
committee meeting.
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Fees Earned or
Option
Paid in
Awards
Total
Cash
($)(1)
($)
$
58,000
$
129,528
$
187,528
$
58,000
$
129,528
$
187,528
$
58,000
$
129,528
$
187,528
(1)
Amount reflects the total compensation expense for the fiscal
year ended June 30, 2009 calculated in accordance with
stock-based compensation expense guidance. The valuation
assumptions used in determining such amounts are described in
Note 10 to our consolidated financial statements included
in this prospectus.
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Douglas Valenti, Chief Executive Officer, or CEO;
Bronwyn Syiek, President and Chief Operating Officer;
Kenneth Hahn, Chief Financial Officer, or CFO;
Tom Cheli, Executive Vice President; and
Scott Mackley, Executive Vice President.
attract, motivate and retain highly-talented individuals who are
incented to achieve our strategic goals;
closely align compensation with our business and financial
objectives and the long-term interests of our stockholders;
motivate and reward individuals whose skills and performance
promote our continued success; and
offer total compensation that is competitive and fair.
base salary;
performance-based cash bonuses;
equity incentive awards;
employee benefits and perquisites; and
change in control benefits.
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health, dental insurance and vision coverage;
life insurance;
an employee stock purchase plan;
a medical and dependent care flexible spending account;
short- and long-term disability, accidental death and
dismemberment insurance; and
a Section 401(k) plan.
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Non-Equity
Option
Incentive Plan
All Other
Name and Principal
Fiscal
Awards
Compensation
Compensation
Total
Year
Salary ($)
($)(1)
($)
($)(2)
($)
2009
$
451,500
$
299,356
$
386,243
$
243
$
1,137,342
2009
$
394,000
$
268,883
$
319,743
$
239
$
982,865
2009
$
315,000
$
150,059
$
238,298
$
196
$
703,553
2009
$
315,000
$
150,059
$
294,458
$
196
$
759,713
2009
$
330,000
$
62,478
$
174,290
$
204
$
566,972
(1)
Amounts shown in this column do not reflect dollar amounts
actually received by our named executive officers. Instead,
these amounts reflect the dollar amount recognized for financial
statement reporting purposes for the referenced fiscal year, in
accordance with the provisions of SFAS No. 123(R).
Assumptions used in the calculation of these amounts are
included in Note 10 to our consolidated financial
statements included in this prospectus. As required by SEC
rules, the amounts shown exclude the impact of estimated
forfeitures related to service-based vesting conditions. Our
named executive officers will only realize compensation to the
extent the trading price of our common stock is greater than the
exercise price of such stock options.
(2)
All other compensation represents amounts we pay towards
employee life insurance.
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Estimated
Future
All Other
Payouts
Option
Under Non-
Awards:
Exercise or
Grant Date
Equity
Number of
Base Price of
Fair Value of
Incentive
Securities
Option
Stock and
Plan Awards
Underlying
Awards
Option
Target ($)
Options (#)
($/Sh)
Awards ($)(2)
July 25, 2008
85,000
$
11.31
(1)
$
375,258
May 30, 2008
$
304,500
(3)
May 30, 2008
$
(4)
July 25, 2008
125,000
$
10.28
$
578,163
May 30, 2008
$
238,000
(3)
May 30, 2008
$
(4)
July 25, 2008
75,000
$
10.28
$
346,898
May 30, 2008
$
187,200
(3)
May 30, 2008
$
(4)
July 25, 2008
75,000
$
10.28
$
346,898
May 30, 2008
$
187,200
(3)
May 30, 2008
$
(4)
July 25, 2008
50,000
$
10.28
$
231,563
May 30, 2008
$
113,000
(3)
May 30, 2008
$
(4)
(1)
Option granted to Mr. Valenti had an exercise price per
share equal to 110% of the fair market value of one share of our
common stock on the date of grant.
(2)
Amounts represent the total fair value of stock options granted
in fiscal year 2009, calculated in accordance with stock-based
compensation expense guidance. See Note 10 to our
consolidated financial statements included in this prospectus
for a discussion of assumptions made in determining the grant
date fair value and compensation expense of our stock options.
(3)
Represents the executives target bonus under our 2009
Bonus Plan as of the date of grant. The plan provides for
individual bonus targets ranging from 34% of base salary to 67%
of base salary. Payout of the bonuses was dependent on
achievement against our plan for revenue growth and Adjusted
EBITDA and, where applicable, the individual executives
business units achievement against that units plan
for revenue growth and Adjusted EBITDA, as further described in
Compensation Discussion and Analysis. Actual
payments for fiscal year 2009 are set forth in the Fiscal
Year 2009 Summary Compensation Table above.
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(4)
Represents the executives target bonus under our 2009
Incremental Bonus Plan as of the date of grant. The 2009
Incremental Bonus Plan paid out to the senior management team
was 15% of any Adjusted EBITDA in excess of our target of 20%
Adjusted EBITDA margin for the year. The incremental bonus plan
allocated differing amounts to executives based on their role
and tenure at the company and ranged between 1% of any Adjusted
EBITDA over the 20% margin target and 2.25% of such excess.
Option Awards
Number of
Securities
Number of
Underlying
Securities
Unexercised
Underlying
Options
Unexercised
Option
Exercisable
Options
Exercise
Option Expiration
(#)
Unexercisable (#)(1)
Price ($)
July 25, 2008
85,000
$
11.31
July 24, 2013
January 31, 2007
99,687
65,313
$
10.34
January 30, 2014
July 25, 2008
125,000
$
10.28
July 24, 2015
May 31, 2007
52,083
47,917
$
10.28
May 30, 2014
May 17, 2006
77,083
22,917
$
9.01
May 16, 2016
September 23, 2005
93,750
6,250
$
7.74
September 22, 2015
May 20, 2005
185,000
$
6.38
May 19, 2015
July 28, 2004
150,000
$
4.60
July 27, 2014
November 19, 2003
100,000
$
4.60
November 18, 2013
September 11, 2001
150,000
$
0.59
September 10, 2011
June 28, 2000
45,000
$
0.59
June 27, 2010
July 25, 2008
75,000
$
10.28
July 24, 2015
May 31, 2007
26,041
23,959
$
10.28
May 30, 2014
May 17, 2006
38,540
11,460
$
9.01
May 16, 2016
September 23, 2005
93,750
6,250
$
7.74
September 22, 2015
May 20, 2005
80,000
$
6.38
May 19, 2015
July 28, 2004
100,000
$
4.60
July 27, 2014
September 26, 2002
150,000
$
1.50
September 25, 2012
September 19, 2000
1,905
$
0.59
September 18, 2010
July 25, 2008
75,000
$
10.28
July 24, 2015
May 31, 2007
26,041
23,959
$
10.28
May 30, 2014
May 17, 2006
38,540
11,460
$
9.01
May 16, 2016
September 23, 2005
93,750
6,250
$
7.74
September 22, 2015
May 20, 2005
80,000
$
6.38
May 19, 2015
July 28, 2004
120,000
$
4.60
July 27, 2014
July 22, 2003
100,000
$
2.00
July 21, 2013
April 4, 2002
42,292
$
0.59
April 3, 2012
March 15, 2001
6,667
$
0.59
March 14, 2011
June 28, 2000
8,334
$
0.59
June 27, 2010
July 25, 2008
50,000
$
10.28
July 24, 2015
May 17, 2006
289,062
85,938
$
9.01
May 16, 2016
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(1)
Each stock option to our executive officers vests over a
four-year period as follows: 25% of the shares underlying the
option vest on the first anniversary of the date of the vesting
commencement date, which is the date of grant, and the remainder
of the shares underlying the option vest in equal monthly
installments over the remaining 36 months thereafter. Each
option also provides that 25% of the unvested shares subject to
such option will vest if the executive is terminated without
cause following a change in control.
(2)
In fiscal year 2007, our board of directors changed the default
term of option grants to seven years.
Option Awards
Number of
Value
Shares
Realized on
Acquired on
Exercise
Exercise (#)
($)(1)
3,095
$
29,991
(1)
The aggregate dollar value realized upon exercise of an option
represents the difference between the aggregate fair market
value of our common stock underlying the option on the date of
exercise, which was determined by our board of directors to be
approximately $10.28 per share, and the aggregate exercise price
of the option.
Value of
Accelerated
Equity
Awards ($)
(1)
$
$
1,984
$
1,984
$
1,984
$
(1)
The aggregate dollar value realized in connection the
acceleration of the equity awards represents the difference
between the aggregate fair market value of our common stock
underlying the accelerated options as of June 30, 2009,
which was determined by our board of directors to be
approximately $9.01 per share, and the aggregate exercise price
of the accelerated options.
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arrange for the assumption, continuation, or substitution of a
stock award by a surviving or acquiring entity or parent company;
arrange for the assignment of any reacquisition right held by us
to the surviving or acquiring entity;
accelerate the vesting of a stock award and provide for its
termination prior to the effective time of the corporate
transaction;
arrange for the lapse of any reacquisition or repurchase rights
held by us;
cancel or arrange for the cancellation of the stock award in
exchange for such cash consideration, if any, as our board may
deem appropriate; or
provide for the surrender of a stock award in exchange for a
payment equal to the excess of (a) the value of the
property that the optionee would have received upon exercise of
the stock award over (b) the exercise price otherwise
payable in connection with the stock award.
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Initial Grant.
Any person who becomes a
non-employee director after the completion of this offering will
automatically receive an initial grant of an option to purchase
shares of our common stock upon his or her election or
appointment, subject to adjustment by our board of directors
from time to time. These options will vest in equal monthly
installments over three years. These initial grants may also be
issued in the form of restricted stock awards if so determined
by our board of directors.
Annual Grant.
In addition, any person who is a
non-employee director on the date of each annual meeting of our
stockholders automatically will be granted, on the annual
meeting date, beginning with our 2010 annual meeting, an option
to purchase shares of our common stock, or the annual grant,
subject to adjustment by our board of directors from time to
time. However, the size of an annual grant made to a
non-employee director who is elected after the completion of
this offering and who has served for less than 12 months at
the time of the annual meeting will be reduced pro rata for each
full month prior to the date of grant during which such person
did not serve as a non-employee director. These options will
vest in equal monthly installments over 12 months. These
annual grants may also be issued in the form of restricted stock
unit awards if so determined by our board of directors.
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any breach of the directors duty of loyalty to us or our
stockholders;
any act or omission not in good faith or that involves
intentional misconduct or a knowing violation of law;
unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided in Section 174 of the Delaware
General Corporation Law; or
any transaction from which the director derived an improper
personal benefit.
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Shares Repurchased
198,480
150,000
50,000
$
10.28
10/18/07
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each of our named executive officers;
each of our directors;
all of our current officers and directors as a group; and
each person, or group of affiliated persons, known by us to
beneficially own more than 5% of our common stock.
Number of
Shares
Percentage of Shares Beneficially Owned
Beneficially
Before the
After the
Owned
Offering
Offering
6,379,622
18.33
%
5,682,951
16.40
%
3,655,681
10.55
%
2,441,975
7.05
%
2,376,228
6.86
%
2,033,899
5.87
%
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Number of
Shares
Percentage of Shares Beneficially Owned
Beneficially
Before the
After the
Owned
Offering
Offering
1,913,620
5.52
%
6,379,622
18.33
%
942,878
2.65
%
353,645
1.01
%
545,936
1.55
%
602,602
1.71
%
179,000
*
191,000
*
3,754,990
10.84
%
5,682,951
16.41
%
2,441,975
7.05
%
203,900
*
21,958,680
57.30
%
*
Represents beneficial ownership of less than one percent (1%) of
the outstanding common stock.
(1)
Includes 3,985,738 shares held by the Valenti Living Trust
of which Mr. Valenti is a co-trustee, 2,240,000 shares
held by DJ & TL Valenti Investments, LP, of which
Mr. Valenti is the general partner, and 6,905 shares
held by Mr. Valenti and his immediate family members. Also
includes stock options exercisable for 146,979 shares of
our common stock within 60 days of October 31, 2009.
(2)
Consists of 5,561,627 shares held by SPVC V, LLC and
121,324 shares held by SPVC Affiliates Fund I, LLC.
Split Rock Partners, LLC, together with Vestbridge Partners,
LLC, is the manager of SPVC V, LLC and SPVC Affiliates
Fund I, LLC, however, voting and investment power are
delegated solely to Split Rock Partners, LLC. Michael Gorman,
James Simons, David Stassen and Allan Will, as managing
directors of Split Rock Partners, LLC, share voting and
investment power with respect to the shares held by SPVC V,
LLC and SPVC Affiliates Fund I, LLC and disclaim beneficial
ownership of such shares except to the extent of any pecuniary
interest therein.
(3)
Consists of 3,509,543 shares held by Sutter Hill Ventures,
LP, 104,764 shares held by Sutter Hill Entrepreneurs Fund
(QP), LP and 41,374 shares held by Sutter Hill
Entrepreneurs Fund (AI), LP. Gregory Sands, David L. Anderson,
G. Leonard Baker, Jr., Jeffrey W. Bird, Tench Coxe,
James C. Gaither, Andrew T. Sheehan, Michael L. Speiser, David
E. Sweet, James N. White and William H. Younger, Jr. share
voting and investment power over these shares and disclaim
beneficial ownership of such shares except to the extent of any
pecuniary interest therein.
(4)
Consists of 1,367,105 shares held by Granite Global
Ventures III L.P., 1,020,188 shares held by Granite
Global Ventures II L.P., 33,330 shares held by
GGV III Entrepreneurs Fund L.P. and 21,352 shares held
by GGV II Entrepreneurs Fund L.P. Granite Global
Ventures III L.L.C. is the General Partner of Granite
Global Ventures III L.P. and GGV III Entrepreneurs
Fund L.P. Mr. Solomon, Mr. Ng, Mr. Nada,
Mr. Bonham, Mr. Foo, Ms. Lee, Mr. Zhan and
Ms. Jin share voting and investment authority over the
shares held by Granite Global Ventures III L.P. and GGV III
Entrepreneurs Fund L.P., and disclaim beneficial ownership
of such shares except to the extent of any pecuniary interest
therein. Granite Global Ventures II L.L.C. is the General
Partner of Granite Global Ventures II L.P. and GGV II
Entrepreneurs Fund L.P. Mr. Solomon, Mr. Ng, Mr.
Nada, Mr. Bonham, Mr. Foo and Ms. Lee share
voting and investement power over the shares held by Granite
Global Ventures II L.P. and GGV Entrepreneurs
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Fund L.P., and disclaim beneficial ownership of such shares
except to the extent of any pecuniary interest therein.
(5)
The sole general partner of W Capital Partners II, L.P. is WCP
GP II, L.P. and the sole general partner of WCP GP II, L.P. is
WCP GP II, LLC. The managing members of WCP GP II, LLC exercise
voting and investment power over securities held by W Capital
Partners II, L.P. The managing members of WCP GP II, LLC are
Stephen Wertheimer, David Wachter and Robert Migliorino, each of
whom disclaims beneficial ownership of the securities held by W
Capital Partners II, L.P., except to the extent of any pecuniary
interest therein.
(6)
Consists of 904,937 shares held by Catterton Partners IV,
L.P., 762,885 shares held by Catterton Partners IV
Offshore, L.P., 317,263 shares held by Catterton Partners
IV-A, L.P., 26,695 shares held by Catterton
Partners IV Special Purpose, L.P. and 22,119 shares
held by Catterton Partners IV-B, L.P. Catterton Managing Partner
IV, L.L.C. is the general partner of Catterton Partners IV,
L.P., Catterton Partners IV-A, L.P. and Catterton Partners IV-B,
L.P. and the managing general partner of Catterton Partners IV
Special Purpose, L.P. and Catterton Partners IV Offshore, L.P.
CP4 Principals, L.L.C. is the Managing Member of Catterton
Managing Partner IV, L.L.C. CP4 Principals is managed by a
managing board. The members of the managing board are J. Michael
Chu and Scott A. Dahnke. These individuals disclaim beneficial
ownership of such shares except to the extent of any pecuniary
interest therein.
(7)
Consists of 642,226 shares held by Partech International
Growth II LLC, 513,783 shares held by Partech
International Growth III LLC, 385,866 shares held by
Partech U.S. Partners IV LLC, 128,446 shares held by
Partech International Growth I LLC, 205,513 shares
held by AXA Growth Capital II L.P., 25,689 shares held
by Double Black Diamond II LLC and 12,097 shares held
by PAR SF II LLC. Vincent Worms has sole voting and
investment authority over all such shares. Mr. Worms
disclaims beneficial ownership of all such shares except to the
extent of any pecuniary interest therein.
(8)
Includes 4,760 shares held in a trust for the benefit of
Ms. Syieks stepdaughter for which Ms. Syiek is
the custodian. Also includes stock options exercisable for
926,352 shares of our common stock within 60 days of
October 31, 2009.
(9)
Represents stock options exercisable for shares of our common
stock within 60 days of October 31, 2009.
(10)
Includes stock options exercisable for 534,507 shares of
our common stock within 60 days of October 31, 2009.
(11)
Includes stock options exercisable for 559,895 shares of
our common stock within 60 days of October 31, 2009.
(12)
Includes stock options exercisable for 175,000 shares of
our common stock within 60 days of October 31, 2009.
(13)
Includes 16,000 shares held in a family trust of which
Mr. Donald is a trustee. Also, includes stock options
exercisable for 175,000 shares of our common stock within
60 days of October 31, 2009.
(14)
Includes 77,612 shares held in family trusts for which
Mr. Sands and his spouse are trustees, 6,785 shares
held in a charitable remainder unitrust for which Mr. Sands
is the trustee and 14,912 shares held in irrevocable trusts for
the benefit of Mr. Sands minor children. Also
includes 3,509,543 shares held by Sutter Hill Ventures, LP,
104,764 shares held by Sutter Hill Entrepreneurs Fund (QP),
LP and 41,374 shares held by Sutter Hill Entrepreneurs Fund
(AI), LP. Mr. Sands is a Managing Director of Sutter Hill
Ventures. Mr. Sands disclaims beneficial ownership of the
shares held by Sutter Hill Ventures except to the extent of his
proportionate pecuniary interest therein.
(15)
Includes 5,561,627 shares held by SPVC V, LLC and
121,324 shares held by SPVC Affiliates Fund I, LLC.
Mr. Simons is a Managing Director of Split Rock Partners
LLC, the manager of SPVC V, LLC and SPVC Affiliates
Fund I, LLC. Mr. Simons, together with
Mr. Gorman, Mr. Stassen and Mr. Will share voting
and investment power with respect to the shares held by
SPVC V, LLC and SPVC Affiliates Fund I, LLC.
Mr. Simons disclaims beneficial ownership of these shares
except to the extent of his proportionate pecuniary interest
therein.
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(16)
Includes 1,367,105 shares held by Granite Global
Ventures III L.P., 1,020,188 shares held by Granite
Global Ventures II L.P., 33,330 shares held by
GGV III Entrepreneurs Fund L.P. and 21,352 shares held
by GGV II Entrepreneurs Fund L.P. Mr. Solomon is a
Managing Director of Granite Global Ventures III L.L.C., the
General Partner of Granite Global Ventures III L.P. and GGV
III Entrepreneurs Fund L.P. He is also a Managing Director of
Granite Global Ventures II, L.L.C., the General Partner of
Granite Global Ventures II L.P. and GGV II Entrepreneurs Fund
L.P. Mr. Solomon, Mr. Ng, Mr. Nada,
Mr. Bonham, Mr. Foo, Ms. Lee, Mr. Zhuo and
Ms. Jin share voting and investment authority over the
shares held by Granite Global Ventures III L.P. and GGV III
Entrepreneurs Fund L.P. Mr. Solomon, Mr. Ng,
Mr. Nada, Mr. Bonham, Mr. Foo and Ms. Lee
share voting and investment authority over the shares held by
Granite Global Ventures II L.P. and GGV II Entrepreneurs Fund
L.P. Mr. Solomon disclaims beneficial ownership of these
shares except to the extent of his proportionate pecuniary
interest therein. Does not include a maximum of 34,257 shares
held by entities affiliated with Partech International.
Mr. Solomon was associated with Partech International prior
to joining GGV Capital. These shares represent Mr.
Solomons maximum pecuniary interest in the shares held by
entities affiliated with Partech International. Mr. Solomon
has no voting or investment authority over these shares.
(17)
Includes 3,900 shares held in a family trust for which
Mr. Stalder is the trustee. Also includes stock options
exercisable for 200,000 shares of our common stock within
60 days of October 31, 2009.
(18)
Includes stock options exercisable for an aggregate for shares
of our common stock within 60 days of October 31, 2009
that are held by our directors and officers as a group.
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34,631,876 shares of common stock held by approximately 304
stockholders of record; and
10,654,296 shares of common stock issuable upon the
exercise of outstanding stock options pursuant to our 2008
Equity Incentive Plan and having a weighted average exercise
price of $8.1717 per share.
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before such date, the board of directors of the corporation
approved either the business combination or the transaction that
resulted in the stockholder becoming an interested stockholder;
upon completion of the transaction that resulted in the
stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction began,
excluding for purposes of determining the voting stock
outstanding (but not the outstanding voting stock owned by the
interested stockholder) those shares owned (i) by persons
who are directors and also officers and (ii) employee stock
plans in which employee participants do not have the right to
determine confidentially whether shares held subject to the plan
will be tendered in a tender or exchange offer; or
on or after such date, the business combination is approved by
the board of directors and authorized at an annual or special
meeting of the stockholders, and not by written consent, by the
affirmative vote of at least
66
2
/
3
%
of the outstanding voting stock that is not owned by the
interested stockholder.
any merger or consolidation involving the corporation and the
interested stockholder;
any sale, transfer, pledge or other disposition of 10% or more
of the assets of the corporation involving the interested
stockholder;
subject to certain exceptions, any transaction that results in
the issuance or transfer by the corporation of any stock of the
corporation to the interested stockholder;
any transaction involving the corporation that has the effect of
increasing the proportionate share of the stock or any class or
series of the corporation beneficially owned by the interested
stockholder; or
the receipt by the interested stockholder of the benefit of any
loss, advances, guarantees, pledges or other financial benefits
by or through the corporation.
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no restricted shares will be eligible for immediate sale upon
the completion of this offering;
up
to
restricted shares will be eligible for sale under Rule 144
or Rule 701 upon expiration of
lock-up
agreements at least 180 days after the date of this
offering; and
the remainder of the restricted shares will be eligible for sale
from time to time thereafter upon expiration of their respective
one-year holding periods under Rule 144, but could be sold
earlier if the holders exercise any available registration
rights.
1% of the number of shares of our common stock then outstanding,
which will
equal approximately
shares immediately after this offering assuming no exercise of
the underwriters overallotment option, based on the number
of shares of common stock outstanding as of September 30,
2009; or
the average weekly trading volume of our common stock
on during
the four calendar weeks preceding the filing of a notice on
Form 144 with respect to the sale;
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FOR
NON-U.S.
HOLDERS
an individual who is a citizen or resident of the U.S.;
a corporation or other entity taxable as a corporation created
or organized under the laws of the U.S. or any political
subdivision thereof;
an estate whose income is subject to U.S. federal income
tax regardless of its source; or
a trust (x) whose administration is subject to the primary
supervision of a U.S. court and which has one or more
U.S. persons who have the authority to control all
substantial decisions of the trust or (y) which has in
effect a valid election to be treated a U.S. person.
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the gain is effectively connected with a U.S. trade or
business of the
non-U.S. holder,
and, if an applicable tax treaty so requires, is attributable to
a U.S. permanent establishment maintained by such
non-U.S. holder;
the
non-U.S. holder
is an individual who is present in the U.S. for a period or
periods aggregating 183 days or more during the calendar
year in which the sale or disposition occurs and certain other
conditions are met; or
our common stock constitutes a U.S. real property interest
by reason of our status as a U.S. real property
holding corporation for U.S. federal income tax
purposes at any time within the shorter of the five-year period
preceding the disposition or the holders holding period
for our common stock. We believe that we are not currently, and
that we will not become, a U.S. real property holding
corporation for U.S. federal income tax purposes.
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Number of Shares
Incorporated
Per Share(1)
Total(1)
Without
With
Without
With
Over-Allotment
Over-Allotment
Over-Allotment
Over-Allotment
$
$
$
$
$
$
$
$
(1)
Includes fees payable to Qatalyst Partners LP for services as
our financial advisor.
106
Table of Contents
the information presented in this prospectus and otherwise
available to the underwriters;
the history of and the prospects for the industry in which we
compete;
the ability of our management;
the prospects for our future earnings;
the present state of our development and our current financial
condition;
the recent market prices of, and the demand for, publicly-traded
common stock of generally comparable companies; and
the general condition of the securities markets at the time of
the offering.
Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a
specified maximum.
Over-allotment involves sales by the underwriters of shares in
excess of the number of shares the underwriters are obligated to
purchase, which creates a syndicate short position. The short
position may be either a covered short position or a naked short
position. In a covered short position, the number of shares
over-allotted by the underwriters is not greater than the number
of shares that they may purchase in the over-allotment option.
In a naked short position, the number of shares involved is
greater than the number of shares in the over-allotment option.
The underwriters may close out any covered short position by
either exercising their over-allotment option
and/or
purchasing shares in the open market.
Syndicate covering transactions involve purchases of the common
stock in the open market after the distribution has been
completed in order to cover syndicate short positions. In
determining the source of shares to close out the short
position, the underwriters will consider, among other things,
the price of shares available for purchase in the open market as
compared to the price at which they may purchase shares through
the over-allotment option. If the underwriters sell more shares
than could be covered by the over-allotment option, a naked
short position, the position can only be closed out by buying
shares
107
Table of Contents
in the open market. A naked short position is more likely to be
created if the underwriters are concerned that there could be
downward pressure on the price of the shares in the open market
after pricing that could adversely affect investors who purchase
in the offering.
Penalty bids permit the representatives to reclaim a selling
concession from a syndicate member when the common stock
originally sold by the syndicate member is purchased in a
stabilizing or syndicate covering transaction to cover syndicate
short positions.
In passive market making, market makers in the common stock who
are underwriters or prospective underwriters may, subject to
limitations, make bids for or purchases of our common stock
until the time, if any, at which a stabilizing bid is made.
108
Table of Contents
109
Table of Contents
110
Table of Contents
F-1
Table of Contents
Pro Forma
Shareholders
Equity at
June 30,
September 30,
September 30,
2008
2009
2009
2009
(Unaudited)
$
24,953
$
25,182
$
28,095
2,302
25,281
33,283
39,015
2,738
5,543
5,542
1,713
1,228
1,471
56,987
65,236
74,123
5,725
4,741
4,666
80,468
106,744
119,455
34,826
33,990
36,571
247
1,525
1,493
642
595
$
179,746
$
212,878
$
235,410
$
10,042
$
13,408
$
14,252
19,571
21,794
26,024
863
718
723
9,489
12,890
13,182
39,965
48,810
54,181
1,394
820
721
42,165
44,350
52,995
2,508
2,309
2,387
86,032
96,289
110,284
43,403
43,403
43,403
$
7,971
13,585
15,627
59,030
34
21
3
3
42,306
59,580
66,093
66,093
50,311
73,186
81,723
$
125,126
$
179,746
$
212,878
$
235,410
F-2
Table of Contents
F-3
Table of Contents
Accumulated
Convertible Preferred
Other
Total
Shares
Common Shares
Comprehensive
Retained
Shareholders
Comprehensive
Shares
Amount
Shares
Amount
Income
Earnings
Equity
Income
15,808,777
$
43,286
12,593,410
$
2,748
$
(49
)
$
15,651
$
18,350
381,030
714
714
125
125
2,071
2,071
415
415
117
(117
)
(117
)
15,610
15,610
15,610
1
1
1
143
143
143
$
15,754
15,808,777
$
43,403
12,974,440
$
6,073
$
95
$
31,144
$
37,312
893,197
2,575
2,575
3,222
3,222
1,707
1,707
(558,730
)
(5,606
)
(5,606
)
(1,705
)
(1,705
)
12,867
12,867
$
12,867
10
10
10
(71
)
(71
)
(71
)
$
12,806
15,808,777
$
43,403
13,308,907
$
7,971
$
34
$
42,306
$
50,311
169,716
304
304
6,173
6,173
474
474
(163,275
)
(1,337
)
(1,337
)
17,274
17,274
$
17,274
(10
)
(10
)
(10
)
(3
)
(3
)
(3
)
$
17,261
15,808,777
$
43,403
13,315,348
$
13,585
$
21
$
59,580
$
73,186
211,890
296
296
2,229
2,229
94
94
(71,895
)
(577
)
(577
)
6,513
6,513
$
6,513
(18
)
(18
)
(18
)
$
6,495
15,808,777
$
43,403
13,455,343
$
15,627
$
3
$
66,093
$
81,723
F-4
Table of Contents
Three Months Ended
Fiscal Years Ended June 30,
September 30,
2007
2008
2009
2008
2009
(Unaudited)
$
15,610
$
12,867
$
17,274
$
3,304
$
6,513
9,637
11,727
15,978
4,114
3,952
8
(35
)
(81
)
(5
)
426
106
10
22
(36
)
356
1,040
1,463
953
252
2,071
3,222
6,173
1,398
2,229
(415
)
(1,707
)
(474
)
(559
)
(94
)
421
404
563
154
107
(472
)
(921
)
(9,042
)
(8,577
)
(5,849
)
(656
)
(228
)
485
(925
)
(236
)
17
(555
)
(710
)
99
44
82
(3,772
)
(4,081
)
6
3,440
(4,977
)
3,359
1,905
843
(831
)
8,020
2,491
(1,864
)
4,229
(2,893
)
(954
)
(720
)
(135
)
(116
)
(1,497
)
(107
)
514
(199
)
(75
)
(25
)
25,197
24,751
32,570
(261
)
11,808
(33
)
(23
)
711
715
3
2
44
44
(2,030
)
(2,177
)
(1,347
)
(504
)
(443
)
(11,856
)
(63,244
)
(27,932
)
(12,430
)
(11,763
)
(1,493
)
(1,378
)
(1,060
)
(346
)
(316
)
(40,860
)
(11,642
)
29,905
29,172
2,302
1,383
(26,365
)
(49,248
)
(27,326
)
(11,182
)
(12,475
)
29,000
8,607
8,500
6,500
(3,500
)
(750
)
(3,932
)
(4,920
)
(9,560
)
(1,362
)
(1,963
)
415
1,707
474
559
94
(5,606
)
(1,337
)
(982
)
(577
)
714
2,575
304
173
296
(2,803
)
22,756
(5,012
)
6,888
3,600
143
(71
)
(3
)
1
(20
)
(3,828
)
(1,812
)
229
(4,554
)
2,913
30,593
26,765
24,953
24,953
25,182
$
26,765
$
24,953
$
25,182
$
20,399
$
28,095
348
1,193
2,269
282
770
10,376
8,473
20,354
2,873
814
117
125
4,047
16,910
8,151
4,705
6,347
F-5
Table of Contents
1.
The
Company
2.
Summary
of Significant Accounting Policies
F-6
Table of Contents
Three Months Ended
Fiscal Year Ended June 30,
September 30,
2007
2008
2009
2008
2009
(Unaudited)
22
%
23
%
19
%
20
%
13
%
15
%
12
%
6
%
8
%
6
%
13
%
11
%
8
%
9
%
6
%
F-7
Table of Contents
3 years
3 years
3 to 5 years
the shorter of the lease term or the estimated useful lives of
the improvements
F-8
Table of Contents
F-9
Table of Contents
F-10
Table of Contents
F-11
Table of Contents
F-12
Table of Contents
June 30,
September 30,
2008
2009
2009
(Unaudited)
$
177,854
$
211,337
$
233,902
1,224
927
806
668
614
702
$
179,746
$
212,878
$
235,410
$
120,745
$
145,219
$
160,438
22
35
252
221
254
$
121,019
$
145,475
$
160,692
Table of Contents
3.
Revision
of prior period financial statements
F-14
Table of Contents
Fiscal Year Ended June 30,
2007
2008
2009
As Reported
As Revised
As Reported
As Revised
As Reported
As Revised
$
117,905
$
108,945
$
130,610
$
130,869
$
181,370
$
181,593
49,465
58,425
61,420
61,161
79,157
78,934
24,537
24,404
21,822
21,330
35,259
34,721
15,733
15,610
13,228
12,867
17,914
17,274
$
0.37
$
0.36
$
0.29
$
0.28
$
0.42
$
0.41
$
0.34
$
0.34
$
0.27
$
0.26
$
0.40
$
0.39
$
31,267
$
31,144
$
44,495
$
42,306
$
62,409
$
59,580
$
25,197
$
25,197
$
28,599
$
24,751
$
32,570
$
32,570
(26,365
)
(26,365
)
(53,096
)
(49,248
)
(27,326
)
(27,326
)
(2,803
)
(2,803
)
22,756
22,756
(5,012
)
(5,012
)
4.
Net
income attributable to common shareholders and pro forma net
income per share
F-15
Table of Contents
Fiscal Year Ended June 30,
Three Months Ended September 30,
2007
2008
2009
2008
2009
(Unaudited)
$
15,610
$
12,867
$
17,274
$
3,304
$
6,513
(3,276
)
(3,276
)
(3,276
)
(819
)
(819
)
(7,690
)
(5,925
)
(8,599
)
(1,527
)
(3,487
)
$
4,644
$
3,666
$
5,399
$
958
$
2,207
$
4,644
$
3,666
$
5,399
$
958
$
2,207
522
360
399
77
188
$
5,166
$
4,026
$
5,798
$
1,035
$
2,395
12,789
13,104
13,294
13,279
13,405
12,789
13,104
13,294
13,279
13,405
2,474
2,221
1,677
1,852
1,976
15,263
15,325
14,971
15,131
15,381
$
0.36
$
0.28
$
0.41
$
0.07
$
0.16
$
0.34
$
0.26
$
0.39
$
0.07
$
0.16
13,294
13,405
21,177
21,177
34,471
34,582
14,971
15,381
21,177
21,177
36,148
36,558
$
0.50
$
0.19
$
0.48
$
0.18
F-16
Table of Contents
5.
Balance
Sheet Components
June 30, 2008
Gross
Gross
Amortized
Unrealized
Unrealized
Carrying
Cost
Gains
Losses
Value
$
2,296
$
6
$
$
2,302
$
2,296
$
6
$
$
2,302
Level 1
June 30,
September 30,
2008
2009
2009
(Unaudited)
$
27,443
$
36,792
$
42,736
(622
)
(506
)
(466
)
(1,540
)
(3,003
)
(3,255
)
$
25,281
$
33,283
$
39,015
F-17
Table of Contents
June 30,
September 30,
2008
2009
2009
(Unaudited)
$
9,670
$
10,295
$
10,414
4,512
4,955
5,015
1,802
1,992
1,865
579
694
700
12,396
13,456
13,773
28,959
31,392
31,767
(23,234
)
(26,651
)
(27,101
)
$
5,725
$
4,741
$
4,666
June 30, 2008
June 30, 2009
September 30, 2009
Gross
Net
Gross
Net
Gross
Net
Carrying
Accumulated
Carrying
Carrying
Accumulated
Carrying
Carrying
Accumulated
Carrying
Amount
Amortization
Amount
Amount
Amortization
Amount
Amount
Amortization
Amount
(Unaudited)
$
18,789
$
(2,046
)
$
16,743
$
22,982
$
(6,299
)
$
16,683
$
24,311
$
(7,462
)
$
16,849
15,467
(6,530
)
8,937
18,145
(10,546
)
7,599
21,250
(11,648
)
9,602
6,216
(2,446
)
3,770
9,187
(2,988
)
6,199
10,407
(3,366
)
7,041
9,286
(3,910
)
5,376
10,034
(6,525
)
3,509
10,116
(7,037
)
3,079
$
49,758
$
(14,932
)
$
34,826
$
60,348
$
(26,358
)
$
33,990
$
66,084
$
(29,513
)
$
36,571
F-18
Table of Contents
$
12,137
9,402
6,553
4,057
921
920
$
33,990
DMS
DSS
Total
$
23,320
$
1,231
$
24,551
55,917
55,917
79,237
1,231
80,468
26,276
26,276
105,513
1,231
106,744
12,711
12,711
$
118,224
$
1,231
$
119,455
June 30,
September 30,
2008
2009
2009
(Unaudited)
$
7,943
$
12,920
$
15,545
5,286
6,457
3,431
3,090
430
4,708
3,252
1,987
2,340
$
19,571
$
21,794
$
26,024
F-19
Table of Contents
6.
Acquisitions
Amount
$
6,000
3,759
$
9,759
Estimated
Estimated
Fair Value
Useful Life
$
50
(1,684
)
1,200
3 years
800
6 years
1,300
6 years
8,093
Indefinite
$
9,759
F-20
Table of Contents
Amount
$
10,372
4,278
20
$
14,670
Estimated
Estimated
Fair Value
Useful Life
$
834
(206
)
2,325
7 years
776
5 years
124
3 years
140
2 years
10,677
Indefinite
$
14,670
Amount
$
26,519
1,841
212
$
28,572
F-21
Table of Contents
Estimated
Estimated
Fair Value
Useful Life
$
4,006
(2,998
)
7,692
3-5 years
2,482
3 years
391
2 years
199
5 years
176
3 years
16,624
Indefinite
$
28,572
Amount
$
17,500
6,723
54
$
24,277
F-22
Table of Contents
Estimated
Estimated
Fair Value
Useful Life
$
859
(987
)
(3,849
)
7,476
5 years
1,124
5 years
814
5 years
183
4 years
18,657
Indefinite
$
24,277
Amount
$
10,665
3,404
128
$
14,197
F-23
Table of Contents
Estimated
Estimated
Fair Value
Useful Life
$
413
(221
)
156
2 years
899
5 years
639
3 years
252
5 years
88
3 years
11,971
Indefinite
$
14,197
Amount
$
4,468
2,588
$
7,056
F-24
Table of Contents
Estimated
Estimated
Fair Value
Useful Life
$
1
1,059
1-6 years
129
1-7 years
420
5 years
83
2-3 years
746
3 years
4,618
Indefinite
$
7,056
Amount
$
14,606
3,873
134
$
18,613
F-25
Table of Contents
Estimated
Estimated
Fair Value
Useful Life
$
(22
)
2,538
1-6 years
1,952
1-7 years
2,418
5 years
236
5 years
392
3 years
11,099
Indefinite
$
18,613
Amount
$
9,471
4,942
84
$
14,497
Estimated
Estimated
Fair Value
Useful Life
$
3,281
2-5 years
918
2-5 years
1,364
5 years
269
2-3.5 years
8,665
Indefinite
$
14,497
F-26
Table of Contents
Three Months Ended
Fiscal Year Ended June 30,
September 30,
2008
2009
2008
2009
(Unaudited)
$
198,478
$
263,397
$
63,877
$
78,718
10,232
15,111
2,919
6,220
$
0.20
$
0.34
$
0.06
$
0.16
$
0.19
$
0.33
$
0.06
$
0.15
7.
Debt
F-27
Table of Contents
Term Loan and
Revolving
Notes
Credit
Year Ending June 30,
Payable
Facility
$
10,214
$
3,000
8,215
4,500
3,790
6,750
1,330
9,000
1,520
11,507
25,069
34,757
(1,850
)
(736
)
(10,085
)
(2,805
)
$
13,134
$
31,216
F-28
Table of Contents
8.
Convertible
Preferred Shares
Proceeds
Shares
Liquidation
Net of
Authorized
Outstanding
Amount
Issuance Costs
5,500,000
5,367,756
$
16,577
$
9,047
10,200,000
9,941,021
51,256
28,563
500,000
500,000
2,500
570
13,800,000
30,000,000
15,808,777
$
70,333
$
38,180
For Series A and B convertible preferred shares, an amount
equal to the sum of (i) the original issue price of the
respective preferred shares plus (ii) an amount equal to 8%
per annum of the original issue price of the respective
preferred shares less (iii) any such dividends, if declared
and paid, to and through the date of full payment.
For Series C convertible preferred shares, an amount equal
to the sum of (i) the original issue price of the preferred
shares plus (ii) any declared and unpaid dividends.
F-29
Table of Contents
For Series B convertible preferred shares, an amount equal
to 1.75 times the original issue price of the preferred shares,
or $5.16 per share, plus any declared and unpaid dividends.
For Series C convertible preferred shares, an amount equal
to the original issue price of $5.00 per share plus any declared
and unpaid dividends.
F-30
Table of Contents
9.
Common
Shares
Shares
10,891,100
10,735,512
9,941,021
500,000
32,067,633
10.
Equity
Benefit Plans
F-31
Table of Contents
F-32
Table of Contents
Three Months Ended
Year Ended June 30,
September 30,
2007
2008
2009
2008
2009
(Unaudited)
4.6 - 6.1
4.6
4.6
4.6
4.6
48%
52%
62%
61%
73%
4.6% - 4.9%
2.8% - 4.5%
1.8% - 3.1%
3.1%
2.5%
F-33
Table of Contents
Weighted
Weighted
Average
Average
Remaining
Exercise
Contractual
Shares
Price
Life (in Years)
8,279,468
$
6.48
1,315,400
10.28
(893,197
)
2.88
(784,959
)
9.16
(122,301
)
7.93
7,794,411
$
7.24
6.25
2,575,100
10.03
(169,716
)
1.79
(656,610
)
9.98
(391,762
)
8.50
9,151,423
$
7.87
5.43
8,282,043
$
7.65
5.38
5,428,414
$
6.41
5.12
9,151,423
$
7.87
1,962,755
9.05
(211,890
)
1.46
(193,409
)
10.05
(54,583
)
8.93
10,654,296
$
8.17
5.62
(1)
The
expected-to-vest
options are the result of applying the pre-vesting forfeiture
assumption to total outstanding options.
