Exhibit 10.09
KEYNOTE SYSTEMS INCORPORATED
LOAN AGREEMENT
This Loan Agreement (the "AGREEMENT") is made and entered into as of
June 28, 1999 by and between Xxxxx Xxxxx (the "SHAREHOLDER") and Keynote Systems
Incorporated, a California corporation (the "COMPANY").
RECITALS
A. Shareholder and the Company entered into a Loan and Pledge Agreement,
dated as of April 23, 1998 (the "INITIAL LOAN AGREEMENT"), pursuant to which the
Company loaned Shareholder $280,000 in connection with the Shareholder's
exercise of an option to purchase 3,500,000 shares of the Common Stock of the
Company.
B. Shareholder and the Company entered into a Loan Agreement, dated as of
May 6, 1999 (the "SECOND LOAN AGREEMENT" and together with the Initial Loan
Agreement, the "LOAN AGREEMENTS"), pursuant to which the Company loaned
Shareholder an additional $300,000. In connection with the Second Loan
Agreement, Shareholder executed a Secured Full Recourse Promissory Note in the
principal amount of $300,000 (the "PRIOR NOTE") and pledged certain shares of
Common Stock of the Company held by the Shareholder pursuant to a Stock Pledge
Agreement (the "PRIOR PLEDGE AGREEMENT") to secure the loan
C. Shareholder and the Company wish to consolidate the Loan Agreements,
the Prior Note and the Prior Pledge Agreement into a single agreement having
consistent terms and obligations for all of Shareholder's indebtedness to the
Company.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. CONSOLIDATION OF INDEBTEDNESS. Shareholder's indebtedness represented
by the Loan Agreements and by the Prior Note shall be evidenced by that Secured
Full Recourse Promissory Note attached hereto as Exhibit A in the principal
amount of $580,000 (the "NOTE"). Such indebtedness shall be secured by a
warrant to purchase shares of the Series C Preferred Stock of the Company held
by Shareholder (the "WARRANT") or the shares acquired upon exercise of the
Warrant (the "WARRANT SHARES"), net of shares sold to exercise the Warrant and
purchase the Warrant Shares and/or to make provision for tax obligations arising
from exercise of the Warrant, on the terms set forth in that Stock Pledge
Agreement attached hereto as Exhibit B (the "STOCK PLEDGE AGREEMENT").
2. REPAYMENT. Shareholder agrees to repay the indebtedness evidenced by
the Note (the "LOAN") on the terms set forth in the Note.
3. DELIVERY AND RELEASE OF COLLATERAL. In consideration of the Loan,
Shareholder agrees to deliver to the Company the Warrant or the Warrant Shares,
as applicable, together with any other Collateral (as such term is defined in
the Pledge Agreement), pursuant to the terms of the Stock Pledge Agreement.
Upon receipt of such Collateral, the Company will promptly
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release all collateral held pursuant to the Prior Pledge Agreement to the
Shareholder. Upon receipt of the Note, the Company will deliver to
Shareholder for cancellation the Initial Loan Agreement and the Prior Note.
4. EMPLOYMENT MATTERS. In consideration of the Loan: (i) Shareholder
agrees that upon request of the Company's Board of Directors, he will actively
participate in the recruitment of a successor Chief Executive Officer; and
(ii) Shareholder further agrees that, except in the event of a Sale (as such
term is defined in that certain Employment Agreement, dated as of December 9,
1997, by and between the Company and the Shareholder) of the Company, he will
not terminate his employment in a Voluntary Termination (as such term is defined
in the Employment Agreement) prior to the later of (1) December 31, 2000, and
(2) the date on which a successor Chief Executive Officer commences employment
with the Company. Any breach of either of these agreements will be an Event of
Default under this Loan Agreement and the Note and, in such event, the Company
will have rights to the Collateral, as set forth in the Stock Pledge Agreement.
5. 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.
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 duly 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 interest under this Agreement
or in the Warrant or the Warrant 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.
10. PRIOR AGREEMENTS SUPERSEDED. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof and
merges and supersedes all prior and contemporaneous agreements, written or oral,
between them concerning such subject matter, including, but not limited to, the
Prior Loan Agreements, the Prior Note and the Prior Pledge Agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
KEYNOTE SYSTEMS INCORPORATED
By:
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Print Name:
-----------------
Title:
----------------------
SHAREHOLDER
By:
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Xxxxx Xxxxx
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.
