KEYNOTE SYSTEMS INCORPORATED
LOAN AND PLEDGE AGREEMENT
LOAN AND PLEDGE AGREEMENT effective as of 15 January 1999 between Xxxxx
Xxxxxx and Keynote Systems Incorporated, a California corporation (the
"Company").
R E C I T A L S
A. Shareholder has purchased from the Company on 15 January 1999 (the
"Exercise Date") upon exercise of an option ("Option") 300,000 shares of Common
Stock (the "Pledged Shares"), at a price of $0.25 per share and a total exercise
price of $75,000.000 (the "Exercise Price").
B. Shareholder is paying the Exercise Price in full by the execution
and delivery of this Agreement.
THE PARTIES AGREE AS FOLLOWS:
1. LOAN
1.1 PRINCIPAL AND INTEREST. Shareholder hereby promises to pay
to the order of the Company the principal amount of $300.00 (the "Loan")
together with simple interest at the rate of seven percent (7%) per annum, from
the date of this Agreement.
1.2 PAYMENT SCHEDULE. Interest shall be due and payable in
arrears on the first anniversary of the Exercise Date and on each subsequent
anniversary thereafter until all principal and accrued interest have been paid
in full. Payment of the entire unpaid principal balance shall be made on or
before the fifth anniversary of the Exercise Date.
1.3 OPTIONAL PREPAYMENT. The Loan may be prepaid, in whole
or in part, at any time without prepayment penalty.
1.4 FULL RECOURSE. The Loan is a full recourse obligation and
the promise to pay principal is absolute and unconditional and is not subject to
offset by Shareholder. Shareholder shall be liable for any deficiency in the
collateral.
1.5 RIGHT OF REPURCHASE. The Company has a Right of Repurchase
under the Option Agreement. If the Company elects to exercise that Right, the
Company shall have the right (but not the obligation) to offset the repurchase
price directly against accrued interest or principal of the Loan upon notice to
the Shareholder.
2. SECURITY
2.1 PLEDGE. Shareholder hereby assigns and pledges to the
Company the Pledged Shares as security for repayment of the Loan in full and
payment of all expenses under this Agreement. Shareholder has delivered to the
Company the certificates representing the Pledged Shares together with an
UNDATED SIGNED Assignment Separate From Certificate.
2.2 DIVIDENDS AND DISTRIBUTIONS. Provided that Shareholder is
not in default under the Loan, all current cash dividends paid in respect of the
Pledged Shares shall be delivered to Shareholder. All other distributions,
including liquidating dividends, shares received in recapitalizations or
pursuant to stock dividends, shall be delivered to the Company to be held by the
Company as additional collateral, whether or not the Shareholder is in default
under the Loan. If Shareholder is in default under the Loan, the Company shall
be entitled to all current cash dividends.
2.3 VOTING RIGHTS. Provided that Shareholder is not in default
under the Loan, Shareholder shall have all voting rights with respect to the
Pledge Shares on all corporate matters. If Shareholder is in default under the
Loan, the Company shall have all such voting rights.
2.4 RELEASE OF SECURITY. Upon payment in full of all principal
and interest on the Loan, the Pledged Shares shall be released to the
Shareholder or the escrow agent as appropriate. At the request of the
Shareholder and upon Shareholder's repaying or making arrangements satisfactory
to the Company to repay the Loan in part, the Company shall release the Pledged
Shares on a pro rata basis in accordance with the portion of that principal
payment on the Loan; provided that the ratio of the fair market value of the
remaining Pledged Shares to the remaining principal amount of the Loan is not
less than such a ratio on the Exercise Date.
3. ACCELERATION OF THE LOAN. In the event that Shareholder is in
default in making any payment required under the Loan for a period of more than
five days or ceases to be employed by the Company for any reason, the Company
may (i) declare the entire unpaid balance under the Loan immediately due and
payable, (ii) sell the Pledged Shares at any private or public sale on not less
than ten days' written notice to Shareholder, and otherwise in accordance with
the provisions of Section 9504(3) of the California Commercial Code, or (iii)
retain the Pledged Shares in satisfaction of the indebtedness evidenced by the
Loan pursuant to the provisions of Section 9505(2) of the California
Corporations Code. In case of any sale, after deducting the costs of sale, the
remaining proceeds of such sale shall be applied first to accrued interest and
then to the principal of the Loan, and the balance, if any shall be paid to
Shareholder.
4. AMENDMENT. This Agreement may be amended only upon the written
consent of the parties. The Company may waive any provision of this Agreement
and may condition such waiver in any manner it deems appropriate.
5. COSTS AND ATTORNEYS' FEES. All costs and expenses, including
reasonable attorneys' fees, incurred in the exercise of any right, power, or
remedy conferred by this Agreement shall be an obligation of Shareholder and
become part of the indebtedness secured by this Agreement.
6. RIGHTS OF THE PARTIES. The rights, powers, and remedies of the
parties under this Agreement shall be in addition to all rights, powers, and
remedies given to them by virtue of any statute or rule of law. Any forbearance
or failure or delay by either party in exercising any right, power, or remedy
shall not be deemed to be a waiver and any single or partial exercise shall not
preclude further exercise.
7. NOTICES. All notices and other communications shall be in writing
and shall be deemed to have been given on the date of service if served
personally or on the second day after mailing if mailed to the party to whom
notice is to be given by first class mail, registered or certified, postage
prepaid, and addressed to the most recent address of the parties set forth in
the records of the Company.
8. ASSIGNMENT. The Company's rights under this Agreement may be
assigned or transferred in whole or in part to any party to whom the Loan is
assigned or transferred. The Shareholder may not transfer his or her interest
under this Agreement or in the Pledged Shares for so long as this Agreement
shall remain in effect.
9. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California excluding those laws that
direct the application of the laws of another jurisdiction.
IN WITNESS WHEREOF, the undersigned have executed this Loan and Pledge
Agreement the date first written above written.
KEYNOTE SYSTEMS INCORPORATED
By: /s/ Xxxxx Xxxxx
Print name:
Title:
SHAREHOLDER
By: /s/ Xxxxx X. Xxxxxx
Print name: Xxxxx X. Xxxxxx
If I reside in California, or in another community property
jurisdiction, my spouse also accepts and agrees to be bound by the terms and
conditions of this Agreement.
/s/ Xxxx X. Xxxxxx
Shareholder's Spouse
Assignment Separate From Certificate
FOR VALUE RECEIVED, employee name hereby assigns and transfers unto
Keynote Systems Incorporated (the "Company"), 300,000 shares of Common Stock of
the Company represented by certificate number ______ standing in the name of the
undersigned on the books of the Company and all rights, obligations, preferences
and privileges relating to such securities. The undersigned also does hereby
irrevocably constitute and appoint the Secretary of the Company or the transfer
agent of the Company as the undersigned's attorney in fact to transfer the said
securities on the books of the above named corporation with full Power of
Substitution
Dated:_________________________ ________________________