F-34
Table of Contents
11.
Income
Taxes
Fiscal Year Ended June 30,
2007
2008
2009
$
23,914
$
20,299
$
30,806
1,524
1,444
377
$
25,438
$
21,743
$
31,183
Fiscal Year Ended June 30,
2007
2008
2009
$
9,043
$
9,856
$
14,018
1,914
2,437
3,808
475
355
164
$
11,432
$
12,648
$
17,990
$
(1,484
)
$
(3,074
)
$
(4,109
)
(120
)
(698
)
94
(66
)
(1,604
)
(3,772
)
(4,081
)
$
9,828
$
8,876
$
13,909
F-35
Table of Contents
Fiscal Year Ended June 30,
2007
2008
2009
35.0
%
35.0
%
35.0
%
4.6
%
5.1
%
8.2
%
(1.0
)%
0.7
%
1.4
%
38.6
%
40.8
%
44.6
%
Fiscal Year Ended June 30,
2008
2009
$
163
$
143
550
178
1,362
3,155
685
663
1,382
$
2,738
$
5,543
$
(1,433
)
$
(460
)
143
156
229
(74
)
1,436
2,055
15
4
390
1,681
(143
)
(156
)
$
247
$
1,525
$
2,985
$
7,068
F-36
Table of Contents
Fiscal Year Ended
June 30,
2008
2009
$
2,383
$
2,248
193
868
(328
)
(293
)
(206
)
$
2,248
$
2,617
12.
Commitments
and Contingencies
F-37
Table of Contents
Operating
Leases
$
1,104
242
22
$
1,368
F-38
Table of Contents
13.
Related
Party Transactions
14.
Subsequent
Events
F-39
Table of Contents
F-40
Table of Contents
Credit
Suisse
BofA Merrill Lynch
J.P. Morgan
Table of Contents
ITEM 13.
Other
Expenses of Issuance and Distribution
Amount
$
13,950
25,500
*
*
*
*
*
*
*
$
*
*
To be filed by amendment.
ITEM 14.
Indemnification
of Directors and Officers.
II-1
Table of Contents
ITEM 15.
Recent
Sales of Unregistered Securities.
ITEM 16.
Exhibits
and Financial Statement Schedules.
1
.1*
Form of Underwriting Agreement.
3
.1*
Amended and Restated Certificate of Incorporation of QuinStreet,
Inc., as currently in effect.
3
.2*
Form of Amended and Restated Certificate of Incorporation of
QuinStreet, Inc., to be in effect upon completion of the
offering.
3
.3*
Amended and Restated Bylaws of QuinStreet, Inc., as currently in
effect.
3
.4*
Form of Amended and Restated Bylaws of QuinStreet, Inc., to be
in effect upon completion of the offering.
4
.1*
Form of QuinStreet, Inc.s Common Stock Certificate.
4
.2
Second Amended and Restated Investor Rights Agreement, by and
between QuinStreet, Inc., Douglas Valenti and the investors
listed on Schedule 1 thereto, dated May 28, 2003.
5
.1*
Form of Opinion of Cooley Godward Kronish LLP.
10
.1+
QuinStreet, Inc. 2008 Equity Incentive Plan.
10
.2+
Forms of Option Agreement and Option Grant Notice under 2008
Equity Incentive Plan (for non-executive officer employees).
10
.3+
Forms of Option Agreement and Option Grant Notice under 2008
Equity Incentive Plan (for executive officers).
10
.4+
Forms of Option Agreement and Option Grant Notice under 2008
Equity Incentive Plan (for non-employee directors).
10
.5*+
QuinStreet, Inc. 2010 Equity Incentive Plan.
10
.6*+
Forms of Option Agreement and Option Grant Notice under 2010
Equity Incentive Plan (for non-executive officer employees).
10
.7*+
Forms of Option Agreement and Option Grant Notice under 2010
Equity Incentive Plan (for executive officers).
10
.8*+
QuinStreet, Inc. 2010 Non-Employee Directors Stock Award
Plan.
10
.9*+
Form of Option Agreement and Option Grant Notice for Initial
Grants under the 2010 Non-Employee Directors Stock Award
Plan.
II-2
Table of Contents
10
.10*+
Form of Option Agreement and Option Grant Notice for Annual
Grants under the 2010 Non-Employee Directors Stock Award
Plan.
10
.11+
Form of Indemnification Agreement made by and between
QuinStreet, Inc. and each of its directors and executive
officers.
10
.12*+
2010 Management Bonus Incentive Plan.
10
.13
Revolving Credit and Term Loan Agreement, by and between
QuinStreet, Inc., lenders thereto and Comerica Bank as
Administrative Agent and Lead Arranger, dated as of
September 29, 2008.
10
.14
Acknowledgment and Agreement of Revolving Credit Commitment
Increase, dated as of November 18, 2009, from Comerica
Bank, Bank of America, N.A. and Union Bank N.A to QuinStreet,
Inc.
10
.15*
QuinStreet Merchant Agreement, dated as of July 3, 2001, as
amended, by and between QuinStreet, Inc. and DeVry, Inc.
10
.16
Office Lease Agreement, dated as of June 2, 2003, by and
between QuinStreet, Inc. and CA-Parkside Towers Limited
Partnership, as amended.
21
.1
List of subsidiaries.
23
.1*
Consent of Cooley Godward Kronish LLP (included in
Exhibit 5.1).
23
.2
Consent of PricewaterhouseCoopers LLP, independent registered
public accounting firm.
24
.1
Power of Attorney (see page II-5).
*
To be filed by amendment. All other exhibits are filed herewith.
+
Indicates management contract or compensatory plan.
Schedule II:
Valuation and
Qualifying Accounts
Charged to
Balance at the
Expenses/
Write-offs
Balance at
Beginning
Against the
Net of
the End of
of the Year
Revenue
Receivables
the Year
$
474
$
781
$
(161
)
$
1,094
$
1,094
$
1,217
$
(150
)
$
2,161
$
2,161
$
1,463
$
(115
)
$
3,509
ITEM 17.
Undertakings
Table of Contents
II-4
Table of Contents
By:
Chief Executive Officer and Chairman (
Principal Executive
Officer
)
November 19, 2009
Chief Financial Officer
(
Principal Financial and Accounting Officer
)
November 19, 2009
Director
November 19, 2009
Director
November 19, 2009
Director
November 19, 2009
Director
November 19, 2009
Director
November 19, 2009
Director
November 19, 2009
II-5
Table of Contents
1
.1*
Form of Underwriting Agreement.
3
.1*
Amended and Restated Certificate of Incorporation of QuinStreet,
Inc., as currently in effect.
3
.2*
Form of Amended and Restated Certificate of Incorporation of
QuinStreet, Inc., to be in effect upon completion of the
offering.
3
.3*
Amended and Restated Bylaws of QuinStreet, Inc., as currently in
effect.
3
.4*
Form of Amended and Restated Bylaws of QuinStreet, Inc., to be
in effect upon completion of the offering.
4
.1*
Form of QuinStreet, Inc.s Common Stock Certificate.
4
.2
Second Amended and Restated Investor Rights Agreement, by and
between QuinStreet, Inc., Douglas Valenti and the investors
listed on Schedule 1 thereto, dated May 28, 2003.
5
.1*
Form of Opinion of Cooley Godward Kronish LLP.
10
.1+
QuinStreet, Inc. 2008 Equity Incentive Plan.
10
.2+
Forms of Option Agreement and Option Grant Notice under 2008
Equity Incentive Plan (for non-executive officer employees).
10
.3+
Forms of Option Agreement and Option Grant Notice under 2008
Equity Incentive Plan (for executive officers).
10
.4+
Forms of Option Agreement and Option Grant Notice under 2008
Equity Incentive Plan (for non-employee directors).
10
.5*+
QuinStreet, Inc. 2010 Equity Incentive Plan.
10
.6*+
Forms of Option Agreement and Option Grant Notice under 2010
Equity Incentive Plan (for non-executive officer employees).
10
.7*+
Forms of Option Agreement and Option Grant Notice under 2010
Equity Incentive Plan (for executive officers).
10
.8*+
QuinStreet, Inc. 2010 Non-Employee Directors Stock Award
Plan.
10
.9*+
Form of Option Agreement and Option Grant Notice for Initial
Grants under the 2010 Non-Employee Directors Stock Award
Plan.
10
.10*+
Form of Option Agreement and Option Grant Notice for Annual
Grants under the 2010 Non-Employee Directors Stock Award
Plan.
10
.11+
Form of Indemnification Agreement made by and between
QuinStreet, Inc. and each of its directors and executive
officers.
10
.12*+
2010 Management Bonus Incentive Plan.
10
.13
Revolving Credit and Term Loan Agreement, by and between
QuinStreet, Inc., the lenders thereto and Comerica Bank as
Administrative Agent and Lead Arranger, dated as of
September 29, 2008.
10
.14
Acknowledgment and Agreement of Revolving Credit Commitment
Increase, dated as of November 18, 2009, from Comerica
Bank, Bank of America, N.A. and Union Bank N.A to QuinStreet,
Inc.
10
.15*
QuinStreet Merchant Agreement, dated as of July 3, 2001, by
and between QuinStreet, Inc. and DeVry, Inc., as amended.
10
.16
Office Lease Agreement, dated as of June 2, 2003, by and
between QuinStreet, Inc. and CA-Parkside Towers Limited
Partnership, as amended.
21
.1
List of subsidiaries.
23
.1*
Consent of Cooley Godward Kronish LLP (included in
Exhibit 5.1).
23
.2
Consent of PricewaterhouseCoopers LLP, independent registered
public accounting firm.
24
.1
Power of Attorney (see page II-5).
*
To be filed by amendment. All other exhibits are filed herewith.
+
Indicates management contract or compensatory plan.
Page | ||||||||
|
4.4 | Legend | 20 | |||||
|
||||||||
|
(c) Removal of Legend | 20 | ||||||
|
||||||||
5. | Voting; Board Composition, Etc. | 20 | ||||||
|
||||||||
|
5.1 | Voting Obligations | 20 | |||||
|
||||||||
|
5.2 | Limitation | 21 | |||||
|
||||||||
|
5.3 | Waiver of Right to Abstain or be Absent from a Meeting | 21 | |||||
|
||||||||
|
5.4 | Limitations on Transfer | 21 | |||||
|
||||||||
6. | Termination | 21 | ||||||
|
||||||||
|
6.1 | Termination of Certain Covenants | 21 | |||||
|
||||||||
|
6.2 | Termination of Rights of First Refusal and Co-Sale | 21 | |||||
|
||||||||
7. | Miscellaneous | 22 | ||||||
|
||||||||
|
7.1 | Waivers, Amendments and Approvals | 22 | |||||
|
||||||||
|
7.2 | Oral Changes, Waivers, Etc. | 24 | |||||
|
||||||||
|
7.3 | Notices | 24 | |||||
|
||||||||
|
7.4 | Governing Law | 24 | |||||
|
||||||||
|
7.5 | Survival of Representations, Warranties, Agreements, Etc. | 24 | |||||
|
||||||||
|
7.6 | Delays or Omissions | 24 | |||||
|
||||||||
|
7.7 | Other Remedies | 25 | |||||
|
||||||||
|
7.8 | Attorneys Fees | 25 | |||||
|
||||||||
|
7.9 | Entire Agreement | 25 | |||||
|
||||||||
|
7.10 | Severability | 25 | |||||
|
||||||||
|
7.11 | Successors and Assigns | 25 | |||||
|
||||||||
|
7.12 | Counterparts | 26 | |||||
|
||||||||
|
7.13 | Aggregation of Series Preferred and Voting Preferred | 26 |
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
If to a Holder: | If to the Company: | If to the Principal Shareholder: | ||
To the address listed
on
Schedule 1 with a copy to: Clifford Chance Rogers & Wells LLP Attn: Brian Lauck 200 Park Avenue New York, NY 10166-0153 |
QuinStreet, Inc.
[to be completed after Parkside Towers lease is signed] Attn: Douglas J. Valenti with a copy to: Cooley Godward LLP Attn: Christopher A. Westover One Maritime Plaza, 20 th Floor San Francisco, CA 94111 |
Douglas J. Valenti
[to be completed after Parkside Towers lease is signed] |
24.
25.
26.
Company:
|
QuinStreet, Inc. | |
|
||
|
||
|
/s/ Douglas J. Valenti | |
|
||
|
Douglas J. Valenti , President and CEO | |
|
||
|
||
Principal Shareholder:
|
/s/ Douglas J. Valenti | |
|
||
|
Douglas J. Valenti | |
|
||
|
||
Investors:
|
||
|
||
|
Mark W. Rhodes | |
|
||
|
||
|
Seligman Investment Opportunities (Master)
Fund-NTV II Portfolio |
|
|
|
By: | J.&W. Seligman & Co. Incorporated, its investment advisor | ||
|
||||
|
By: | |||
|
||||
|
||||
|
Name: | |||
|
||||
|
||||
|
Title: | |||
|
||||
|
||||
Seligman New Technologies Fund, Inc. | ||||
|
||||
|
By: | J.&W. Seligman & Co. Incorporated, its investment advisor | ||
|
||||
|
By: | |||
|
||||
|
||||
|
Name: | |||
|
||||
|
||||
|
Title: | |||
|
Venture Strategy Partners II LP | ||||
|
||||
|
By: |
Venture Strategy Management Company LLC, Its
General Partner |
||
|
||||
|
||||
|
By: | /s/ Joanna Rees Gallanter | ||
|
||||
|
Joanna Rees Gallanter, Managing Member | |||
|
||||
Venture Strategy Affiliate Fund LP | ||||
|
||||
|
By: |
Venture Strategy Management Company LLC, Its
General Partner |
||
|
||||
|
By: | /s/ Joanna Rees Gallanter | ||
|
||||
|
Joanna Rees Gallanter, Managing Member | |||
|
||||
St. Paul Venture Capital V, LLC | ||||
|
||||
|
||||
|
By: | /s/ James Simons | ||
|
||||
|
||||
|
Name: | |||
|
||||
|
||||
|
Title: | |||
|
||||
|
||||
|
||||
Sutter Hill Ventures,
a California Limited Partnership |
||||
|
||||
|
By: | /s/ Gregory Sands | ||
|
||||
|
||||
|
Name: | |||
|
||||
|
Managing Director of the General Partner | |||
|
||||
Sutter Hill Entrepreneurs Fund (AI), L.P. | ||||
|
||||
|
By: | /s/ Gregory Sands | ||
|
||||
|
||||
|
Name: | |||
|
||||
|
Managing Director of the General Partner |
Sutter Hill Entrepreneurs Fund (QP), L.P. | ||||
|
||||
|
By: | /s/ Gregory Sands | ||
|
||||
|
Name: | Gregory Sands | ||
|
||||
|
Managing Director of the General Partner | |||
|
||||
The Anderson Living Trust, U/A/D 1/22/98 | ||||
|
||||
|
By: | |||
|
||||
|
David L. Anderson, Trustee | |||
|
||||
|
||||
|
G. Leonard Baker, Jr. | |||
|
||||
|
||||
The Younger Living Trust, U/A/D 1/20/95 | ||||
|
||||
|
||||
|
By: | |||
|
||||
|
William H. Younger, Jr., Trustee | |||
|
||||
Tench Coxe, Trustee, The Tamerlane Charitable
Remainder Unitrust |
||||
|
||||
|
||||
|
By: | |||
|
||||
|
Tench Coxe, Trustee | |||
|
||||
Gregory P. and Sarah J.D. Sands, Trustees, the Gregory P. and Sarah J.D. Sands Trust Agreement dated 2/24/99 | ||||
|
||||
|
||||
|
By: | /s/ Gregory P. Sands | ||
|
||||
|
Gregory P. Sands, Trustee |
Lawrence Ebringer | ||||||||
|
||||||||
James C. Gaither | ||||||||
|
||||||||
Wells Fargo Bank, Trustee | ||||||||
SHV S/P/T FBO Sherryl W. Hossack | ||||||||
|
By: | |||||||
|
Name: | |||||||
|
||||||||
|
Title: | |||||||
|
||||||||
|
||||||||
|
By: | |||||||
|
Name: | |||||||
|
||||||||
|
Title: | |||||||
|
||||||||
|
||||||||
Wells Fargo Bank, Trustee | ||||||||
SHV S/P/T FBO Michele Y. Phua | ||||||||
|
By: | |||||||
|
Name: | |||||||
|
||||||||
|
Title: | |||||||
|
||||||||
|
||||||||
|
By: | |||||||
|
Name: | |||||||
|
||||||||
|
Title: | |||||||
|
Rosewood Capital III, L.P. | ||||||
|
||||||
|
By: | Rosewood Capital Associates LLC, | ||||
|
Its General Partner | |||||
|
||||||
|
By: | /s/ Kevin Reilly | ||||
|
||||||
|
Kevin Reilly, Vice President | |||||
|
||||||
GC& H Investments | ||||||
|
||||||
|
By: | |||||
|
||||||
|
John L. Cardoza, Executive Partner | |||||
|
||||||
Kirk P. Hobbs |
Catterton Partners IV, L.P. | ||||||
|
By: | Catterton Managing Partner IV, L.L.C. | ||||
|
its General Partner | |||||
|
||||||
|
By: | CP4 Principals, L.L.C., its Managing Member | ||||
|
||||||
|
By: | /s/ J. Michael Chu | ||||
|
||||||
|
Name: J. Michael Chu | |||||
|
Title: Managing Partner | |||||
|
||||||
Catterton Partners IV-A, L.P. | ||||||
|
By: | Catterton Managing Partner IV, L.L.C. its General Partner | ||||
|
||||||
|
By: | CP4 Principals, L.L.C., its Managing Member | ||||
|
||||||
|
By: | /s/ J. Michael Chu | ||||
|
||||||
|
Name: J. Michael Chu | |||||
|
Title: Authorized Person | |||||
|
||||||
Catterton Partners IV-B, L.P. | ||||||
|
By: | Catterton Managing Partner IV, L.L.C. its General Partner | ||||
|
||||||
|
By: | CP4 Principals, L.L.C., its Managing Member | ||||
|
||||||
|
By: | /s/ J. Michael Chu | ||||
|
||||||
|
Name: J. Michael Chu | |||||
|
Title: Authorized Person | |||||
|
||||||
Catterton Partners Offshore, L.P. | ||||||
|
By: | Catterton Managing Partner IV, L.L.C. its General Partner | ||||
|
||||||
|
By: | CP4 Principals, L.L.C., its Managing Member | ||||
|
||||||
|
By: | /s/ J. Michael Chu | ||||
|
||||||
|
Name: J. Michael Chu | |||||
|
Title: Authorized Person |
Catterton Partners Special Purpose, L.P. | ||||||
|
By: | Catterton Managing Partner IV, L.L.C. its General Partner | ||||
|
||||||
|
By: | CP4 Principals, L.L.C., its Managing Member | ||||
|
||||||
|
By: | /s/ J. Michael Chu | ||||
|
||||||
|
Name: J. Michael Chu | |||||
|
Title: Authorized Person |
James L. or Lisa C. Kelly, Trustees, | ||||||||
Kelly Family Trust, DTD 1/24/90 | ||||||||
|
||||||||
|
By: | |||||||
James L. Kelly, Trustee | ||||||||
|
||||||||
Stanford University | ||||||||
|
||||||||
|
By: | |||||||
|
||||||||
Murdock Venture Partners | ||||||||
|
||||||||
|
By: | |||||||
|
||||||||
Jane Carmena DiLena | ||||||||
|
||||||||
Mohan Giridharadas | ||||||||
|
||||||||
Scott R. Gordon |
Richard S. Gostyla | ||||||||
|
||||||||
Philip D. Johnston | ||||||||
|
||||||||
Reena Kapoor | ||||||||
|
||||||||
David J. Kennedy | ||||||||
|
||||||||
Kenneth J. Ostrowski | ||||||||
|
||||||||
Patrick Quigley | ||||||||
|
||||||||
Mihir Shah | ||||||||
|
||||||||
Gregory S. Smirin |
|
||||||||
Stephen R. Strain | ||||||||
|
||||||||
Bronwyn Syiek | ||||||||
|
||||||||
John H. Ware | ||||||||
|
||||||||
Steve Wennerstrum | ||||||||
|
||||||||
Venture Lending & Leasing II | ||||||||
|
||||||||
|
By: | |||||||
|
Name: | |||||||
|
||||||||
|
Title: | |||||||
|
Anvest, L.P. | ||||||||
|
||||||||
|
By: | |||||||
David L. Anderson, General Partner | ||||||||
|
||||||||
Saunders Holdings, L.P. | ||||||||
|
||||||||
|
By: | |||||||
G. Leonard Baker, Jr., General Partner | ||||||||
|
||||||||
Tench Coxe, Trustee, The Coxe/Otus | ||||||||
Revocable Trust | ||||||||
|
||||||||
|
By: | |||||||
Tench Coxe, Trustee | ||||||||
|
||||||||
/s/ Gregory P. Sands | ||||||||
Gregory P. Sands | ||||||||
|
||||||||
Sherryl W. Hossack | ||||||||
|
||||||||
Venture Strategy Partners | ||||||||
|
||||||||
By: | /s/ Joanna Rees Gallanter | |||||||
Joanna Rees Gallanter, Managing Member |
St. Paul Venture Capital Affiliates Fund I, LLC | ||||||||
|
||||||||
By: | St. Paul Venture Capital, Inc., its Manager | |||||||
|
||||||||
By: | /s/ James Simons | |||||||
|
Name: | |||||||
|
||||||||
|
Title: | |||||||
|
Investor Name and Address | Series A Shares | Series B Shares | Series C Shares | |||
Seligman Investment Opportunities (Master)
|
0 | 3,223,729 | 0 | |||
Fund-NTV II Portfolio
c/o J. & W. Seligman & Co. 100 Park Avenue New York, NY 10017 |
||||||
|
||||||
Seligman New Technologies Fund, Inc.
|
0 | 166,102 | 0 | |||
c/o J. & W. Seligman & Co.
100 Park Avenue New York, NY 10017 |
||||||
|
||||||
Catterton Partners IV, L.P.
|
0 | 2,033,899 | 0 | |||
Catterton Partners IV Offshore, L.P.
Catterton Partners IV Special Purpose, L.P. Catterton Partners IV-A, L.P. Catterton Partners IV-B, L.P. c/o Catterton Partners Attn: Michael Chu 9 Greenwich Office Park, 3 rd Fl. Greenwich, CT 06830 |
||||||
|
||||||
Venture Strategy Partners (same address
|
58,824 | 0 | 0 | |||
for all related entities below)
Attn: Joanna Rees Gallanter Venture Strategy Group LLC 655 Third Street San Francisco, CA 94107 (415) 558-8600 phone (415) 558-8686 fax jgallanter@venturestrategy.com |
||||||
|
||||||
Venture Strategy Partners II LP
|
0 | 1,280,000 | 0 | |||
|
||||||
Venture Strategy Affiliate Fund LP
|
0 | 75,932 | 0 | |||
|
||||||
St. Paul Venture Capital V, LLC
|
2,145,220 | 1,271,187 | 0 | |||
c/o St. Paul Venture Capital, Inc.
Suite 550 10400 Viking Drive Eden Prairie, MN 55344 |
||||||
|
||||||
St. Paul
Venture Capital Affiliates Fund I, LLC
|
60,662 | 0 | 0 | |||
c/o St. Paul Venture Capital, Inc.
Suite 550 10400 Viking Drive Eden Prairie, MN 55344 |
Investor Name and Address | Series A Shares | Series B Shares | Series C Shares | |||
Sutter Hill Ventures, a California Limited
|
1,598,569 | 921,210 | 0 | |||
Partnership (same address for all related
entities below) Attn: Sherryl Hossack 755 Page Mill Road, Suite A-200 Palo Alto, CA 94304 (650) 493-5600 |
||||||
|
||||||
Sutter Hill
Entrepreneurs Fund (AI), L.P.
|
15,810 | 9,111 | 0 | |||
|
||||||
Sutter Hill
Entrepreneurs Fund (QP), L.P.
|
40,033 | 23,070 | 0 | |||
|
||||||
David L. Anderson, Trustee, The
|
54,486 | 44,926 | 0 | |||
Anderson Living Trust, U/A/D
1/22/98
|
||||||
|
||||||
G. Leonard Baker, Jr.
|
0 | 44,926 | 0 | |||
|
||||||
William H. Younger, Jr.,
|
108,971 | 37,469 | 0 | |||
Trustee, The Younger Living
Trust, U/A/D 1/20/95 |
||||||
|
||||||
Mark Younger
|
0 | 7,457 | 0 | |||
|
||||||
James C. Gaither, Custodian
|
0 | 7,457 | 0 | |||
FBO Julie A. Younger CUTMA
|
||||||
|
||||||
James C. Gaither, Custodian
|
0 | 7,457 | 0 | |||
FBO Kelly Younger
|
||||||
|
||||||
Tamerlane Charitable Remainder
|
0 | 101,729 | 0 | |||
Unitrust, Tench Coxe, Trustee
|
||||||
|
||||||
Gregory P. Sands and Sarah J.D.
|
0 | 1,528 | 0 | |||
Sands, Trustee, The Gregory P. and
Sarah J.D. Sands Trust Agreement dated 2/24/99 |
||||||
|
||||||
Gregory P. Sands Custodian FBO
|
0 | 3,728 | 0 | |||
Natalie O. Sands
|
||||||
|
||||||
Gregory P.
Sands Custodian FBO Kate A. Sands
|
0 | 3,728 | 0 | |||
|
||||||
Gregory P. Sands FBO Jaspar D. Sands
|
0 | 3,728 | 0 | |||
|
||||||
Lawrence Ebringer
|
0 | 12,712 | 0 | |||
|
||||||
James C. Gaither
|
10,896 | 6,356 | 0 |
Investor Name and Address | Series A Shares | Series B Shares | Series C Shares | |||
Wells Fargo Bank, Trustee, SHV
|
0 | 3,178 | 0 | |||
M/P/T FBO Sherryl W. Hossack
Attn: Vicki Bandel 420 Montgomery Street, 2 nd Floor San Francisco, CA 94104 Phone: (415) 396-3739 Fax: (415) 956-9362 vicki.bandel@wellsfargo.com |
||||||
|
||||||
Wells Fargo Bank, Trustee, SHV
|
2,205 | 1,589 | 0 | |||
M/P/T FBO Michele Y. Phua
|
||||||
|
||||||
Anvest, L.P.
|
54,485 | 14,914 | 0 | |||
|
||||||
Saunders Holdings, L.P.
|
108,971 | 14,914 | 0 | |||
|
||||||
Tench Coxe, Trustee, The Coxe/Otus
|
185,250 | 0 | 0 | |||
Revocable Trust
|
||||||
|
||||||
Gregory P. Sands
|
21,794 | 0 | 0 | |||
|
||||||
Sherryl W. Hossack
|
4,412 | 0 | 0 | |||
|
||||||
Rosewood Capital III, L.P.
|
588,235 | 338,984 | 0 | |||
Attn: Kevin Reilly
One Maritime Plaza, 13 th Floor San Francisco, CA 94111 |
||||||
|
||||||
GC&H Investments
|
19,721 | 16,950 | 0 | |||
Attn: Jim Kindler
Cooley Godward LLP One Maritime Plaza, 20 th Floor San Francisco, CA 94111 (415) 693-2000 |
||||||
|
||||||
P. Kirk Hobbs
|
0 | 16,950 | 0 | |||
3505 Scott St.
San Francisco, CA 94123 (415)674-8975 (510) 985-9733 khobbs@offi.com |
||||||
|
||||||
James L. Kelly
|
58,824 | 0 | 0 | |||
241 N. El Camino Real, 402
San Mateo, CA 94401 |
||||||
|
||||||
Lisa C. Kelly
|
58,823 | 0 | 0 | |||
2658 Belmont Canyon Road
Belmont, CA 94002 |
Investor Name and Address | Series A Shares | Series B Shares | Series C Shares | |||
Stanford University
|
29,412 | 0 | 0 | |||
Attn: Carol Gilmer
Stanford Management Company 2770 Sand Hill Road Menlo Park, CA 94305-0200 (650) 926-0273 cgilmer@stanford.edu |
||||||
|
||||||
Murdock Venture Partners
|
5,882 | 0 | 0 | |||
Attn: Mr. Leslie Murdock
2041 Mission College Blvd., Suite 159 Santa Clara, CA 95054 (408) 562-2082 lmurdock@murdocknet.com |
||||||
|
||||||
Jane Carmena DiLena
|
735 | 0 | 0 | |||
Spencer Stuart
Attn: Christine Carlino 3000 Sand Hill Rd., Bldg. 2, Ste. 175 Menlo Park, CA 94025 (650) 356-5500 ccarlino@spencerstuart.com |
||||||
|
||||||
Mohan Giridharadas
|
5,882 | 0 | 0 | |||
McKinsey & Company, Inc.
Suite 4600, Georgia-Pacific Center 133 Peachtree Street, N.E. Atlanta, GA 30303 (404) 525-9900 x3568 mohan_giridharadas@mckinsey.com |
||||||
|
||||||
Scott R. Gordon
|
1,029 | 0 | 0 | |||
Spencer Stuart
Attn: Christine Carlino 3000 Sand Hill Rd., Bldg. 2, Ste. 175 Menlo Park, CA 94025 (650) 356-5500 |
||||||
|
||||||
Richard S. Gostyla
|
1,029 | 0 | 0 | |||
Spencer Stuart
Attn: Christine Carlino 3000 Sand Hill Rd., Bldg. 2, Ste. 175 Menlo Park, CA 94025 (650) 356-5500 |
||||||
|
||||||
Philip D. Johnston
|
1,029 | 0 | 0 | |||
Spencer Stuart
Attn: Christine Carlino 3000 Sand Hill Rd., Bldg. 2, Ste. 175 Menlo Park, CA 94025 (650) 356-5500 |
Investor Name and Address | Series A Shares | Series B Shares | Series C Shares | |||
Reena Kapoor
|
5,882 | 0 | 0 | |||
585 Keelson Circle
Redwood City, CA 94065 (650) 254-0565 (x212) reena@chingari.com |
||||||
|
||||||
David J. Kennedy
|
50,000 | 0 | 0 | |||
5910 N. Central Expressway, Ste. 760
Dallas, TX 75206 (214) 346-2561 dkennedy@dallasabacus.com |
||||||
|
||||||
Kenneth J. Ostrowski
|
5,882 | 0 | 0 | |||
McKinsey & Company, Inc.
Suite 4600, Georgia-Pacific Center 133 Peachtree Street, N.E. Atlanta, GA 30303 (404) 525-9900 ken_ostrowski@mckinsey.com |
||||||
|
||||||
Patrick Quigley
|
2,941 | 0 | 0 | |||
c/o QuinStreet, Inc.
2750-A El Camino Real Redwood City, CA 94061 |
||||||
|
||||||
Mihir Shah
|
5,882 | 0 | 0 | |||
c/o QuinSteet, Inc.
2750-A El Camino Real Redwood City, CA 94061 |
||||||
|
||||||
Sherwin Faden,
Trustee, 2002 Faden Family Trust
|
29,412 | 0 | 0 | |||
132-14
th
Ave.
San Mateo, CA 94402 |
||||||
|
||||||
Stephen R. Strain
|
1,029 | 0 | 0 | |||
Spencer Stuart
Attn: Christine Carlino 3000 Sand Hill Rd., Bldg. 2, Ste. 175 Menlo Park, CA 94025 (650) 356-5500 |
||||||
|
||||||
Bronwyn Syiek
|
5,882 | 0 | 0 | |||
c/o QuinStreet, Inc.
2750-A El Camino Real Redwood City, CA 94061 |
Investor Name and Address | Series A Shares | Series B Shares | Series C Shares | |||
John H. Ware
|
1,029 | 0 | 0 | |||
Spencer Stuart
Attn: Christine Carlino 3000 Sand Hill Rd., Bldg. 2, Ste. 175 Menlo Park, CA 94025 (650) 356-5500 |
||||||
|
||||||
Steve Wennerstrum
|
5,882 | 0 | 0 | |||
4144 Grand Avenue
Western Springs, IL 60558 (312) 904-8897 steven.wennerstrum@abnamro.com |
||||||
|
||||||
Venture Lending & Leasing II
|
Warrant for 14,706 shares | 0 | 0 | |||
Attn: Jay Cohan
2010 N. First Street, Suite 310 San Jose, CA 95131 (408) 436-8577 x11 jay@westerntech.com |
||||||
|
||||||
Mark Rhodes
|
500,000 | |||||
Dodds Hall
Queenborough Lane Braintree Essex CM7 8QE ENGLAND |
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
Type of Grant:
|
o Incentive Stock Option 1 | o Nonstatutory Stock Option | ||
|
||||
Exercise Schedule
:
|
o Same as Vesting Schedule | o Early Exercise Permitted | ||
|
||||
Vesting Schedule : | 1/4 th of the shares vest one year after the Vesting Commencement Date. | |||
1/36 th of the remaining shares vest monthly thereafter over the next three years. | ||||
|
||||
Payment: | By one or a combination of the following items (described in the Stock Option Agreement): | |||
|
||||
o By cash or check | ||||
o Pursuant to a Regulation T Program if the Shares are publicly traded | ||||
o By delivery of already-owned shares if the Shares are publicly traded |
1 | If this is an Incentive Stock Option, it (plus other outstanding Incentive Stock Options) cannot be first exercisable for more than $100,000 in value (measured by exercise price) in any calendar year. Any excess over $100,000 is a Nonstatutory Stock Option. |
QuinStreet, Inc. | ||
1051 East Hillsdale Blvd. | ||
Foster City, CA 94404 | Date of Exercise: _________________ |
Type of option (check one): | Incentive o | Nonstatutory o | ||||
|
||||||
Stock option dated:
|
||||||
|
||||||
Number of shares as
to which option is
exercised:
|
||||||
|
||||||
Certificates to be
issued in name of:
|
||||||
|
||||||
Total exercise price:
|
$ | |||||
|
||||||
|
||||||
Cash payment delivered
herewith:
|
$ | |||||
|
||||||
|
||||||
Value of ________ shares of
QuinStreet, Inc. common
stock delivered herewith
2
:
|
$ | |||||
|
2 | Shares must meet the public trading requirements set forth in the option. Shares must be valued in accordance with the terms of the option being exercised, and must be owned free and clear of any liens, claims, encumbrances or security interests. Certificates must be endorsed or accompanied by an executed assignment separate from certificate. |
Type of Grant:
|
o Incentive Stock Option 1 | o Nonstatutory Stock Option | ||
|
||||
Exercise Schedule
:
|
o Same as Vesting Schedule | o Early Exercise Permitted | ||
|
||||
Vesting Schedule : | 1/4 th of the shares vest one year after the Vesting Commencement Date. | |||
1/36 th of the remaining shares vest monthly thereafter over the next three years. | ||||
The vesting schedule may accelerate upon a Change in Control (described in the Stock Option Agreement). | ||||
|
||||
Payment: | By one or a combination of the following items (described in the Stock Option Agreement): | |||
|
||||
o By cash or check | ||||
o Pursuant to a Regulation T Program if the Shares are publicly traded | ||||
o By delivery of already-owned shares if the Shares are publicly traded |
|
Other Agreements: | |||
|
||||
|
||||
|
QuinStreet, Inc. | Optionholder: | |||||||||
|
||||||||||
By:
|
||||||||||
|
Signature | Signature | ||||||||
Title: | Date: | |||||||||
|
||||||||||
Date:
|
||||||||||
|
Attachments : Stock Option Agreement, 2008 Equity Incentive Plan and Notice of Exercise |
1 | If this is an Incentive Stock Option, it (plus other outstanding Incentive Stock Options) cannot be first exercisable for more than $100,000 in value (measured by exercise price) in any calendar year. Any excess over $100,000 is a Nonstatutory Stock Option. |
QuinStreet, Inc.
|
||||||
1051 East Hillsdale Blvd.
|
||||||
Foster City, CA 94404
|
Date of Exercise: | |||||
|
|
Type of option (check one): | Incentive o | Nonstatutory o | |||||||||
|
||||||||||||
|
Stock option dated: | |||||||||||
|
||||||||||||
|
Number of shares as to which option is exercised: | |||||||||||
|
||||||||||||
|
Certificates to be issued in name of: | |||||||||||
|
||||||||||||
|
Total exercise price: | $ | ||||||||||
|
|
|||||||||||
|
||||||||||||
|
Cash payment delivered herewith: | $ | ||||||||||
|
|
|||||||||||
|
||||||||||||
|
Value of shares of QuinStreet, Inc. common stock delivered herewith 2 : | $ | ||||||||||
|
|
2 | Shares must meet the public trading requirements set forth in the option. Shares must be valued in accordance with the terms of the option being exercised, and must be owned free and clear of any liens, claims, encumbrances or security interests. Certificates must be endorsed or accompanied by an executed assignment separate from certificate. |
|
Very truly yours, | |
|
||
|
Type of Grant:
|
o Incentive Stock Option 1 | o Nonstatutory Stock Option | ||
|
||||
Exercise Schedule
:
|
o Same as Vesting Schedule | o Early Exercise Permitted |
Vesting Schedule
:
|
1/4 th of the shares vest one year after the Vesting Commencement Date. | |
|
1/36 th of the remaining shares vest monthly thereafter over the next three years. | |
|
The vesting schedule may accelerate upon a Change in Control (described in the Stock Option Agreement). | |
Payment:
|
By one or a combination of the following items (described in the Stock Option Agreement): | |
|
o By cash or check | |
|
o Pursuant to a Regulation T Program if the Shares are publicly traded | |
|
o By delivery of already-owned shares if the Shares are publicly traded |
Other Agreements:
|
||
QuinStreet, Inc. |
Optionholder:
|
|||
By:
|
||||
Signature | Signature | |||
Title:
|
Date:
|
|||
Date:
|
||||
1 | If this is an Incentive Stock Option, it (plus other outstanding Incentive Stock Options) cannot be first exercisable for more than $100,000 in value (measured by exercise price) in any calendar year. Any excess over $100,000 is a Nonstatutory Stock Option. |
QuinStreet, Inc.