By:
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Shareholder's Spouse
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ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, the undersigned hereby assigns and transfers unto
Keynote Systems Incorporated (the "Company"), as applicable, either (i) a
warrant to purchase shares of the Series C Preferred Stock of the Company held
by the undersigned (the "WARRANT") or (ii) certificate number(s) __________
standing in the name of the undersigned on the books of the Company representing
the shares acquired upon exercise of the Warrant, net of shares sold to exercise
the Warrant and/or to make provision for tax obligations arising from exercise
of the Warrant, and all the 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:
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Xxxxx Xxxxx
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(spouse)
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EXHIBIT A
SECURED FULL RECOURSE PROMISSORY NOTE
San Mateo, California
$580,000.00 June 28, 1999
Reference is made to that certain Loan Agreement of even date herewith (the
"LOAN AGREEMENT"), by and between the undersigned (the "BORROWER") and Keynote
Systems Incorporated, a California corporation (the "COMPANY"). This Secured
Full Recourse Promissory Note (the "NOTE") is being tendered by Borrower to the
Company in connection with the consolidation of Borrower's two existing loans
(the "ORIGINAL NOTES") in the aggregate amount of Five Hundred Eighty Thousand
Dollars ($580,000.00).
1. OBLIGATION. In exchange for the continuing loans to Borrower of
$580,000.00 (plus interest accrued under the Original Notes), (the "LOAN"),
Borrower hereby promises to pay to the order of the Company on or before
December 31, 2001, at the Company's principal place of business located at 0000
Xxxxxx Xxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx, or at such other place as the
Company may direct, the principal sum of Five Hundred Eighty Thousand Dollars
($580,000.00), together with interest accrued to date under the Original Notes
and interest compounded annually on the unpaid principal of this Note at the
rate of six percent (6%), which rate is not less than the minimum rate
established pursuant to Section 1274(d) of the Internal Revenue Code of 1986, as
amended, on the earliest date on which there was a binding contract in writing
for the Loan; PROVIDED, HOWEVER, that the rate at which interest will accrue on
unpaid principal under this Note will not exceed the highest rate permitted by
applicable law. All payments hereunder shall be made in lawful tender of the
United States.
2. SECURITY. Performance of Borrower's obligations under this Note is
secured by a security interest in a warrant to purchase shares of the Series C
Preferred Stock of the Company held by Borrower (the "WARRANT") or the shares
acquired upon exercise of the Warrant (the "WARRANT SHARES"), net of shares sold
to exercise the Warrant and purchase the Warrant Shares and/or to make provision
for tax obligations arising from exercise of the Warrant, granted to the Company
by Borrower under a Pledge Agreement dated of even date herewith between the
Company and Borrower (the "PLEDGE AGREEMENT").
3. EVENTS OF DEFAULT. Borrower will be deemed to be in default under
this Note upon the occurrence of any of the following events (each an "EVENT OF
DEFAULT"): (i) upon Borrower's failure to make any payment when due under this
Note; (ii) an Event of Default under the Loan Agreement; (iii) the failure of
any representation or warranty in the Pledge Agreement to have been true, the
failure of Borrower to perform any obligation under the Pledge Agreement, or
upon any other material breach by the Borrower of the Pledge Agreement; (iv) any
voluntary or involuntary transfer of any of the Shares or any interest therein
(except a
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transfer to the Company); (v) upon the filing regarding the Borrower
of any voluntary or involuntary petition for relief under the United States
Bankruptcy Code or the initiation of any proceeding under federal law or law of
any other jurisdiction for the general relief of debtors; or (vi) upon the
execution by Borrower of an assignment for the benefit of creditors or the
appointment of a receiver, custodian, trustee or similar party to take
possession of Borrower's assets or property.
4. ACCELERATION; REMEDIES ON DEFAULT. Upon the occurrence of any Event
of Default, at the option of the Company, all principal and other amounts owed
under this Note shall become immediately due and payable without notice or
demand on the part of the Company, and the Company will have, in addition to its
rights and remedies under this Note and the Pledge Agreement, full recourse
against any real, personal, tangible or intangible assets of Borrower, and may
pursue any legal or equitable remedies that are available to it.
5. PREPAYMENT. Prepayment of principal and/or other amounts owed under
this Note may be made at any time without penalty. Unless otherwise agreed in
writing by the Company, each payment will be applied to the extent of available
funds from such payment in the following order: (i) first to the accrued and
unpaid costs and expenses under the Note or the Pledge Agreement; (ii) then to
accrued but unpaid interest; and (iii) lastly to the outstanding principal.
6. GOVERNING LAW; WAIVER. The validity, construction and performance of
this Note will be governed by the internal laws of the State of California,
excluding that body of law pertaining to conflicts of law. Borrower hereby
waives presentment, notice of non-payment, notice of dishonor, protest, demand
and diligence.