|
|||
1051 East Hillsdale Blvd.
|
|||
Foster City, CA 94404
|
Date of Exercise: |
Type of option (check one):
|
Incentive o | Nonstatutory o | ||
|
||||
Stock option dated:
|
|
|||
|
||||
Number of shares as
to which option is
exercised:
|
|
|||
|
||||
Certificates to be
issued in name of:
|
|
|||
|
||||
Total exercise price:
|
$
|
|||
|
||||
Cash payment delivered
herewith: |
$
|
|||
|
||||
Value of
shares of
QuinStreet, Inc. common
stock delivered herewith
2
:
|
$
|
2 | Shares must meet the public trading requirements set forth in the option. Shares must be valued in accordance with the terms of the option being exercised, and must be owned free and clear of any liens, claims, encumbrances or security interests. Certificates must be endorsed or accompanied by an executed assignment separate from certificate. |
|
Very truly yours, | |
|
||
|
2
3
4
5
6
7
8
9
10
11
12
13
COMPANY | ||||||||||
|
||||||||||
QuinStreet, Inc. | ||||||||||
|
||||||||||
|
By: | |||||||||
|
||||||||||
|
Name: | |||||||||
|
|
|||||||||
|
Title: | |||||||||
|
|
|||||||||
|
||||||||||
INDEMNITEE | ||||||||||
|
||||||||||
Name: | ||||||||||
|
||||||||||
Address: | ||||||||||
|
||||||||||
|
||||||||||
|
||||||||||
|
||||||||||
Page | ||||
1. DEFINITIONS
|
2 | |||
1.1 Certain Defined Terms
|
2 | |||
|
||||
2. REVOLVING CREDIT
|
25 | |||
2.1 Commitment
|
25 | |||
2.2 Accrual of Interest and Maturity; Evidence of Indebtedness
|
25 | |||
2.3 Requests for and Refundings and Conversions of Advances
|
26 | |||
2.4 Disbursement of Advances
|
28 | |||
2.5 Swing Line
|
30 | |||
2.6 Interest Payments; Default Interest
|
35 | |||
2.7 Optional Prepayments
|
36 | |||
2.8 Prime-based Advance in Absence of Election or Upon Default
|
37 | |||
2.9 Revolving Credit Facility Fee
|
37 | |||
2.10 Mandatory Repayment of Revolving Credit Advances
|
38 | |||
2.11 Optional Reduction or Termination of Revolving Credit Aggregate Commitment
|
39 | |||
2.12 Use of Proceeds of Advances
|
39 | |||
2.13 Optional Increase in Revolving Credit Aggregate Commitment
|
40 | |||
|
||||
3. LETTERS OF CREDIT
|
41 | |||
3.1 Letters of Credit
|
41 | |||
3.2 Conditions to Issuance
|
42 | |||
3.3 Notice
|
43 | |||
3.4 Letter of Credit Fees; Increased Costs
|
43 | |||
3.5 Other Fees
|
45 | |||
3.6 Participation Interests in and Drawings and Demands for Payment Under
Letters of Credit
|
45 | |||
3.7 Obligations Irrevocable
|
47 | |||
3.8 Risk Under Letters of Credit
|
48 | |||
3.9 Indemnification
|
49 | |||
3.10 Right of Reimbursement
|
50 | |||
|
||||
4. TERM LOAN
|
50 | |||
4.1 Term Loan
|
50 | |||
4.2 Accrual of Interest and Maturity; Evidence of Indebtedness
|
50 | |||
4.3 Repayment of Principal
|
51 | |||
4.4 Term Loan Rate Requests; Refundings and Conversions of Advances of Term Loan
|
52 | |||
4.5 Prime-based Advance in Absence of Election or Upon Default
|
53 | |||
4.6 Interest Payments; Default Interest
|
53 | |||
4.7 Optional Prepayment of Term Loan
|
54 | |||
4.8 Mandatory Prepayment of Term Loan
|
54 | |||
4.9 Use of Proceeds
|
55 |
i
Page | ||||
5. CONDITIONS
|
56 | |||
5.1 Conditions of Initial Advances
|
56 | |||
5.2 Continuing Conditions
|
58 | |||
|
||||
6. REPRESENTATIONS AND WARRANTIES
|
59 | |||
6.1 Corporate Authority
|
59 | |||
6.2 Due Authorization
|
59 | |||
6.3 Good Title; Leases; Assets; No Liens
|
59 | |||
6.4 Taxes
|
60 | |||
6.5 No Defaults
|
60 | |||
6.6 Enforceability of Agreement and Loan Documents
|
60 | |||
6.7 Compliance with Laws
|
60 | |||
6.8 Non-contravention
|
61 | |||
6.9 Litigation
|
61 | |||
6.10 Consents, Approvals and Filings, Etc.
|
61 | |||
6.11 Agreements Affecting Financial Condition
|
61 | |||
6.12 No Investment Company or Margin Stock
|
61 | |||
6.13 ERISA
|
62 | |||
6.14 Conditions Affecting Business or Properties
|
62 | |||
6.15 Environmental and Safety Matters
|
62 | |||
6.16 Subsidiaries
|
63 | |||
6.17 Management Agreements
|
63 | |||
6.18 [Intentionally Deleted
|
63 | |||
6.19 Franchises, Patents, Copyrights, Tradenames, etc.
|
63 | |||
6.20 Capital Structure
|
63 | |||
6.21 Accuracy of Information
|
63 | |||
6.22 Solvency
|
64 | |||
6.23 Employee Matters
|
64 | |||
6.24 No Misrepresentation
|
64 | |||
6.25 Corporate Documents and Corporate Existence
|
64 | |||
|
||||
7. AFFIRMATIVE COVENANTS
|
65 | |||
7.1 Financial Statements
|
65 | |||
7.2 Certificates; Other Information
|
65 | |||
7.3 Payment of Obligations
|
67 | |||
7.4 Conduct of Business and Maintenance of Existence; Compliance with Laws
|
67 | |||
7.5 Maintenance of Property; Insurance
|
67 | |||
7.6 Inspection of Property; Books and Records, Discussions
|
68 | |||
7.7 Notices
|
68 | |||
7.8 Hazardous Material Laws
|
69 | |||
7.9 Financial Covenants
|
70 | |||
7.10 Governmental and Other Approvals
|
70 | |||
7.11 Compliance with ERISA; ERISA Notices
|
70 | |||
7.12 Defense of Collateral
|
71 | |||
7.13 Future Subsidiaries; Additional Collateral
|
71 | |||
7.14 Accounts
|
72 | |||
7.15 Use of Proceeds
|
72 |
ii
Page | ||||
7.17 Further Assurances and Information
|
73 | |||
|
||||
8. NEGATIVE COVENANTS
|
73 | |||
8.1 Limitation on Debt
|
73 | |||
8.2 Limitation on Liens
|
75 | |||
8.3 Acquisitions
|
76 | |||
8.4 Limitation on Mergers, Dissolution or Sale of Assets
|
76 | |||
8.5 Restricted Payments
|
78 | |||
8.6 [Intentionally Deleted
|
79 | |||
8.7 Limitation on Investments, Loans and Advances
|
79 | |||
8.8 Transactions with Affiliates
|
80 | |||
8.9 Sale-Leaseback Transactions
|
81 | |||
8.10 Limitations on Other Restrictions
|
81 | |||
8.11 Prepayment of Debt
|
82 | |||
8.12 Amendment of Subordinated Debt Documents
|
82 | |||
8.13 Modification of Certain Agreements
|
82 | |||
8.14 Management Fees
|
82 | |||
8.15 Fiscal Year
|
82 | |||
|
||||
9. DEFAULTS
|
82 | |||
9.1 Events of Default
|
82 | |||
9.2 Exercise of Remedies
|
85 | |||
9.3 Rights Cumulative
|
86 | |||
9.4 Waiver by Borrower of Certain Laws
|
86 | |||
9.5 Waiver of Defaults
|
86 | |||
9.6 Set Off
|
86 | |||
|
||||
10. PAYMENTS, RECOVERIES AND COLLECTIONS
|
87 | |||
10.1 Payment Procedure
|
87 | |||
10.2 Application of Proceeds of Collateral
|
88 | |||
10.3 Pro-rata Recovery
|
89 | |||
|
||||
11. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS
|
89 | |||
11.1 Reimbursement of Prepayment Costs
|
89 | |||
11.2 Eurodollar Lending Office
|
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11.3 Circumstances Affecting Eurodollar-based Rate Availability
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90 | |||
11.4 Laws Affecting Eurodollar-based Advance Availability
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90 | |||
11.5 Increased Cost of Eurodollar-based Advances
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91 | |||
11.6 Capital Adequacy and Other Increased Costs
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92 | |||
11.7 Right of Lenders to Fund through Branches and Affiliates
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93 | |||
11.8 Margin Adjustment
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93 | |||
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12. AGENT
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12.1 Appointment of Agent
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12.2 Deposit Account with Agent or any Lender
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94 | |||
12.3 Scope of Agents Duties
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94 | |||
12.4 Successor Agent
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95 |
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12.5 Credit Decisions
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95 | |||
12.6 Authority of Agent to Enforce This Agreement
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96 | |||
12.7 Indemnification of Agent
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96 | |||
12.8 Knowledge of Default
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96 | |||
12.9 Agents Authorization; Action by Lenders
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97 | |||
12.10 Enforcement Actions by the Agent
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97 | |||
12.11 Collateral Matters
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97 | |||
12.12 Agents in their Individual Capacities
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98 | |||
12.13 Agents Fees
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98 | |||
12.14 Documentation Agent or other Titles
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98 | |||
12.15 No Reliance on Agents Customer Identification Program
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98 | |||
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13. MISCELLANEOUS
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99 | |||
13.1 Accounting Principles
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99 | |||
13.2 Consent to Jurisdiction
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99 | |||
13.3 Law of California
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100 | |||
13.4 Interest
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100 | |||
13.5 Closing Costs and Other Costs; Indemnification
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100 | |||
13.6 Notices
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101 | |||
13.7 Further Action
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102 | |||
13.8 Successors and Assigns; Participations; Assignments
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102 | |||
13.9 Counterparts
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106 | |||
13.10 Amendment and Waiver
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106 | |||
13.11 Confidentiality
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107 | |||
13.12 Substitution of Lenders
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107 | |||
13.13 Withholding Taxes
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108 | |||
13.14 Taxes and Fees
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109 | |||
13.15 WAIVER OF JURY TRIAL
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109 | |||
13.16 USA Patriot Act Notice
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112 | |||
13.17 Complete Agreement; Conflicts
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112 | |||
13.18 Severability
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112 | |||
13.19 Table of Contents and Headings; Section References
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112 | |||
13.20 Construction of Certain Provisions
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112 | |||
13.21 Independence of Covenants
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112 | |||
13.22 Electronic Transmissions
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113 | |||
13.23 Advertisements
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113 | |||
13.24 Reliance on and Survival of Provisions
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113 | |||
13.25 Amendment and Restatement; Assignment and Assumptions
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114 | |||
13.26 Individual Employee Liability to Lenders
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114 |
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(a) | If such acquisition is structured as an acquisition of the Equity Interests of any Person, then the Person so acquired shall (X) become a wholly-owned direct Subsidiary of Borrower or of a wholly-owned Subsidiary of Borrower and the Borrower or the applicable Subsidiary shall cause such acquired Person to comply with Section 7.13 hereof or (Y) provided that the Credit Parties continue to comply with Section 7.4(a) hereof, be merged with and into Borrower or such Subsidiary (and, in the case of the Borrower, with the Borrower being the surviving entity); | ||
(b) | If such acquisition is structured as the acquisition of assets, such assets shall be acquired directly by Borrower or a wholly-owned Subsidiary (subject to compliance with Section 7.4(a) hereof); | ||
(c) | Borrower shall have delivered to Agent not less than ten (10) (or such shorter period of time agreed to by the Agent) nor more than ninety (90) days prior to the date of such acquisition, notice of such acquisition, copies of all material documents relating to such acquisition (including the acquisition agreement and any related material document), and historical financial information (including income statements, balance sheets and cash flows) covering at least three (3) complete fiscal years of the acquisition target, if available, prior to the effective date of the acquisition or the entire credit history of the acquisition target, whichever period is shorter, in each case in form and substance reasonably satisfactory to the Agent; | ||
(d) | Both immediately before and after the consummation of such acquisition, |
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no Default or Event of Default shall have occurred and be continuing; and | |||
(e) | The acquisition shall not result in a Change of Control. |
(a) | Governmental Obligations; | ||
(b) | Obligations of a state or commonwealth of the United States or the obligations of the District of Columbia or any possession of the United States, or any political subdivision of any of the foregoing, which are described in Section 103(a) of the Internal Revenue Code and are graded in any of the highest three (3) major grades as determined by at least one Rating Agency; or secured, as to payments of principal and interest, by a letter of credit provided by a financial institution or insurance provided by a bond insurance company which in each case is itself or its debt is rated in one of the highest three (3) major grades as determined by at least one Rating Agency; | ||
(c) | Bankers acceptances, commercial accounts, demand deposit accounts, certificates of deposit, other time deposits or depository receipts issued by or maintained with any Lender or any Affiliate thereof, or any bank, trust company, savings and loan association, savings bank or other financial institution whose deposits are insured by the Federal Deposit Insurance Corporation and whose reported capital and surplus equal at least $250,000,000, provided that such minimum capital and surplus requirement shall not apply to demand deposit accounts maintained by any Credit Party in the ordinary course of business; | ||
(d) | Commercial paper rated at the time of purchase within the two highest classifications established by not less than one Rating Agency, and which matures within 270 days after the date of issue; | ||
(e) | Secured repurchase agreements against obligations itemized in paragraph (a) above, and executed by a bank or trust company or by members of the association of primary dealers or other recognized dealers in United States government securities, the market value of which must be maintained at levels at least equal to the amounts advanced; | ||
(f) | Any fund or other pooling arrangement which exclusively purchases and holds the investments itemized in (a) through (e) above; | ||
(g) | Debt issued by Persons (other than Affiliates of the Borrower) with a rating of A or higher from S&P or A02 or higher from Moodys (or reasonably equivalent ratings of another internationally recognized ratings agency in each case with maturities not exceeding two years form the date of acquisition; |
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(h) | Deposits held with financial institutions in countries outside of the United States where the Credit Parties conduct business; and | ||
(i) | Investments made pursuant to the Borrowers investment policy as in effect on the Effective Date. |
(a) | Liens for (i) taxes or governmental assessments or charges or (ii) customs duties in connection with the importation of goods to the extent such Liens attach to the imported goods that are the subject of the duties, in each case (x) to the extent not yet due, (y) as to which the period of grace, if any, related thereto has not expired or (z) which are being contested in good faith by appropriate proceedings, provided that in the case of any such contest, any proceedings for the enforcement of such liens have been suspended and adequate reserves with respect thereto are maintained on the books of such Person in conformity with GAAP; | ||
(b) | carriers, warehousemens, mechanics, materialmens, repairmens, processors, landlords liens or other like liens arising in the ordinary course of business which secure obligations that are not overdue for a period of more than 30 days or which are being contested in good faith by appropriate proceedings, provided that in the case of any such contest, (x) any proceedings commenced for the enforcement of such Liens have been suspended and (y) appropriate reserves with respect thereto are maintained on the books of such Person in conformity with GAAP; | ||
(c) | (i) Liens incurred in the ordinary course of business to secure the performance of statutory obligations arising in connection with progress payments or advance payments due under contracts with the United States government or any agency thereof entered into in the ordinary course of business and (ii) Liens incurred or deposits made in the ordinary course of business to secure the performance of statutory obligations (not otherwise permitted under subsection (f) of this definition), bids, leases, fee and expense arrangements with trustees and fiscal agents, trade contracts, surety and appeal bonds, performance bonds and other similar obligations (exclusive of obligations incurred in connection with the borrowing of money, any lease-purchase arrangements or the payment of the deferred purchase price of property), provided, that in each case full provision for the payment of all such obligations has been made on the books of such Person as may be required by GAAP; | ||
(d) | any attachment or judgment lien that remains unpaid, unvacated, unbonded or unstayed by appeal or otherwise for a period ending on the earlier of (i) thirty (30) consecutive days from the date of its attachment or entry (as applicable) or (ii) the commencement of enforcement steps with respect thereto, other than the filing of notice thereof in the public record; |
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(e) | minor survey exceptions or minor encumbrances, easements or reservations, or rights of others for rights-of-way, utilities and other similar purposes, or zoning or other restrictions as to the use of real properties, or any interest of any lessor or sublessor under any lease permitted hereunder which, in each case, does not materially interfere with the business of such Person; | ||
(f) | Liens arising in connection with workers compensation, unemployment insurance, old age pensions and social security benefits and similar statutory obligations (excluding Liens arising under ERISA), provided that no enforcement proceedings in respect of such Liens are pending and provisions have been made for the payment of such liens on the books of such Person as may be required by GAAP; | ||
(g) | continuations of Liens that are permitted under subsections (a)-(g) hereof, provided such continuations do not violate the specific time periods set forth in subsections (b) and (d) and provided further that such Liens do not extend to any additional property or assets of any Credit Party or secure any additional obligations of any Credit Party; | ||
(h) | Liens in favor of financial institutions arising in connection with a Credit Partys deposit accounts held at such institutions to secure standard fees for deposit services charged by, but not financing made available by, such institutions; and | ||
(i) | Any interest or title of a lessor in the property (and the proceeds, accession or products thereof) subject to an operating lease or precautionary filings in respect of true leases. |
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(a) | Borrower hereby unconditionally promises to pay to the Agent for the account of each Revolving Credit Lender the then unpaid principal amount of each Revolving Credit Advance (plus all accrued and unpaid interest) of such Revolving Credit Lender to Borrower on the Revolving Credit Maturity Date and on such other dates and in such other amounts as may be required from time to time pursuant to this Agreement. Subject to the terms and conditions hereof, each Revolving Credit Advance shall, from time to time from and after the date of such Advance (until paid), bear interest at its Applicable Interest Rate. | ||
(b) | Each Revolving Credit Lender shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of Borrower to the appropriate lending office of such Revolving Credit Lender resulting from each Revolving Credit Advance made by such lending office of such Revolving Credit Lender from time to time, including the amounts of principal and interest payable thereon and paid to such Revolving Credit Lender from time to time under this Agreement. |
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(c) | The Agent shall maintain the Register pursuant to Section 13.8(g), and a subaccount therein for each Revolving Credit Lender, in which Register and subaccounts (taken together) shall be recorded (i) the amount of each Revolving Credit Advance made hereunder, the type thereof and each Eurodollar-Interest Period applicable to any Eurodollar-based Advance, (ii) the amount of any principal or interest due and payable or to become due and payable from Borrower to each Revolving Credit Lender hereunder in respect of the Revolving Credit Advances and (iii) both the amount of any sum received by the Agent hereunder from Borrower in respect of the Revolving Credit Advances and each Revolving Credit Lenders share thereof. | ||
(d) | The entries made in the Register maintained pursuant to paragraph (c) of this Section 2.2 shall, absent manifest error, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of Borrower therein recorded; provided , however , that the failure of any Revolving Credit Lender or the Agent to maintain the Register or any account, as applicable, or any error therein, shall not in any manner affect the obligation of Borrower to repay the Revolving Credit Advances (and all other amounts owing with respect thereto) made to Borrower by the Revolving Credit Lenders in accordance with the terms of this Agreement. | ||
(e) | Borrower agrees that, upon written request to the Agent by any Revolving Credit Lender, Borrower will execute and deliver, to such Revolving Credit Lender, at Borrowers own expense, a Revolving Credit Note evidencing the outstanding Revolving Credit Advances owing to such Revolving Credit Lender. |
(a) | each such Request for Revolving Credit Advance shall set forth the information required on the Request for Revolving Credit Advance, including without limitation: |
(i) | the proposed date of such Revolving Credit Advance (or the refunding or conversion of an outstanding Revolving Credit Advance), which must be a Business Day; | ||
(ii) | whether such Advance is a new Revolving Credit Advance or a refunding or conversion of an outstanding Revolving Credit Advance; and |
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(iii) | whether such Revolving Credit Advance is to be a Prime-based Advance or a Eurodollar-based Advance, and, except in the case of a Prime-based Advance, the first Eurodollar-Interest Period applicable thereto, provided, however, that the initial Revolving Credit Advance made under this Agreement shall be a Prime-based Advance, which may then be converted into a Eurodollar-based Advance in compliance with this Agreement. |
(b) | each such Request for Revolving Credit Advance shall be delivered to Agent by 12:00 p.m. (Pacific time) three (3) Business Days prior to the proposed date of the Revolving Credit Advance, except in the case of a Prime-based Advance, for which the Request for Revolving Credit Advance must be delivered by 10:00 a.m. (Pacific time) on the proposed date for such Revolving Credit Advance; | ||
(c) | on the proposed date of such Revolving Credit Advance, the sum of (x) the aggregate principal amount of all Revolving Credit Advances and Swing Line Advances outstanding on such date (including, without duplication) the Advances that are deemed to be disbursed by Agent under Section 3.6(a) hereof in respect of Borrowers Reimbursement Obligations hereunder), plus (y) the Letter of Credit Obligations as of such date, in each case after giving effect to all outstanding requests for Revolving Credit Advances and Swing Line Advances and for the issuance of any Letters of Credit, shall not exceed the Revolving Credit Aggregate Commitment; | ||
(d) | in the case of a Prime-based Advance, the principal amount of the initial funding of such Advance, as opposed to any refunding or conversion thereof, shall be at least $2,000,000 or the remainder available under the Revolving Credit Aggregate Commitment if less than $2,000,000; | ||
(e) | in the case of a Eurodollar-based Advance, the principal amount of such Advance, plus the amount of any other outstanding Revolving Credit Advance to be then combined therewith having the same Eurodollar-Interest Period, if any, shall be at least $2,000,000 (or a larger integral multiple of $100,000) or the remainder available under the Revolving Credit Aggregate Commitment if less than $2,000,000 and at any one time there shall not be in effect more than six (6) different Eurodollar-Interest Periods; | ||
(f) | a Request for Revolving Credit Advance, once delivered to Agent, shall not be revocable by Borrower and shall constitute a certification by Borrower as of the date thereof that: |
(i) | all conditions to the making of Revolving Credit Advances set forth in this Agreement have been satisfied, and shall remain satisfied to the date of such Revolving Credit Advance (both |
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before and immediately after giving effect to such Revolving Credit Advance); | |||
(ii) | there is no Default or Event of Default in existence, and none will exist upon the making of such Revolving Credit Advance (both before and immediately after giving effect to such Revolving Credit Advance); and | ||
(iii) | the representations and warranties of the Credit Parties contained in this Agreement and the other Loan Documents are true and correct in all material respects and shall be true and correct in all material respects as of the date of the making of such Revolving Credit Advance (both before and immediately after giving effect to such Revolving Credit Advance), other than any representation or warranty that expressly speaks only as of a different date; |
(i) | for Prime-based Advances, at the office of Agent located at 75 East Trimble Road, San Jose, California 95131, not later than 12:00 p.m. (Pacific time) on the date of such Advance; and | ||
(ii) | for Eurodollar-based Advances, at the Agents Correspondent for the account of the Eurodollar Lending Office of the Agent, not |
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later than 12:00 p.m. (the time of the Agents Correspondent) on the date of such Advance. |
(i) | for Prime-based Advances, not later than 1:00 p.m. (Pacific time) on the date of such Revolving Credit Advance, by credit to an account of Borrower maintained with Agent or to such other account or third party as Borrower may reasonably direct in writing, provided such direction is timely given; and | ||
(ii) | for Eurodollar-based Advances, not later than 1:00 p.m. (the time of the Agents Correspondent) on the date of such Revolving Credit Advance, by credit to an account of Borrower maintained with Agents Correspondent or to such other account or third party as Borrower may direct, provided such direction is timely given. |
(i) | in the case of such Revolving Credit Lender, for the first two (2) Business Days such amount remains unpaid, the Federal Funds |
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Effective Rate, and thereafter, at the rate of interest then applicable to such Revolving Credit Advances; and | |||
(ii) | in the case of Borrower, the rate of interest then applicable to such Advance of the Revolving Credit. |
(i) | Swing Line Lender shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of the Borrower to Swing Line Lender resulting from each Swing Line Advance from time to time, including the amount and date of each Swing Line Advance, its Applicable Interest Rate, its Interest Period, if any, and the amount and date of any repayment made on any Swing Line Advance from time to time. The entries made in such account or accounts of Swing Line Lender shall be prima facie evidence, absent manifest error, of the existence and amounts of the obligations of the Borrower therein recorded; provided, however, that the failure of Swing Line Lender to maintain such account, as applicable, or any error therein, shall not in any manner affect the obligation of the Borrower to repay the Swing Line Advances (and all other amounts owing with respect thereto) in accordance with the terms of this Agreement. | ||
(ii) | The Borrower agrees that, upon the written request of Swing Line Lender, the Borrower will execute and deliver to Swing Line Lender a Swing Line Note. | ||
(iii) | Borrower unconditionally promises to pay to the Swing Line Lender the then unpaid principal amount of such Swing Line |
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Advance (plus all accrued and unpaid interest) on the Revolving Credit Maturity Date and on such other dates and in such other amounts as may be required from time to time pursuant to this Agreement. Subject to the terms and conditions hereof, each Swing Line Advance shall, from time to time after the date of such Advance (until paid), bear interest at its Applicable Interest Rate. |
(c) | Requests for Swing Line Advances . Borrower may request a Swing Line Advance by the delivery to Swing Line Lender of a Request for Swing Line Advance executed by an Authorized Signer for the Borrower, subject to the following: |
(i) | each such Request for Swing Line Advance shall set forth the information required on the Request for Advance, including without limitation, (A) the proposed date of such Swing Line Advance, which must be a Business Day, (B) whether such Swing Line Advance is to be a Prime-based Advance or a Quoted Rate Advance, and (C) in the case of a Quoted Rate Advance, the duration of the Interest Period applicable thereto; | ||
(ii) | on the proposed date of such Swing Line Advance, after giving effect to all outstanding requests for Swing Line Advances made by Borrower as of the date of determination, the aggregate principal amount of all Swing Line Advances outstanding on such date shall not exceed the Swing Line Maximum Amount; | ||
(iii) | on the proposed date of such Swing Line Advance, after giving effect to all outstanding requests for Revolving Credit Advances and Swing Line Advances and Letters of Credit requested by the Borrower on such date of determination (including, without duplication, Advances that are deemed disbursed pursuant to Section 3.6(a) hereof in respect of the Borrowers Reimbursement Obligations hereunder), the sum of (x) the aggregate principal amount of all Revolving Credit Advances and the Swing Line Advances outstanding on such date plus (y) the Letter of Credit Obligations on such date shall not exceed the Revolving Credit Aggregate Commitment; | ||
(iv) | (A) in the case of a Swing Line Advance that is a Prime-based Advance, the principal amount of the initial funding of such Advance, as opposed to any refunding or conversion thereof, shall be at least Two |
31
Hundred Fifty Thousand Dollars ($250,000) or such lesser amount as may be agreed to by the Swing Line Lender, and (B) in the case of a Swing Line Advance that is a Quoted Rate Advance, the principal amount of such Advance, plus any other outstanding Swing Line Advances to be then combined therewith having the same Interest Period, if any, shall be at least Two Hundred Fifty Thousand Dollars ($250,000) or such lesser amount as may be agreed to by the Swing Line Lender, and at any time there shall not be in effect more than three (3) Interest Rates and Interest Periods; | |||
(v) | each such Request for Swing Line Advance shall be delivered to the Swing Line Lender by 11:00 a.m. (Pacific time) on the proposed date of the Swing Line Advance; | ||
(vi) | each Request for Swing Line Advance, once delivered to Swing Line Lender, shall not be revocable by Borrower, and shall constitute and include a certification by Borrower as of the date thereof that: |
(A) | all conditions to the making of Swing Line Advances set forth in this Agreement shall have been satisfied and shall remain satisfied to the date of such Swing Line Advance (both before and immediately after giving effect to such Swing Line Advance); | ||
(B) | there is no Default or Event of Default in existence, and none will exist upon the making of such Swing Line Advance (both before and immediately after giving effect to such Swing Line Advance); and | ||
(C) | the representations and warranties of the Credit Parties contained in this Agreement and the other Loan Documents are true and correct in all material respects and shall be true and correct in all material respect as of the date of the making of such Swing Line Advance (both before and immediately after giving effect to such Swing Line Advance), other than any representation or warranty that expressly speaks only as of a different date; |
(vii) | At the option of the Agent, subject to revocation by Agent at any time and from time to time and so long as the Agent is the Swing Line Lender, Borrower may utilize the Agents Sweep to Loan automated system for obtaining Swing Line Advances and making periodic repayments. At any time during which the Sweep to Loan system is in effect, Swing Line Advances shall be advanced to fund borrowing needs pursuant to the terms of the Sweep Agreement. Each time a Swing Line Advance is made using the Sweep to Loan system, Borrower shall be deemed to have certified to the Agent and the Lenders each of the matters set forth in clause (vi) of this Section 2.5(b). Principal and interest on Swing Line Advances requested, or deemed requested, pursuant to this Section shall be paid pursuant to the terms and conditions of |
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the Sweep Agreement without any deduction, setoff or counterclaim whatsoever. Unless sooner paid pursuant to the provisions hereof or the provisions of the Sweep Agreement, the principal amount of the Swing Loans shall be paid in full, together with accrued interest thereon, on the Revolving Credit Maturity Date. Agent may suspend or revoke Borrowers privilege to use the Sweep to Loan system at any time and from time to time for any reason and, immediately upon any such revocation, the Sweep to Loan system shall no longer be available to Borrower for the funding of Swing Line Advances hereunder (or otherwise), and the regular procedures set forth in this Section 2.5 for the making of Swing Line Advances shall be deemed immediately to apply. Agent may, at its option, also elect to make Swing Line Advances upon Borrowers telephone requests on the basis set forth in the last paragraph of Section 2.3, provided that the Borrower complies with the provisions set forth in this Section 2.5. |
(d) | Disbursement of Swing Line Advances . Upon receiving any executed Request for Swing Line Advance from the Borrower and the satisfaction of the conditions set forth in Section 2.5(c) hereof, Swing Line Lender shall make available to Borrower the amount so requested in Dollars not later than 2:00 p.m. (Pacific time) on the date of such Advance, by credit to an account of Borrower maintained with Agent or to such other account or third party as the Borrower may reasonably direct in writing, provided such direction is timely given. Swing Line Lender shall promptly notify Agent of any Swing Line Advance by telephone, telex or telecopier. | ||
(e) | Refunding of or Participation Interest in Swing Line Advances . |
(i) | The Agent, at any time in its sole and absolute discretion, may, in each case on behalf of the Borrower (which hereby irrevocably directs the Agent to act on their behalf) request each of the Revolving Credit Lenders (including the Swing Line Lender in its capacity as a Revolving Credit Lender) to make an Advance of the Revolving Credit to Borrower, in an amount equal to such Revolving Credit Lenders Revolving Credit Percentage of the aggregate principal amount of the Swing Line Advances outstanding on the date such notice is given (the Refunded Swing Line Advances); provided however that the Swing Line Advances carried at the Quoted Rate which are refunded with Revolving Credit Advances at the request of the Swing Line Lender at a time when no Default or Event of Default has occurred and is continuing shall not be subject to Section 11.1 and no losses, costs or expenses may be assessed by the Swing Line Lender against the Borrower or the Revolving Credit Lenders as a consequence of such refunding. The applicable Revolving Credit Advances used to refund any Swing Line Advances shall be Prime-based Advances. |
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In connection with the making of any such Refunded Swing Line Advances or the purchase of a participation interest in Swing Line Advances under Section 2.5(e)(ii) hereof, the Swing Line Lender shall retain its claim against Borrower for any unpaid interest or fees in respect thereof accrued to the date of such refunding. Unless any of the events described in Section 9.1(i) hereof shall have occurred (in which event the procedures of Section 2.5(e)(ii) shall apply) and regardless of whether the conditions precedent set forth in this Agreement to the making of a Revolving Credit Advance are then satisfied (but subject to Section 2.5(e)(iii)), each Revolving Credit Lender shall make the proceeds of its Revolving Credit Advance available to the Agent for the benefit of the Swing Line Lender at the office of the Agent specified in Section 2.4(a) hereof prior to 10:00 a.m. Pacific time on the Business Day next succeeding the date such notice is given, in immediately available funds. The proceeds of such Revolving Credit Advances shall be immediately applied to repay the Refunded Swing Line Advances, subject to Section 11.1 hereof . | |||
(ii) | If, prior to the making of an Advance of the Revolving Credit pursuant to Section 2.5(e)(i) hereof, one of the events described in Section 9.1(i) hereof shall have occurred, each Revolving Credit Lender will, on the date such Advance of the Revolving Credit was to have been made, purchase from the Swing Line Lender an undivided participating interest in each Swing Line Advance that was to have been refunded in an amount equal to its Revolving Credit Percentage of such Swing Line Advance. Each Revolving Credit Lender within the time periods specified in Section 2.5(e)(i) hereof, as applicable, shall immediately transfer to the Agent, for the benefit of the Swing Line Lender, in immediately available funds, an amount equal to its Revolving Credit Percentage of the aggregate principal amount of all Swing Line Advances outstanding as of such date. Upon receipt thereof, the Agent will deliver to such Revolving Credit Lender a Swing Line Participation Certificate evidencing such participation. | ||
(iii) | Each Revolving Credit Lenders obligation to make Revolving Credit Advances to refund Swing Line Advances, and to purchase participation interests, in accordance with Section 2.5(e)(i) and (ii), respectively, shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (A) any set-off, counterclaim, recoupment, defense or other right which such Revolving Credit Lender may have against Swing Line Lender, Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of any Default or Event of Default; (C) any adverse change in the condition (financial or otherwise) of Borrower or any other Person; (D) any breach of this |
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Agreement or any other Loan Document by Borrower or any other Person; (E) any inability of Borrower to satisfy the conditions precedent to borrowing set forth in this Agreement on the date upon which such Revolving Credit Advance is to be made or such participating interest is to be purchased; (F) the termination of the Revolving Credit Aggregate Commitment hereunder; or (G) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. If any Revolving Credit Lender does not make available to the Agent the amount required pursuant to Section 2.5(e)(i) or (ii) hereof, as the case may be, the Agent on behalf of the Swing Line Lender, shall be entitled to recover such amount on demand from such Revolving Credit Lender, together with interest thereon for each day from the date of non-payment until such amount is paid in full (x) for the first two (2) Business Days such amount remains unpaid, at the Federal Funds Effective Rate and (y) thereafter, at the rate of interest then applicable to such Swing Line Advances. The obligation of any Revolving Credit Lender to make available its pro rata portion of the amounts required pursuant to Section 2.5(e)(i) or (ii) hereof shall not be affected by the failure of any other Revolving Credit Lender to make such amounts available, and no Revolving Credit Lender shall have any liability to any Credit Party, the Agent, the Swing Line Lender, or any other Revolving Credit Lender or any other party for another Revolving Credit Lenders failure to make available the amounts required under Section 2.5(e)(i) or (ii) hereof. | |||
(iv) | Notwithstanding the foregoing, no Revolving Credit Lender shall be required to make any Revolving Credit Advance to refund a Swing Line Advance or to purchase a participation in a Swing Line Advance if at least two (2) Business Days prior to the making of such Swing Line Advance by the Swing Line Lender, the officers of the Swing Line Lender immediately responsible for matters concerning this Agreement shall have received written notice from Agent or any Lender that Swing Line Advances should be suspended based on the occurrence and continuance of a Default or Event of Default and stating that such notice is a notice of default; provided, however that the obligation of the Revolving Credit Lenders to make such Revolving Credit Advances (or purchase such participations) shall be reinstated upon the date on which such Default or Event of Default has been waived by the requisite Lenders. |
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(a) | (i) after giving effect to the Letter of Credit requested, the Letter of Credit Obligations do not exceed the Letter of Credit Maximum Amount; and (ii) after giving effect to the Letter of Credit requested, the Letter of Credit Obligations on such date plus the aggregate amount of all Revolving Credit Advances and Swing Line Advances (including all Advances deemed disbursed by Agent under Section 3.6(a) hereof in respect of Borrower Reimbursement Obligations) hereunder requested or outstanding on such date do not exceed the Revolving Credit Aggregate Commitment; | ||
(b) | the representations and warranties of the Credit Parties contained in this Agreement and the other Loan Documents are true and correct in all material respects and shall be true and correct in all material respects as of date of the issuance of such Letter of Credit (both before and immediately after the issuance of such Letter of Credit), other than any representation or warranty that expressly speaks only as of a different date; | ||
(c) | there is no Default or Event of Default in existence, and none will exist upon the issuance of such Letter of Credit; | ||
(d) | Borrower shall have delivered to Issuing Lender at its Issuing Office, not less than three (3) Business Days prior to the requested date for issuance (or such shorter time as the Issuing Lender, in its sole discretion, may permit), the Letter of Credit Agreement related thereto, together with such other documents and materials as may be required pursuant to the terms thereof, and the terms of the proposed Letter of Credit shall be reasonably satisfactory to Issuing Lender; | ||
(e) | no order, judgment or decree of any court, arbitrator or governmental authority shall purport by its terms to enjoin or restrain Issuing Lender from issuing the Letter of Credit requested, or any Revolving Credit Lender from taking an assignment of its Revolving Credit Percentage thereof pursuant to Section 3.6 hereof, and no law, rule, regulation, request or directive (whether or not having the force of law) shall prohibit the Issuing Lender from issuing, or any Revolving Credit Lender from taking an assignment of its Revolving Credit Percentage of, the Letter of Credit requested or letters of credit generally; | ||
(f) | there shall have been (i) no introduction of or change in the interpretation of any law or regulation, (ii) no declaration of a general banking |
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moratorium by banking authorities in the United States, Michigan or the respective jurisdictions in which the Revolving Credit Lenders, the Borrower and the beneficiary of the requested Letter of Credit are located, and (iii) no establishment of any new restrictions by any central bank or other governmental agency or authority on transactions involving letters of credit or on banks generally that, in any case described in this clause (e), would make it unlawful or unduly burdensome for the Issuing Lender to issue or any Revolving Credit Lender to take an assignment of its Revolving Credit Percentage of the requested Letter of Credit or letters of credit generally; and | |||
(g) | Issuing Lender shall have received the issuance fees required in connection with the issuance of such Letter of Credit pursuant to Section 3.4 hereof. |
(i) | A per annum letter of credit fee with respect to the undrawn amount of each Letter of Credit issued pursuant hereto (based on the amount of each Letter of Credit) in the amount of the Applicable Fee Percentage (determined with reference to Schedule 1.1 to this Agreement) shall be paid to the Agent for distribution to the Revolving Credit Lenders in accordance with their Percentages. | ||
(ii) | A letter of credit facing fee on the face amount of each Letter of Credit shall be paid to the Agent for distribution to the Issuing Lender for its own account, in accordance with the terms of the applicable Fee Letter. |
(b) | All payments by Borrower to the Agent for distribution to the Issuing Lender or the Revolving Credit Lenders under this Section 3.4 shall be made in Dollars in immediately available funds at the Issuing Office or such other office of the Agent as may be designated from time to time by written notice to Borrower by the Agent. The fees described in clauses |
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(a)(i) and (ii) above (i) shall be nonrefundable under all circumstances, (ii) in the case of fees due under clause (a)(i) above, shall be payable quarterly in arrears (on the first day of each calendar quarter) and (iii) in the case of fees due under clause (a)(ii) above, shall be payable upon the issuance of such Letter of Credit and upon any amendment thereto or extension thereof . The fees due under clause (a)(i) above shall be determined by multiplying the Applicable Fee Percentage times the undrawn amount of the face amount of each such Letter of Credit on the date of determination, and shall be calculated on the basis of a 360 day year and assessed for the actual number of days from the date of the issuance thereof to the stated expiration thereof. The parties hereto acknowledge that, unless the Issuing Lender otherwise agrees, any material amendment and any extension to a Letter of Credit issued hereunder shall be treated as a new Letter of Credit for the purposes of the letter of credit facing fee. | |||
(c) | If any change in any law or regulation or in the interpretation thereof by any court or administrative or governmental authority charged with the administration thereof, adopted after the date hereof, shall either (i) impose, modify or cause to be deemed applicable any reserve, special deposit, limitation or similar requirement against letters of credit issued or participated in by, or assets held by, or deposits in or for the account of, Issuing Lender or any Revolving Credit Lender or (ii) impose on Issuing Lender or any Revolving Credit Lender any other condition regarding this Agreement, the Letters of Credit or any participations in such Letters of Credit, and the result of any event referred to in clause (i) or (ii) above shall be to increase the cost or expense to Issuing Lender or such Revolving Credit Lender of issuing or maintaining or participating in any of the Letters of Credit (which increase in cost or expense shall be determined by the Issuing Lenders or such Revolving Credit Lenders reasonable allocation of the aggregate of such cost increases and expenses resulting from such events), then, upon demand by the Issuing Lender or such Revolving Credit Lender, as the case may be, Borrower shall, within thirty (30) days following demand for payment, pay to Issuing Lender or such Revolving Credit Lender, as the case may be, from time to time as specified by the Issuing Lender or such Revolving Credit Lender, additional amounts which shall be sufficient to compensate the Issuing Lender or such Revolving Credit Lender for such increased cost and expense (together with interest on each such amount from ten days after the date such payment is due until payment in full thereof at the Prime-based Rate), provided that if the Issuing Lender or such |
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Revolving Credit Lender could take any reasonable action, without cost or administrative or other burden or restriction to such Lender, to mitigate or eliminate such cost or expense, it agrees to do so within a reasonable time after becoming aware of the foregoing matters. Each demand for payment under this Section 3.4(c) shall be accompanied by a certificate of Issuing Lender or the applicable Revolving Credit Lender setting forth the amount of such increased cost or expense incurred by the Issuing Lender or such Revolving Credit Lender, as the case may be, as a result of any event mentioned in clause (i) or (ii) above, and in reasonable detail, the methodology for calculating and the calculation of such amount, which certificate shall be prepared in good faith and shall be conclusive evidence, absent manifest error, as to the amount thereof. |
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(a) | Any lack of validity or enforceability of any Letter of Credit, any Letter of Credit Agreement, any other documentation relating to any Letter of Credit, this Agreement or any of the other Loan Documents (the Letter of Credit Documents); | ||
(b) | Any amendment, modification, waiver, consent, or any substitution, exchange or release of or failure to perfect any interest in collateral or security, with respect to or under any Letter of Credit Document; | ||
(c) | The existence of any claim, setoff, defense or other right which Borrower may have at any time against any beneficiary or any transferee of any Letter of Credit (or any persons or entities for whom any such beneficiary or any such transferee may be acting), the Agent, the Issuing Lender or any Revolving Credit Lender or any other Person, whether in connection with this Agreement, any of the Letter of Credit Documents, the transactions contemplated herein or therein or any unrelated transactions; | ||
(d) | Any draft or other statement or document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; | ||
(e) | Payment by the Issuing Lender to the beneficiary under any Letter of Credit against presentation of documents which do not comply with the terms of such Letter of Credit, including failure of any documents to bear any reference or adequate reference to such Letter of Credit; | ||
(f) | Any failure, omission, delay or lack on the part of the Agent, Issuing Lender or any Revolving Credit Lender or any party to any of the Letter of Credit Documents to enforce, assert or exercise any right, power or remedy conferred upon the Agent, Issuing Lender, any Revolving Credit Lender or any such party under this Agreement, any of the other Loan |
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Documents or any of the Letter of Credit Documents, or any other acts or omissions on the part of the Agent, Issuing Lender, any Revolving Credit Lender or any such party; or | |||
(g) | Any other event or circumstance that would, in the absence of this Section 3.7, result in the release or discharge by operation of law or otherwise of Borrower from the performance or observance of any obligation, covenant or agreement contained in Section 3.6 hereof. |
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(a) | the use which may be made of any Letter of Credit or for any acts or omissions of any beneficiary in connection therewith; | ||
(b) | the validity, sufficiency or genuineness of documents or of any endorsement thereon, even if such documents should in fact prove to be in any or all respects invalid, insufficient, fraudulent or forged; | ||
(c) | payment by the Issuing Lender to the beneficiary under any Letter of Credit against presentation of documents which do not strictly comply with the terms of any Letter of Credit (unless such payment resulted from the gross negligence or willful misconduct of the Issuing Lender), including failure of any documents to bear any reference or adequate reference to such Letter of Credit; | ||
(d) | any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit; or | ||
(e) | any other event or circumstance whatsoever arising in connection with any Letter of Credit. |
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Installment No. | Payment | |||
1-8
|
$ | 750,000 | ||
9-12
|
$ | 1,500,000 | ||
13-16
|
$ | 1,875,000 | ||
17-19
|
$ | 2,625,000 | ||
Term Loan Maturity Date
|
Any amounts of principal or interest then outstanding on the Term Loan |
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(i) | whether the Term Loan Advance is a refunding or conversion of an outstanding Term Loan Advance; | ||
(ii) | in the case of a refunding or conversion of an outstanding Term Loan Advance, the proposed date of such refunding or conversion, which must be a Business Day; and | ||
(iii) | whether such Term Loan Advance (or any portion thereof) is to be a Prime-based Advance or a Eurodollar-based Advance, and, in the case of a Eurodollar-based Advance, the Eurodollar-Interest Period(s) applicable thereto. |
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5. | CONDITIONS. |
(i) | corporate resolutions (or the equivalent) of each Obligor authorizing the transactions contemplated by this Agreement and the other Loan Documents approval of this Agreement and the other Loan Documents, in each case to which such Obligor is party, and authorizing the execution and delivery of this Agreement and the other Loan Documents, and in the case of Borrower, authorizing the execution and delivery of requests for Advances and the issuance of Letters of Credit hereunder, | ||
(ii) | the incumbency and signature of the officers or other authorized persons of such Obligor executing any Loan Document and in the case of the Borrower, the officers who are authorized to execute any Requests for Advance, or requests for the issuance of Letters of Credit, | ||
(iii) | a certificate of good standing or continued existence (or the equivalent thereof) from the state of its incorporation or formation, and from every state or other jurisdiction where such Obligor is qualified to do business, which jurisdictions are listed on Schedule 5.2 to the Disclosure Letter, and | ||
(iv) | copies of such Obligors articles of incorporation and bylaws or other constitutional documents, as in effect on the Closing Date. |
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(i) | The following Collateral Documents, each in form and substance acceptable to Agent and fully executed by each party thereto and dated as of the Effective Date: |
(A) | the Security Agreement, executed and delivered by the Obligors; | ||
(B) | the Guaranty, executed and delivered by the Guarantors; and | ||
(C) | Mortgages for each of the owned properties listed on Schedule 6.3(b) to the Disclosure Letter. |
(ii) | For Borrowers principal place of business, a Collateral Access Agreement. | ||
(iii) | (A) Certified copies of uniform commercial code requests for information, or a similar search report certified by a party acceptable to the Agent, dated a date reasonably prior to the Closing Date, listing all effective financing statements in the jurisdiction noted on Schedule 5.1(c) to the Disclosure Letter which name any Obligor (under their present names or under any previous names used within five (5) years prior to the date hereof) as debtors, together with (x) copies of such financing statements, and (y) authorized Uniform Commercial Code (Form UCC-3) Termination Statements, if any, necessary to release all Liens and other rights of any Person in any Collateral described in the Collateral Documents previously granted by any Person (other than Liens permitted by Section 8.2 of this Agreement) and (B) intellectual property search reports results from the United States Patent and Trademark Office and the United States Copyright Office for the Obligors dated a date reasonably prior to the Closing Date. | ||
(iv) | Any documents (including, without limitation, financing statements, amendments to financing statements and assignments of financing statements, stock powers executed in blank and any endorsements) requested by Agent and reasonably required to be provided in connection with the Collateral Documents to create, in favor of the Agent (for and on behalf of the Lenders), a first priority perfected security interest in the Collateral thereunder shall have been filed, registered or recorded, or shall have been delivered to Agent in proper form for filing, registration or recordation. |
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(a) | all facilities and property owned or leased by the Credit Parties are in compliance with all applicable Hazardous Material Laws; | ||
(b) | to the best knowledge of Borrower, there have been no unresolved and outstanding past, and there are no pending or threatened in writing: |
(i) | claims, complaints, notices or requests for information received by any Credit Party with respect to any alleged violation of any applicable Hazardous Material Law, or | ||
(ii) | written complaints, notices or inquiries to any Credit Party |
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regarding potential liability of any Credit Parties under any applicable Hazardous Material Law; and |
(c) | to the best knowledge of Borrower, no conditions exist at, on or under any property now or previously owned or leased by any Credit Party which, with the passage of time, or the giving of notice or both, are reasonably likely to give rise to liability under any applicable Hazardous Material Law or create a significant adverse effect on the value of the property. |
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(a) | as soon as available, but in any event within one hundred twenty (120) days after the end of each Fiscal Year, a copy of the audited Consolidated and, if reasonably requested by the Agent, unaudited Consolidating financial statements of the Borrower and its Consolidated Subsidiaries as at the end of such Fiscal Year and the related audited Consolidated and if reasonably requested by the Agent, unaudited Consolidating statements of income, stockholders equity, and cash flows of the Borrower and its Consolidated Subsidiaries for such Fiscal Year or partial Fiscal Year and underlying assumptions, setting forth in each case in comparative form the figures for the previous Fiscal Year, certified as being fairly stated in all material respects by an independent, nationally recognized certified public accounting firm reasonably satisfactory to the Agent; and | ||
(b) | as soon as available, but in any event within forty five (45) days after the end of each fiscal quarter of the Credit Parties (except the last quarter of each Fiscal Year), Borrower prepared unaudited Consolidated and if reasonably requested by the Agent, Consolidating balance sheets of the Borrower and its Consolidated Subsidiaries as at the end of such quarter and the related unaudited statements of income, stockholders equity and cash flows of the Borrower and its Consolidated Subsidiaries for the portion of the Fiscal Year through the end of such quarter, setting forth in each case in comparative form the figures for the corresponding periods in the previous Fiscal Year, and certified by a Responsible Officer of the Borrower as being fairly stated in all material respects; |
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(a) | Concurrently with the delivery of the financial statements described in Sections 7.1(a) for each fiscal year end, and 7.1(b) for each fiscal quarter end, a Covenant Compliance Report (or, in the case of the Borrower prepared financial statements for the last fiscal quarter of each fiscal year, a draft Covenant Compliance Certificate) duly executed by a Responsible Officer of Borrower; | ||
(b) | Promptly upon receipt thereof, copies of all significant reports submitted by the Credit Parties firm(s) of certified public accountants in connection with each annual, interim or special audit or review of any type of the financial statements or related internal control systems of the Credit Parties made by such accountants, including any comment letter submitted by such accountants to management in connection with their services; | ||
(c) | Any financial reports, statements, press releases, other material information or written notices delivered to the holders of the Subordinated Debt pursuant to any applicable Subordinated Debt Documents (to the extent not otherwise required hereunder), as and when delivered to such Persons and, if applicable, all reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission; | ||
(d) | Within forty five (45) days after the end of each Fiscal Year, an annual budget reviewed by Borrowers Board of Directors certified by a Responsible Officer of the Borrower; | ||
(e) | Within forty five (45) days after and as of the end of each fiscal quarter, including the last fiscal quarter of each Fiscal Year, (i) the quarterly aging of the accounts receivable and accounts payable of the Credit Parties and (ii) a report signed by a Responsible Officer, in form reasonably acceptable to Agent, listing any applications or registrations that Borrower or any Guarantor has made or filed in respect of any Patents, Trademarks or Copyrights and the status of any outstanding applications or registrations, as well as any material change in the Intellectual Property Collateral (as defined in the Collateral Documents), including but not limited to any Patent, Trademark or Copyright not specified in the exhibits to the Security Agreement; | ||
(f) | Any additional information as required by any Loan Document, and such additional schedules to the Disclosure Letter, certificates and reports respecting all or any of the Collateral, the items or amounts received by the Credit Parties in full or partial payment thereof, and any goods (the sale or lease of which shall have given rise to any of the Collateral) possession of which has been obtained by the Credit Parties, all to such extent as Agent may reasonably request from time to time, any such schedule, certificate or report to be certified as true and correct in all material respects by a Responsible Officer of the applicable Credit Party and shall be in such form and detail as Agent may reasonably specify; and |
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(g) | Such additional financial and/or other information as Agent or any Lender may from time to time reasonably request, promptly following such request. |
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(a) | the occurrence of any Default or Event of Default of which any Credit Party has knowledge; | ||
(b) | any (i) litigation or proceeding existing at any time between any Credit Party and any Governmental Authority or other third party, or any investigation of any Credit Party conducted by any Governmental Authority, which in any case if adversely determined would have a Material Adverse Effect or which could reasonably be expected to result in damages or costs to Borrower or any Subsidiary of Two Million Five Hundred Thousand Dollars ($2,500,000) or more or (ii) any material adverse change in the financial condition of any Credit Party since the date |
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of the last audited financial statements delivered pursuant to Section 7.1(a) hereof; |
(c) | the occurrence of any event which any Credit Party believes could reasonably be expected to have a Material Adverse Effect, promptly after concluding that such event could reasonably be expected to have such a Material Adverse Effect; | ||
(d) | promptly after becoming aware thereof, the taking by the Internal Revenue Service or any foreign taxing jurisdiction of a written tax position (or any such tax position taken by any Credit Party in a filing with the Internal Revenue Service or any foreign taxing jurisdiction) which could reasonably be expected to have a Material Adverse Effect, setting forth the details of such position and the financial impact thereof; | ||
(e) | (i) the acquisition or creation of any new Subsidiaries, (iii) any material change after the Closing Date in the authorized and issued Equity Interests of any Obligor or any other material amendment to any Obligors charter, by-laws or other organizational documents, such notice, in each case, to identify the applicable jurisdictions, capital structures or amendments as applicable, provided that such notice shall be given not less than five (5) Business Days prior to the proposed effectiveness of such changes, acquisition or creation, as the case may be (or such shorter period to which Agent may consent); | ||
(f) | not less than ten (10) Business Days (or such other shorter period to which Agent may agree) prior to the proposed effective date thereof, any proposed material amendments, restatements or other modifications to any Subordinated Debt Documents which would have an adverse effect on the Lenders (it being acknowledged by Borrower that any change in term, interest rate, prepayment provisions, amortization, financial covenants or default provisions shall be deemed to have an adverse effect on the Lenders); and | ||
(g) | any default or event of default by any Person under any Subordinated Debt Document, concurrently with delivery or promptly after receipt (as the case may be) of any notice of default or event of default under the applicable document, as the case may be. |
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(i) | within thirty (30) days after the date such Person becomes a Material Subsidiary (or such longer time period as the Agent may determine), a Guaranty, or in the event that a Guaranty already exists, a joinder agreement to the Guaranty whereby such Domestic Subsidiary becomes obligated as a Guarantor under the Guaranty; and |
(ii) | within thirty (30) days after the date such Person becomes a Material Subsidiary (or such longer time period as the Agent may determine), a joinder agreement to the Security Agreement whereby such Domestic Subsidiary grants a Lien over its assets (other than Equity Interests which should be governed by (b) of this Section 7.13) as set forth in the Security Agreement, and such Domestic Subsidiary shall take such additional actions as may be necessary to ensure a valid first priority perfected Lien over such assets of such Domestic Subsidiary, subject only to the other Liens permitted pursuant to Section 8.2 of this Agreement. |
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(a) | Indebtedness of any Credit Party to Agent and the Lenders under this Agreement and/or the other Loan Documents; |
(b) | any Debt existing on the Effective Date and set forth in Schedule 8.1 to the Disclosure Letter and any renewals or refinancing of such Debt (provided that (i) the aggregate principal amount of such renewed or refinanced Debt shall not exceed the aggregate principal amount of the original Debt outstanding on the Effective Date (less any principal payments and the amount of any commitment reductions made thereon on or prior to such renewal or refinancing), (ii) the renewal or refinancing of such Debt shall be on substantially the same or better terms as in effect with respect to such Debt on the Effective Date, and shall otherwise be in compliance with this Agreement, and (iii) at the time of such renewal or refinancing no Default or Event of Default has occurred and is continuing or would result from the renewal or refinancing of such Debt; |
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(c) | any Debt of Borrower or any Subsidiary incurred to finance the acquisition of fixed or capital assets, whether pursuant to a loan or a Capitalized Lease provided that both at the time of and immediately after giving effect to the incurrence thereof (i) no Default or Event of Default shall have occurred and be continuing, and (ii) the aggregate amount of all such Debt at any one time outstanding (including, without limitation, any Debt of the type described in this clause (c) which is set forth on Schedule 8.1 to the Disclosure Letter) shall not exceed $10,000,000, and any renewals or refinancings of such Debt on terms substantially the same or better than those in effect at the time of the original incurrence of such Debt; |
(d) | Subordinated Debt; |
(e) | Debt under any Hedging Transactions, provided that such transaction is entered into for risk management purposes and not for speculative purposes; |
(f) | Debt arising from judgments or decrees not deemed to be a Default or Event of Default under subsection (g) of Section 9.1; |
(g) | Debt owing to a Person that is a Credit Party, but only to the extent permitted under Section 8.7 hereof; |
(h) | Debt incurred under Seller Notes (including any Seller Notes listed in Schedule 8.1 to the Disclosure Letter) not to exceed Thirty Million Dollars ($30,000,000) in the aggregate during the term of this Agreement; |
(i) | Guaranty Obligations of Indebtedness otherwise permitted hereunder of any Credit Party and Guaranties in the ordinary course of business of the obligations of suppliers, customers and licensees of any Credit Party; |
(j) | Debt of Foreign Subsidiaries not to exceed $2,500,000 in the aggregate; |
(k) | Debt relating to premium financing arrangements for property and casualty insurance plans and health and welfare benefit plans (including health and workers compensation insurance, employment practices liability insurance and directors and officers insurance); |
(l) | Debt relating to tenant improvement loans and real estate commissions in an amount not exceeding $2,500,000 in the aggregate; |
(m) | Debt in respect of performance bonds securing obligations not constituting Debt for borrowed money (including workers compensation claims, health benefits and local, state and federal payroll taxes) and obligations in connection with self-insurance or similar requirements, in each case provided in the ordinary course of business; |
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(n) | third-party indebtedness assumed pursuant to a Permitted Acquisition completed in compliance with this Agreement of a type which is permitted under this Agreement (except as a result of giving effect to a Dollar limitation contained in this Section 8.1) in an amount not exceeding $5,000,000 in the aggregate; |
(o) | non-recourse Debt with a maturity of less than 15 days incurred in connection with a Permitted Acquisition with respect to which an I.R.C. Section 338(h) election has been made; provided that no such Debt shall be permitted following the initial maturity date of such Debt; and |
(p) | additional unsecured Debt not otherwise described above, provided that both at the time of and immediately after giving effect to the incurrence thereof (i) no Default or Event of Default shall have occurred and be continuing or result therefrom and (ii) the aggregate amount of all such Debt shall not exceed $7,500,000 at any one time outstanding. |
(a) | Permitted Liens; |
(b) | Liens securing Debt permitted by Section 8.1(c), provided that (i) such Liens are created upon fixed or capital assets acquired by the applicable Credit Party after the date of this Agreement (including without limitation by virtue of a loan or a Capitalized Lease), (ii) any such Lien is created solely for the purpose of securing indebtedness representing or incurred to finance the cost of the acquisition of the item of property subject thereto, (iii) the principal amount of the Debt secured by any such Lien shall at no time exceed 100% of the sum of the purchase price or cost of the applicable property, equipment or improvements and the related costs and charges imposed by the vendors thereof and (iv) the Lien does not cover any property other than the fixed or capital asset acquired; provided, however, that no such Lien shall be created over any owned real property of any Credit Party for which Agent has received a Mortgage or for which such Credit Party is required to execute a Mortgage pursuant to the terms of this Agreement; |
(c) | any Lien securing third-party indebtedness assumed pursuant to any Permitted Acquisition conducted in compliance with this Agreement; provided that such Lien is limited to the property so acquired, was not entered into, extended or renewed in contemplation of such acquisition and is of a type of Lien permitted under this Agreement (except as a result of giving effect to a Dollar limitation contained in this Section 8.2); |
(d) | Liens on intellectual property assets and tangible personal property of the applicable seller granted in connection with Seller Notes; |
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(e) | Liens created pursuant to the Loan Documents; |
(f) | Liens on the assets of Foreign Subsidiaries to secure the Debt permitted under Section 8.1(j); |
(g) | Liens on unearned premiums under insurance policies to secure the Debt permitted under Section 8.1(k); |
(h) | Liens on tenant improvements to secure the Debt permitted under Section 8.1(l); and |
(i) | other Liens, existing on the Closing Date, set forth on Schedule 8.2 to the Disclosure Letter and renewals, refinancings and extensions thereof on substantially the same or better terms as in effect on the Closing Date and otherwise in compliance with this Agreement. |
(a) | Inventory leased or sold in the ordinary course of business; |
(b) | obsolete, damaged, uneconomic or worn out machinery, parts, property or equipment, or property or equipment no longer used or useful in the conduct of the applicable Credit Partys business; | ||
(c) | Permitted Acquisitions; |
(d) | mergers or consolidations of any Subsidiary of Borrower with or into Borrower or any Guarantor so long as the Borrower or such Guarantor shall be the continuing or surviving entity; provided that at the time of each such merger or consolidation, both before and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing or result from such merger or consolidation; |
(e) | any Subsidiary of Borrower may liquidate or dissolve into Borrower or a Guarantor if Borrower determines in good faith that such liquidation or |
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dissolution is in the best interests of Borrower, so long as no Default or Event of Default has occurred and is continuing or would result therefrom; |
(f) | sales or transfers, including without limitation upon voluntary liquidation from any Credit Party to Borrower or a Guarantor, provided that the applicable Borrower or Guarantor takes such actions as Agent may reasonably request to ensure the perfection and priority of the Liens in favor of the Lenders over such transferred assets; |
(g) | sales or transfers from any Foreign Subsidiary to any other Foreign Subsidiary; |
(h) | subject to Section 4.8(a) hereof, (i) Asset Sales (exclusive of asset sales permitted pursuant to all other subsections of this Section 8.4) in which the sales price is at least equal to the fair market value of the assets sold and the consideration received is cash or cash equivalents, Equity Interests or Debt of any Credit Party being assumed by the purchaser, provided that (A) the aggregate amount of such Asset Sales does not exceed five percent (5%) of Borrowers Total Assets in any Fiscal Year and no Default or Event of Default has occurred and is continuing at the time of each such sale (both before and after giving effect to such Asset Sale), and (B) the aggregate amount received in Equity Interests during the term of this Agreement shall not exceed $5,000,000 and (ii) other Asset Sales approved by the Majority Lenders in their sole discretion; |
(i) | the sale or disposition of Permitted Investments and other cash equivalents in the ordinary course of business; |
(j) | dispositions of owned or leased vehicles in the ordinary course of business; |
(k) | licenses and similar arrangements for the use of property of any Credit Party in the ordinary course of business; |
(l) | notes or accounts receivable in order to resolve disputes that occur in the ordinary course of business, and discounts thereof; |
(m) | condemned property to the respective governmental authority or agency that has condemned the same (whether by deed in lieu of condemnation or otherwise), and transfers of properties that have been subject to a casualty of the respective insurer of such property or its designee as party of any insurance settlement; and |
(n) | the sale or disposition of the Direct Selling Services division. |
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(a) | each Credit Parties may pay cash Distributions to the Borrower or any Guarantor; |
(b) | each Credit Party may declare and make Distributions payable in the Equity Interests of such Credit Party, provided that the issuance of such Equity Interests does not otherwise violate the terms of this Agreement and no Default or Event of Default has occurred and is continuing at the time of making such Distribution or would result from the making of such Distribution; |
(c) | Borrower may (i) repurchase Equity Interests of former or current employees, officers and directors pursuant to stock purchase agreements or stock purchase plans so long as no Default or Event of Default exists prior to such repurchase or would exist after giving effect to such repurchase, and (ii) repurchase Equity Interests of former or current employees, officers and directors pursuant to stock purchase agreements or stock purchase plans by the cancellation of debt owed by such former employee to Borrower regardless of whether a Default or Event of Default exists; |
(d) | Borrower may pay dividends to its shareholders so long as at the time paid and after giving effect thereto no Default or Event of Default shall exist; |
(e) | Borrower may convert any of its convertible securities into other securities pursuant to the terms of such convertible securities; |
(f) | Borrower may distribute securities to employees, officers or directors upon exercise of their options; |
(g) | Borrower may make any redemption of Equity Interests with the proceeds received from a substantially concurrent issue of Equity Interests; |
(h) | Borrower any distribute and redeem rights under any stockholder rights plan; |
(i) | any Credit Party may make capital contributions if such capital contribution is otherwise permitted as an Investment pursuant to Section 8.7; and |
(j) | Borrower may issue Equity Interests in connection with a Permitted Acquisition. |
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(a) | Permitted Investments; |
(b) | Investments existing on the Closing Date and listed on Schedule 8.7 to the Disclosure Letter; | ||
(c) | sales on open account in the ordinary course of business; |
(d) | intercompany loans or intercompany Investments made by any Credit Party to or in any Guarantor or Borrower; provided that, in each case, no Default or Event of Default shall have occurred and be continuing at the time of making such intercompany loan or intercompany Investment or result from such intercompany loan or intercompany Investment being made and that any intercompany loans shall, if requested by Agent, be evidenced by and funded under an Intercompany Note pledged to the Agent under the appropriate Collateral Documents; |
(e) | Intercompany loans or intercompany Investments to a Credit Party that is that is not a Guarantor or Borrower; provided that, the aggregate amount from time to time outstanding in respect thereof shall not exceed Five Million Dollars ($5,000,000) in any Fiscal Year; |
(f) | Investments in respect of Hedging Transactions provided that such transaction is entered into for risk management purposes and not for speculative purposes; |
(g) | Investments not to exceed Two Million Five Hundred Thousand Dollars ($2,500,000) in the aggregate consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors relating to the purchase of Equity Interests of Borrower or its Subsidiaries pursuant to employee stock purchase plan agreements approved by Borrowers Board of Directors; |
(h) | joint ventures or strategic alliances in the ordinary course of Borrowers business consisting of the license of technology, the development of technology or the providing of technical support, provided that any cash Investments by Borrower do not exceed $2,500,000 in any Fiscal Year; |
(i) | Permitted Acquisitions and Investments in any Person acquired pursuant to a Permitted Acquisition; |
79
(j) | Investments constituting deposits made in connection with the purchase of goods or services in the ordinary course of business or in satisfaction of requirements imposed by governmental authorities in an aggregate amount for such deposits not to exceed $2,500,000 at any one time outstanding; |
(k) | Investments accepted in connection with permitted transfers under Section 8.4; |
(l) | Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business; provided that this subparagraph shall not apply to Investments of Borrower in any Subsidiary; |
(m) | Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business; |
(n) | Investments made prior to the consummation of any Permitted Acquisition consisting of reasonable earnest money deposits, working fees or other similar prepaid consideration or similar amounts that would be applied toward consideration upon consummation of such Permitted Acquisition (in each case whether or not refundable under any circumstances); |
(o) | Investments by any Foreign Subsidiary in any other Foreign Subsidiary or Borrower or parent, provided that 65% of the ownership interest in each such Foreign Subsidiary has been pledged to Bank; and |
(p) | other Investments not described above provided that both at the time of and immediately after giving effect to any such Investment (i) no Default or Event of Default shall have occurred and be continuing or shall result from the making of such Investment and (ii) the aggregate amount of all such Investments shall not exceed $2,500,000 in any Fiscal Year. |
80
81
(a) | non-payment when due of (i) the principal or interest on the Indebtedness under the Revolving Credit (including the Swing Line) or the Term Loan or (ii) any Reimbursement Obligation; |
(b) | non-payment of any Fees or any other amounts due and owing by Borrower under this Agreement or by any Credit Party under any of the other Loan Documents to which it is a party, other than as set forth in subsection (a) above, within three (3) Business Days after the same is due and payable; |
(c) | default in the observance or performance of any of the conditions, covenants or agreements of Borrower set forth in Article 7 or Article 8 |
82
which continues for ten (10) Business Days; |
(d) | default in the observance or performance of any of the other conditions, covenants or agreements set forth in this Agreement or any of the other Loan Documents by any Credit Party and continuance thereof for a period of thirty (30) days after Borrower receives notice thereof or any officer of Borrower becomes aware thereof; provided, however, that if the default cannot by its nature be cured within the thirty (30) day period or cannot after diligent attempts by Borrower be cured within such thirty (30) day period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional reasonable period (which shall not in any case exceed forty five (45) days) to attempt to cure such default, and within such reasonable time period the failure to have cured such default shall not be deemed an Event of Default but no Advances or other credit extensions will be made; |
(e) | any representation or warranty made by any Credit Party herein or in any certificate, instrument or other document submitted pursuant hereto proves untrue or misleading in any material adverse respect when made; |
(f) | (i) default by any Credit Party in the payment of any indebtedness for borrowed money, whether under a direct obligation or guaranty (other than Indebtedness hereunder) of any Credit Party in excess of Two Million Five Hundred Thousand Dollars ($2,500,000) (or the equivalent thereof in any currency other than Dollars) individually or in the aggregate when due and continuance thereof beyond any applicable period of cure or grace and or (ii) failure to comply with the terms of any other obligation of any Credit Party with respect to any indebtedness for borrowed money (other than Indebtedness hereunder) in excess of Two Million Five Hundred Thousand Dollars ($2,500,000) (or the equivalent thereof in any currency other than Dollars) individually or in the aggregate, which continues beyond any applicable period of cure or grace and which would permit the holder or holders thereto to accelerate such other indebtedness for borrowed money, or require the prepayment, repurchase, redemption or defeasance of such indebtedness; |
(g) | the rendering of any judgment(s) (not covered by adequate insurance from a solvent carrier which is defending such action without reservation of rights) for the payment of money in excess of the sum of Two Million Five Hundred Thousand Dollars ($2,500,000) (or the equivalent thereof in any currency other than Dollars) (or if covered by such insurance, in excess of $5,000,000) individually or in the aggregate against any Credit Party, and such judgments shall remain unpaid, unvacated, unbonded or unstayed by appeal or otherwise for a period of thirty (30) consecutive days from the date of its entry; |
(h) | the occurrence of (i) a reportable event, as defined in ERISA, which is |
83
determined by the PBGC to constitute grounds for a distress termination of any Pension Plan subject to Title IV of ERISA maintained or contributed to by or on behalf of any Credit Party for the benefit of any of its employees or for the appointment by the appropriate United States District Court of a trustee to administer such Pension Plan and such reportable event is not corrected and such determination is not revoked within sixty (60) days after notice thereof has been given to the plan administrator of such Pension Plan (without limiting any of Agents or any Lenders other rights or remedies hereunder), or (ii) the termination or the institution of proceedings by the PBGC to terminate any such Pension Plan, or (iii) the appointment of a trustee by the appropriate United States District Court to administer any such Pension Plan, or (iv) the reorganization (within the meaning of Section 4241 of ERISA) or insolvency (within the meaning of Section 4245 of ERISA) of any Multiemployer Plan, or receipt of notice from any Multiemployer Plan that it is in reorganization or insolvency, or the complete or partial withdrawal by any Credit Party from any Multiemployer Plan, which in the case of any of the foregoing, could reasonably be expected to have a Material Adverse Effect; |
(i) | except as expressly permitted under this Agreement, any Credit Party (other than a dissolution of a Subsidiary of Borrower which is not a Guarantor or Borrower) shall be dissolved or liquidated (or any judgment, order or decree therefor shall be entered) except as otherwise permitted herein; or if a creditors committee shall have been appointed for the business of any Credit Party (other than a dissolution of any Subsidiary which is not a Material Subsidiary); or if any Credit Party (other than a dissolution of any Subsidiary which is not a Material Subsidiary) shall have made a general assignment for the benefit of creditors or shall have been adjudicated bankrupt and if not an adjudication based on a filing by a Credit Party (other than a dissolution of any Subsidiary which is not a Material Subsidiary), it shall not have been dismissed within sixty (60) days, or shall have filed a voluntary petition in bankruptcy or for reorganization or to effect a plan or arrangement with creditors or shall fail to pay its debts generally as such debts become due in the ordinary course of business (except as contested in good faith and for which adequate reserves are made in such partys financial statements); or shall file an answer to a creditors petition or other petition filed against it, admitting the material allegations thereof for an adjudication in bankruptcy or for reorganization; or shall have applied for or permitted the appointment of a receiver or trustee or custodian for any of its property or assets; or such receiver, trustee or custodian shall have been appointed for any of its property or assets (otherwise than upon application or consent of a Credit Party ) and shall not have been removed within sixty (60) days; or if an order shall be entered approving any petition for reorganization of any Credit Party (other than a dissolution of any Subsidiary which is not a Material Subsidiary) and shall not have been reversed or dismissed within sixty (60) days; |
84
(j) | the validity, binding effect or enforceability of any subordination provisions relating to any Subordinated Debt shall be contested by any Person party thereto (other than any Lender, Agent, Issuing Lender or Swing Line Lender), or such subordination provisions shall fail to be enforceable by Agent and the Lenders in accordance with the terms thereof, or the Indebtedness shall for any reason not have the priority contemplated by this Agreement or such subordination provisions, and such failure or lack of priority shall continue for more than five (5) days after the Borrower receives notice or knowledge thereof; or |
(k) | any Loan Document shall at any time for any reason cease to be in full force and effect (other than in accordance with the terms thereof or the terms of any other Loan Document), as applicable, or the validity, binding effect or enforceability thereof shall be contested by any party thereto (other than any Lender, Agent, Issuing Lender or Swing Line Lender), or any Person shall deny that it has any or further liability or obligation under any Loan Document, or any such Loan Document shall be terminated (other than in accordance with the terms thereof or the terms of any other Loan Document), invalidated, revoked or set aside or in any way cease to give or provide to the Lenders and the Agent the benefits purported to be created thereby, or any Loan Document purporting to grant a Lien to secure any Indebtedness shall, at any time after the delivery of such Loan Document, fail to create a valid and enforceable Lien on any Collateral purported to be covered thereby or such Lien shall fail to cease to be a perfected Lien with the priority required in the relevant Loan Document; or |
(l) | if there shall occur any circumstance or circumstances that could reasonably be expected to have a material adverse effect on Borrowers or any Guarantors interest in, or the value, perfection or priority of Agents Lien in a material portion of the Collateral; or | ||
(m) | if there shall occur a Change of Control. |
85
86
87
(i) | pay to the Agent for Agents own account and/or, as the case may be, for the account of the Lenders such additional amounts as may be necessary to ensure that the Agent and/or such Lender or Lenders (including the Swing Line Lender) receive a net amount equal to the full amount which would have been receivable had payment not been made subject to such tax; and |
(ii) | remit such tax to the relevant taxing authorities according to applicable law, and send to the Agent or the applicable Lender or Lenders (including the Swing Line Lender), as the case may be, such certificates or certified copy receipts as the Agent or such Lender or Lenders shall reasonably require as proof of the payment by Borrower of any such taxes payable by Borrower. |
88
89
90
(a) | shall subject any of the Lenders (or any of their respective Eurodollar Lending Offices) to any tax, duty or other charge with respect to any Advance or shall change the basis of taxation of payments to any of the Lenders (or any of their respective Eurodollar Lending Offices) of the principal of or interest on any Advance or any other amounts due under this Agreement in respect thereof (except for changes in the rate of tax on the overall net income of any of the Lenders or any of their respective Eurodollar Lending Offices); or |
(b) | shall impose, modify or deem applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any of the Lenders (or any of their respective Eurodollar Lending Offices) or shall impose on any of the Lenders (or any of their respective Eurodollar Lending Offices) or the foreign exchange and interbank markets any other condition affecting any Advance; |
91
(a) | If, after the date of this Agreement, the adoption or introduction of, or any change in any applicable law, treaty, rule or regulation (whether domestic or foreign) now or hereafter in effect and whether or not presently applicable to any Lender or Agent, or any interpretation or administration thereof by any governmental authority charged with the interpretation or administration thereof, or compliance by any Lender or Agent with any guideline, request or directive of any such authority (whether or not having the force of law), including any risk based capital guidelines, affects or would affect the amount of capital required to be maintained by such Lender or Agent (or any corporation controlling such Lender or Agent) and such Lender or Agent, as the case may be, determines that the amount of such capital is increased by or based upon the existence of such Lenders or Agents obligations or Advances hereunder and such increase has the effect of reducing the rate of return on such Lenders or Agents (or such controlling corporations) capital as a consequence of such obligations or Advances hereunder to a level below that which such Lender or Agent (or such controlling corporation) could have achieved but for such circumstances (taking into consideration its policies with respect to capital adequacy) by an amount deemed by such Lender or Agent to be material (collectively, Increased Costs), then Agent or such Lender shall notify Borrower, and thereafter Borrower shall pay to such Lender or Agent, as the case may be, within ten (10) Business Days of written demand therefor from such Lender or Agent, additional amounts sufficient to compensate such Lender or Agent (or such controlling corporation) for any increase in the amount of capital and reduced rate of return which such Lender or Agent reasonably determines to be allocable to the existence of such Lenders or Agents obligations or Advances hereunder. A statement setting forth the amount of such compensation, the methodology for the calculation and the calculation thereof which shall also be prepared in good faith and in reasonable detail by such Lender or Agent, as the case may be, shall be submitted by such Lender or by Agent to Borrower, reasonably promptly after becoming aware of any event described in this Section 11.6(a) and shall be conclusively presumed to be correct, absent manifest error. |
(b) | Notwithstanding the foregoing, however, Borrower shall not be required to pay any increased costs under Sections 11.5, 11.6 or 3.4(c) for any period ending prior to the date that is 120 days prior to the making of a Lenders initial request for such additional amounts unless the applicable change in law or other event resulting in such increased costs is effective retroactively to a date more than 120 days prior to the date of such request, in which case a Lenders request for such additional amounts relating to the period more than 120 days prior to the making of the request must be given not more than 120 days after such Lender becomes aware of the applicable change in law or other event resulting in such increased costs. |
92
(a) | Such adjustments shall be given prospective effect only, effective as to all Advances outstanding hereunder, the Applicable Fee Percentage and the Letter of Credit Fee, upon the date of delivery of the financial statements under Sections 7.1(a) and 7.1(b) hereunder and the Covenant Compliance Report under Section 7.2(a) hereof, in each case establishing applicability of the appropriate adjustment and in each case with no retroactivity or claw-back. In the event Borrower shall fail timely to deliver such financial statements or the Covenant Compliance Report and such failure continues for three (3) days, then (but without affecting the Event of Default resulting therefrom) from the date delivery of such financial statements and report was required until such financial statements and report are delivered, the Applicable Margins and Applicable Fee Percentages shall be at the highest level on the Pricing Matrix attached to this Agreement as Schedule 1.1. |
(b) | From the Effective Date until the required date of delivery (or, if earlier, delivery) of the financial statements under Section 7.1(a) or 7.1(b) hereof, as applicable, and the Covenant Compliance Report under Section 7.2(a) hereof, for the fiscal quarter ending September 30, 2008, the Applicable Margins and Applicable Fee Percentages shall be those set forth under the Level II column of the pricing matrix attached to this Agreement as Schedule 1.1. Thereafter, Applicable Margins and Applicable Fee Percentages shall be based upon the quarterly financial statements and Covenant Compliance Reports, subject to recalculation as provided in Section 11.8(a) above. |
(c) | Notwithstanding the foregoing, however, if, prior to the payment and discharge in full (in cash) of the Indebtedness and the termination of any and all commitments hereunder, as a result of any restatement of or adjustment to the financial statements of Borrower and any of its Subsidiaries (relating to the current or any prior fiscal period) or for any other reason, Agent determines that the Applicable Margin and/or the Applicable Fee Percentages as calculated by Borrower as of any applicable date of determination were inaccurate in any respect and a proper calculation thereof would have resulted in different pricing for any fiscal period, then (x) if the proper calculation thereof would have resulted in higher pricing for any such period, Borrower shall automatically and |
93
retroactively be obligated to pay to Agent, promptly upon demand by Agent or the Majority Lenders, an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period and, if the current fiscal period is affected thereby, the Applicable Margin and/or the Applicable Fee Percentages for the current period shall be adjusted based on such recalculation; and (y) if the proper calculation thereof would have resulted in lower pricing for such period, Agent and Lenders shall have no obligation to recalculate such interest or fees or to repay any interest or fees to the Borrower. |
94
95
96
97
98
99
100
(a) | Except as expressly provided otherwise in this Agreement (and except as provided in clause (b) below), all notices and other communications provided to any party hereto under this Agreement or any other Loan Document shall be in writing and shall be given by personal delivery, by mail, by reputable overnight courier or by facsimile and addressed or delivered to it at its address set forth on Schedule 13.6 to the Disclosure Letter or at such other address as may be designated by such party in a notice to the other parties that complies as to delivery with the terms of |
101
this Section 13.6 or posted to an E-System set up by or at the direction of Agent (as set forth below). Any notice, if personally delivered or if mailed and properly addressed with postage prepaid and sent by registered or certified mail, shall be deemed given when received or when delivery is refused; any notice, if given to a reputable overnight courier and properly addressed, shall be deemed given two (2) Business Days after the date on which it was sent, unless it is actually received sooner by the named addressee; and any notice, if transmitted by facsimile, shall be deemed given when received. The Agent may, but, except as specifically provided herein, shall not be required to, take any action on the basis of any notice given to it by telephone, but the giver of any such notice shall promptly confirm such notice in writing, by facsimile, and such notice will not be deemed to have been received until such confirmation is deemed received in accordance with the provisions of this Section set forth above. If such telephonic notice conflicts with any such confirmation, the terms of such telephonic notice shall control. Any notice given by the Agent or any Lender to the Borrower shall be deemed to be a notice to all of the Credit Parties. |
(b) | Notices and other communications provided to the Agent and the Lenders party hereto under this Agreement or any other Loan Document may be delivered or furnished by electronic communication (including email and Internet or intranet websites) pursuant to procedures approved by the Agent. The Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications (including email and any E-System) pursuant to procedures approved by it. Unless otherwise agreed to in a writing by and among the parties to a particular communication, (i) notices and other communications sent to an email address shall be deemed received upon the senders receipt of an acknowledgment from the intended recipient (such as by the return receipt requested function, return email, or other written acknowledgment) and (ii) notices and other communications posted to any E-System shall be deemed received upon the deemed receipt by the intended recipient at its email address as described in the foregoing clause (i) of notification that such notice or other communication is available and identifying the website address therefore. |
102
(i) | each such assignment shall be made on a pro rata basis, and shall be in a minimum amount of the lesser of (x) Five Million Dollars ($5,000,000) or such lesser amount as the Agent shall agree and (y) the entire remaining amount of assigning Lenders aggregate interest in the Revolving Credit (and participations in any outstanding Letters of Credit) and the Term Loan; provided however that, after giving effect to such assignment, in no event shall the entire remaining amount (if any) of assigning Lenders aggregate interest in the Revolving Credit (and participations in any outstanding Letters of Credit) and the Term Loan be less than $5,000,000; and |
(ii) | the parties to any assignment shall execute and deliver to Agent an Assignment Agreement substantially (as determined by Agent) in the form annexed hereto as Exhibit H (with appropriate insertions acceptable to Agent), together with a processing and recordation fee in the amount, if any, required as set forth in the Assignment Agreement (provided however that such Lender need not deliver an Assignment Agreement in connection with assignments to such Lenders Affiliates or to a Federal Reserve Bank). |
103
(i) | such Lender shall remain the holder of its Notes hereunder (if such Notes are issued), notwithstanding any such participation; |