7. ATTORNEYS' FEES. If suit is brought for collection of this Note,
Borrower agrees to pay all reasonable expenses, including attorneys' fees,
incurred by the holder in connection therewith whether or not such suit is
prosecuted to judgment.
IN WITNESS WHEREOF, Borrower has executed this Note as of the date and year
first above written.
XXXXX XXXXX (BORROWER)
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Borrower's Signature
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EXHIBIT B
PLEDGE AGREEMENT
This Pledge Agreement (the "PLEDGE AGREEMENT") is made and entered into as
of June 28, 1999 between Keynote Systems Incorporated, a California corporation
(the "COMPANY"), and Xxxxx Xxxxx (the "PLEDGOR"). Capitalized terms that are
not defined herein shall have the meanings ascribed to them in the Secured Full
Recourse Promissory Note of even date herewith delivered by Pledgor to the
Company (the "NOTE").
R E C I T A L S
- - - - - - - -
A. In exchange for delivery of the Note to the Company, the Company has
consolidated Pledgor's two existing loans into one loan in the aggregate amount
of Five Hundred Eighty Thousand Dollars ($580,000.00).
B. Pledgor has agreed that repayment of the Note will be secured by the
pledge of a warrant to purchase shares of the Series C Preferred Stock of the
Company held by Pledgor (the "WARRANT") or the shares acquired upon exercise of
the Warrant (the "WARRANT SHARES"), net of shares sold to exercise the Warrant
and purchase the Warrant Shares and/or to make provision for tax obligations
arising from exercise of the Warrant, pursuant to this Pledge Agreement.
NOW, THEREFORE, the parties agree as follows:
1. CREATION OF SECURITY INTEREST. Pursuant to the provisions of the
California Commercial Code, Pledgor hereby grants to the Company, and the
Company hereby accepts, a first and present security interest in (i) the Warrant
or the Warrant Shares, (ii) all Dividends (as defined in Section 5 hereof),
(iii) all Additional Securities (as defined in Section 6 hereof), to secure
payment of the Note and performance of all Pledgor's obligations under this
Pledge Agreement and under the Loan Agreement. Pledgor herewith delivers to the
Company, as applicable, either (i) the Warrant or (ii) certificate(s) No(s).
__________, representing all the Warrant Shares, together with one or more stock
power(s) for each certificate so delivered in the form attached as an Exhibit to
the Loan Agreement, duly executed (with the date and number of shares left
blank) by Pledgor and Pledgor's spouse, if any. For purposes of this Pledge
Agreement, the Warrant, Warrant Shares, all Dividends, and all Additional
Securities will hereinafter be collectively referred to as the "COLLATERAL."
Pledgor agrees that the Collateral will be deposited with and held by the
Company or with an escrow holder and that, for purposes of carrying out the
provisions of this Pledge Agreement, an escrow holder will act solely for the
Company as its agent.
2. REPRESENTATIONS AND WARRANTIES AND COVENANTS REGARDING COLLATERAL.
Pledgor hereby represents and warrants to the Company that Pledgor has good
title (both record and beneficial) to the Collateral, free and clear of all
claims, pledges, security interests, liens or
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encumbrances of every nature whatsoever, and that Pledgor has the right to
pledge and grant the Company the security interest in the Collateral granted
under this Pledge Agreement. Pledgor further agrees that, until all sums due
under the Note have been paid in full, and all of Purchaser's obligations
under this Pledge Agreement and under the Loan Agreement have been performed,
Purchaser will not, without the Company's prior written consent, (i) sell,
assign or transfer, or attempt to sell, assign or transfer, any of the
Collateral, or (ii) grant or create, or attempt to grant or create, any
security interest, lien, pledge, claim or other encumbrance with respect to
any of the Collateral or (iii) suffer or permit to continue upon any of the
Collateral during the term of this Pledge Agreement, an attachment, levy,
execution or statutory lien.
3. RIGHTS ON DEFAULT. Upon an occurrence of an Event of Default under
the Loan Agreement, all of the Collateral will be forfeited to the Company.
Upon an occurrence of an Event of Default under the Note, the Company will have
full power to sell, assign and deliver or otherwise dispose the whole or any
part of the Collateral at any broker's exchange or elsewhere, at public or
private sale, at the option of the Company, in order to satisfy any part of the
obligations of Pledgor now existing or hereinafter arising under the Note or
under this Pledge Agreement. On any such sale, the Company or its assigns may
purchase all or any part of the Collateral. In addition, at its sole option,
the Company may elect to retain all the Collateral in full satisfaction of
Pledgor's obligation under the Note and the Loan Agreement, in accordance with
the provisions and procedures set forth in the California Uniform Commercial
Code. Pledgor agrees at the Company's request, to cooperate with the Company in
connection with the disposition of any and all of the Collateral and to execute
and deliver any documents which the Company shall reasonably request to permit
disposition of the Collateral.