(ii) | a participant shall not reassign or transfer, or grant any sub-participations in its participation interest hereunder or any part thereof; and |
(iii) | such Lender shall retain the sole right and responsibility to enforce the obligations of the Credit Parties relating to the Notes and the other Loan Documents, including, without limitation, the right to proceed against any Guarantors, or cause the Agent to do so (subject to the terms and conditions hereof), and the right to approve any amendment, modification or waiver of any provision of this Agreement without the consent of the participant (unless such participant is an Affiliate of such Lender), except for those matters covered by Section 13.10(a) through (e) hereof (provided that a participant may exercise approval rights over such matters only on an indirect basis, acting through such Lender and the Credit Parties, Agent and the other Lenders may continue to deal directly with such Lender in connection with such Lenders rights and duties hereunder). Notwithstanding the foregoing, however, in the case of any participation granted by any Lender hereunder, the participant shall not have any rights under this Agreement or any of the other Loan Documents against the Agent, any other Lender or any Credit Party; provided, however that the participant may |
104
have rights against such Lender in respect of such participation as may be set forth in the applicable participation agreement and all amounts payable by the Credit Parties hereunder shall be determined as if such Lender had not sold such participation. Each such participant shall be entitled to the benefits of Article 11 of this Agreement to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to clause (d) of this Section, provided that no participant shall be entitled to receive any greater amount pursuant to such the provisions of Article 11 than the issuing Lender would have been entitled to receive in respect of the amount of the participation transferred by such issuing Lender to such participant had no such transfer occurred and each such participant shall also be entitled to the benefits of Section 9.6 hereof as though it were a Lender, provided that such participant agrees to be subject to Section 10.3 hereof as though it were a Lender. |
105
106
107
108
109
110
111
112
(a) | Each of the Agent, the Credit Parties, the Lenders, and each of their Affiliates is authorized (but not required) to transmit, post or otherwise make or communicate, in its sole discretion, Electronic Transmissions in connection with any Loan Document and the transactions contemplated therein. The Borrower and each other Credit Party hereby acknowledges and agrees that the use of Electronic Transmissions is not necessarily secure and that there are risks associated with such use, including risks of interception, disclosure and abuse and each indicates it assumes and accepts such risks by hereby authorizing the transmission of Electronic Transmissions. | ||
(b) | All uses of an E-System shall be governed by and subject to, in addition to Section 13.6 and this Section 13.22, separate terms and conditions posted or referenced in such E-System and related contractual obligations executed by the Agent, the Credit Parties and the Lenders in connection with the use of such E-System. | ||
(c) | All E-Systems and Electronic Transmissions shall be provided as is and as available. None of the Agent or any of its Affiliates warrants the accuracy, adequacy or completeness of any E-Systems or Electronic Transmission, and each disclaims all liability for errors or omissions therein. No warranty of any kind is made by the Agent or any of its Affiliates in connection with any E Systems or Electronic Transmission, including any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects. The Agent, the Credit Parties and the Lenders agree that the Agent has no responsibility for maintaining or providing any equipment, software, services or any testing required in connection with any Electronic Transmission or otherwise required for any E-System. |
113
114
COMERICA BANK
,
as Administrative Agent |
QUINSTREET, INC. | |||||||||
|
||||||||||
By:
|
/s/ Illegible
|
By: |
/s/ Douglas Valenti
|
|||||||
|
||||||||||
Its:
|
Senior Vice President | Its: | CEO |
COMERICA BANK
,
as a Lender, as Issuing Lender and as Swing Line Lender |
||||
|
||||
By:
|
/s/ Illegible
|
|||
|
||||
Its:
|
Senior Vice President |
115
WACHOVIA BANK NATIONAL
ASSOCIATION , as a Lender |
||||
|
||||
By:
|
/s/ Illegible
|
|||
|
||||
Its:
|
Senior Vice President |
116
BANK OF AMERICA, N.A.,
as a Lender |
||||
|
||||
By:
|
/s/ Illegible
|
|||
|
||||
Its:
|
Senior Vice President |
117
UNION BANK OF CALIFORNIA,
as a Lender |
||||
|
||||
By:
|
/s/ Illegible
|
|||
|
||||
Its:
|
Senior Vice President |
118
Basis for Pricing | Level I | Level II | Level III | Level IV | ||||||||||||||||||
Funded Debt to EBITDA Ratio*
|
<0.75 to 1.0 |
³
0.75 to 1.0
and <1.5 to 1.0 |
³
1.5 to 1.0
and <2.25 to 1.0 |
³ 2.25 to 1.0 | ||||||||||||||||||
Revolving Credit Eurodollar Margin
|
187.50 | 212.50 | 237.50 | 262.50 | ||||||||||||||||||
Revolving Credit Prime-Based Rate Margin
|
75.00 | 75.00 | 100.00 | 125.00 | ||||||||||||||||||
Revolving Credit Facility Fee
|
37.50 | 37.50 | 37.50 | 37.50 | ||||||||||||||||||
Letter of Credit Fees (exclusive of facing fees)
|
187.50 | 212.50 | 237.50 | 262.50 | ||||||||||||||||||
Term Loan Eurodollar Margin
|
225.00 | 250.00 | 275.00 | 300.00 | ||||||||||||||||||
Term Loan Prime-Based Rate Margin
|
75.00 | 75.00 | 100.00 | 125.00 | ||||||||||||||||||
* | Definitions as set forth in the Credit Agreement. | |
** | Level II pricing shall be in effect until the delivery of the financial statements for the quarter ending September 30, 2008 after which time the pricing grid shall govern. |
Percentages and Allocations
Revolving Credit and Term Loan Facilities
REVOLVING
REVOLVING
CREDIT
CREDIT
TERM LOAN
TERM LOAN
WEIGHTED
LENDERS
PERCENTAGE
ALLOCATIONS
PERCENTAGE
ALLOCATIONS
PERCENTAGE
35
%
$
24,500,000
35
%
$
10,500,000
35
%
25
%
$
17,500,000
25
%
$
7,500,000
25
%
20
%
14,000,000
20
%
$
6,000,000
20
%
20
%
$
14,000,000
20
%
$
6,000,000
20
%
100
%
$
70,000,000
100
%
$
30,000,000
100
%
No. | Dated: , 20 |
TO:
|
Comerica Bank (Agent) | |
|
||
RE:
|
Revolving Credit and Term Loan Agreement (Agreement) is made as of the ___day of September, 2008, (as amended, restated or otherwise modified from time to time, the Credit Agreement) by and among the financial institutions from time to time signatory thereto (individually a Lender, and any and all such financial institutions collectively the Lenders), Comerica Bank, as Administrative Agent for the Lenders (in such capacity, the Agent) and QuinStreet, Inc. (Borrower). |
(b) | Date of Advance: | |
(c) | o (check if applicable) | |
This Advance is or includes a whole or partial refunding/conversion of: | ||
Advance No(s). | ||
(d) | Type of Advance (check only one): | |
o Prime-based Advance | ||
o Eurodollar-based Advance | ||
(e) | Amount of Advance: | |
$ | ||
(f) | Interest Period (applicable to Eurodollar-based Advances) | |
months | ||
(g) | Disbursement Instructions | |
o Comerica Bank Account No. | ||
o Other: |
119
QUINSTREET, INC. | ||||||
|
||||||
|
By: | |||||
|
|
|||||
|
Its: | |||||
|
|
120
$ | , 20 |
QUINSTREET, INC. | ||||||
|
||||||
|
By: | |||||
|
|
|||||
|
Its: | |||||
|
|
2
$5,000,000 | , 20 |
QUINSTREET, INC. | ||||||
|
||||||
|
By: | |||||
|
|
|||||
|
Its: | |||||
|
|
2
No. | Dated: |
TO:
|
Comerica Bank (Swing Line Lender) | |
|
||
RE:
|
Revolving Credit and Term Loan Agreement (Agreement) is made as of the ___day of September, 2008, (as amended, restated or otherwise modified from time to time, the Credit Agreement) by and among the financial institutions from time to time signatory thereto (individually a Lender, and any and all such financial institutions collectively the Lenders), Comerica Bank, as Administrative Agent for the Lenders (in such capacity, the Agent) and QuinStreet, Inc. (Borrower). |
(a) | Date of Advance: | |
(b) | o (check if applicable) | |
This Advance is or includes a whole or partial refunding/conversion of: | ||
Advance No(s). | ||
(c) | Type of Advance (check only one): | |
o Prime-based Advance | ||
o Quoted Rate Advance | ||
(d) | Amount of Advance: | |
$ | ||
(e) | Interest Period (applicable to Quoted Rate Advances) | |
months | ||
(f) | Disbursement Instructions | |
o Comerica Bank Account No. | ||
o Other: |
QUINSTREET, INC. | ||||||
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Its: | |||||
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TO:
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RE:
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Issuance of Letter of Credit pursuant to Article 3 of the Revolving Credit and Term Loan Agreement (Agreement) is made as of the ___ day of September, 2008, (as amended, restated or otherwise modified from time to time, the Credit Agreement) by and among the financial institutions from time to time signatory thereto (individually a Lender, and any and all such financial institutions collectively the Lenders), Comerica Bank, as Administrative Agent for the Lenders (in such capacity, the Agent) and QuinStreet, Inc. (Borrower). | |
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On , 20 , 1 Agent, in accordance with Article 3 of the Credit Agreement, issued its Letter of Credit number , in favor of 2 for the account of . 3 The face amount of such Letter of Credit is $ . The amount of each Lenders participation in such Letter of Credit is as follows: 4 |
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[Lender] | $ | ||
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[Lender] | $ | ||
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[Lender] | $ | ||
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[Lender] | $ |
Signed: | ||||||
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COMERICA BANK , as Agent | ||||||
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By: | |||||
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Its: | |||||
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1 | Date of Issuance | |
2 | Beneficiary | |
3 | Name of applicable Borrower | |
4 | Amounts based on Percentages |
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(a) | all Accounts; | ||
(b) | all Chattel Paper; | ||
(c) | all General Intangibles; | ||
(d) | all Equipment; | ||
(e) | all Inventory; | ||
(f) | all Documents; | ||
(g) | all Instruments; | ||
(h) | all Deposit Accounts and any other cash collateral, deposit or investment accounts, including all cash collateral, deposit or investment accounts established or maintained pursuant to the terms of this Agreement or the other Loan Documents; |
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(i) | all Computer Records and Software, whether relating to the foregoing Collateral or otherwise, but in the case of such Software, subject to the rights of any non-affiliated licensee of software; | ||
(j) | all Investment Property; and | ||
(k) | the Proceeds, in cash or otherwise, of any of the property described in the foregoing clauses (a) through (j) and all Liens, security, rights, remedies and claims of such Debtor with respect thereto (provided that the grant of a security interest in Proceeds set forth is in this subsection (k) shall not be deemed to give the applicable Debtor any right to dispose of any of the Collateral, except as may otherwise be permitted pursuant to the terms of the Credit Agreement); |
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(a) | Location of Inventory and Equipment. As of the date hereof, (i) all Inventory (except Inventory in transit) and Equipment (except trailers, rolling stock, vessels, aircraft and Vehicles) of each Debtor are located at the places specified on Schedule 3. 3(a) attached hereto, (ii) the name and address of the landlord leasing any location to any Debtor is identified on such Schedule 3.3(a) , and (iii) the name of and address of each bailee or warehouseman which holds any Collateral and the location of such Collateral is identified on such Schedule 3.3(a) . | ||
(b) | Account Information. As of the date hereof, all Deposit Accounts, cash collateral account or investment accounts of each Debtor (except for those Deposit Accounts located with the Agent) are located at the banks specified on Schedule 3.3(b ) attached hereto which Schedule sets forth the true and correct name of each bank where such accounts are located, such banks address, the type of account and the account number. | ||
(c) | Documents. As of the date hereof, except as set forth on Schedule 3.3(c) , none of the Inventory or Equipment of such Debtor (other than trailers, rolling stock, vessels, aircraft and Vehicles) is evidenced by a Document (including, without limitation, a negotiable document of title). |
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(d) | Intellectual Property . Set forth on Schedule 1.1 (the same may be amended from time to time) is a true and correct list of the registered Patents, Patent Licenses, registered Trademarks, Trademark Licenses, registered Copyrights and Copyright Licenses owned by the Debtors (including, in the case of the Patents, Trademarks and Copyrights, the applicable name, date of registration (or of application if registration not completed) and application or registration number). |
(a) | Duly Authorized and Validly Issued . The Pledged Shares that are shares of a corporation have been duly authorized and validly issued and are fully paid and nonassessable, and the Pledged Shares that are membership interests or partnership units (if any) have been validly granted, under the laws of the jurisdiction of organization of the issuers thereof, and, to the extent applicable, are fully paid and nonassessable. No such membership or partnership interests constitute securities within the meaning of Article 8 of the UCC, and each Debtor covenants and agrees not to allow any such membership or partnership interest to become securities for purposes of Article 8 of the UCC. | ||
(b) | Valid Title; No Liens; No Restrictions . Each Debtor is the legal and beneficial owner of the Pledged Shares, free and clear of any Lien (other than the Liens created by this Agreement), and such Debtor has not sold, granted any option with respect to, assigned, transferred or otherwise disposed of any of its rights or interest in or to the Pledged Shares. None of the Pledged Shares are subject to any contractual or other restrictions upon the pledge or other transfer of such Pledged Shares, other than those imposed by securities laws generally. No issuer of Pledged Shares is party to any agreement granting control (as defined in Section 8-106 of the UCC) of such Debtors Pledged Shares to any third party. All such Pledged Shares are held by each Debtor directly and not through any securities intermediary. | ||
(c) | Description of Pledged Shares; Ownership . The Pledged Shares constitute the percentage of the issued and outstanding shares of stock, partnership units or membership interests of the issuers thereof indicated on Schedule 1.2 (as the same may be amended from time to time) and such Schedule contains a description of all shares of capital stock, membership interests and other equity interests of or in any Subsidiaries owned by such Debtor, |
(a) | Filings and Recordation . Bach Debtor has made all necessary filings and recordations to protect and maintain its interest in the Trademarks, Patents and Copyrights set forth on Schedule 1.1 (as the same may be amended from time to time), including, without limitation, all necessary filings and recordings, and payments of all maintenance fees, in the United States Patent and Trademark Office and United States Copyright Office to the extent such Trademarks, Patents and Copyrights are material to such Debtors business. Also set forth on Schedule |
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1.1 (as the same may be amended from time to time) is a complete and accurate list of all of the material Trademark Licenses, Patent Licenses and Copyright Licenses owned by the Debtors as of the date hereof. | |||
(b) | Trademarks and Trademark Licenses Valid. (i) Each Material Trademark of the Debtors set forth on Schedule 1.1 (as the same may be amended from time to time) is subsisting and has not been adjudged invalid, unregisterable or unenforceable, in whole or in part, and, to the Debtors knowledge, is valid, registrable and enforceable, except as enforceability may be limited by bankruptcy insolvency, reorganization moratorium or similar laws affecting the enforcement of creditors rights generally and by equitable principles (whether enforcement is sought by proceedings in equity or at law) (ii) each of the Trademark Licenses set forth on Schedule 1.1 (as the same may be amended from time to time) is validly subsisting and has not been adjudged invalid or unenforceable, in whole or in part, and, to the Debtors knowledge, is valid and enforceable, except as enforceability may be limited by bankruptcy insolvency, reorganization moratorium or similar laws affecting the enforcement of creditors rights generally and by equitable principles (whether enforcement is sought by proceedings in equity or at law) and (iii) the Debtors have notified the Agent in writing of all uses of any material item of Trademark Collateral of which any Debtor is aware which could reasonably be expected to lead to such item becoming invalid or unenforceable, including unauthorized uses by third parties and uses which were not supported by the goodwill of the business connected with such Collateral. | ||
(c) | Patents and Patent Licenses Valid. (i) Each Material Patent of the Debtors set forth on Schedule 1.1 (as the same may be amended from time to time) is subsisting and has not been adjudged invalid, unpatentable or unenforceable, in whole or in part, and, to the Debtors knowledge, is valid, patentable and enforceable except as otherwise set forth on Schedule 1.1 (as the same may be amended from time to time), except as enforceability may be limited by bankruptcy insolvency, reorganization moratorium or similar laws affecting the enforcement of creditors rights generally and by equitable principles (whether enforcement is sought by proceedings in equity or at law) (ii) each of the Patent Licenses set forth on Schedule 1.1 (as the same may be amended from time to time) is validly subsisting and has not been adjudged invalid or unenforceable, in whole or in part, and, to the Debtors knowledge, is valid and enforceable, except as enforceability may be limited by bankruptcy insolvency, reorganization moratorium or similar laws affecting the enforcement of creditors rights generally and by equitable principles (whether enforcement is sought by proceedings in equity or at law) and (iii) the Debtors have notified the Agent in writing of all uses of any item of Patent Collateral material to any Debtors business of which any Debtor is aware which could reasonably be expected to lead to such item becoming invalid or unenforceable. | ||
(d) | Copyright and Copyright Licenses Valid. (i) Each Material Copyright of the Debtors set forth on Schedule 1.1 (as the same may be amended from time to |
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time) is subsisting and has not been adjudged invalid, uncopyrightable or unenforceable, in whole or in part, and, to the Debtors knowledge, is valid, copyrightable and enforceable, except as enforceability may be limited by bankruptcy insolvency, reorganization moratorium or similar laws affecting the enforcement of creditors rights generally and by equitable principles (whether enforcement is sought by proceedings in equity or at law) (ii) each of the Copyright Licenses set forth on Schedule 1.1 (as the same may be amended from time to time) is validly subsisting and has not been adjudged invalid or unenforceable, in whole or in part, and, to the Debtors knowledge, is valid and enforceable, except as enforceability may be limited by bankruptcy insolvency, reorganization moratorium or similar laws affecting the enforcement of creditors rights generally and by equitable principles (whether enforcement is sought by proceedings in equity or at law) and (iii) the Debtors have notified the Agent in writing of all uses of any item of Copyright Collateral material to any Debtors business of which any Debtor is aware which could reasonably be expected to lead to such item becoming invalid or unenforceable. | |||
(e) | No Assignment . The Debtors have not made a previous assignment, sale, transfer or agreement constituting a present or future assignment, sale, transfer or encumbrance of any of the Intellectual Property Collateral, except with respect to non-exclusive licenses granted in the ordinary course of business or as permitted by this Agreement or the Loan Documents. No Debtor has granted any license, shop right, release, covenant not to sue, or non-assertion assurance to any Person with respect to any part of the Intellectual Property Collateral, except as set forth on Schedule 1.1 or as otherwise disclosed to the Agent in writing. | ||
(f) | Products Marked . Each Debtor has marked its products with the trademark registration symbol, copyright notices, the numbers of all appropriate patents, the common law trademark symbol or the designation patent pending, as the case may be, to the extent that Debtor, in good faith, believes is reasonably and commercially practicable. | ||
(g) | Other Rights . Except for the Trademark Licenses, Patent Licenses and Copyright Licenses listed on Schedule 1.1 hereto under which a Debtor is a licensee, no Debtor has knowledge of the existence of any right or any claim (other than as provided by this Agreement) that is likely to be made under or against any item of Intellectual Property Collateral contained on Schedule 1.1 to the extent such claim could reasonably be expected to have a Material Adverse Effect. | ||
(h) | No Claims . Except as set forth on Schedule 1.1 or as otherwise disclosed to the Agent in writing, no claim has been made and is continuing or, to any Debtors knowledge, threatened that the use by any Debtor of any item of Intellectual Property Collateral is invalid or unenforceable or that the use by any Debtor of any Intellectual Property Collateral does or may violate the rights of any Person, except to the extent such invalidity, unenforceability or violation could not reasonably be expected to have a Material Adverse Effect. To the Debtors |
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knowledge, there is no infringement or unauthorized use of any item of Intellectual Property Collateral contained on Schedule 1.1 or as otherwise disclosed to the Agent in writing and except to the extent such claim could not reasonably be expected to have a Material Adverse Effect. | |||
(i) | No Consent . No consent of any party (other than such Debtor) to any Patent License, Copyright License or Trademark License constituting Intellectual Property Collateral is required, or purports to be required, to be obtained by or on behalf of such Debtor in connection with the execution, delivery and performance of this Agreement that has not been obtained. To any Debtors knowledge, each Patent License, Copyright License and Trademark License constituting Intellectual Property Collateral is in full force and effect and constitutes a valid and legally enforceable obligation of the applicable Debtor and (to the knowledge of the Debtors) each other party thereto except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). No consent or authorization of, filing with or other act by or in respect of any Governmental Authority is required in connection with the execution, delivery, performance, validity or enforceability of any of the Patent Licenses, Copyright Licenses or Trademark Licenses by any party thereto other than those which have been duly obtained, made or performed and are in full force and effect. Neither the Debtors nor (to the knowledge of any Debtor) any other party to any Patent License, Copyright License or Trademark License constituting Collateral is in default in the performance or observance of any of the terms thereof, except for such defaults as would not reasonably be expected, in the aggregate, to have a material adverse effect on the value of the Intellectual Property Collateral. To the knowledge of such Debtor, the right, title and interest of the applicable Debtor in, to and under each Patent License, Copyright License and Trademark License constituting Intellectual Property Collateral is not subject to any defense, offset, counterclaim or claim. |
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(f) | Equipment and Inventory . |
(i) | Location . Each Debtor shall keep the Equipment (other than Vehicles) and Inventory (other than Inventory in transit) which is in such Debtors possession or in the possession of any bailee or warehouseman at any of the locations specified on Schedule 3. 3(a) attached hereto or as otherwise disclosed in writing to the Agent from time to time, subject to compliance with the other provisions of this Agreement, including subsection (ii) below. | ||
(ii) | Landlord Consents and Bailees Waivers . Borrower shall provide a landlord consent in form acceptable to Agent for its corporate headquarters and upon the occurrence and during the continuance of an Event of Default, each Debtor shall provide, as applicable, a bailees waiver or landlord consent, in form and substance acceptable to the Agent, for each non-Debtor owned location of Collateral disclosed on Schedule 3.3(a) or otherwise disclosed to the Agent in writing, promptly after leasing such location, and shall take all other actions required by the Agent to perfect the Agents security interest in the Equipment and Inventory with the priority required by this Agreement. | ||
(iii) | Maintenance . Each Debtor shall maintain the Equipment and Inventory in such condition as may be specified by the terms of the Credit Agreement. |
(g) | Intellectual Property . |
(i) | Trademarks . Each Debtor agrees to take all necessary steps, including, without limitation, in the United States Patent and Trademark Office or in any court, to (x) defend, enforce, preserve the validity and ownership of, and maintain each Trademark registration and each Trademark License identified on Schedule 1.1 hereto, and (y) pursue each trademark application now or hereafter identified on Schedule 1.1 hereto, including, without limitation, the filing of responses to office actions issued by the United States Patent and Trademark Office, the filing of applications for renewal, the filing of affidavits under Sections 8 and 15 of the United States Trademark Act, and the participation in opposition, cancellation, infringement and misappropriation proceedings, except, in each case in which the Debtors have determined, using their commercially reasonable judgment, that any of the foregoing is not of material economic value to them. Each Debtor agrees to take corresponding steps with respect to each |
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new or acquired Trademark registration, Trademark application or any rights obtained under any Trademark License, in each case, which it is now or later becomes entitled, except in each case in which such Debtor has determined, using its commercially reasonable judgment, that any of the foregoing is not of material economic value to it. Any expenses incurred in connection with such activities shall be borne by the Debtors. | |||
(ii) | Patents . Each Debtor to take all necessary steps, including, without limitation, in the United States Patent and Trademark Office or in any court, to (x) defend, enforce, preserve the validity and ownership of, and maintain each Patent and each Patent License identified on Schedule 1.1 hereto, and (y) pursue each patent application, now or hereafter identified on Schedule 1.1 hereto, including, without limitation, the filing of divisional, continuation, continuation-in-part and substitute applications, the filing of applications for reissue, renewal or extensions, the payment of maintenance fees, and the participation in interference, reexamination, opposition, infringement and misappropriation proceedings, except in each case in which the Debtors have determined, using their commercially reasonable judgment, that any of the foregoing is not of material economic value to them. Each Debtor agrees to take corresponding steps with respect to each new or acquired Patent, patent application, or any rights obtained under any Patent License, in each case, which it is now or later becomes entitled, except in each case in which the Debtors have determined, using their commercially reasonable judgment, that any of the foregoing is not of material economic value to them. Any expenses incurred in connection with such activities shall be borne by the Debtors. | ||
(iii) | Copyrights . Each Debtor agrees to take all necessary steps, including, without limitation, in the United States Copyright Office or in any court, to (x) defend, enforce, and preserve the validity and ownership of each Copyright and each Copyright License identified on Schedule 1.1 hereto, and (y) pursue each Copyright and mask work application, now or hereafter identified on Schedule 1.1 hereto, including, without limitation, the payment of applicable fees, and the participation in infringement and misappropriation proceedings, except in each case in which the Debtors have determined, using their commercially reasonable judgment, that any of the foregoing is not of material economic value to them. Each Debtor agrees to take corresponding steps with respect to each new or acquired Copyright, Copyright and mask work application, or any rights obtained under any Copyright License, in each case, which it is now or later becomes entitled, except in each case in which the Debtors have determined, using their commercially reasonable judgment, that any of the foregoing is not of material economic value to them. Any expenses incurred in connection with such activities shall be borne by the Debtors. | ||
(iv) | No Abandonment . The Debtors shall not abandon any Trademark, Patent, Copyright or any pending Trademark, Copyright, mask work or |
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Patent application, without the written consent of the Agent, unless the Debtors shall have previously determined, using their commercially reasonable judgment, that such use or the pursuit or maintenance of such Trademark registration, Patent, Copyright registration or pending Trademark, Copyright, mask work or Patent application is not of material economic value to it, in which case, the Debtors shall give notice of any such abandonment to the Agent promptly in writing after the determination to abandon such Intellectual Property Collateral is made. | |||
(v) | No Infringement . In the event that a Debtor becomes aware that any item of the Intellectual Property Collateral which such Debtor has determined, using its commercially reasonable judgment, to be material to its business is infringed or misappropriated by a third party, such Debtor shall promptly notify the Agent promptly and in writing, in reasonable detail, and shall take such actions as such Debtor or the Agent deems reasonably appropriate under the circumstances to protect such Intellectual Property Collateral, including, without limitation, suing for infringement or misappropriation and for an injunction against such infringement or misappropriation. Any expense incurred in connection with such activities shall be borne by the Debtors. Each Debtor will advise the Agent promptly and in writing, in reasonable detail, of any adverse determination or the institution of any proceeding (including, without limitation, the institution of any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any court) regarding any material item of the Intellectual Property Collateral. |
(h) | Accounts and Contracts . Each Debtor shall, in accordance with its usual business practices in effect from time to time, endeavor to collect or cause to be collected from each account debtor under its Accounts, as and when due, any and all amounts owing under such Accounts. So long as no Default or Event of Default has occurred and is continuing and except as otherwise provided in Section 6.3 , each Debtor shall have the right to collect and receive payments on its Accounts, and to use and expend the same in its operations in each case in compliance with the terms of each of the Credit Agreement. | ||
(i) | Vehicles; Aircraft and Vessels . Notwithstanding any other provision of this Agreement, no Debtor shall be required to make any filings as may be necessary to perfect the Agents Lien on its Vehicles, aircraft and vessels, unless a Default or an Event of Default has occurred and is continuing, whereupon the Agent may require such filings be made. | ||
(J) | [Intentionally Deleted] . | ||
(k) | Deposit Accounts . Each Debtor agrees to promptly notify the Agent in writing of all Deposit Accounts, cash collateral accounts or investments accounts opened after the date hereof (except with Agent), and such Debtor shall take such actions as may be necessary or deemed desirable by the Agent (including the execution |
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and delivery of an account control agreement in form and substance satisfactory to the Agent) to grant the Agent a perfected, first priority Lien over each of the Deposit Accounts, cash collateral accounts or investment accounts disclosed on Schedule 3. 3(b) and over each of the additional accounts disclosed pursuant to this Section 4.1(k) . |
(a) | provided that no Default or Event of Default has occurred and is continuing hereunder, (i) if the amount of Insurance Proceeds in respect of any loss or casualty does not exceed One Million Dollars ($1,000,000), such Debtor shall be entitled, in the event of such loss or casualty, to receive all such Insurance |
17
Proceeds and to apply the same toward the replacement of the Collateral affected thereby or to the purchase of other assets to be used in such Debtors business (provided that such assets shall be subjected to a first priority Lien in favor of the Agent and such repurchase of assets shall occur within 270 days of such Debtor receiving the Insurance Proceeds); and (ii) if the amount of Insurance Proceeds in respect of any loss or casualty exceeds One Million Dollars ($1,000,000), such Insurance Proceeds shall be paid to and received by the Agent, for release to such Debtor for the replacement of the Collateral affected thereby or to the purchase of other assets to be used in such Debtors business (provided that such assets shall be subjected to a first priority Lien in favor of the Agent); or, upon written request of such Debtor (accompanied by reasonable supporting documentation), for such other use or purpose as approved by the Agent, in their reasonable discretion, it being understood and agreed in connection with any release of funds under this subparagraph (ii), that the Agent may impose reasonable and customary conditions on the disbursement of such Insurance Proceeds; and | |||
(b) | if a Default or Event of Default has occurred or is continuing and is not waived as provided in the Credit Agreement, all Insurance Proceeds in respect of any loss or casualty shall be paid to and received by the Agent, to be applied by the Agent against the Indebtedness in the manner specified in the Credit Agreement and/or to be held by the Agent as cash collateral for the Indebtedness, as the Agent may direct in its sole discretion. |
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(i) | So long as no Default or Event of Default shall have occurred and be continuing (both before and after giving effect to any of the actions or other matters described in clauses (A) or (B) of this subparagraph): |
(A) | Each Debtor shall be entitled to exercise any and all voting and other consensual rights (including, without limitation, the right to give consents, waivers and ratifications) pertaining to any of the Pledged Shares or any part thereof; provided , however , that no vote shall be cast or consent, waiver or ratification given or action taken without the prior written consent of the Agent which would violate any provision of this Agreement or the Credit Agreement; and | ||
(B) | Except as otherwise provided by the Credit Agreement, such Debtor shall be entitled to receive and retain any and all dividends, distributions and interest paid in respect to any of the Pledged Shares. |
(ii) | Upon the occurrence and during the continuance of a Default or an Event of Default: |
(A) | The Agent may, without notice to such Debtor, transfer or register in the name of the Agent or any of its nominees, for the equal and ratable benefit of the Banks, any or all of the Pledged Shares and the Proceeds thereof (in cash or otherwise) held by the Agent hereunder, and the Agent or its nominee may thereafter, after delivery of notice to such Debtor, exercise all voting and corporate rights at any meeting of any corporation issuing any of the Pledged Shares and any and all rights of conversion, exchange, subscription or any other rights, privileges or options pertaining to any of the Pledged Shares as if the Agent were the absolute owner thereof, including, without limitation, the right to exchange, at its discretion, any and all of the Pledged Shares upon the merger, consolidation, reorganization, recapitalization or other readjustment of any corporation issuing any of such Pledged Shares or upon the exercise by any such issuer or the Agent of any right, privilege or option pertaining to any of the Pledged Shares, and in connection therewith, to deposit and deliver any and all of the Pledged Shares with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Agent may determine, all without liability except to account for property actually received by it, but the Agent shall have no duty to exercise any of the aforesaid rights, privileges or options, and the Agent shall not be responsible for any failure to do so or delay in so doing. |
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(B) | All rights of such Debtor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant to Section 4. 7(a)(i) (A) and to receive the dividends, interest and other distributions which it would otherwise be authorized to receive and retain pursuant to Section 4. 7(a)(i) (B) shall be suspended until such Default or Event of Default shall no longer exist, and all such rights shall, until such Default or Event of Default shall no longer exist, thereupon become vested in the Agent which shall thereupon have the sole right to exercise such voting and other consensual rights and to receive, hold and dispose of as Pledged Shares such dividends, interest and other distributions. | ||
(C) | All dividends, interest and other distributions which are received by such Debtor contrary to the provisions of this Section 4. 7(a)(ii) shall be received in trust for the benefit of the Agent, shall be segregated from other funds of such Debtor and shall be forthwith paid over to the Agent as Collateral in the same form as so received (with any necessary endorsement). | ||
(D) | Each Debtor shall execute and deliver (or cause to be executed and delivered) to the Agent all such proxies and other instruments as the Agent may reasonably request for the purpose of enabling the Agent to exercise the voting and other rights which it is entitled to exercise pursuant to this Section 4. 7(a)(ii) and to receive the dividends, interest and other distributions which it is entitled to receive and retain pursuant to this Section 4. 7(a)(ii) . The foregoing shall not in any way limit the Agents power and authority granted pursuant to the other provisions of this Agreement. |
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(a) | With respect to each Domestic Subsidiary which becomes a Material Subsidiary of a Debtor subsequent to the date hereof or which is otherwise required under the provisions of Section 7.13 of the Credit Agreement to execute and deliver a Guaranty, execute and deliver such joinders or security agreements or other pledge documents as are required by the Credit Agreement, within the time periods set forth therein. | ||
(b) | Each Debtor agrees that, (i) except with the written consent of the Agent, it will not permit any Domestic Subsidiary (whether now existing or formed after the date hereof) to issue to such Debtor or any of such Debtors other Subsidiaries any shares of stock, membership interests, partnership units, notes or other securities or instruments (including without limitation the Pledged Shares) in addition to or in substitution for any of the Collateral, unless, concurrently with each issuance thereof, any and all such shares of stock, membership interests, partnership units, notes or instruments are encumbered in favor of the Agent under this Agreement or otherwise (except that only 65% of such shares of stock, membership interests or partnership units of Foreign Subsidiaries are required to be encumbered in favor of Agent) (it being understood and agreed that all such shares of stock, membership interests, partnership units, notes or instruments issued to such Debtor shall, without further action by such Debtor or the Agent, be automatically encumbered by this Agreement as Pledged Shares to the extent required under the terms of this Agreement or the Credit Agreement) and (ii) it will promptly following the issuance thereof deliver to the Agent (A) an amendment, duly executed by such Debtor, in substantially the form of Exhibit A hereto in respect of such shares of stock, membership interests, partnership units, notes or instruments issued to Debtor or (B) if reasonably required by the Banks, a new stock pledge, duly executed by the applicable Debtor, in substantially the form of this Agreement (a New Pledge ), in respect of such shares of stock, membership interests, partnership units, notes or instruments issued to any Debtor granting to the Agent, for the benefit of the Banks, a first priority security interest, pledge and Lien thereon, together in each case with all certificates, notes or other instruments representing or evidencing the same, together with such other documentation as the Agent may reasonably request. Such Debtor hereby (x) authorizes the Agent to attach each such amendment to this Agreement, (y) agrees that all such shares of stock, membership interests, partnership units, notes or instruments listed in any such amendment delivered to the Agent shall for all purposes hereunder constitute Pledged Shares, and (z) is deemed to have made, upon the delivery of each such amendment, the representations and warranties contained in Section 3.4 of this Agreement with respect to the Collateral covered thereby. | ||
(c) | With respect to any Intellectual Property Collateral owned, licensed or otherwise acquired by any Debtor after the date hereof, and with respect to any Patent, Trademark or Copyright which is not registered or filed with the U.S. Patent and Trademark Office and/or the U.S. Copyright Office at the time such Collateral is pledged by a Debtor to the Agent pursuant to this Security Agreement, and which is subsequently registered or filed by such Debtor in the appropriate office, such |
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Debtor shall promptly after the acquisition or registration thereof execute or cause to be executed and delivered to the Agent, (i) an amendment, duly executed by such Debtor, in substantially the form of Exhibit A hereto, in respect of such additional or newly registered collateral or (ii) at the Agents option, a new security agreement, duly executed by the applicable Debtor, in substantially the form of this Agreement, in respect of such additional or newly registered collateral, granting to the Agent, for the benefit of the Banks, a first priority security interest, pledge and Lien thereon (subject only to the Permitted Liens), together in each case with all certificates, notes or other instruments representing or evidencing the same, and shall, upon the Agents request, execute or cause to be executed any financing statement or other document (including without limitation, filings required by the U.S. Patent and Trademark Office and/or the U.S. Copyright Office in connection with any such additional or newly registered collateral) granting or otherwise evidencing a Lien over such new Intellectual Property Collateral. Each Debtor hereby (x) authorizes the Agent to attach each amendment to this Agreement, (y) agrees that all such additional collateral listed in any amendment delivered to the Agent shall for all purposes hereunder constitute Collateral, and (z) is deemed to have made, upon the delivery of each such Amendment, the representations and warranties contained in Section 3.3(d) and Section 3.5 of this Agreement with respect to the Collateral covered thereby. |
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(a) | to demand, sue for, collect or receive, in the name of such Debtor or in its own name, any money or property at any time payable or receivable on account of or in exchange for any of the Collateral and, in connection therewith, endorse checks, notes, drafts, acceptances, money orders, documents of title or any other instruments for the payment of money under the Collateral or any policy of insurance; | ||
(b) | to pay or discharge taxes, Liens (other than Permitted Liens) or other encumbrances levied or placed on or threatened against the Collateral; | ||
(c) | (i) to direct account debtors and any other parties liable for any payment under any of the Collateral to make payment of any and all monies due and to become due thereunder directly to the Agent or as the Agent shall direct; (ii) to receive payment of and receipt for any and all monies, claims and other amounts due and to become due at any time in respect of or arising out of any Collateral; (iii) to sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, proxies, stock powers, verifications and notices in connection with accounts and other documents relating to the Collateral; (iv) to commence and prosecute any suit, action or proceeding at law or in equity in any court of competent jurisdiction to collect the Collateral or any part thereof and to enforce any other right in respect of any Collateral; (v) to defend any suit, action or proceeding brought against such Debtor with respect to any Collateral; (vi) to settle, compromise or adjust any suit, action or proceeding described above and, in connection therewith, to give such discharges or releases as the Agent may deem appropriate; (vii) to exchange any of the Collateral for other property upon any merger, consolidation, reorganization, recapitalization or other readjustment of the issuer thereof and, in connection therewith, deposit any of the Collateral with any committee, depositary, transfer agent, registrar or other designated agency upon such terms as the Agent may determine; (viii) to add or release any guarantor, indorser, surety or other party to any of the Collateral; (ix) to renew, extend or otherwise change the terms and conditions of any of the Collateral; (x) to make, settle, compromise or adjust any claim under or pertaining to any of the Collateral (including claims |
23
under any policy of insurance); (xi) subject to any pre-existing rights or licenses, to assign any Patent, Copyright or Trademark constituting Intellectual Property Collateral (along with the goodwill of the business to which any such Patent, Copyright or Trademark pertains), for such term or terms, on such conditions and in such manner, as the Agent shall in its sole discretion determine, and (xii) to sell, transfer, pledge, convey, make any agreement with respect to, or otherwise deal with, any of the Collateral as fully and completely as though the Agent were the absolute owner thereof for all purposes, and to do, at the Agents option and such Debtors expense, at any time, or from time to time, all acts and things which the Agent deems necessary to protect, preserve, maintain, or realize upon the Collateral and the Agents security interest therein. |
24
(a) | The Agent may exercise any of the rights and remedies set forth in this Agreement (including, without limitation, Article 5 hereof), in the Credit Agreement, or in any other Loan Document, or by applicable law. |
25
(b) | In addition to all other rights and remedies granted to the Agent in this Agreement, the Credit Agreement or by applicable law, the Agent shall have all of the rights and remedies of a secured party under the UCC (whether or not the UCC applies to the affected Collateral) and the Agent may also, without previous demand or notice except as specified below or in the Credit Agreement, sell the Collateral or any part thereof in one or more parcels at public or private sale, at any exchange, brokers board or at any of the Agents offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Agent may, in its reasonable discretion, deem commercially reasonable or otherwise as may be permitted by law. Without limiting the generality of the foregoing, the Agent may (i) without demand or notice to the Debtors (except as required under the Credit Agreement or applicable law), collect, receive or take possession of the Collateral or any part thereof, and for that purpose the Agent (and/or its Agents, servicers or other independent contractors) may enter upon any premises on which the Collateral is located and remove the Collateral therefrom or render it inoperable, and/or (ii) sell, lease or otherwise dispose of the Collateral, or any part thereof, in one or more parcels at public or private sale or sales, at the Agents offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Agent may, in its reasonable discretion, deem commercially reasonable or otherwise as may be permitted by law. The Agent and, subject to the terms of the Credit Agreement, each of the Banks shall have the right at any public sale or sales, and, to the extent permitted by applicable law, at any private sale or sales, to bid (which bid may be, in whole or in part, in the form of cancellation of indebtedness) and become a purchaser of the Collateral or any part thereof free of any right of redemption on the part of the Debtors, which right of redemption is hereby expressly waived and released by the Debtors to the extent permitted by applicable law. The Agent may require the Debtors to assemble the Collateral and make it available to the Agent at any place designated by the Agent to allow the Agent to take possession or dispose of such Collateral. The Debtors agree that the Agent shall not be obligated to give more than five (5) days prior written notice of the time and place of any public sale or of the time after which any private sale may take place and that such notice shall constitute reasonable notice of such matters. The foregoing shall not require notice if none is required by applicable law. The Agent shall not be obligated to make any sale of Collateral if, in the exercise of its reasonable discretion, it shall determine not to do so, regardless of the fact that notice of sale of Collateral may have been given. The Agent may, without notice or publication (except as required by applicable law), adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. The Debtors shall be liable for all reasonable expenses of retaking, holding, preparing for sale or the like, and all reasonable attorneys fees, legal expenses and other costs and expenses incurred by the Agent in connection with the collection of the Indebtedness and the enforcement of the Agents rights under this Agreement and the Credit Agreement. The Debtors shall, to the extent permitted by applicable law, remain liable for any deficiency if the proceeds of |
26
any such sale or other disposition of the Collateral (conducted in conformity with this clause (ii) and applicable law) applied to the Indebtedness are insufficient to pay the Indebtedness in full. The Agent shall apply the proceeds from the sale of the Collateral hereunder against the Indebtedness in such order and manner as provided in the Credit Agreement. | |||
(c) | The Agent may cause any or all of the Collateral held by it to be transferred into the name of the Agent or the name or names of the Agents nominee or nominees. | ||
(d) | The Agent may exercise any and all rights and remedies of the Debtors under or in respect of the Collateral, including, without limitation, any and all rights of the Debtors to demand or otherwise require payment of any amount under, or performance of any provision of any of the Collateral and any and all voting rights and corporate powers in respect of the Collateral. | ||
(e) | On any sale of the Collateral, the Agent is hereby authorized to comply with any limitation or restriction with which compliance is necessary (based on a reasoned opinion of the Agents counsel) in order to avoid any violation of applicable law or in order to obtain any required approval of the purchaser or purchasers by any applicable Governmental Authority. | ||
(f) | The Agent may direct account debtors and any other parties liable for any payment under any of the Collateral to make payment of any and all monies due and to become due thereunder directly to the Agent or as the Agent shall direct. | ||
(g) | In the event of any sale, assignment or other disposition of the Intellectual Property Collateral, the goodwill of the business connected with and symbolized by any Collateral subject to such disposition shall be included, and the Debtors shall supply to the Agent or its designee the Debtors know-how and expertise related to the Intellectual Property Collateral subject to such disposition, and the Debtors notebooks, studies, reports, records, documents and things embodying the same or relating to the inventions, processes or ideas covered by and to the manufacture of any products under or in connection with the Intellectual Property Collateral subject to such disposition. | ||
(h) | For purposes of enabling the Agent to exercise its rights and remedies under this Section 6.1 and enabling the Agent and its successors and assigns to enjoy the full benefits of the Collateral, the Debtors hereby grant to the Agent an irrevocable, nonexclusive license (exercisable without payment of royalty or other compensation to the Debtors) to use, assign, license or sublicense any of the Intellectual Property Collateral, Computer Records or Software (including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and all computer programs used for the completion or printout thereof), exercisable upon the occurrence and during the continuance of a Default or an Event of Default (and thereafter if Agent succeeds to any of the Collateral pursuant to an enforcement proceeding or voluntary arrangement with Debtor), except as may be prohibited by any licensing agreement relating to such |
27
Computer Records or Software. This license shall also inure to the benefit of all successors, assigns, transferees of and purchasers from the Agent. |
(a) | In view of the fact that applicable securities laws may impose certain restrictions on the method by which a sale of the Pledged Shares may be effected after an Event of Default, Debtors agree that upon the occurrence and during the continuance of an Event of Default, the Agent may from time to time attempt to sell all or any part of the Pledged Shares by a private sale in the nature of a private placement, restricting the bidders and prospective purchasers to those who will represent and agree that they are accredited investors within the meaning of Regulation D promulgated pursuant to the Securities Act of 1933, as amended (the Securities Act ), and are purchasing for investment only and not for distribution. In so doing, the Agent may solicit offers for the Pledged Shares, or any part thereof, from a limited number of investors who might be interested in purchasing the Pledged Shares. Without limiting the methods or manner of disposition which could be determined to be commercially reasonable, if the Agent hires a firm of regional or national reputation that is engaged in the business of rendering investment banking and brokerage services to solicit such offers and facilitate the sale of the Pledged Shares, then the Agents acceptance of the highest offer (including its own offer, or the offer of any of the Banks at any such sale) obtained through such efforts of such firm shall be deemed to be a commercially reasonable method of disposition of such Pledged Shares. The Agent shall not be under any obligation to delay a sale of any of the Pledged Shares for the period of time necessary to permit the issuer of such securities to register such securities under the laws of any jurisdiction outside the United States, under the Securities Act or under any applicable state securities laws, even if such issuer would agree to do so. | ||
(b) | The Debtors further agree to do or cause to be done, to the extent that the Debtors may do so under applicable law, all such other reasonable acts and things as may be necessary to make such sales or resales of any portion or all of the Collateral valid and binding and in compliance with any and all applicable laws, regulations, orders, writs, injunctions, decrees or awards of any and all courts, arbitrators or governmental instrumentalities, domestic or foreign, having jurisdiction over any such sale or sales, all at the Debtors expense. |
(a) | Immediately upon the occurrence and during the continuance of an Event of Default (without the necessity of any notice hereunder), there may be established upon the request of the Agent by each Debtor with the Agent, for the benefit of the Banks in the name of the Agent, a segregated non-interest bearing cash collateral account (the Cash Collateral Account ) bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Agent and the Banks; provided, however, that the Cash Collateral Account may be an |
28
interest-bearing account with a commercial bank (including Comerica or any other Bank which is a commercial bank) if determined by the Agent, in its reasonable discretion, to be practicable, invested by the Agent in its sole discretion, but without any liability for losses or the failure to achieve any particular rate of return. Furthermore, in connection with the establishment of a Cash Collateral Account under the first sentence of this Section 6.3 (and on the terms and within the time periods provided thereunder), (i) each Debtor agrees to establish and maintain (and the Agent, acting at the request of the Banks, may establish and maintain) at Debtors sole expense a United States Post Office lock box (the Lock Box ), to which the Agent shall have exclusive access and control. Each Debtor expressly authorizes the Agent, from time to time, to remove the contents from the Lock Box for disposition in accordance with this Agreement; and (ii) each Debtor shall notify all account debtors that all payments made to Debtor (a) other than by electronic funds transfer, shall be remitted, for the credit of Debtor, to the Lock Box, and Debtor shall include a like statement on all invoices, and (b) by electronic funds transfer, shall be remitted to the Cash Collateral Account, and Debtor shall include a like statement on all invoices. Each Debtor agrees to execute all documents and authorizations as reasonably required by the Agent to establish and maintain the Lock Box and the Cash Collateral Account. It is acknowledged by the parties hereto that any lockbox presently maintained or subsequently established by a Debtor with the Agent may be used, subject to the terms hereof, to satisfy the requirements set forth in the first sentence of this Section 6.3 . | |||
(b) | Immediately upon the occurrence and during the continuance of an Event of Default, any and all cash (including amounts received by electronic funds transfer), checks, drafts and other instruments for the payment of money received by each Debtor at any time, in full or partial payment of any of the Collateral consisting of Accounts or Inventory, shall forthwith upon receipt be transmitted and delivered to the Agent, properly endorsed, where required, so that such items may be collected by the Agent. Any such amounts and other items received by a Debtor shall not be commingled with any other of such Debtors funds or property, but will be held separate and apart from such Debtors own funds or property, and upon express trust for the benefit of the Agent until delivery is made to the Agent. All items or amounts which are remitted to a Lock Box or otherwise delivered by or for the benefit of a Debtor to the Agent on account of partial or full payment of, or any other amount payable with respect to, any of the Collateral shall, at the Agents option, be applied to any of the Indebtedness, whether then due or not, in the order and manner set forth in the Credit Agreement. No Debtor shall have any right whatsoever to withdraw any funds so deposited. Each Debtor further grants to the Agent a first security interest in and Lien on all funds on deposit in such account. Each Debtor hereby irrevocably authorizes and directs the Agent to endorse all items received for deposit to the Cash Collateral Account, notwithstanding the inclusion on any such item of a restrictive notation, e.g., paid in full, balance of account, or other restriction. |
29
30
(a) | THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA. | ||
(b) | ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA SITTING IN THE COUNTY OF SANTA CLARA OR OF THE UNITED STATES FOR THE___NORTHERN DISTRICT OF CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE DEBTOR AND THE AGENT CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE DEBTOR AND THE AGENT IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS , WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY LOAN DOCUMENT. |
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DEBTORS : | ||||||
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QUINSTREET, INC. | ||||||
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By: | |||||
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Name: |
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Title | |||||
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Address for Notices: | ||||||
1051 East Hillsdale Blvd. | ||||||
Foster City, California 94404 | ||||||
Fax No.: (650) 578-7604 | ||||||
Telephone No.: | ||||||
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Attention: Chief Financial Officer | |||||
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QUINSTREET PROPERTIES, INC. | ||||||
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By: | |||||
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Name: |
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Title |
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Address for Notices: | ||||||
1051 East Hillsdale Blvd. | ||||||
Foster City, California 94404 | ||||||
Fax No.: (650) 578-7604 | ||||||
Telephone No.: | ||||||
Attention: Chief Financial Officer | ||||||
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QUINSTREET LLC | ||||||
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By: | |||||
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Name: |
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Title |
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Address for Notices: | ||||||
1051 East Hillsdale Blvd. | ||||||
Foster City, California 94404 | ||||||
Fax No.: (650) 578-7604 | ||||||
Telephone No.: | ||||||
Attention: Chief Financial Officer |
34
QUINSTREET MEDIA, INC. | ||||||
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By: | |||||
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Name: |
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Title |
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Address for Notices: | ||||||
1051 East Hillsdale Blvd. | ||||||
Foster City, California 94404 | ||||||
Fax No.: (650) 578-7604 | ||||||
Telephone No.: | ||||||
Attention: Chief Financial Officer | ||||||
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CYBERSPACE COMMUNICATIONS CORPORATION | ||||||
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By: | |||||
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Name: |
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Title |
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Address for Notices: | ||||||
1051 East Hillsdale Blvd. | ||||||
Foster City, California 94404 | ||||||
Fax No.: (650) 578-7604 | ||||||
Telephone No.: | ||||||
Attention: Chief Financial Officer | ||||||
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RELIABLEREMODELER.COM, INC. | ||||||
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By: | |||||
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Name: |
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Title |
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Address for Notices: | ||||||
1051 East Hillsdale Blvd. | ||||||
Foster City, California 94404 | ||||||
Fax No.: (650) 578-7604 | ||||||
Telephone No.: | ||||||
Attention: Chief Financial Officer |
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HQ PUBLICATIONS LLC | ||||||
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By: | |||||
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Name: |
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Title |
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Address for Notices: | ||||||
1051 East Hillsdale Blvd. | ||||||
Foster City, California 94404 | ||||||
Fax No.: (650) 578-7604 | ||||||
Telephone No.: | ||||||
Attention: Chief Financial Officer | ||||||
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AGENT : | ||||||
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COMERICA BANK, as Agent | ||||||
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Address for Notices: | ||||||
75 East Trimble Road, M/C 4770 | ||||||
San Jose, California 95131 | ||||||
Attention: Manager | ||||||
Fax No.: (408) 556-5091 | ||||||
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With a copy to: | ||||||
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Comerica Bank | ||||||
2 Embarcadero Center, Suite 300 | ||||||
San Francisco, CA 94111 | ||||||
Attn: Phil Koblis Vice President | ||||||
Fax No.: (415) 477-3260 |
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QUINSTREET, INC. | ||||||
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COMERICA BANK, as Agent | ||||||
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[NEW DEBTOR] | ||||||
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Accepted: | ||||
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COMERICA BANK, as Agent | ||||
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By:
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Its:
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39
To: |
Borrower
and Comerica Bank (Agent) |
Re: | Revolving Credit and Term Loan Agreement (Agreement) is made as of the ___ day of September, 2008, (as amended, restated or otherwise modified from time to time, the Credit Agreement) by and among the financial institutions from time to time signatory thereto (individually a Lender, and any and all such financial institutions collectively the Lenders), Comerica Bank, as Administrative Agent for the Lenders (in such capacity, the Agent) and QuinStreet, Inc. (Borrower). |
13.1 | the Assignee: (i) shall be deemed automatically to have become a party to the Credit Agreement and the other Loan Documents, to have assumed all of the Assignors obligations thereunder to the extent of the Assignees percentage referred to in the second paragraph of this Assignment Agreement, and to have all the rights and obligations of a party to the Credit Agreement and the other Loan Documents, as if it were an original signatory thereto to the extent specified in the second paragraph hereof; and (ii) agrees to be bound by the terms and conditions set forth in the Credit Agreement and the other Loan Documents as if it were an original signatory thereto; and | ||
13.2 | the Assignors obligations under the Credit Agreement and the other Loan Documents shall be reduced by the Percentage referred to in the second paragraph of this Assignment Agreement. |
(A) | the delivery to the Agent of an original of this Assignment Agreement executed by the Assignor and the Assignee; | ||
(B) | the payment to the Agent, of all accrued fees, expenses and other items for which reimbursement is then owing under the Credit Agreement; | ||
(C) | the payment to the Agent of the processing fee referred to in Section 13.8(d)(1) of the Credit Agreement; and | ||
(D) | all other restrictions and items noted in Section 13.8 of the Credit Agreement have been completed. |
2
(A) | Address for Notices: | ||
Institution Name: | |||
Address: | |||
Attention: | |||
Telephone: | |||
Facsimile: | |||
(B) | Payment Instructions: | ||
(C) | Proposed effective date of assignment. |
3
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[ASSIGNOR] | ||||||
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[ASSIGNEE] | ||||||
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4
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COMERICA BANK, as Agent | ||||
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By:
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Its:
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QUINSTREET, INC.* | ||||
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By:
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Its:
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[* | Borrowers consent will be required except as specified in Section 13.8 of the Credit Agreement.] |
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QUINSTREET PROPERTIES, INC. | ||||||
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By: | |||||
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QUINSTREET LLC | ||||||
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QUINSTREET MEDIA, INC. | ||||||
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CYBERSPACE COMMUNICATIONS CORPORATION | ||||||
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RELIABLEREMODELER.COM, INC. | ||||||
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HQ PUBLICATIONS LLC | ||||||
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14
[NEW GUARANTOR]
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By: | ||||
Its: |
2
1. | ADJUSTED QUICK RATIO (SECTION 7.9(A)) . ON THE COMPUTATION DATE, THE ADJUSTED QUICK RATIO, WHICH IS REQUIRED TO BE NOT LESS THAN TO 1.00 WAS TO 1.00, AS COMPUTED IN THE SUPPORTING DOCUMENTS ATTACHED HERETO AS SCHEDULE 1. | |
2. | FIXED CHARGE COVERAGE RATIO (SECTION 7.9(B)) . ON THE COMPUTATION DATE, THE FIXED CHARGE COVERAGE RATIO, WHICH IS REQUIRED TO BE NOT LESS THAN TO 1.0 WAS TO 1.0 AS COMPUTED IN THE SUPPORTING DOCUMENTS ATTACHED HERETO AS SCHEDULE 2. | |
3. | FUNDED DEBT TO EBITDA RATIO (SECTION 7.9(C)) . ON THE COMPUTATION DATE, THE FUNDED DEBT TO EBITDA RATIO, WHICH IS REQUIRED TO BE NOT MORE THAN TO 1.0 WAS TO 1.0 AS COMPUTED IN THE SUPPORTING DOCUMENTS ATTACHED HERETO AS SCHEDULE 2. |
QUINSTREET, INC.
|
||||
By: | ||||
Its: | ||||
2
$ | , 20___ |
QUINSTREET, INC.
|
||||
By: | ||||
Its: | ||||
2
No. | Dated: |
To:
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Comerica Bank, as Agent | |
|
||
RE:
|
Revolving Credit and Term Loan Agreement (Agreement) is made as of the ___day of September, 2008, (as amended, restated or otherwise modified from time to time, the Credit Agreement) by and among the financial institutions from time to time signatory thereto (individually a Lender, and any and all such financial institutions collectively the Lenders), Comerica Bank, as Administrative Agent for the Lenders (in such capacity, the Agent) and QuinStreet, Inc. (Borrower). | |
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Pursuant to the Credit Agreement, the Borrower hereby requests that the Lenders refund or
convert, as applicable, an Advance under the Term Loan from Lenders as follows:
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(a)
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Date of Refunding or Conversion of Advance: | |
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(b)
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Type of Activity: | |
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o Refunding | |
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o Conversion | |
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(c)
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Type of Advance (check only one): | |
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o
Prime-based Advance
o Eurodollar-based Advance |
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(d)
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Amount of Advance: | |
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$ | |
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(e)
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Interest Period (applicable to Eurodollar-based Advances) | |
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months (insert 1, 2 or 3) | |
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(f)
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Disbursement Instructions | |
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o Comerica Bank Account No. | |
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o Other: | |
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QUINSTREET, INC.
|
||||
By: | ||||
Its: | ||||
2
Re: | Revolving Credit and Term Loan Agreement (Agreement) is made as of the ___day of September, 2008, (as amended, restated or otherwise modified from time to time, the Credit Agreement) by and among the financial institutions from time to time signatory thereto (individually a Lender, and any and all such financial institutions collectively the Lenders), Comerica Bank, as Administrative Agent for the Lenders (in such capacity, the Agent) and QuinStreet, Inc. (Borrower). |
Very truly yours,
Comerica Bank , as Agent |
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By: | ||||
Its: |
(a) | the New Bank (i) shall be deemed automatically to have become a party to the Credit Agreement and the other Loan Documents, and to have all the rights and |
obligations of a party to the Credit Agreement and the other Loan Documents, as if it were an original signatory; and (ii) agrees to be bound by the terms and conditions set forth in the Credit Agreement and the other Loan Documents as if it were an original signatory thereto; and | |||
(b) | the New Bank shall be a Revolving Credit Bank and its Percentage of the Revolving Credit (and its risk participation in Letters of Credit) shall be as set forth in the attached revised Schedule 1.2 (Percentages); provided any fees paid prior to the Effective Date, including any Letter of Credit Fees, shall not be recalculated, redistributed or reallocated by Company, Agent or the Banks. |
[Name of New Bank]
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By: | ||||
Its: |
QUINSTREET, INC. | ||||
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By:
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Its:
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COMERICA BANK, as Agent | ||||
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||||
By:
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||||
Its:
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||||
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COMERICA BANK, as Lender and as Agent
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||||
By: | /s/ Illegible | |||
Its: | Senior Vice President | |||
BANK OF AMERICA, N.A., as a Lender
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||||
By: | /s/ Illegible | |||
Its: | SVP | |||
UNION BANK, N.A. (f/k/a Union Bank of California), as a Lender | ||||
By: | /s/ Illegible | |||
Its: | Assistant Vice President |
REVOLVING | REVOLVING | |||||||||||||||||||
CREDIT | CREDIT | TERM LOAN | TERM LOAN | WEIGHTED | ||||||||||||||||
LENDERS | PERCENTAGE | ALLOCATIONS | PERCENTAGE | ALLOCATIONS | PERCENTAGE | |||||||||||||||
Comerica Bank
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35 | % | $ | 35,000,000 | 35 | % | $ | 9,450,000 | 35.00 | % | ||||||||||
Union Bank
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25 | % | $ | 25,000,000 | 25 | % | $ | 6,750,000 | 25.00 | % | ||||||||||
Bank of America
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26 | % | $ | 26,000,000 | 20 | % | $ | 5,400,000 | 24.72 | % | ||||||||||
Wells Fargo
|
14 | % | $ | 14,000,000 | 20 | % | $ | 5,400,000 | 15.28 | % | ||||||||||
TOTALS
|
100 | % | $ | 100,000,000 | 100 | % | $ | 27,000,000 | 100 | % |
1.01 | Building shall collectively mean the buildings and retail concourse in Foster City, California, located at 1001 East Hillsdale Boulevard (the West Tower), 1031 A-F East Hillsdale Boulevard (the Retail Concourse), and 1051 East Hillsdale Boulevard (the East Tower). Rentable Square Footage of the Building is deemed to be 398,460 square feet based upon the combined rentable area of the West Tower, the Retail Concourse and the East Tower. | ||
1.02 | Premises shall mean the area shown on Exhibit A to this Lease. The Premises is located on the eighth floor of the East Tower and known as suite 800. If the Premises include one or more floors in their entirety, all corridors and restroom facilities located on such full floor(s) shall be considered part of the Premises. The Rentable Square Footage of the Premises is deemed to be 35,435 square feet. Landlord and Tenant stipulate and agree that the Rentable Square Footage of the Building and the Rentable Square Footage of the Premises are correct. | ||
1.03 | Base Rent: |
Annual Rate | Monthly | |||||||
Months of Term | Per Square Foot | Base Rent | ||||||
1 - 12
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$ | 22.80 | $ | 67,326.50 | ||||
13 - 24
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$ | 24.60 | $ | 72,641.75 | ||||
25 - 36
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$ | 26.40 | $ | 77,957.00 | ||||
37 - 48
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$ | 27.60 | $ | 81,500.50 | ||||
49 - 60
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$ | 28.80 | $ | 85,044.00 | ||||
61 - 72
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$ | 30.00 | $ | 88,587.50 |
Notwithstanding anything in this Section of the Lease to the contrary, so long as Tenant is not in default under this Lease, Tenant shall be entitled to an abatement of Base Rent in the amount of $67,326.50 per month for three consecutive full calendar months of the Term, beginning with the first full calendar month of the Term (the Base Rent Abatement Period). The total amount of Base Rent abated during the Base Rent Abatement Period shall equal $201,979.50 (the Abated Base Rent). If Tenant defaults at any time during the Term and fails to cure such default within any applicable cure period under the Lease, all Abated Base Rent shall immediately become due and payable. The payment by Tenant of the Abated Base Rent in the event of a default shall not limit or affect any of Landlords other rights, pursuant to this Lease or at law or in equity. During the Base Rent Abatement Period, only Base Rent shall be abated, and all Additional Rent and other costs and charges specified in this Lease shall remain as due and payable pursuant to the provisions of this Lease. | |||
1.04 | Tenants Pro Rata Share: 8.8930%. For purposes of determining Tenants Pro Rata Share, and as used throughout Exhibit B of this Lease, the Building shall mean, collectively, the West Tower, the Retail Concourse and the East Tower, it being understood and agreed that all of the foregoing buildings, collectively, are treated as a single building for purposes of obtaining or providing services or otherwise determining Expenses and/or Taxes. In calculating Tenants Pro Rata Share of Expenses and/or Taxes with respect to the Premises, the Rentable Square Footage of the Building described in Section 1.01 above reflects the combined rentable area in the foregoing buildings, collectively, and Tenants Pro Rata Share with respect to the Premises, as described above, is based upon the foregoing Rentable Square Footage of the Building. However, notwithstanding the foregoing, if one or more buildings are removed from the group of buildings comprising the Building, as described above in this Section, whether as a result of a sale or demolition of the building(s) or otherwise, or if one or more buildings owned by Landlord are added to the group of buildings comprising the Building, as |
1
described above in this Section, then the definition of Building and the Rentable Square Footage of the Building, as described in this Section 1, and Tenants Pro Rata Share with respect to the Premises, shall be appropriately modified or adjusted to reflect the deletion or addition of such buildings, and, if Tenants Pro Rata Share of Expenses and/or Taxes with respect to the Premises is based upon increases in Expenses and/or Taxes over a Base Year, then Expenses and/or Taxes for the Base Year shall be restated on a going forward basis effective as of the date such buildings are deleted or added to the definition of Building as described in this Section. |
1.05 | Base Year for Taxes (defined in Exhibit B): 2004; Base Year for Expenses (defined in Exhibit B): 2004. | ||
1.06 | Term: A period of 72 months. Subject to Section 3, the Term shall commence on October 15, 2003 (the Commencement Date) and, unless terminated early in accordance with this Lease, end on October 14, 2009 (the Termination Date ). | ||
1.07 | [Intentionally Omitted.] | ||
1.08 | Security Deposit: $177,175.00, as more fully described in Section 6. | ||
1.09 | Guarantor(s): None. | ||
1.10 | Broker(s): Wayne Mascia Associates. | ||
1.11 | Permitted Use: General office use. | ||
1.12 | Notice Address(es): |
Landlord: | Tenant: | ||
CA-Parkside Towers Limited Partnership
|
Prior to Commencement Date : | ||
c/o Equity Office Management, L.L.C.
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301 Constitution Drive | ||
725 Saginaw Drive
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Menlo Park, CA 94025 | ||
Redwood City, California 94063
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Attn: Michael McDonough | ||
Attention: Property Manager
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Following the Commencement Date : | ||
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1051 East Hillsdale Boulevard | ||
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Suite 800 | ||
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Foster City, CA 94404 | ||
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Attn: Michael McDonough |
A copy of any notices to Landlord shall be sent to Equity Office, Two North Riverside Plaza, Suite 2100, Chicago, Illinois, 60606, Attn: San Francisco Regional Counsel. | |||
1.13 | Business Day(s) are Monday through Friday of each week, exclusive of New Years Day, Presidents Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day (Holidays) . Landlord may designate additional Holidays that are commonly recognized by other office buildings in the area where the Building is located. Building Service Hours are 6:00 a.m. to 6:00 p.m. on Business Days. | ||
1.14 | Landlord Work means the work that Landlord is obligated to perform in the Premises pursuant to a separate agreement (the Work Letter ) attached to this Lease as Exhibit C . | ||
1.15 | Property means the Building and the parcel(s) of land on which it is located and, at Landlords discretion, the parking facilities and other improvements, if any, serving the Building and the parcel(s) of land on which they are located. |
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(a) | Terminate this Lease and Tenants right to possession of the Premises and recover from Tenant an award of damages equal to the sum of the following: |
(i) | The Worth at the Time of Award of the unpaid Rent which had been earned at the time of termination; | ||
(ii) | The Worth at the Time of Award of the amount by which the unpaid Rent which would have been earned after termination until the time of award exceeds the amount of such Rent loss that Tenant affirmatively proves could have been reasonably avoided; | ||
(iii) | The Worth at the Time of Award of the amount by which the unpaid Rent for the balance of the Term after the time of award exceeds the amount of such Rent loss that Tenant affirmatively proves could be reasonably avoided; | ||
(iv) | Any other amount necessary to compensate Landlord for all the detriment either proximately caused by Tenants failure to perform Tenants obligations under this Lease or which in the ordinary course of things would be likely to result therefrom; and |
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(v) | All such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time under applicable law. |
The Worth at the Time of Award of the amounts referred to in parts (i) and (ii) above, shall be computed by allowing interest at the lesser of a per annum rate equal to: (A) the greatest per annum rate of interest permitted from time to time under applicable law, or (B) the Prime Rate plus 5%. For purposes hereof, the Prime Rate shall be the per annum interest rate publicly announced as its prime or base rate by a federally insured bank selected by Landlord in the State of California. The Worth at the Time of Award of the amount referred to in part (iii), above, shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus 1%; | |||
(b) | Employ the remedy described in California Civil Code § 1951.4 (Landlord may continue this Lease in effect after Tenants breach and abandonment and recover Rent as it becomes due, if Tenant has the right to sublet or assign, subject only to reasonable limitations); or | ||
(c) | Notwithstanding Landlords exercise of the remedy described in California Civil Code § 1951.4 in respect of an event or events of default, at such time thereafter as Landlord may elect in writing, to terminate this Lease and Tenants right to possession of the Premises and recover an award of damages as provided above in Paragraph 19.01 (a). |
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LANDLORD: | |
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CA-PARKSIDE TOWERS LIMITED PARTNERSHIP,
a Delaware limited partnership |
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By: EOM GP, L.L.C., a Delaware limited liability company, | |
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its general partner | |
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||
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By: Equity Office Management, L.L.C., a Delaware | |
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limited liability company, its non-member manager |
By: | /s/ Mark Geisreiter | |||
Name: | Mark Geisreiter | |||
Title: | Senior Vice President - San Francisco Region | |||
TENANT:
QUINSTREET, INC., a California corporation |
||||
By: | /s/ Douglas J. Valenti | |||
Name: | Douglas J. Valenti | |||
Title: | President & CEO | |||
By: | /s/ Bronwyn Syiek | |||
Name: | Bronwyn Syiek | |||
Title: | SVP & General Manager | |||
|
77-0512121 | |
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||
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Tenants Tax ID Number (SSN or FEIN) |
15
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(a) | Sums (other than management fees, it being agreed that the management fees included in Expenses are as described in Section 2.01(b) above) paid to subsidiaries or other affiliates of Landlord for services on or to the Property, Building and/or Premises, but only to the extent that the costs of such services exceed the competitive cost for such services rendered by persons or entities of similar skill, competence and experience. | ||
(b) | Any fines, penalties or interest resulting from the negligence or willful misconduct of the Landlord or its agents, contractors, or employees. | ||
(c) | Advertising and promotional expenditures. | ||
(d) | Landlords charitable and political contributions. | ||
(e) | Ground lease rental. | ||
(f) | Attorneys fees and other expenses incurred in connection with negotiations or disputes with prospective tenants or tenants or other occupants of the Building. | ||
(g) | The cost or expense of any services or benefits provided generally to other tenants in the Building and not provided or available to Tenant. | ||
(h) | All costs of purchasing or leasing major sculptures, paintings or other major works or objects of art (as opposed to decorations purchased or leased by Landlord for display in the Common Areas of the Building). | ||
(i) | Any expenses for which Landlord has received actual reimbursement (other than through Expenses). | ||
(j) | Expenses for the replacement of any item covered under warranty, unless Landlord has not received payment under such warranty and it would not be fiscally prudent to pursue legal action to collect on such warranty. | ||
(k) | Fines or penalties incurred as a result of violation by Landlord of any applicable Laws. |
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1. | Landlord shall perform improvements to the Premises in accordance with the plans prepared by API Design, Inc. dated May 28, 2003 (the Plans), which are attached hereto as Exhibit C-1. The improvements to be performed by Landlord in accordance with the Plans are hereinafter referred to as the Landlord Work. It is agreed that construction of the Landlord Work will be completed at Landlords sole cost and expense (subject to the terms of Section 2 below) using Building standard methods, materials and finishes, which standards are attached hereto as Exhibit C-2. If any finishes or materials specified in the Landlord Work are or become unavailable or have long lead times that would delay Landlords completion of the Landlord Work, Landlord and Tenant shall work together in good faith to select alternative finishes or materials to allow Landlord to complete the Landlord Work in a timely manner. Landlord shall enter into a direct contract for the Landlord Work with Venture Builders as general contractor. In addition, Landlord shall have the right to select and/or approve of any subcontractors used in connection with the Landlord Work. Landlords supervision or performance of any work for or on behalf of Tenant shall not be deemed a representation by Landlord that such Plans or the revisions thereto comply with applicable insurance requirements, building codes, ordinances, laws or regulations, or that the improvements constructed in accordance with the Plans and any revisions thereto will be adequate for Tenants use, it being agreed that Tenant shall be responsible for all elements of the design of Tenants plans (including, without limitation, compliance with law, functionality of design, the structural integrity of the design, the configuration of the premises and the placement of Tenants furniture, appliances and equipment). |
2. | If Tenant shall request any revisions to the Plans, Landlord shall have such revisions prepared at Tenants sole cost and expense and Tenant shall reimburse Landlord for the cost of preparing any such revisions to the Plans, plus any applicable state sales or use tax thereon, upon demand. Promptly upon completion of the revisions, Landlord shall notify Tenant in writing of the increased cost in the Landlord Work, if any, resulting from such revisions to the Plans. Tenant, within one Business Day, shall notify Landlord in writing whether it desires to proceed with such revisions. In the absence of such written authorization, Landlord shall have the option to continue work on the Premises disregarding the requested revision. Tenant shall be responsible for any Tenant Delay in completion of the Premises resulting from any revision to the Plans. . If such revisions result in an increase in the cost of Landlord Work, such increased costs, plus any applicable state sales or use tax thereon, shall be payable by Tenant upon demand. Notwithstanding anything herein to the contrary, all revisions to the Plans shall be subject to the approval of Landlord. |
3. | In addition to the Landlord Work, Landlord shall construct a shower facility on the 5 th floor of the East Tower, as more fully described in those certain Plans prepared by API Design, Inc. dated May 13, 2003 (the Shower Facility) at Landlords sole cost and expense using Building Standard methods, materials and finishes. Landlord shall enter into a direct contract for the Landlord Work with Venture Builders as general contractor. In addition, Landlord shall have the right to select and/or approve of any subcontractors used in connection with the Landlord Work. Landlord shall use reasonable efforts to complete the Shower Facility by November 1, 2003, but any delay in the completion of the Shower Facility or inconvenience suffered by Tenant during the construction of the Shower Facility shall not delay the Commencement Date nor shall it subject Landlord to any liability for any loss or damage resulting therefrom or entitle Tenant to any credit, abatement or adjustment of Rent or other sums payable under the Lease. |
4. | This Work Letter shall not be deemed applicable to any additional space added to the Premises at any time or from time to time, whether by any options under the Lease or otherwise, or to any portion of the original Premises or any additions to the Premises in the event of a renewal or extension of the original Term of the Lease, whether by any options under the Lease or otherwise, unless expressly so provided in the Lease or any amendment or supplement to the Lease. |
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May 29, 2003
Matter ID Number: 7329
CARPET
MFG:
BIGELOW
PAINT
MFG:
ICI
STYLE:
CYBERWEAVE
P1
GENERAL
COLOR:
SWISS COFFEE
COLOR:
SILVER MOSS
NUMBER:
2012
NUMBER:
W019-3770
CARPET
MFG:
BIGELOW
PAINT
MFG:
ICI
STYLE:
CAMDEN
P2
ACCENT
COLOR:
AMISH LINEN
COLOR:
EARTH MNERAL
NUMBER:
563
NUMBER:
W310-3887
CARPET
MFG:
BIGELOW
MFG:
ICI
STYLE:
SPECTRUM II
PAINT
COLOR:
ABBEY CREAM
COLOR:
FAWN
P3
ACCENT
NUMBER:
484
NUMBER:
B5117-862
WEIGHT:
36 OZ.
MFG:
ARMSTRONG
MFG:
NEVAMAR
RESILIENT
STYLE:
STONETEX EXCELON
LP1
LAMINATED
STYLE:
TEMPERA TEXTURED
TILE
COLOR:
SANDSTONE TAN
PLASTIC
COLOR:
OCHRE
NUMBER:
52143
NUMBER:
TM2IT
SIZE:
12 X 12
MFG:
BURKE
MFG:
NEVAMAR
RESILIENT
STYLE:
4 TOPSET
LP2
LAMINATED
STYLE:
SHIBORI TEXTURED
BASE
COLOR:
BEIGE
PLASTIC
COLOR:
MAIZE
NUMBER:
203
NUMBER:
SH22T
May 30, 2003
Matter ID Number: 7329
BUILDING STANDARDS
Ms. Carol Donnelly
Equity Office Properties
2929 Campus Drive, Suite 125
San Mateo, CA 94403
QuinStreet
1051 East Hillsdale Boulevard, Suite 800
Foster City, CA 94404
Budget Price (revision # 3)
1.
Price includes:
a)
One time lobby/elevator protection
b)
Barricades/Traffic control
c)
General Labor
d)
Concrete pad on roof.
1.
Price includes:
a)
All millwork is figured to be plastic laminate.
b)
Break Room Upper and lower cabinets with countertop.
c)
Coffee Bar Upper and lower cabinets with countertop.
d)
Copy/mail/Storage upper and lower cabinets with countertop.
e)
Phone Room counters
1.
Price includes:
a)
All wood doors to be flush plain sliced white maple with a clear finish.
b)
(37) each 3 x 9 non rated office doors in factory finished aluminum frames.
2.
Price excludes:
a)
Micro-key hardware.
b)
Any work to core and shell doors shown as existing.
c)
Keying
d)
Grouting of frames.
e)
Glass and glazing.
f)
Rated assemblies
May 30, 2003
Matter ID Number: 7329
1.
Price includes:
a)
(15) each ¼ clear tempered 3 glass at office sidelights.
b)
(7) each ¼ clear tempered 1 glass at office sidelights.
c)
Install roll-in gasketing supplied by others.
2.
Price excludes:
a)
Rated glass
1.
Price includes:
a)
All walls around core area that are exposed to open office are to be full
height non-rated walls..
b)
All walls inside core area are to be ceiling height plus 6 with insulation
laid over the top for sound dampening.
c)
In wall insulation at conference rooms only.
d)
All perimeter low sill walls up to 38 to be framed rocked and finished.
e)
All perimeter over head sill wall to be framed, rocked and finished to hold window
blinds.
f)
Soffits up to deck at break rooms Copy/Mail/Storage and Coffee Bar.
g)
Frame rock and tape all columns to full height.
h)
Rear and adjoining sidewalls in the phone and conference rooms will be 3 5/8
studs filled
with 3 1/2 insulation batts for sound containment.
2.
Price excludes:
a)
Fire extinguisher cabinets (not shown).
b)
Access panels.
c)
Fire stopping at penetrations (walls are non rated).
d)
Upgrades to existing construction.
1.
Price includes:
a)
Acoustical ceiling grid and tile throughout entire core areas (Conf Rooms, Copy
Rooms, Meeting Rooms, Storage, Break Rooms)
b)
Server Room to have a dropped 2x4 grid with fissured tiles.
c)
Tile to be Armstrong, White 2x2 Dune second look with a 9/16 reveal.
d)
The grid is a 9/16 expose tee suspension system in white.
e)
All open office to have white PAPER covering to underside of existing
insulation with stick pin installation*.
*
Landlord has asked the installing contractor to do a mockup of the proposed ceiling
installation to review with all parties. Until that time, Landlord is willing to commit to
providing a insulation covering that is mutually agreeable for both the customer and the
Landlord, which Landlord believes the specified paper covering can achieve. Parties agree
that a professional/clean installation and aesthetical appearance is necessary to complete
the space in a first class fashion, for the benefit of Quinstreet and future customers
seeking space within the project. In the event it does not meet with both parties approval,
we will identify a suitable covering to achieve both parties desired results.
1.
Price includes:
a)
All carpeting, VCT and base.
b)
Floor preparation as required.
c)
Server room (only) floor to have anti-static floor tiles
installed
NOTE:
a)
Carpeting being carried is Mohawk standard carpet.
b)
VCT is Armstrong Excelon.
May 30, 2003
Matter ID Number: 7329
1.
Price includes:
a)
Paint all partitions as scheduled (see Drywall scope).
b)
Base coat and two finish coats.
c)
Touch up.
d)
Walls to be smooth finish
1.
Price includes:
a)
Levolor 1 perforated blinds.
1.
Price includes:
a)
(1) sink and faucet each for Break Room and Coffee Bar.
b)
(1) water cooler supply for Break Room.
c)
(1) coffee maker outlet each for Break Room and Coffee Bar.
d)
(1) dishwasher supply for Break Room.
e)
(2) condensate drains for HVAC units at Server Room.
f)
Core drilling
g)
(1) Dishwasher.
h)
(1) Garbage disposal
1.
Price includes:
a)
All design-build sprinkler engineering, fabrication and installation.
2.
Price excludes:
a)
Special detection systems.
b)
Low voltage wiring.
1.
Price includes:
a)
Install duct mains
b)
Install hot water supply/return mains and distribution.
c)
(15) perimeter reheat VAV zones
d)
(19) cooling only interior VAV zones
e)
Exposed ductwork
f)
Transfer fan from break room
g)
Install (2) 3 ton chilled water fan coils
h)
Chilled water piping
i)
Start up
J)
DDC controls
k)
Air balance.
I)
Engineering and Coordination.
a)
Electrical wiring.
b)
Relocation of existing conditions.
c)
Cutting, coring, and roofing.
d)
Duct detectors.
e)
Smoke detectors.
f)
Concrete pad on roof.
a)
(108) 2 x 4s
b)
(10) downlights
c)
(7) undercoutner lights
d)
(11) exit signs
e)
(30) emergency lights
f)
(40) 2 gang switch/motion sensor
g)
(86) wall receptacles
h)
(11) 120/20 dedicated
May 30, 2003
Matter ID Number: 7329
i)
(20) floor power
j)
(20) floor telephone
k)
(40) furniture power
l)
(40) furniture telephone
m)
(4) 3 way switches
n)
(13) single switches
o)
(1) exhaust fan
p)
(20) wall sconces
q)
(8) override switches
r)
(38) conference room downlites
s)
(4) 12 fluorescent indirect uplites
t)
(6) 20 fluorescent indirect uplites
u)
(15) 24 fluorescent indirect uplites
v)
(21) 36 fluorescent indirect uplites
w)
EMS
x)
Engineering
y)
Elevator lobby downlites
z)
Temp Power & Lighting
aa)
Large Conference rooms to receive a total of 6 duplex receptacles and 6 data
receptacles, the remainder (small & medium conference rooms, phone rooms) shall receive
a total of 3 duplex receptacles and 3 data receptacles which will be placed one per
wall excluding door opening.
bb)
Each group of four workstations will be provided with 2 circuits per grouping.
cc)
Break
room to receive electrical outlets for (2) 110v vending machines, (2) 110v refrigerators,
(3) 110v microwaves, (2) 110v coffee makers for a total of (12) dedicated circuits.
a)
120/208 panel
b)
Feeder
c)
(20) 120/20 dedicated isolated grounds
d)
(4) 208/30 dedicated
e)
(2) fancoils (HVAC)
f)
(1) shunt trip
g)
(1) Emon meter
h)
(1) 225 KVA transformer
i)
Distribution
j)
Buss plug
k)
Transformer feed
l)
Panel feed
m)
Light Fixtures
1.
An allowance is being carried for (2) card readers for stair well doors and a low voltage
panel.
1.
The electrical includes the connection of the furniture whips to the floor monument only, it
is the responsibility of the furniture contractor to connect the whip to the furniture.
2.
Landlord agrees to install draft stops if/as needed per code.
1.
Structural engineering or work.
2.
Signage.
3.
Bathrooms.
4.
Keying.
5.
Furniture.
6.
Work stations.
7.
Telecommunications except as noted above
8.
All Micro-key hardware and coordination.
9.
Audiovisual work, monitors and projectors.
VENTURE BUILDERS
May 30, 2003
Matter ID Number: 7329
COMMENCEMENT LETTER
(EXAMPLE)
Re:
Commencement Letter with respect to that certain Lease dated as of the _____ day of
____________ , 2003, by and between
CA-PARKSIDE TOWERS LIMITED PARTNERSHIP, a
Delaware limited partnership,
as Landlord, and
QUINSTREET, INC., a California corporation,
as Tenant, for
35,435
rentable square feet on the eighth floor of the Building located at
1051 East Hillsdale Boulevard, Foster City, California.
1.
The Commencement Date of the Lease is __________________________;
2.
The Termination Date of the Lease is_____________________________.
Tenant:
QuinStreet, Inc.
By:
Name:
Title:
Date:
May 30, 2003
Matter ID Number: 7329
1.
Sidewalks, doorways, vestibules, halls, stairways and other similar areas shall not be
obstructed by Tenant or used by Tenant for any purpose other than ingress and egress to and
from the Premises. No rubbish, litter, trash, or material shall be placed, emptied, or thrown
in those areas. At no time shall Tenant permit Tenants employees to loiter in Common Areas or
elsewhere about the Building or Property.
2.
Plumbing fixtures and appliances shall be used only for the purposes for which designed and
no sweepings, rubbish, rags or other unsuitable material shall be thrown or placed in the
fixtures or appliances. Damage resulting to fixtures or appliances by Tenant, its agents,
employees or invitees shall be paid for by Tenant and
Landlord shall not be responsible for the damage.
3.
No signs, advertisements or notices shall be painted or affixed to windows, doors or other
parts of the Building, except those of such color, size, style and in such places as are first
approved in writing by Landlord. Tenant shall be entitled to tenant identification and suite
number signage at the entrance to the Premises, as well as elevator lobby signage on the
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th
floor of the Building, all of which shall be installed by Landlord, at Tenants
cost and expense, using the standard graphics for the Building. Except in connection with the
hanging of lightweight pictures and wall decorations, no nails, hooks or screws shall be
inserted into any part of the Premises or Building except by the Building maintenance
personnel without Landlords prior approval, which approval shall not be unreasonably
withheld.
4.
Landlord shall provide and maintain in the first floor (main lobby) of the Building an
alphabetical directory board or other directory device listing tenants, including Tenant, at
Landlords cost and no other directory shall be permitted unless previously consented to by
Landlord in writing.