4. ADDITIONAL REMEDIES. The rights and remedies granted to the Company
herein upon an Event of Default will be in addition to all the rights, powers
and remedies of the Company under the California Uniform Commercial Code and
applicable law and such rights, powers and remedies will be exercisable by the
Company with respect to all of the Collateral. Pledgor agrees that the
Company's reasonable expenses of holding the Collateral, preparing it for resale
or other disposition, and selling or otherwise disposing of the Collateral,
including attorneys' fees and other legal expenses, will be deducted from the
proceeds of any sale or other disposition and will be included in the amounts
Pledgor must tender to redeem the Collateral. All rights, powers and remedies
of the Company will be cumulative and not alternative. Any forbearance or
failure or delay by the Company in exercising any right, power or remedy
hereunder will not be deemed to be a waiver of any such right, power or remedy
and any single or partial exercise of any such right, power or remedy hereunder
will not preclude the further exercise thereof.
5. DIVIDENDS; VOTING. All dividends hereinafter declared on or payable
with respect to any Collateral during the term of this Pledge Agreement
(excluding only ordinary cash dividends, which will be payable to Pledgor so
long as no Event of Default has occurred under the Note or the Loan Agreement)
(the "DIVIDENDS") will be immediately delivered to the Company to be held in
pledge under this Pledge Agreement. Notwithstanding this Pledge Agreement, so
long as Pledgor owns the Warrant Shares and no Event of Default has occurred
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under the Note or the Loan Agreement, Pledgor will be entitled to vote any
shares comprising the Collateral, subject to any proxies granted by Pledgor.
6. ADJUSTMENTS. In the event that during the term of this Pledge
Agreement, any stock dividend, reclassification, readjustment, stock split or
other change is declared or made with respect to the Collateral, or if warrants
or any other rights, options or securities are issued in respect of the
Collateral, (the "ADDITIONAL SECURITIES") then all new, substituted and/or
additional shares or other securities issued by reason of such change or by
reason of the exercise of such warrants, rights, options or securities, will be
(if delivered to Pledgor, immediately surrendered to the Company and) pledged to
the Company to be held under the terms of this Pledge Agreement as and in the
same manner as the Collateral is held hereunder.
7. REDELIVERY OF COLLATERAL; NO RELEASE FOR PARTIAL PAYMENT.
(a) Until all obligations of Pledgor under the Note, the Loan
Agreement and under this Pledge Agreement have been satisfied in full, all
Collateral will continue to be held in pledge under this Pledge Agreement.
(b) Upon performance of all Pledgor's obligations under the Note, the
Loan Agreement and this Pledge Agreement, and subject to the terms and
conditions of the Loan Agreement, the Company will immediately redeliver the
Collateral to Pledgor and this Pledge Agreement will terminate.
8. FURTHER ASSURANCES. Pledgor shall, at the Company's request, execute
and deliver such further documents and take such further actions as the Company
shall reasonably request to perfect and maintain the Company's security interest
in the Collateral, or in any part thereof.
9. SUCCESSORS AND ASSIGNS. This Pledge Agreement will inure to the
benefit of the respective heirs, personal representatives, successors and
assigns of the parties hereto.
10. GOVERNING LAW; SEVERABILITY. This Pledge Agreement will be governed
by and construed in accordance with the internal laws of the State of
California, excluding that body of law relating to conflicts of law. Should one
or more of the provisions of this Pledge Agreement be determined by a court of
law to be illegal or unenforceable, the other provisions nevertheless will
remain effective and will be enforceable.
11. MODIFICATION; ENTIRE AGREEMENT. This Pledge Agreement will not be
amended without the written consent of both parties hereto. This Pledge
Agreement, together with the Note and the Loan Agreement constitute the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings related to such subject
matter.
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IN WITNESS WHEREOF, the parties hereto have executed this Pledge Agreement
as of the date and year first above written.
KEYNOTE SYSTEMS INCORPORATED PLEDGOR
By:
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Xxxxx Xxxxx
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(Please print name)
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(Please print title)
[SIGNATURE PAGE TO KEYNOTE SYSTEMS INCORPORATED PLEDGE AGREEMENT]
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