5.
Tenant shall not place any lock(s) on any door in the Premises or Building without Landlords
prior written consent, which consent shall not be unreasonably withheld, and Landlord shall
have the right at all times to retain and use keys or other access codes or devices to all
locks within and into the Premises. A reasonable number of keys to the locks on the entry
doors in the Premises shall be furnished by Landlord to Tenant at Tenants cost and Tenant
shall not make any duplicate keys. All keys shall be returned to Landlord at the expiration or
early termination of the Lease.
6.
All contractors, contractors representatives and installation technicians performing work in
the Building shall be subject to Landlords prior approval, which approval shall not be
unreasonably withheld, and shall be required to comply with Landlords standard rules,
regulations, policies and procedures, which may be revised from time to time.
7.
Movement in or out of the Building of furniture or office equipment, or dispatch or receipt
by Tenant of merchandise or materials requiring the use of elevators, stairways, lobby areas
or loading dock areas, shall be restricted to hours reasonably designated by Landlord. Tenant
shall obtain Landlords prior approval by providing a detailed listing of the activity, which
approval shall not be unreasonably withheld. If approved by Landlord, the activity shall be
under the supervision of Landlord and performed in the manner required by Landlord. Tenant
shall assume all risk for damage to articles moved and injury to any persons resulting from
the activity. If equipment, property, or personnel of Landlord or of any other party is
damaged or injured as a result of or in connection with the activity, Tenant shall be solely
liable for any resulting damage, loss or injury.
8.
Landlord shall have the right to approve the weight, size, or location of heavy equipment or
articles in and about the Premises, which approval shall not be unreasonably withheld. Damage
to the Building by the installation, maintenance, operation, existence or removal of Tenants
Property shall be repaired at Tenants sole expense.
9.
Corridor doors, when not in use, shall be kept closed.
10.
Tenant shall not: (1) make or permit any improper, objectionable or unpleasant noises or
odors in the Building, or otherwise interfere in any way with other tenants or persons having
business with them; (2) solicit business or distribute or cause to be distributed, in any
portion of the
May 30, 2003
Matter ID Number: 7329
Building, handbills, promotional materials or other advertising; or (3) conduct or permit
other activities in the Building that might, in Landlords sole opinion, constitute a
nuisance.
11.
No animals, except those assisting handicapped persons, shall be brought into the Building or
kept in or about the Premises.
12.
No inflammable, explosive or dangerous fluids or substances shall be used or kept by Tenant
in the Premises, Building or about the Property, except for those substances as are typically
found in similar premises used for general office purposes and are being used by Tenant in a
safe manner and in accordance with all applicable Laws. Tenant shall not, without Landlords
prior written consent, use, store, install, spill, remove, release or dispose of, within or
about the Premises or any other portion of the Property, any asbestos-containing materials or
any solid, liquid or gaseous material now or subsequently considered toxic or hazardous under
the provisions of 42 U.S.C. Section 9601 et seq. or any other applicable environmental Law
which may now or later be in effect. Tenant shall comply with all Laws pertaining to and
governing the use of these materials by Tenant and shall remain solely liable for the costs of
abatement and removal.
13.
Tenant shall not use or occupy the Premises in any manner or for any purpose which might
injure the reputation or impair the present or future value of the Premises or the Building.
Tenant shall not use, or permit any part of the Premises to be used for lodging, sleeping or
for any illegal purpose.
14.
Tenant shall not take any action which would violate Landlords labor contracts or which
would cause a work stoppage, picketing, labor disruption or dispute or interfere with
Landlords or any other tenants or occupants business or with the rights and privileges of
any person lawfully in the Building
(Labor Disruption)
. Tenant shall take the actions
necessary to resolve the Labor Disruption, and shall have pickets removed and, at the request
of Landlord, immediately terminate any work in the Premises that gave rise to the Labor
Disruption, until Landlord gives its written consent for the work to resume. Tenant shall have
no claim for damages against Landlord or any of the Landlord Related Parties nor shall the
Commencement Date of the Term be extended as a result of the above actions.
15.
Tenant shall not install, operate or maintain in the Premises or in any other area of the
Building, electrical equipment that would overload the electrical system beyond its capacity
for proper, efficient and safe operation as determined solely by Landlord. Tenant shall not
furnish cooling or heating to the Premises, including, without limitation, the use of electric
or gas heating devices, without Landlords prior written consent. Tenant shall not use more
than its proportionate share of telephone lines and other telecommunication facilities
available to service the Building.
16.
Tenant shall not operate or permit to be operated a coin or token operated vending machine or
similar device (including, without limitation, telephones, lockers, toilets, scales, amusement
devices and machines for sale of beverages, foods, candy, cigarettes and other goods), except
for machines for the exclusive use of Tenants employees and invitees.
17.
Bicycles and other vehicles are not permitted inside the Building or on the walkways outside
the Building, except in areas designated by Landlord. This exclusion is expressly understood
not to apply to conveyances reasonably necessary for the movement of persons with disabilities
or for the easy movement of children under 4 years of age within the Building.
18.
Landlord may from time to time adopt systems and procedures for the security and safety of
the Building and the Property, its occupants, entry, use and contents. Tenant, its agents,
employees, contractors, guests and invitees shall comply with Landlords systems and
procedures.
19.
Landlord shall have the right to prohibit the use of the name of the Building or any other
publicity by Tenant that in Landlords sole opinion may impair the reputation of the Building
or its desirability. Upon written notice from Landlord, Tenant shall refrain from and
discontinue such publicity immediately.
20.
Neither Tenant nor its agents, employees, contractors, guests or invitees shall smoke or
permit smoking in the Common Areas, unless a portion of the Common Areas have been declared a
designated smoking area by Landlord, nor shall the above parties allow smoke from the Premises
to emanate into the Common Areas or any other part of the Building. Landlord shall have the
right to designate the Building (including the Premises) as a non-smoking building.
21.
Landlord shall have the right to designate and approve standard window coverings for the
Premises and to establish rules to assure that the Building presents a uniform exterior
appearance. Tenant shall ensure, to the extent reasonably practicable, that window coverings
are closed on windows in the Premises while they are exposed to the direct rays of the sun.
May 30, 2003
Matter ID Number: 7329
22.
Deliveries to and from the Premises shall be made only at the times in the areas and through
the entrances and exits reasonably designated by Landlord. Tenant shall not make deliveries to
or from the Premises in a manner that might
interfere with the use by any other tenant of its premises or of the Common Areas, any
pedestrian use, or any use which is inconsistent with good business practice.
23.
The work of cleaning personnel shall not be hindered by Tenant after 5:30
p.m
., and
cleaning work may be done at any time when the offices are vacant. Windows, doors and fixtures
may be cleaned at any time. Tenant shall provide adequate waste and rubbish receptacles to
prevent unreasonable hardship to the cleaning service.
May 30, 2003
Matter ID Number: 7329
1.
Renewal Option.
A.
Grant of Option; Conditions
. Tenant shall have the right to extend the
Term (the
Renewal Option)
for one additional period of five (5) years commencing on the day
following the Termination Date of the initial Term and ending on the fifth anniversary
of the Termination Date (the
Renewal Term),
if:
1.
Landlord receives notice of exercise
(Initial Renewal Notice)
not
less than 9 full calendar months prior to the expiration of the initial Term and
not more than 12 full calendar months prior to the expiration of the initial
Term; and
2.
Tenant is not in default under the Lease beyond any applicable cure
periods at the time that Tenant delivers its Initial Renewal Notice or at the
time Tenant delivers its Binding Notice (as defined below); and
3.
No part of the Premises is sublet (other than pursuant to a
Permitted Transfer, as defined in Section 11 of the Lease) at the time that
Tenant delivers its Initial Renewal Notice or at the time Tenant delivers its
Binding Notice; and
4.
The Lease has not been assigned (other than pursuant to a Permitted
Transfer, as defined in Section 11 of the Lease) prior to the date that Tenant
delivers its Initial Renewal Notice or prior to the date Tenant delivers its
Binding Notice.
B.
Terms Applicable to Premises During Renewal Term
.
1.
The initial Base Rent rate per rentable square foot for the
Premises during the Renewal Term shall equal 95% of the Prevailing Market rate
(hereinafter defined) per rentable square foot for the Premises. Base Rent during
the Renewal Term shall increase, if at all, in accordance with the increases
assumed in the determination of Prevailing Market rate. Base Rent attributable to
the Premises shall be payable in monthly installments in accordance with the
terms and conditions of Section 4 of the Lease.
2.
Tenant shall pay Additional Rent (i.e. Taxes and Expenses) for the
Premises during the Renewal Term In accordance with the terms of Section 4 of the
Lease, and the manner and method in which Tenant reimburses Landlord for Tenants
share of Taxes and Expenses and the Base Year applicable to such matter, shall be
some of the factors considered in determining the Prevailing Market rate for the
Renewal Term.
C.
Initial Procedure for Determining Prevailing Market
. Within 30 days after
receipt of
Tenants Initial Renewal Notice, Landlord shall advise Tenant of the applicable Base
Rent
rate for the Premises for the Renewal Term. Tenant, within 30 days after the date on
which Landlord advises Tenant of the applicable Base Rent rate for the Renewal Term,
shall either (i) give Landlord final binding written notice
(Binding Notice)
of
Tenants
exercise of its Renewal Option, or (ii) if Tenant disagrees with Landlords
determination,
provide Landlord with written notice of rejection (the
Rejection Notice)
. If Tenant
fails
to provide Landlord with either a Binding Notice or Rejection Notice within such 30 day
period, Tenants Renewal Option shall be null and void and of no further force and
effect.
If Tenant provides Landlord with a Binding Notice, Landlord and Tenant shall enter into
the Renewal Amendment (as defined below) upon the terms and conditions set forth
herein. If Tenant provides Landlord with a Rejection Notice, Landlord and Tenant shall
work together in good faith to agree upon the Prevailing Market rate for the Premises
during the Renewal Term. Upon agreement, Landlord and Tenant shall enter into the
Renewal Amendment in accordance with the terms and conditions hereof.
Notwithstanding the foregoing, if Landlord and Tenant fail to agree upon the Prevailing
Market rate within 30 days after the date Tenant provides Landlord with the Rejection
Notice, Tenant, by written notice to Landlord (the
Arbitration Notice)
within 5 days
after
the expiration of such 30 day period, shall have the right to have the Prevailing
Market
rate determined in accordance with the arbitration procedures described in Section D
May 30, 2003
Matter ID Number: 7329
D.
Arbitration Procedure
.
1.
If Tenant provides Landlord with an Arbitration Notice, Landlord
and Tenant, within
5 days after the date of the Arbitration Notice, shall each simultaneously
submit to
the other, in a sealed envelope, its good faith estimate of the Prevailing
Market
rate for the Premises during the Renewal Term (collectively referred to as the
Estimates
). If the higher of such Estimates is not more than 105% of the lower
of such Estimates, then Prevailing Market rate shall be the average of the two
Estimates. If the Prevailing Market rate is not resolved by the exchange of
Estimates, then, within 7 days after the exchange of Estimates, Landlord and
Tenant shall each select an appraiser to determine which of the two Estimates
most closely reflects the Prevailing Market rate for the Premises during the
Renewal Term. Each appraiser so selected shall be certified as an MAI appraiser
or as an ASA appraiser and shall have had at least 5 years experience within the
previous 10 years as a real estate appraiser working in the Foster City/San
Mateo
area with working knowledge of current rental rates and practices. For purposes
hereof, an MAI appraiser means an individual who holds an MAI designation
conferred by, and is an independent member of, the American Institute of Real
Estate Appraisers (or its successor organization, or in the event there is no
successor organization, the organization and designation most similar), and an
ASA appraiser means an individual who holds the Senior Member designation
conferred by, and is an independent member of, the American Society of
Appraisers (or its successor organization, or, in the event there is no
successor
organization, the organization and designation most similar).
2.
Upon selection, Landlords and Tenants appraisers shall work
together in good
faith to agree upon which of the two Estimates most closely reflects the
Prevailing
Market rate for the Premises. The Estimate chosen by such appraisers shall be
binding on both Landlord and Tenant as the Base Rent rate for the Premises
during the Renewal Term, subject to the terms of Section D.4 below regarding the
Minimum Renewal Base Rent, as defined therein. If either Landlord or Tenant
fails to appoint an appraiser within the 7 day period referred to above, the
appraiser appointed by the other party shall be the sole appraiser for the
purposes
hereof. If the two appraisers cannot agree upon which of the two Estimates most
closely reflects the Prevailing Market within 20 days after their appointment,
then,
within 10 days after the expiration of such 20 day period, the two appraisers
shall
select a third appraiser meeting the aforementioned criteria. Once the third
appraiser (i.e. arbitrator) has been selected as provided for above, then, as
soon
thereafter as practicable but in any case within 14 days, the arbitrator shall
make
his determination of which of the two Estimates most closely reflects the
Prevailing
Market rate and such Estimate shall be binding on both Landlord and Tenant as
the Base Rent rate for the Premises, subject to the terms of Section D.4 below
regarding the Minimum Renewal Base Rent, as defined therein. If the arbitrator
believes that expert advice would materially assist him, he may retain one or
more
qualified persons to provide such expert advice. The parties shall share equally
in
the costs of the arbitrator and of any experts retained by the arbitrator. Any
fees
of any appraiser, counsel or experts engaged directly by Landlord or Tenant,
however, shall be borne by the party retaining such appraiser, counsel or
expert.
3.
If the Prevailing Market rate has not been determined by the
commencement date
of the Renewal Term, Tenant shall pay Base Rent upon the terms and conditions
in effect during the last month of the initial Term for the Premises until such
time
as the Prevailing Market rate has been determined. Upon such
determination, the
Base Rent for the Premises shall be retroactively adjusted to the commencement
of the Renewal Term for the Premises. If such adjustment results in an
underpayment of Base Rent by Tenant, Tenant shall pay Landlord the amount of
such underpayment within 30 days after the determination thereof. If such
adjustment results in an overpayment of Base Rent by Tenant, Landlord shall
credit such overpayment against the next installment of Base Rent due under the
Lease and, to the extent necessary, any subsequent installments, until the
entire
amount of such overpayment has been credited against Base Rent.
E.
Renewal Amendment
. If Tenant is entitled to and properly exercises its
Renewal Option,
Landlord shall prepare an amendment (the
Renewal Amendment
) to reflect changes in
the Base Rent, Term, Termination Date and other appropriate terms. The Renewal
May 30, 2003
Matter ID Number: 7329
Amendment shall be sent to Tenant within a reasonable time after receipt of the
Binding Notice and Tenant shall execute and return the Renewal Amendment to Landlord
within 15 days after Tenants receipt of same, but, upon final determination of the
Prevailing Market rate applicable during the Renewal Term as described herein, an
otherwise valid exercise of the Renewal Option shall be fully effective whether or not
the Renewal Amendment is executed.
F.
Prevailing Market
. For purposes hereof,
Prevailing Market
shall mean
the arms length fair market annual rental rate per rentable square foot under renewal
leases and amendments entered into on or about the date on which the Prevailing Market
is being determined hereunder for space comparable to the Premises in the Building and
office buildings comparable to the Building in the Foster City/San Mateo area. The
determination of Prevailing Market shall take into account any material economic
differences between the terms of this Lease and any comparison lease or amendment, such
as rent abatements, construction costs and other concessions and the manner, if any, in
which the landlord under any such lease is reimbursed for operating expenses and taxes.
2.
Right of First Refusal.
A.
Grant of Option; Conditions
. Tenant shall have an ongoing right of first
refusal (the
Right of First Refusal
) with respect to the approximately 36,885 rentable square feet
of
space consisting of the 7
th
floor of the East Tower Building, shown on the
demising plan
attached hereto as
Exhibit F-1
(the
Refusal
Space
). Tenants Right of First Refusal
shall be exercised as follows: when Landlord has a prospective tenant, other than the
then-existing tenant in the applicable portion of the Refusal Space, (the
Prospect
)
interested in leasing all or a portion of the Refusal Space, Landlord shall advise
Tenant
(the
Advice
) of the terms under which Landlord is prepared to lease such portion of
the
Refusal Space to such Prospect and Tenant may lease such portion of the Refusal
Space, under such terms, by providing Landlord with written notice of exercise (the
Notice of Exercise
) within 5 Business Days after the date of the Advice, except that
Tenant shall have no such Right of First Refusal and Landlord need not provide Tenant
with an Advice if:
1.
Tenant is in default under the Lease beyond any applicable cure
periods at the time that Landlord would otherwise deliver the Advice; or
2.
the Premises, or any portion thereof, is sublet (other than pursuant
to a Permitted Transfer, as defined in Section 11 of the Lease) at the time
Landlord would otherwise deliver the Advice; or
3.
the Lease has been assigned (other than pursuant to a Permitted
Transfer, as defined in Section 11 of the Lease) prior to the date Landlord would
otherwise deliver the Advice; or
4.
the Refusal Space is not intended for the exclusive use of Tenant or
the transferee of a Permitted Transfer during the Term; or
5.
the Tenant or the transferee of a Permitted Transfer is not occupying
the Premises on the date Landlord would otherwise deliver the Advice.
Notwithstanding anything in the foregoing to the contrary, Landlord shall not deliver
an Advice to Tenant prior to the earlier of the following: (1) the date that is 30
months after the Commencement Date, or (2) the first date by which at least 50% of the
Building is leased, it being understood that Landlord will not lease any portion of the
Refusal Space to a third party prior to the earlier of such dates.
B.
Terms for Refusal Space.
1.
The term for the Refusal Space shall commence upon the commencement
date stated in the Advice and thereupon such Refusal Space shall be considered a
part of the Premises, provided that all of the terms stated in the Advice,
including the termination date set forth in the Advice, shall govern Tenants
leasing of the Refusal Space and only to the extent that they do not conflict
with the Advice, the terms and conditions of the Lease shall apply to the Refusal
Space. Tenant shall pay Base Rent and Additional Rent for the Refusal Space in
accordance with the terms and conditions of the Advice.
May 30, 2003
Matter ID Number: 7329
2.
The Refusal Space (including improvements and personalty, if any)
shall be accepted by Tenant in its condition and as-built configuration existing
on the earlier of the date Tenant takes possession of the Refusal Space or the
date the term for such Refusal Space commences, unless the Advice specifies work
to be performed by Landlord in the Refusal Space, in which case Landlord shall
perform such work in the Refusal Space. If Landlord is delayed delivering
possession of the Refusal Space due to the holdover or unlawful possession of such
space by any party, Landlord shall use reasonable efforts to obtain possession of
the space, and the commencement of the term for the Refusal Space shall be
postponed until the date Landlord delivers possession of the Refusal Space to
Tenant free from occupancy by any party.
C.
Termination of Right of First Refusal.
The rights of Tenant hereunder
with respect to the
Refusal Space shall terminate on the earlier to occur of (i) the original Termination
Date
under this Lease (not including the Renewal Term, if any), (ii) with respect to any
particular Advice, Tenants failure to exercise its Right of First Refusal within the 5
Business Day period provided in Section A above; and (iii) with respect to any
particular
Advice, the date Landlord would have provided Tenant such Advice if Tenant had not
been in violation of one or more of the conditions set forth in Section A above.
D.
Refusal Space Amendment.
If Tenant exercises its Right of First Refusal,
Landlord shall
prepare an amendment (the
Refusal Space Amendment)
adding the Refusal Space to
the Premises on the terms set forth in the Advice and reflecting the changes in the
Base
Rent, Rentable Square Footage of the Premises, Tenants Pro Rata Share and other
appropriate terms. A copy of the Refusal Space Amendment shall be sent to Tenant
within a reasonable time after Landlords receipt of the Notice of Exercise executed by
Tenant, and Tenant shall execute and return the Refusal Space Amendment to Landlord
within 15 days thereafter, but an otherwise valid exercise of the Right of First
Refusal
shall be fully effective whether or not the Refusal Space Amendment is executed.
3.
Shower Facility.
Subject to the provisions of this Section 3 of Exhibit F, following the
completion of construction of the Shower Facility (as defined in the Work Letter) by Landlord,
so long as Tenant is not in default under this Lease, Tenant shall be entitled to the
non-exclusive use of the Shower Facility. The use of the Shower Facility shall be subject to
the reasonable rules and regulations (including rules regarding hours of use) established from
time to time by Landlord for the Shower Facility. The costs of operating, maintaining and
repairing the Shower Facility may be included as part of Expenses. Tenant acknowledges that
the provisions of this Section shall not be deemed to be a representation by Landlord that
Landlord shall continuously maintain the Shower Facility in its original configuration
throughout the Term, and Landlord shall have the right, at Landlords sole discretion, to
expand, contract or otherwise modify the Shower Facility, so long as the benefits to Tenant in
connection therewith are not materially reduced. Tenant hereby voluntarily releases,
discharges, waives and relinquishes any and all actions or causes of action for personal
injury or property damage occurring to Tenant or its employees or agents arising as a result
of the use of the Shower Facility, or any activities incidental thereto, wherever or however
the same may occur, and further agrees that Tenant will not prosecute any claim for personal
injury or property damage against Landlord or any of its officers, agents, servants or
employees for any said causes of action, except to the extent arising out of the gross
negligence or willful misconduct of Landlord. It is the intention of Tenant with respect to
the Shower Facility to exempt and relieve Landlord from liability for personal injury or
property damage caused by negligence.
4.
Temporary Fitness Center Use.
During the period starting with the Commencement Date and
ending on the date on which Landlord first offers Tenant an Advice with respect to all or any
portion of the Refusal Space in accordance with the provisions of Paragraph 2 of this Exhibit
F, Tenant may have access to up to 5,000 rentable square feet in a location designated by
Landlord on the 7
th
floor of the Building (the Fitness Center Space) for the
placing of exercise equipment and use as a fitness center by Tenants employees only, all at
Tenants sole risk and Tenants sole cost and expense. Tenants use of the Fitness Center
Space shall be subject to Landlord reasonable prior approval of the nature of the equipment
to be installed by Tenant and the use thereof, and shall be subject to all the terms and
conditions of the Lease (and the Fitness Center Space shall be considered part of the Premises
for purposes of Tenants insurance and indemnification obligations under the Lease), except
that Tenant shall not be required to pay Base Rent and Additional Rent in connection with such
use. Landlord may deny or withdraw such permission to enter or use the Fitness Center Space
prior to the first Advice at any time that Landlord reasonably determines that such entry by
Tenant is causing a dangerous situation for Landlord, Tenant or their respective contractors
or employees.
May 30, 2003
Matter ID Number: 7329
May 29, 2003
Matter ID Number: 7329
1.
The capitalized terms used in this Parking Agreement shall have the same definitions as set
forth in the Lease to the extent that such capitalized terms are defined therein and not
redefined in this Parking Agreement. In the event of any conflict between the Lease and this
Parking Agreement, the latter shall control.
2.
During the initial Term, Tenant agrees to lease from Landlord and Landlord agrees to lease to
Tenant a total of 128 non-reserved parking spaces in the parking facility servicing the
Building
(Parking Facility)
. During the initial Term, the charge for such 128 non-reserved
parking spaces shall be $0.00 per non-reserved parking pass, per month. Tenant may, from time
to time request additional parking spaces, and if Landlord shall provide the same, such
parking spaces shall be provided and used on a month-to-month basis, and otherwise on the
foregoing terms and provisions, and at such prevailing monthly parking charges as shall be
established from time to time, provided that Tenant shall be entitled to use such additional
parking spaces at no additional charge so long as such additional spaces are available in the
Parking Facility and Tenants use of such additional parking spaces does not interfere with
the rights of the employees and invitees of other tenants of the Building to use the Parking
Facility, as reasonably determined by Landlord. No deductions from the monthly charge, if
any, shall be made for days on which the Parking Facility is not used by Tenant.
3.
Tenant shall at all times comply with all applicable ordinances, rules, regulations, codes,
laws, statutes and requirements of all federal, state, county and municipal governmental
bodies or their subdivisions respecting the use of the Parking Facility. Landlord reserves the
right to adopt, modify and enforce reasonable rules
(Rules)
governing the use of the Parking
Facility from time to time including any key-card, sticker or other identification or entrance
system and hours of operation. The Rules set forth herein are currently in effect. Landlord
may refuse to permit any person who violates such Rules to park in the Parking Facility, and
any violation of the Rules shall subject the car to removal from the Parking Facility.
4.
Unless specified to the contrary above, the parking spaces hereunder shall be provided on a
non-designated first-come, first-served basis. Tenant acknowledges that Landlord has no
liability for claims arising through acts or omissions of any independent operator of the
Parking Facility. Landlord shall have no liability whatsoever for any damage to items located
in the Parking Facility, nor for any personal injuries or death arising out of any matter
relating to the Parking Facility, and in all events, Tenant agrees to look first to its
insurance carrier and to require that Tenants employees look first to their respective
insurance carriers for payment of any losses sustained in connection with any use of the
Parking Facility. Tenant hereby waives on behalf of its insurance carriers all rights of
subrogation against Landlord or Landlords agents. Landlord reserves the right to assign
specific parking spaces, and to reserve parking spaces for visitors, small cars, handicapped
persons and for other tenants, guests of tenants or other parties, which assignment and
reservation or spaces may be relocated as determined by Landlord from time to time, and Tenant
and persons designated by Tenant hereunder shall not park in any location designated for such
assigned or reserved parking spaces. Tenant acknowledges that the Parking Facility may be
closed entirely or in part in order to make repairs or perform maintenance services, or to
alter, modify, re-stripe or renovate the Parking Facility, or if required by casualty,
strike, condemnation, act of God, governmental law or requirement or other reason beyond the
operators reasonable control. In such event, Landlord shall refund any prepaid parking fee
hereunder, prorated on a per diem basis.
5.
If Tenant shall default under this Parking Agreement, the operator shall have the right to
remove from the Parking Facility any vehicles hereunder which shall have been involved or
shall have been owned or driven by parties involved in causing such default, without liability
therefor whatsoever. In addition, if Tenant shall default under this Parking Agreement,
Landlord shall have the right to cancel this Parking Agreement on 30 days written notice,
unless within such 30 day period, Tenant cures such default. If Tenant defaults with respect
to the same term or condition under this Parking Agreement more than 3 times during any 12
month period, and Landlord notifies Tenant thereof promptly after each such default, the next
default of such term or condition during the succeeding 12 month period, shall, at Landlords
election, constitute an incurable default. Such cancellation right shall be cumulative and
in addition to any other rights or remedies available to Landlord at law or equity, or
provided under the Lease (all of which rights and remedies under the Lease are hereby
incorporated herein, as though fully set forth). Any default by Tenant under the Lease shall
be a default under this Parking Agreement.
May 30, 2003
Matter ID Number: 7329
(i)
Tenant shall have access to the Parking Facility on a 24-hour basis, 7 days a week, subject
to the other terms of this Parking Agreement. Tenant shall not store or permit its employees
to store any automobiles in the Parking Facility without the prior written consent of the
operator. Except for emergency repairs, Tenant and its employees shall not perform any work on
any automobiles while located in the Parking Facility, or on the Property. If it is necessary
for Tenant or its employees to leave an automobile in the Parking Facility overnight, Tenant
shall provide the operator with prior notice thereof designating the license plate number and
model of such automobile.
(ii)
Cars must be parked entirely within the stall lines painted on the floor, and only small
cars may be parked in areas reserved for small cars.
(iii)
All directional signs and arrows must be
observed.
(iv)
The speed limit shall be 5 miles per
hour.
(v)
Parking spaces reserved for handicapped persons must be used only by vehicles properly
designated.
(vi)
Parking is prohibited in all areas not expressly designated for parking, including without
limitation:
(a)
Areas not striped for parking
(b)
aisles
(c)
where no parking signs are posted
(d)
ramps
(e)
loading zones
(vii)
Parking stickers, key cards or any other devices or forms of identification or entry
supplied by the operator shall remain the property of the operator. Such device must be
displayed as requested and may not be mutilated in any manner. The serial number of the
parking identification device may not be obliterated. Parking passes and devices are not
transferable and any pass or device in the possession of an unauthorized holder will be void.
(viii)
Monthly fees shall be payable in advance prior to the first day of each month. Failure to
do so will result in a charge at the prevailing daily parking rate until payment is made, and
no refunds shall be made for such daily charges following the late payment of the monthly
fee. No deductions or allowances from the monthly rate will be made for days on which the
Parking Facility is not used by Tenant or its designees.
(ix)
Parking Facility managers or attendants are not authorized to make or allow any exceptions
to these Rules.
(x)
Every parker is required to park and lock his/her own car.
(xi)
Loss or theft of parking pass, identification, key cards or other such devices must be
reported to Landlord and to the Parking Facility manager immediately. Any parking devices
reported lost or stolen found on any authorized car will be confiscated and the illegal
holder will be subject to prosecution. Lost or stolen passes and devices found by Tenant or
its employees must be reported to the office of the Parking Facility immediately.
(xii)
Washing, waxing, cleaning or servicing of any vehicle by the customer and/or his agents is
prohibited. Parking spaces may be used only for parking automobiles.
(xiii)
Tenant agrees to acquaint all persons to whom Tenant assigns a parking space with these
Rules.
6.
TENANT ACKNOWLEDGES AND AGREES THAT, TO THE FULLEST EXTENT PERMITTED BY LAW, LANDLORD SHALL NOT BE
RESPONSIBLE FOR ANY LOSS OR DAMAGE TO TENANT OR TENANTS PROPERTY (INCLUDING, WITHOUT LIMITATIONS,
ANY LOSS OR DAMAGE TO TENANTS AUTOMOBILE OR THE CONTENTS THEREOF DUE TO THEFT, VANDALISM OR
ACCIDENT) ARISING FROM OR RELATED TO TENANTS USE OF THE PARKING FACILITY OR EXERCISE OF ANY
RIGHTS UNDER THIS PARKING AGREEMENT, WHETHER OR NOT SUCH LOSS OR DAMAGE RESULTS FROM LANDLORDS
ACTIVE NEGLIGENCE OR NEGLIGENT OMISSION. THE LIMITATION ON LANDLORDS LIABILITY UNDER THE
May 30, 2003
Matter ID Number: 7329
PRECEDING SENTENCE SHALL NOT APPLY HOWEVER TO LOSS OR DAMAGE
ARISING DIRECTLY FROM LANDLORDS
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
7.
Without limiting the provisions of Paragraph 6 above, Tenant hereby voluntarily releases,
discharges, waives and relinquishes any and all actions or causes of action for personal
injury or property damage occurring to Tenant arising as a result of parking in the Parking
Facility, or any activities incidental thereto, wherever or however the same may occur, and
further agrees that Tenant will not prosecute any claim for personal injury or property damage
against Landlord or any of its officers, agents, servants or employees for any said causes of
action. It is the intention of Tenant by this instrument, to exempt and relieve Landlord from
liability for personal injury or property damage caused by negligence, but shall not apply to
Landlords gross negligence or willful misconduct.
8.
The provisions of Section 20 of the Lease are hereby incorporated by reference as if fully
recited.
Tenant acknowledges that Tenant has read the provisions of this Parking Agreement, has been
fully and completely advised of the potential dangers incidental to parking in the Parking
Facility and is fully aware of the legal consequences of agreeing to this instrument.
May 30, 2003
Matter ID Number: 7329
A.
Landlord and Tenant are parties to that certain lease dated
June 2, 2003 (the
Lease
).
Pursuant to the Lease, Landlord has leased to Tenant space currently containing approximately
35,435
rentable square feet (the
Original Premises
) described as Suite No. 800 on the
8
th
floor of the building commonly known as Parkside Tower East located at 1051 E.
Hillsdale Drive, Foster City, California (defined in Section 1.01 of the Lease as the
East
Tower
), which is a portion of the
Building
defined in Section 1.01 of the Lease.
B.
Tenant has requested that additional space containing approximately
18,442
rentable square
feet described as Suite No. 700 on the 7
th
floor of the Building shown on
Exhibit A
hereto (the
Expansion Space
) be added to the Original Premises and that the Lease be
appropriately amended and Landlord is willing to do the same on the following terms and
conditions.
1.
Expansion and Effective Date.
Effective as of the Expansion Effective Date (defined
below), the Premises, as defined in the Lease, is increased from 35,435 rentable square feet
on the 8
th
floor to
53,877
rentable square feet on the 7
th
and
8
th
floors by the addition of the Expansion Space, and from and after the
Expansion Effective Date, the Original Premises and the Expansion Space, collectively, shall
be deemed the Premises, as defined in the Lease. The Term for the Expansion Space shall
commence on the Expansion Effective Date and end on the Termination Date. The Expansion Space
is subject to all the terms and conditions of the Lease except as expressly modified herein
and except that Tenant shall not be entitled to receive any allowances, abatements or other
financial concessions granted with respect to the Original Premises unless such concessions
are expressly provided for herein with respect to the Expansion Space.
1.01.
The
Expansion Effective Date
shall be the later to occur of (i) November
15, 2004
(Target Expansion Effective Date
), and
(ii) the date upon which the
Expansion Space Landlord Work (as defined in the Expansion Space Work Letter attached
as
Exhibit B
hereto) in the Expansion Space has been Substantially Completed; provided,
however, that if Landlord is delayed in the performance of the Expansion Space
Landlord Work as a result of the acts or omissions of Tenant, the Tenant Related
Parties (defined in Section 13 of the Lease) or their respective contractors or
vendors, including, without limitation, changes requested by Tenant to the Expansion
Space Plans or other approved plans, Tenants failure to comply with any of its
obligations under the Lease or this Amendment or the Expansion Space Work Letter, or
the specification of any materials or equipment with long lead times (a
Tenant
Delay),
the Expansion Space Landlord Work shall be deemed to be Substantially
Complete on the date that Landlord could reasonably have been expected to
Substantially Complete the Expansion Space Landlord Work absent any Tenant Delay.
The Expansion Space Landlord Work shall be deemed to be
Substantially Complete
on
the later of (a) the date that all Expansion Space Landlord Work has been
performed, other than any details of construction, mechanical adjustment or any
other similar matter, the non-completion of which does not materially interfere
with Tenants use of the Expansion Space, in a good and workmanlike manner and in
compliance with the Expansion Space Plans (as defined in the Expansion Space Work
Letter attached hereto as
Exhibit B
) and subject to any revisions to the Expansion
Space Plans approved by Landlord and
Matter ID Number: 13883
Tenant in accordance with the Expansion Space Work Letter), and (b) the date
Landlord receives from the appropriate governmental authorities all approvals
necessary for the occupancy of the Expansion Space.
1.02.
The adjustment of the Expansion Effective Date and,
accordingly, the postponement of Tenants obligation to pay Rent on the Expansion
Space shall be Tenants sole remedy and shall constitute full settlement of all claims
that Tenant might otherwise have against Landlord by reason of the Expansion Space not
being ready for occupancy by Tenant on the Target Expansion Effective Date. If the
Expansion Effective Date is delayed pursuant to the foregoing, the Termination Date
under the Lease shall not be similarly extended.
1.03.
In addition to the postponement, if any, of the Expansion Effective Date as a
result of the applicability of Section 1.01. of this Amendment, the Expansion
Effective Date shall be delayed to the extent that Landlord fails to deliver
possession of the Expansion Space on the Expansion Effective Date for any other reason
(other than Tenant Delays by Tenant), including but not limited to, holding over by
prior occupants. Any such delay in the Expansion Effective Date shall not subject
Landlord to any liability for any loss or damage resulting therefrom. If the
Expansion Effective Date is delayed pursuant to the foregoing, the Termination Date
under the Lease shall not be similarly extended.
2.
Base Rent.
In addition to Tenants obligation to pay Base Rent for the
Original Premises, Tenant shall pay Landlord Base Rent for the Expansion Space as follows:
Annual Rate Per
Months of Term or Period
Square Foot
Monthly Base Rent
$
24.60
$
37,806.10
$
26.40
$
40,572.40
$
27.60
$
42,416.60
$
28.80
$
44,260.80
$
30.00
$
46,105.00
All such Base Rent shall be payable by Tenant in accordance with the terms of the Lease, as
amended hereby.
Landlord and Tenant acknowledge that the foregoing schedule is based on the assumption that
the Expansion Effective Date is the Target Expansion Effective Date. If the Expansion
Effective Date is other than the Target Expansion Effective Date, the schedule set forth
above with respect to the payment of any installment(s) of Base Rent for the Expansion
Space shall be appropriately adjusted on a per diem basis to reflect the actual Expansion
Effective Date, and the actual Expansion Effective Date shall be set forth in a
confirmation letter to be prepared by Landlord. However, the effective date of any
increases or decreases in the Base Rent rate shall not be postponed as a result of an
adjustment of the Expansion Effective Date as provided above.
3.
Security Deposit.
No Security Deposit shall be required in connection with this
Amendment. The definition of Security Deposit set forth in Section 1.08 of the Lease is
hereby deleted and replaced with None. The first sentence of Article V of the Lease is
hereby amended to include the clause, if any, after the words Security Deposit in the
first sentence. The provisions of Section 8.09 below shall apply to Tenants Letter of
Credit obligations under the Lease, as amended hereby.
4.
Tenants Pro Rata Share.
For the period commencing with the Expansion Effective Date
and ending on the Termination Date, Tenants Pro Rata Share for the Expansion Space is
4.6283%.
5.
Expenses and Taxes.
For the period commencing with the Expansion Effective Date and
ending on the Termination Date, Tenant shall pay for Tenants Pro Rata Share of Expenses and
Taxes applicable to the Expansion Space in accordance with the terms of the Lease, as amended
hereby.
6.
Improvements to Expansion Space.
6.01.
Condition of Expansion Space.
Tenant has inspected the Expansion Space and
agrees to accept the same as is without any agreements, representations,
understandings or obligations on the part of Landlord to perform any alterations,
Matter ID Number: 13883
repairs or improvements, except as may be expressly provided otherwise in this
Amendment or in the Expansion Space Work Letter attached hereto as
Exhibit B
.
Notwithstanding the foregoing, except to the extent caused by Tenant or any Tenant
Related Party (as defined in Section 13 of the Lease), as of the Expansion
Effective Date, the electrical, heating, ventilation and air conditioning,
mechanical and plumbing systems serving the Expansion Space shall be in good order
and satisfactory condition and in compliance with applicable Laws (as defined in
Section 5 of the Lease). If the foregoing are not in good working order or
compliance as provided above, Landlord shall be responsible for repairing or
restoring same, or correcting such violations, at its cost and expense, provided
that the foregoing shall not prohibit Landlord from including the cost of routine
maintenance and repair of such systems in Expenses as otherwise permitted under
Section 4.02 of the Lease.
6.02.
Responsibility for Improvements to Expansion Space.
Landlord shall perform
improvements to the Expansion Space in accordance with the Expansion Space Work Letter
attached hereto as
Exhibit B.
7.
Early Access to Expansion Space; Beneficial Occupancy.
Landlord grants Tenant the
right to enter the Expansion Space, at Tenants sole risk, thirty (30) days prior to
Landlords then reasonable estimate of the Expansion Effective Date, for the purpose of
installing telecommunications and data cabling, fiber optic links, equipment, furnishings and
other personalty, and for conducting business operations in the Premises. Such access shall
be subject to the terms and conditions of the Lease, as amended hereby, but Tenant shall not
be required to pay Rent (defined in Section 4.01 of the Lease) to Landlord during such period
of early access before the Expansion Effective Date. However, Tenant shall be responsible for
the reasonable cost of services requested by Tenant (e.g. freight elevator usage of
after-hours HVAC) during such period. Landlord may withdraw or limit such permission to
enter the Expansion Space prior to the Expansion Effective Date at any time that Landlord
reasonably determines that such entry by Tenant is causing a dangerous situation for Landlord,
Tenant or their respective contractors or employees, or if Landlord reasonably determines that
such entry by Tenant is hampering or otherwise preventing Landlord from proceeding with the
completion of the Expansion Space Landlord Work at the earliest possible date.
In addition to the foregoing, if the Expansion Space Landlord Work is Substantially
Complete prior to the Target Expansion Effective Date, subject to the terms of this Section
7.01, Tenant may take possession of and occupy the Expansion Space for the Permitted Use
and may conduct business operations therein following the date of Substantial Completion of
the Expansion Space Landlord Work and prior to the Expansion Effective Date, which
occupancy shall be subject to the terms and conditions of the Lease, as amended hereby, but
Tenant shall not be required to pay Rent (defined in Section 4.01 of the Lease) to Landlord
during such period of early occupancy before the Expansion Effective Date. However, Tenant
shall be responsible for the reasonable cost of services requested by Tenant (e.g. freight
elevator usage of after-hours HVAC) during such period.
8.
Other Pertinent Provisions.
Landlord and Tenant agree that, effective as of the date
of this Amendment (unless different effective
date(s)
is/are specifically referenced in this
Section), the Lease shall be amended in the following additional respects:
8.01
Renewal Option.
Tenants Renewal Option set forth in Section 1 of
Exhibit F
of
the Lease shall apply to the entire Premises (Original Premises and Expansion Space)
only, and the Renewal Term may be subject to reduction pursuant to Section 8.02 below.
8.02
One-Year Extension Option.
Tenant shall have the One-Year Extension Option set
forth below, which Tenant may, at Tenants option, exercise in lieu of one year of the
term of Tenants Renewal Option. Upon Tenants delivery of an Initial Renewal Notice
under the Renewal Option, Tenants One-Year Extension Option automatically shall be of
no further force and effect, and alternatively, upon Tenants delivery of a One-Year
Renewal Notice, Tenants Renewal Option shall automatically be reduced to a 4-year
renewal option commencing at the conclusion of Tenants One-Year Extension Term and the
notice period for the Renewal Option set forth in Section 1.A.1 of
Exhibit F
of the Lease
shall be calculated from the expiration of the One-Year Extension Term rather than from
the expiration of the initial Term.
Matter ID Number: 13883
A.
Grant of Option; Conditions
. Tenant shall have the right to extend
the
Term (the
One-Year Extension Option)
for the entire Premises only
(both the Original Premises and the Expansion Space) for one additional
period of one (1) year commencing on the day following the Termination
Date of the initial Term and ending on the first anniversary of the
Termination Date (the
One-Year Extension Term
), if:
1.
Landlord receives notice of exercise
(One-Year
Extension
Notice)
not less than 9 full calendar months prior to the
expiration of the initial Term; and
2.
Tenant is not in default under the Lease beyond any
applicable cure
periods at the time that Tenant delivers One-Year Extension Notice;
and
3.
No part of the Premises is sublet (other than pursuant to a
Permitted Transfer, as defined in Section 11 of the Lease) at the
time that Tenant delivers its One-Year Extension Notice; and
4.
The Lease has not been assigned (other than pursuant to a
Permitted Transfer, as defined in Section 11 of the Lease) prior to
the date that Tenant delivers its One-Year Extension Notice.
B.
Terms Applicable to Premises During One-Year Extension Term
.
1.
The Base Rent rate per rentable square foot for the
Premises
during the One-Year Extension Term shall be $2.65 per rentable
square foot for the Premises. Such Base Rent shall be payable in
monthly installments in accordance with the terms and conditions
of Section 4 of the Lease, as amended hereby.
2.
Tenant shall continue to pay Additional Rent for the
Premises
during the One-Year Extension Term in accordance with the
terms of the Lease.
3.
Tenant shall accept the Premises on an as-is basis for the
One-Year Extension Term and shall not be entitled to any allowances,
improvements or concessions in connection therewith.
C.
One-Year Extension Amendment
. If Tenant is entitled to and properly
exercises its One-Year Extension Option, Landlord shall prepare an
amendment (the
One-Year Extension Amendment)
to reflect changes
in the Base Rent, Term, Termination Date and other appropriate terms.
The One-Year Extension Amendment shall be sent to Tenant within a
reasonable time after receipt of the One-Year Extension Notice and
Tenant shall execute and return the One-Year Extension Amendment to
Landlord as soon as practicable after Tenants receipt of same, but, upon
delivery of Tenants One-Year Extension Notice, an otherwise valid
exercise of the One-Year Extension Option shall be fully effective
whether or not the One-Year Extension Amendment is executed.
8.03
7
th
Floor Right of First Refusal.
The Right of First Refusal set forth in
Section 2 of
Exhibit F
of the Lease shall remain in full force and effect, except that:
A.
As amended hereby, such Right of First Refusal shall hereafter be referred
to as the
7
th
Floor Right of First Refusal
, and all references to the
Right
of First Refusal in Section 2 of
Exhibit F
of
the Lease shall refer instead to the
7
th
Floor Right of First Refusal.
B.
The Refusal Space for purposes of the 7
th
Floor Right of First
Refusal
shall be amended to include only the approximately 18,443 rentable square
feet that represent the portion of the Refusal Space set forth on
Exhibit F-1
to the Lease other than the Expansion Space,
and accordingly
Exhibit F-1
is hereby deleted and replaced with
Exhibit A-2
attached hereto. As
amended hereby, the term Refusal Space, as defined in Section 2 of
Exhibit F
to the Lease, shall hereafter be referred to as the
7
th
Floor
Matter ID Number: 13883
Refusal Space
, and all references to the Refusal Space in Section 2 of
Exhibit
F
of the Lease shall refer instead to the 7
th
Floor Refusal Space.
C.
Section 2.C(i) of
Exhibit F
of the Lease is hereby deleted and replaced with
the following: the original Termination Date under the Lease (not including any
renewal or extension of the Term, whether pursuant to the Renewal Option, the
One-Year Extension Option, or otherwise).
8.04.
6
th
Floor Right of First Refusal.
A.
Grant of Option; Conditions
. In addition to the Right of First
Refusal set
forth in Section 2 of
Exhibit F
of the Lease, as amended in Section 8.02
below, Tenant shall have an ongoing right of first refusal (the
6
th
Floor
Right of First Refusal
) with respect to the approximately
41,631
rentable square feet of space consisting of the 6
th
floor of the East
Tower,
shown on the demising plan attached hereto as
Exhibit A-1
(the
6
th
Floor Refusal Space
). Tenants 6
th
Floor Right of First Refusal shall
be
exercised as follows: when Landlord has a prospective tenant, other than
the then-existing tenant in the applicable portion of the 6
th
Floor
Refusal
Space, (the
6
th
Floor Prospect
) interested in leasing all or a portion
of
the 6
th
Floor Refusal Space, Landlord shall advise Tenant (the
6
th
Floor
Advice
) of the terms under which Landlord is prepared to lease such
portion of the 6
th
Floor Refusal Space to such Prospect and Tenant may
lease such portion of the 6
th
Floor Refusal Space, under such terms, by
providing Landlord with written notice of exercise (the
6
th
Floor
Notice
of Exercise
) within 5 Business Days after the date of the 6
th
Floor
Advice, except that Tenant shall have no such 6
th
Floor Right of First
Refusal and Landlord need not provide Tenant with a 6
th
Floor Advice if:
1.
Tenant is in default under the Lease beyond any applicable
cure
periods at the time that Landlord would otherwise deliver the
6
th
Floor Advice; or
2.
the Premises, or any portion thereof, is sublet (other
than
pursuant to a Permitted Transfer, as defined in Section 11 of the
Lease) at the time Landlord would otherwise deliver the 6
th
Floor
Advice; or
3.
the Lease has been assigned (other than pursuant to a
Permitted
Transfer, as defined in Section 11 of the Lease) prior to the
date Landlord would otherwise deliver the
6
th
Floor Advice; or
4.
the 6
th
Floor Refusal Space is not intended for
the exclusive use
of Tenant or the transferee of a Permitted Transfer during the Term; or
5.
the Tenant or the transferee of a Permitted Transfer is not
occupying the Premises on the date Landlord would otherwise
deliver the 6
th
Floor Advice.
B.
Terms for
6
th
Floor Refusal Space.
1.
The term for the 6
th
Floor Refusal Space shall
commence upon
the commencement date stated in the 6
th
Floor Advice and
thereupon such 6
th
Floor Refusal Space shall be considered a
part
of the Premises, provided that all of the terms stated in the
6
th
Floor Advice, including the termination date set forth in the
6
th
Floor Advice, shall govern Tenants leasing of the 6
th
Floor
Refusal Space and only to the extent that they do not conflict with
the 6
th
Floor Advice, the terms and conditions of the Lease
shall
apply to the 6
th
Floor Refusal Space. Tenant shall pay Base Rent
and Additional Rent for the 6
th
Floor Refusal Space in
accordance
with the terms and conditions of the 6
th
Floor Advice.
2.
The 6
th
Floor Refusal Space (including
improvements and
personalty, if any) shall be accepted by Tenant in its condition and
as-built configuration existing on the earlier of the date Tenant
Matter ID Number: 13883
takes possession of the 6
th
Floor Refusal Space or the date
the term for such 6
th
Floor Refusal Space commences, unless
the 6
th
Floor Advice specifies work to be performed by
Landlord in the 6
th
Floor Refusal Space, in which case
Landlord shall perform such work in the 6
th
Floor Refusal
Space. If Landlord is delayed delivering possession of the
6
th
Floor Refusal Space due to the holdover or unlawful possession of such space by
any party, Landlord shall use reasonable efforts to obtain possession of
the space, and the commencement of the term for the
6
th
Floor
Refusal Space shall be postponed until the date Landlord delivers
possession of the 6
th
Floor Refusal Space to Tenant free from
occupancy by any party.
C.
Termination of 6
th
Floor Right of First Refusal
. The
rights of Tenant
hereunder with respect to the 6
th
Floor Refusal Space shall terminate
on
the earlier to occur of (i) the original Termination Date under this Lease
(not including the Renewal Term, if any), (ii) with respect to
any particular 6
th
Floor Advice, Tenants failure to exercise its 6
th
Floor
Right of First
Refusal within the 5 Business Day period provided in Section A above;
and (iii) with respect to any particular
6
th
Floor Advice, the date
Landlord
would have provided Tenant such Advice if Tenant had not been in
violation of one or more of the conditions set forth in Section A above.
D.
6
th
Floor Refusal Space Amendment.
If Tenant exercises
its 6
th
Floor
Right of First Refusal, Landlord shall prepare an amendment (the
6
th
Floor Refusal Space Amendment)
adding the 6
th
Floor Refusal Space
to the Premises on the terms set forth in the 6
th
Floor Advice and
reflecting the changes in the Base Rent, Rentable Square Footage of the
Premises, Tenants Pro Rata Share and other appropriate terms. A copy
of the 6
th
Floor Refusal Space Amendment shall be sent to Tenant within
a reasonable time after Landlords receipt of the 6
th
Floor Notice of
Exercise executed by Tenant, and Tenant shall execute and return the
6
th
Floor Refusal Space Amendment to Landlord as soon as practicable
thereafter, but an otherwise valid exercise of the
6
th
Floor Right of
First
Refusal shall be fully effective whether or not the 6
th
Floor Refusal
Space
Amendment is executed.
8.05
Signage.
A.
Elevator Lobby
. In Section 3 of
Exhibit E
(Building
Rules and
Regulations), the phrase
7
th
floor and the shall be added between
the
words the and 8
th
in the second sentence.
B.
Monument Sign
. So long as (i) Tenant is not in default under the
terms of
the Lease; (ii) Tenant is in occupancy of at least 20,000 rentable square
feet of the Premises; and (iii) Tenant has not assigned the Lease or
sublet more than 15% of the Premises to one or more non-affiliated
entities, Tenant shall have the right to have its name listed on the shared
Building monument sign located near the entrance to the East Tower (the
Sign)
. Following installation of Tenants name on the Sign, Tenant
shall be liable for all costs related to the maintenance and, if applicable,
illumination of the sign. In the event that additional names are listed on
the Sign, all future costs of maintenance and repair shall be prorated
between Tenant and the other parties that are listed on such Sign.
Tenant shall be solely responsible for the costs in connection with the
design, fabrication and installation of Tenants name on the Sign. Tenant
must obtain Landlords written consent to any proposed signage and
lettering prior to its fabrication and installation. Landlord reserves the
right to withhold consent to any sign that, in the sole judgment of
Landlord, is not harmonious with the design standards of the Building and
Sign or is in violation of applicable Laws. To obtain Landlords consent,
Tenant shall submit design drawings to Landlord showing the type and
sizes of all lettering; the colors, finishes and types of materials used; and
(if applicable and Landlord consents) any provisions for illumination. If
during the Lease Term (and any extensions thereof) (a) Tenant is in
default under the terms of the Lease after the expiration of applicable
cure periods; or (b) Tenant fails to continuously occupy at least 20,000
Matter ID Number: 13883
rentable square feet of the Premises; or (c) Tenant assigns the Lease to a
non-affiliated entity or subleases more than 15% of the Premises to one or more
non-affiliated entities, then Tenants rights granted herein will terminate and
Landlord may remove Tenants name from the Sign at Tenants sole cost and expense.
8.06.
Parking.
Effective as of the Expansion Effective Date, Section 2 of
Exhibit G
(Parking Agreement) of the Lease is hereby amended to increase Tenants non-reserved parking spaces from 128 to 194. Such additional spaces shall be free
of charge during the initial Term of the Lease and shall be subject to all of the
terms and conditions of the Parking Agreement. Landlord agrees that until such
time as consistent actual demand for visitor parking and/or for the retail portion
of the Building occurs such that the whole of the first floor of the parking garage
is needed for regular occupancy by retail customers and visitors to the Buildings
tenants, including Tenant, as reasonably determined by Landlord, Tenant may
use a reasonable and practical portion of its
non-reserved
parking spaces on the
first floor of the parking garage serving the Building.
8.7.
Landlords Notice Address.
The Landlords Notice Address set forth in Section
1.12 of the Lease is hereby deleted in its entirety and replaced with the following:
LANDLORDS NOTICE ADDRESS:
CA-Parkside Towers Limited Partnership
With a copy to:
c/o Equity Office Management, L.L.C.
Equity Office
950 Tower Lane
One Market, Spear Tower,
Suite 950
Suite 600
Foster City, California 94404
San Francisco, California 94105
Attention: Property Manager
Attention: Regional
Counsel -
San Francisco Region
Notwithstanding anything to the contrary contained in the Lease, Rent shall be made
payable to the entity, and sent to the address, Landlord designates and shall be made by
good and sufficient check or by other means acceptable to Landlord.
8.08
Temporary Fitness Facility and Access.
For purposes of
Section 4 of
Exhibit F
of the Lease, following the date hereof, the Fitness Center Space shall be
relocated to an area of up to 5,000 rentable square feet designated by Landlord
within the 7
th
Floor Refusal Space, as defined in Section 8.03(B).
Solely during the period that Tenant is entitled to use the Fitness Center Space pursuant
to Section 4 of
Exhibit F
of the Lease, Tenant shall
have the non-exclusive license
(License)
to use a portion of the
7
th
Floor Refusal Space, in a location
reasonably designated by Landlord, to the extent reasonably necessary for purposes of
ingress and egress to the Fitness Center Space and for no other purpose. Tenants use of
the 7
th
Floor Refusal Space pursuant to the License, as well as Tenants use of
the Fitness Center Space, shall be subject to Tenants insurance, indemnification and
waiver of subrogation obligations under the Lease as if the same were part of the
Premises.
8.09
Letter(s) of Credit.
Landlord acknowledges that as of the date hereof Landlord is
holding a Letter of Credit in the amount of $177,175.00, pursuant to Section 6 of
the Lease (the
Original Letter of Credit).
Concurrently with Tenants execution
and delivery of this Amendment to Landlord, Tenant shall deliver to Landlord an
additional Letter of Credit (or an amendment to the Original Letter of Credit)
meeting the requirements of this Section 8.09 for Letters of Credit and in the
amount of (or increasing the original amount by)
$46,105.00,
such that thereafter
Landlord is holding Letter(s) of Credit in the total amount of
$223,280.00
(collectively, or as so amended, the
Increased Letter of Credit).
Effective as of
the date of Landlords receipt and acceptance of the Increased Letter of Credit in
accordance with the provisions hereof, the term Letter of Credit in the Lease shall
thereafter refer to such Increased Letter of Credit. Landlord and Tenant agree that
effective as of the date hereof, Paragraphs 2 and 3 of Section 6 of the Lease are
hereby deleted in their entirety, and the following provisions are hereby added to
the Lease as Section 5 of
Exhibit F.
Matter ID Number: 13883
A.
General Provisions
.
The Letter of Credit shall be held by Landlord as
collateral for the full performance by Tenant of all of its obligations under the Lease
and for all losses and damages Landlord may suffer as a result of Tenants failure to
comply with one or more provisions of this Lease, including, but not limited to, any post
lease termination damages under section 1951.2 of the California Civil Code. The Letter of
Credit shall be a standby, unconditional, irrevocable, transferable letter of credit in
the form of
Exhibit H
of the Lease and containing the terms required herein, in the face
amount required under the Lease (the
Letter of Credit Amount),
naming Landlord as
beneficiary, issued (or confirmed) by a financial institution satisfactory to Landlord,
permitting multiple and partial draws thereon, and otherwise in form reasonably acceptable
to Landlord. Tenant shall cause the Letter of Credit to be continuously maintained in
effect (whether through replacement, renewal or extension) in the Letter of Credit Amount
through the date (the
Final LC Expiration Date
) that is 60 days after the scheduled
expiration date of the Term or any renewal or extension Term. If the Letter of Credit held
by Landlord expires earlier than the Final LC Expiration Date (whether by reason of a
stated expiration date or a notice of termination or non-renewal given by the issuing
bank), Tenant shall deliver a new Letter of Credit or certificate of renewal or extension
to Landlord not later than 60 days prior to the expiration date of the Letter of Credit
then held by Landlord. Any renewal or replacement Letter of Credit shall comply with all
of the provisions of this Section 5 of
Exhibit F
, shall be irrevocable, transferable and
shall remain in effect (or be automatically renewable) through the Final LC Expiration
Date upon the same terms as the expiring Letter of Credit or such other terms as may be
acceptable to Landlord in its sole discretion.
B.
Drawings under Letter of Credit
.
Upon Tenants failure to comply with
one or more provisions of the Lease beyond any applicable cure period or
as otherwise specifically agreed to by Landlord and Tenant pursuant to
the Lease or any amendment thereto, Landlord may, without prejudice to
any other remedy provided in the Lease or by law, draw on the Letter of
Credit and use all or part of the proceeds to (i) satisfy any amounts due
to Landlord from Tenant, and (ii) satisfy any other damage, injury,
expense or liability caused by Tenants failure to so comply. In addition, if
Tenant fails to furnish such renewal or replacement at least 60 days prior
to the stated expiration date of the Letter of Credit then held by Landlord,
Landlord may draw upon such Letter of Credit and hold the proceeds
thereof (and such proceeds need not be segregated) in accordance with
the terms of this Section 5 of
Exhibit F.
C.
Use of Proceeds by Landlord.
The proceeds of the Letter of Credit
shall constitute Landlords sole and separate property (and not Tenants
property or the property of Tenants bankruptcy estate) and Landlord may
immediately upon any draw (and without notice to Tenant) apply or offset
the proceeds of the Letter of Credit: (i) against any Rent payable by
Tenant under the Lease that is not paid when due; (ii) against all losses
and damages that Landlord has suffered or that Landlord reasonably
estimates that it may suffer as a result of Tenants failure to comply with
one or more provisions of the Lease, including any damages arising
under section 1951.2 of the California Civil Code following termination of
the Lease; (iii) against any costs incurred by Landlord in connection with
the Lease (including attorneys fees); and (iv) against any other amount
that Landlord may spend or become obligated to spend by reason of
Tenants default. Provided Tenant has performed all of its obligations
under the Lease, Landlord agrees to pay to Tenant within 45 days after
the Final LC Expiration Date the amount of any proceeds of the Letter of
Credit received by Landlord and not applied as allowed above; provided,
that if prior to the Final LC Expiration Date a voluntary petition is filed by
Tenant or any Guarantor, or an involuntary petition is filed against Tenant
or any Guarantor by any of Tenants or Guarantors creditors, under the
Federal Bankruptcy Code, then Landlord shall not be obligated to make
such payment in the amount of the unused Letter of Credit proceeds until
either all preference issues relating to payments under the Lease have
been resolved in such bankruptcy or reorganization case or such
bankruptcy or reorganization case has been dismissed, in each case
Matter ID Number: 13883
pursuant to a final court order not subject to appeal or any stay pending
appeal.
D.
Additional Covenants of Tenant
.
If, as result of any
application or use
by Landlord of all or any part of the Letter of Credit, the amount of the
Letter of Credit shall be less than the Letter of Credit Amount, Tenant
shall, within five days thereafter, provide Landlord with additional
letter(s)
of credit in an amount equal to the deficiency (or a replacement letter of
credit in the total Letter of Credit Amount), and any such additional (or
replacement) letter of credit shall comply with all of the provisions of this
Section 5 of
Exhibit F,
and if Tenant fails to comply with the foregoing,
notwithstanding anything to the contrary contained in the Lease, the
same shall constitute an uncurable Default by Tenant. Tenant further
covenants and warrants that it will neither assign nor encumber the Letter
of Credit or any part thereof and that neither Landlord nor its successors
or assigns will be bound by any such assignment, encumbrance,
attempted assignment or attempted encumbrance.
E.
Nature of Letter of Credit
.
Landlord and Tenant (1)
acknowledge and
agree that in no event or circumstance shall the Letter of Credit or any
renewal thereof or substitute therefor or any proceeds thereof (including
the LC Proceeds Account) be deemed to be or treated as a security
deposit under any Law applicable to security deposits in the commercial
context, including Section 1950.7 of the California Civil Code, as such
section now exist or as may be hereafter amended or succeeded
(
Security Deposit Laws
), (2) acknowledge and agree that the Letter of
Credit (including any renewal thereof or substitute therefor or any
proceeds thereof) is not intended to serve as a security deposit, and the
Security Deposit Laws shall have no applicability or relevancy thereto,
and (3) waive any and all rights, duties and obligations either party may
now or, in the future, will have relating to or arising from the Security
Deposit Laws. Tenant hereby waives the provisions of Section 1950.7 of
the California Civil Code and all other provisions of Law, now or hereafter
in effect, which (i) establish the time frame by which Landlord must
refund a security deposit under a lease, and/or (ii) provide that Landlord
may claim from the Security Deposit only those sums reasonably
necessary to remedy defaults in the payment of rent, to repair damage
caused by Tenant or to clean the Premises, it being agreed that Landlord
may, in addition, claim those sums specified in this Section 8.06 above
and/or those sums reasonably necessary to compensate Landlord for any
loss or damage caused by Tenants breach of this Lease or the acts or
omission of Tenant or any other Tenant Related Parties, including any
damages Landlord suffers following termination of the Lease.
8.10
Landlord Work and Shower Facility.
Tenant acknowledges that Landlord has
completed the Landlord Work and the Shower Facility as required under the
Lease and has no further obligations to Tenant under the Work Letter attached
thereto as
Exhibit C.
Landlord acknowledges that the foregoing shall not be
interpreted to limit Landlords obligations to install a lobby directory including
Tenants information, as provided in Paragraph 4 of
Exhibit F
to the Lease, and
to install security card readers in the elevators in the Building pursuant to Section
7.01 (d) of the Lease.
8.11
Building Services.
The following is hereby added to the end of Section 7.01 of
the Lease: and (h) Landlord shall ensure that the building ledges visible from
the Premises are maintained periodically so that they remain clean and tidy.
9.
Miscellaneous
.
9.01.
This Amendment and the attached exhibits, which are hereby incorporated into
and made a part of this Amendment, set forth the entire agreement between the parties
with respect to the matters set forth herein. There have been no additional oral or
written representations or agreements. Under no circumstances shall Tenant be entitled
to any Rent abatement, improvement allowance, leasehold improvements, or other work to
the Premises, or any similar economic incentives that may have been provided Tenant in
connection with entering into the Lease, unless specifically set forth in this
Amendment.
Matter ID Number: 13883
9.02.
Except as herein modified or amended, the provisions, conditions and terms of the
Lease shall remain unchanged and in full force and effect.
9.03.
In the case of any inconsistency between the provisions of the Lease and this
Amendment, the provisions of this Amendment shall govern and control.
9.04.
Submission of this Amendment by Landlord is not an offer to enter into this
Amendment. Landlord shall not be bound by this Amendment until Landlord has
executed and delivered the same to Tenant.
9.05.
The capitalized terms used in this Amendment shall have the same definitions as
set forth in the Lease to the extent that such capitalized terms are defined therein
and not redefined in this Amendment.
9.06.
Tenant hereby represents to Landlord that Tenant has dealt with Wayne Mascia
Associates (
Broker
) as broker in connection with this Amendment. Tenant
agrees to indemnify and hold Landlord and the Landlord Related Parties harmless
from all claims of any brokers other than Broker claiming to have represented
Tenant in connection with this Amendment. Landlord agrees to pay a brokerage
commission to Broker in accordance with the terms of a separate agreement to be
entered into between Landlord and Broker. Landlord hereby represents to Tenant
that Landlord has dealt with no broker in connection with this Amendment.
Landlord agrees to indemnify and hold Tenant and the Tenant Related Parties
harmless from all claims of any brokers claiming to have represented Landlord in
connection with this Amendment.
Equity Office Properties Management Corp. (
EOPMC
) is an affiliate of Landlord and
represents only the Landlord in this transaction. Any assistance rendered by any agent or
employee of EOPMC in connection with this Amendment or any subsequent amendment or
modification hereto has been or will be made as an accommodation to Tenant solely in
furtherance of consummating the transaction on behalf of Landlord, and not as agent for
Tenant.
9.07.
Each signatory of this Amendment represents hereby that he or she has the
authority to execute and deliver the same on behalf of the party hereto for which
such signatory is acting.
Matter ID Number: 13883
LANDLORD:
CA-PARKSIDE TOWERS LIMITED PARTNERSHIP, a Delaware limited partnership
By:
EOM GP, L.L.C., a Delaware limited liability company, its general partner
By:
Equity Office Management, L.L.C., a
Delaware limited liability company, its non-member
manager
By:
/s/ Mark Geisreiter
Name:
Mark Geisreiter
Title:
Senior Vice President
TENANT:
QUINSTREET, INC., a California-corporation
By:
/s/ Douglas J. Valenti
Name:
Title:
President & CEO
By:
/s/ Michael McDauvgl
Name:
Title:
V.P. and General Counsel
Matter ID Number: 13883
Matter ID Number: 13883
Matter ID Number: 13883
Matter ID Number: 13883
1.
Landlord shall perform improvements to the Expansion Space in accordance with the
plans prepared by AP+I Design, Inc. dated June 7, 2004 (the
Expansion Space
Plans),
which are attached hereto as
Exhibit B-1.
The improvements to be performed
by Landlord in accordance with the Expansion Space Plans are hereinafter referred to
as the
Expansion Space Landlord Work.
It is agreed that construction of the
Expansion Space Landlord Work will be completed at Landlords sole cost and expense
(subject to the terms of Section 2 below) using the Building standard methods, materials
and finishes attached hereto as
Exhibit B-2
. If any finishes or materials specified in the
Expansion Space Landlord Work are or become unavailable or have long lead times
that would delay Landlords completion of the Expansion Space Landlord Work,
Landlord and Tenant shall work together in good faith to select alternative finishes or
materials to allow Landlord to complete the Expansion Space Landlord Work in a timely
manner. Landlord shall enter into a direct contract for the Expansion Space Landlord
Work with Venture Builders as general contractor. In addition, Landlord shall have the
right to select and/or approve of any subcontractors used in connection with the
Expansion Space Landlord Work. Subject to Landlords obligations expressly set forth
in Article 5 of the Lease, which Landlord agrees shall apply to the Expansion Space
Landlord Work to the same extent applicable to the Landlord Work set forth in the
original Lease, Landlords supervision or performance of any work for or on behalf of
Tenant shall not be deemed a representation by Landlord that such Expansion Space
Plans or the revisions thereto comply with applicable insurance requirements, building
codes, ordinances, laws or regulations, or that the improvements constructed in
accordance with the Expansion Space Plans and any revisions thereto will be adequate
for Tenants use, it being agreed that Tenant shall be responsible for all elements of the
design of Tenants plans (including, without limitation, compliance with law, functionality
of design, the structural integrity of the design, the configuration of the premises and the
placement of Tenants furniture, appliances and equipment).
2.
If Tenant shall request any revisions to the Expansion Space Plans, Landlord shall have
such revisions prepared at Tenants sole cost and expense and Tenant shall reimburse
Landlord for the cost of preparing any such revisions to the Expansion Space Plans,
plus any applicable state sales or use tax thereon, upon demand. Promptly upon
completion of the revisions, Landlord shall notify Tenant in writing of the increased cost
in the Expansion Space Landlord Work, if any, resulting from such revisions to the
Expansion Space Plans. Tenant, within three (3) Business Days, shall notify Landlord in
writing whether it desires to proceed with such revisions. In the absence of such written
authorization, Landlord shall have the option to continue work on the Expansion Space
disregarding the requested revision. Tenant shall be responsible for any Tenant Delay
in completion of the Expansion Space resulting from any revision to the Expansion
Space Plans. If such revisions result in an increase in the cost of Expansion Space
Landlord Work, such increased costs, plus any applicable state sales or use tax
thereon, shall be payable by Tenant upon demand. Notwithstanding anything herein to
the contrary, all revisions to the Expansion Space Plans shall be subject to the approval
of Landlord; provided, however, that if Landlord does not disapprove Tenants requested
revisions to the Expansion Plans prior to having such revisions prepared, then if
Landlord proceeds with preparation of the revised Expansion Plans and thereafter
disapproves the revisions for reasons other than (a) a violation of applicable fire or
building codes, or of other Laws, (b) the triggering of a legal requirement for upgrades
or alterations to the Premises or other parts of the Building, or (3) incompatibility or
conflicts with Building systems, then Tenant shall not be obligated to reimburse Landlord
for the cost of preparation of the revised Plans.
3.
This Expansion Space Work Letter shall not be deemed applicable to any additional
space added to the Premises at any time or from time to time, whether by any options
under the Lease (as amended hereby) or otherwise, or to any portion of the original
Premises or any additions to the Premises in the event of a renewal or extension of the
original Term of the Lease, whether by any options under the Lease (as amended
hereby) or otherwise, unless expressly so provided in the Lease (as amended hereby)
or any amendment or supplement to the Lease (as amended hereby).
Matter ID Number: 13883
Matter ID Number: 13883
AP+I DESIGN, INC. | Architecture
Planning
Interior Design
Job No. 04158
1509 Industrial Road
San Carlos, CA 94070
Full height insulated walls at all enclosed rooms.
T-Bar ceiling with parabolic fixtures at all enclosed rooms.
At all open office locations ceiling will be exposed with a system in place for
cable management. Landlord has asked the installing contractor to do a mockup of the proposed
ceiling to review with all parties. Until that time Landlord is willing to commit to
providing
a ceiling that is mutually agreeable for both parties.
Ceiling will be exposed, therefore all overhead cabling, ductwork, etc. must be
clean and installed in an organized neat manner.
Pendant hung strip fixtures used in open office areas to match standard on eighth floor.
Doors will be natural maple veneer (3-0 x 9-0) with brushed aluminum
sidelights (2-6 x 9-0). Door hardware-polished chrome.
Carpet: In open office areas Bigelow Camden. In closed teaming/conference
areas Bigelow Cyberweave. Rubber base Burke.
VCT: In server room, storage room and breakroom Armstrong.
Provide upper and lower cabinets in breakroom w/ dishwasher and garbage disposal.
Upper and lower cabinets in copy/mail area.
Electrical requirements:
Conference rooms floor power/data/phone in center of room
Phone rooms 1 power 1 phone/data
Server room refer to eight floor TI
Matter ID Number: 13883
May 26, 2004
Page Two
Provide building standard stone tile at elevator lobby floor. Provide stone tile base.
Provide painted walls, ceiling and painted elevator doors and trims.
Provide wall sconces to match bldg. standard.
Provide 2-0 soffit at perimeter of ceiling.
Provide building standard can lights at ceiling.
Principal
Date
A.
Landlord and Tenant are parties to that certain lease dated June 2, 2003, which lease has
been previously amended by that certain First Amendment dated June 24, 2004 (the
First Amendment
) (collectively, the
Lease
). Pursuant to the Lease, Landlord has
leased to Tenant space currently containing approximately
53,877
rentable square feet
(the
Premises
) described as Suite Nos. 700 and 800 on the 7
th
and 8
th
floors,
respectively, of the building commonly known as Parkside Tower East located at 1051
East Hillsdale Boulevard, Foster City, California (the
Building
).
B.
Tenant and Landlord mutually desire that the Lease be amended on and subject to the
following terms and conditions.
1.
Amendment.
Effective as of the date hereof, Landlord and Tenant agree that
the Lease shall be amended in accordance with the following terms and conditions:
1.01.
Temporary Fitness Center Space.
A.
As of February 28, 2005, the Lease shall terminate with respect to
the Fitness Center Space, as set forth in Section 8.08 of the First Amendment,
and Tenant shall surrender the Fitness Center Space to Landlord pursuant to
Section 25 of the Lease. During the period beginning on March 1, 2005 and ending
on March 31, 2005 (such period being referred to herein as the
Temporary Fitness Center Space Term
), Landlord shall allow Tenant to use approximately 3,000
rentable square feet of space located on the 4
th
floor of the Building
as shown on
Exhibit A
of this Amendment (the
Temporary Fitness Center Space
)
for the placing of exercise equipment and use as a fitness center by Tenants
employees only, all at Tenants sole risk and Tenants sole cost and expense. THE
TEMPORARY FITNESS CENTER SPACE TERM SHALL AUTOMATICALLY RENEW FOR CONSECUTIVE
PERIODS OF 1 MONTH EACH UNTIL TERMINATED BY EITHER PARTY BY THE DELIVERY OF NOT
LESS THAN 30 DAYS PRIOR WRITTEN NOTICE TO THE OTHER PARTY. Such Temporary Fitness
Center Space shall be accepted by Tenant in its as-is condition and
configuration, it being agreed that Landlord shall be under no obligation to
perform any work in the Temporary Fitness Center Space or to incur any costs in
connection with Tenants move in, move out or occupancy of the Temporary Fitness
Center Space. Tenant acknowledges that it shall be entitled to use and occupy the
Temporary Fitness Center Space at its sole cost, expense and risk. Tenant shall
not construct any improvements or make any alterations of any type to the
Temporary Fitness Center Space unless Tenant has first complied with all
requirements of Section 9 of the Lease. All costs in connection with making the
Temporary Fitness Center Space ready for occupancy by Tenant shall be the sole
responsibility of Tenant. As a condition of Tenants use of the Temporary Fitness
Center Space, and prior to the use of the Temporary Fitness Center Space by and
of Tenants employees, Tenant shall comply with the requirements contained in the
email from the Foster City Fire Marshal, attached hereto as
Exhibit B
(the
Foster City Fire Marshal Requirements
). Tenants failure to comply with the
Foster City Fire Marshal Requirements shall automatically terminate any rights
granted to Tenant to use the Temporary Fitness Center Space.
Matter ID #: 18445
B.
During the Temporary Fitness Center Space Term, the Temporary
Fitness Center Space shall be subject to the terms and conditions of the
Lease, including, without limitation, Section 13 (Indemnity and Waiver of
Claims), Section 14 (Insurance) and Section 15 (Subrogation), except as
expressly modified herein and except that (i) Tenant shall not be entitled to
receive any allowances, abatement or other financial concession in
connection with the Temporary Fitness Center Space which was granted
with respect to the Premises unless such concessions are expressly
provided for herein with respect to the Temporary Fitness Center Space,
(ii) the Temporary Fitness Center Space shall not be subject to any
renewal or expansion rights of Tenant under the Lease, (iii) Tenant shall
not be required to pay Base Rent for the Temporary Space during the
Temporary Fitness Center Space Term, and (iv) Tenant shall not be
required to pay Tenants Pro Rata Share of Expenses and Taxes for the
Temporary Fitness Center Space during the Temporary Fitness Center
Space Term.
C.
Upon termination of the Temporary Fitness Center Space Term, Tenant
shall vacate the Temporary Fitness Center Space and deliver the same
to Landlord in the same condition that the Temporary Fitness Center
Space was delivered to Tenant, ordinary wear and tear excepted. At the
expiration or earlier termination of the Temporary Fitness Center Space
Term, Tenant shall remove all debris, all items of Tenants personalty,
and any trade fixtures of Tenant from the Temporary Fitness Center
Space. Tenant shall be fully liable for all damage Tenant or Tenants
agents, employees, contractors, or subcontractors cause to the
Temporary Fitness Center Space.
D.
Tenant shall have no right to hold over or otherwise occupy the
Temporary Fitness Center Space at any time following the expiration or
earlier termination of the Temporary Fitness Center Space Term, and in
the event of such holdover, Landlord shall immediately be entitled to
institute dispossessory proceedings to recover possession of the
Temporary Fitness Center Space, without first providing notice thereof to
Tenant. In the event of holding over by Tenant after expiration or
termination of the Temporary Fitness Center Space Term without the
written authorization of Landlord, Tenant shall pay, for such holding over,
$6,150.00 for each month or partial month of holdover, plus all
consequential damages that Landlord incurs as a result of the Tenants
hold over. During any such holdover, Tenants occupancy of the
Temporary Fitness Center Space shall be deemed that of a tenant at
sufferance, and in no event, either during the Temporary Fitness Center
Space Term or during any holdover by Tenant, shall Tenant be
determined to be a tenant-at-will under applicable law. While Tenant is
occupying the Temporary Fitness Center Space, Landlord or Landlords
authorized agents shall be entitled to enter the Temporary Fitness Center
Space, upon reasonable notice, to display the Temporary Fitness Center
Space to prospective tenants.
1.02.
Landlords Notice Address.
The Landlords Notice Address as set forth in the
Basic Lease Information of the Lease is hereby deleted in its entirety and replaced
with the following:
ADDRESS OF LANDLORD:
With a copy to:
CA-Parkside Towers Limited Partnership
Equity Office
c/o Equity Office
One Market, Spear Tower,
950 Tower Lane, Suite 950
Suite 600
Foster City, California 94404
San Francisco, California 94105
Attention: Property Manager
Attention: Regional Counsel
San Francisco Region
Notwithstanding anything to the contrary contained in the Lease, as amended hereby, Rent
shall be made payable to the entity, and sent to the address, Landlord designates and shall
be made by good and sufficient check or by other means acceptable to Landlord.
Matter ID #: 18445
2.
Miscellaneous.
2.01.
This Amendment and the attached exhibits, which are hereby incorporated into
and made a part of this Amendment, set forth the entire agreement between the
parties with respect to the matters set forth herein. There have been no additional
oral or written representations or agreements. Under no circumstances shall
Tenant be entitled to any Rent abatement, improvement allowance, leasehold
improvements, or other work to the Premises, or any similar economic incentives
that may have been provided Tenant in connection with entering into the Lease,
unless specifically set forth in this Amendment.
2.02.
Except as herein modified or amended, the provisions, conditions and terms of the
Lease shall remain unchanged and in full force and effect.
2.03.
In the case of any inconsistency between the provisions of the Lease and this
Amendment, the provisions of this Amendment shall govern and control.
2.04.
Submission of this Amendment by Landlord is not an offer to enter into this
Amendment but rather is a solicitation for such an offer by Tenant. Landlord shall
not be bound by this Amendment until Landlord has executed and delivered the same to Tenant.
2.05.
The capitalized terms used in this Amendment shall have the same definitions as
set forth in the Lease to the extent that such capitalized terms are defined therein
and not redefined in this Amendment.
2.06.
Tenant hereby represents to Landlord that Tenant has dealt with no broker in
connection with this Amendment. Tenant agrees to indemnify and hold Landlord
and the Landlord Related Parties harmless from all claims of any brokers claiming
to have represented Tenant in connection with this Amendment. Landlord hereby
represents to Tenant that Landlord has dealt with no broker in connection with this
Amendment. Landlord agrees to indemnify and hold Tenant and the Tenant
Related Parties harmless from all claims of any brokers claiming to have
represented Landlord in connection with this Amendment.
2.07.
Each signatory of this Amendment represents hereby that he or she has the
authority to execute and deliver the same on behalf of the party hereto for which such signatory is acting.
Matter ID #: 18445
LANDLORD:
CA-PARKSIDE TOWERS LIMITED PARTNERSHIP, a Delaware limited partnership
By:
EOM GP, L.L.C., a Delaware limited liability
company, its general partner
By:
Equity Office Management, L.L.C., a Delaware limited liability company, its non-member manager
By:
/s/ Kenneth Young
Name:
Kenneth Young
Title:
Managing Director, Leasing
TENANT:
QUINSTREET, INC., a California
corporation
By:
/s/ Michael McDonough
Name:
Michael McDonough
Title:
V.P. Secretary & General Counsel
By:
/s/ Bronwyn Syiek
Name:
Bronwyn Syiek
Title:
COO
Matter ID #: 18445
Matter ID #: 18445
The work will need to be approved by the City of Foster City.
The work will need to be permitted.
01/31/2005 10:26 AM
To
<David_Weinstein@equityoffice.com>, Chuck Haney
<chaney@fostercity.org>
cc
<Bsonntag@Quinstreet.Com>
Subject
RE: Quinstreet Gym
Fire Marshal
FCFD
Chuck Haney
Chief Building Offical
Matter ID #: 18445
(Lease Extension)
Months
Monthly Base Rent Rate
Monthly Base Rent
$2.65 psf
$142,774.05
6475 Christie Avenue, Suite 550
Emeryville, CA 94608
Attention: Parkside Towers Property Manager
Telephone: (510) 594-2050
Facsimile: (510) 594-2049
500 Three Galleria Tower
13155 Noel Road
Dallas, Texas 75240
Attention: Parkside Towers Asset Manager
Telephone: (972) 715-7497
Facsimile: (972) 715-5816
LANDLORD:
TENANT:
PARKSIDE TOWERS, L.P.,
QUINSTREET, INC.,
a Delaware limited partnership
a California corporation
Harvest Parkside Investors, LLC,
By:
/s/ Daniel E. Caul
a Delaware limited liability company,
Name:
Daniel E. Caul,
its General Partner
Title:
Senior Vice President,
General
Counsel &
Secretary
By:
/s/ Joss Hanna
By:
/s/ Kenneth Hahn
Name:
JOSS HANNA
Name:
KENNETH HAHN
Title:
VP
Title:
SVP FINANCE & CFO
[If
Tenant is a corporation, Tenant should have one
officer from
each
of the following categories sign for Tenant: (a) a president, vice president or
chairman of the board
and
(b) a secretary, assistant secretary, chief financial
officer or assistant treasurer (unless the Amendment is returned accompanied by a corporate
resolution identifying a single authorized signatory).]
Name | Jurisdiction | |
QuinStreet LLC
|
Illinois | |
HQ Publications LLC
|
Illinois | |
ReliableRemodeler.com, Inc.
|
Delaware | |
CyberSpace Communications Corporation
|
Oklahoma | |
QuinStreet Media, Inc.
|
Nevada | |
WorldWide Learn, Inc.
|
Alberta | |
3041486 Nova Scotia Company
|
Nova Scotia | |
WorldWide Learn Partnership
|
Alberta |