Common use of Additional Letter of Credit Clause in Contracts

Additional Letter of Credit. Concurrently with Tenant’s execution and delivery of this First Amendment to Landlord, Tenant shall deliver to Landlord, as protection for Landlord to assure the full and faithful performance by Tenant of all of its obligations under the Lease (as modified by this First Amendment) and for all losses and damages Landlord may suffer as a result of any default (beyond the expiration of all applicable notice and cure periods) by Tenant under the Lease (as modified by this First Amendment), an irrevocable and unconditional negotiable letter or letters of credit (collectively, the “Letter of Credit”), in substantially the form as the Existing Letter of Credit, running in favor of Landlord issued by Silicon Valley Bank, or such other bank that is reasonably acceptable to Landlord (“Bank”), and under the supervision of the Superintendent of Banks of the State of California, in the initial amount, in the aggregate, of Four Hundred Twenty Thousand Dollars ($420,000.00) (“Stated Amount”); provided, however, that, except as hereinafter provided, commencing on the first (1st) anniversary of the Expansion Commencement Date and on each annual anniversary of the Expansion Commencement Date thereafter (each, an “Adjustment Date”), the Stated Amount shall, subject to the terms hereof, be reduced, in the aggregate, as follows: Initial Amount $ 420,000.00 Month 13 of Expansion Space Term $ 281,400.00 Month 25 of Expansion Space Term $ 188,538.00 Month 37 of Expansion Space Term $ 94,269.00 Month 49 of Expansion Space Term $ 0.00 However, if (i) a default (beyond the expiration of all applicable notice and cure periods) by Tenant occurs under the Lease (as modified by this First Amendment), or (ii) circumstances exist that would, with notice or lapse of time, or both, constitute a default by Tenant, and Tenant has failed to cure such default within the cure period permitted by Section 23 of the Lease or such lesser time as may remain before the relevant Adjustment Date as provided above, the Stated Amount shall not thereafter be reduced unless and until such default shall have been fully cured pursuant to the terms of the Lease, at which time the Stated Amount may be reduced as hereinabove described. All of the terms and provisions of Section 5 of the Lease pertaining to the Existing Letter of Credit shall apply with full force to the Additional Letter of Credit except to the extent inconsistent with the terms hereof.

Additional Letter of Credit. Concurrently with Tenant’s execution (a) Landlord and delivery Tenant acknowledge that Landlord is currently holding a Letter of Credit pursuant to Section 16.26 of the Lease in the face amount of Seven Hundred Fifty Thousand and 00/100 Dollars ($750,000.00). Subject to satisfaction of the conditions set forth in Section 16.26(B) of the Lease as of October 1, 2012, Tenant was entitled to a reduction of the Letter of Credit to Six Hundred Thousand and 00/100 Dollars ($600,000.00). As of the date of this First Fourth Amendment, the foregoing reduction has not been memorialized. Notwithstanding such reduction and in consideration of this Fourth Amendment, Landlord and Tenant have agreed that the amount of the Letter of Credit required pursuant to the Lease shall not be reduced and instead shall be increased to One Million Three Hundred Thousand and 00/100 Dollars ($1,300,000.00) (the “Adjusted Security Deposit Amount”) and, accordingly, subsections (B), (C) and (D) of Section 16.26 of the Lease are hereby deleted from the Lease and of no further force and effect. On or before the later of (i) January 15, 2013 and (ii) the date this Fourth Amendment is executed by Tenant and delivered to Landlord, Tenant shall deliver to Landlord, as protection for Landlord a new Letter of Credit or an amendment to assure the full and faithful performance by Tenant existing Letter of all Credit in order to increase the amount of its obligations the Letter of Credit required under the Lease (as modified by this First Amendment) and for all losses and damages Landlord may suffer as a result of any default (beyond to the expiration of all applicable notice and cure periods) by Tenant under the Lease (as modified by this First Amendment), an irrevocable and unconditional negotiable letter or letters of credit (collectively, the “Letter of Credit”), in substantially the form as the Existing Adjusted Security Deposit Amount. The Letter of Credit, running in favor as increased pursuant to this Section 9 of this Fourth Amendment, shall continue to be held by Landlord issued by Silicon Valley Bank, or such other bank that is reasonably acceptable to Landlord (“Bank”), and under the supervision disposed of the Superintendent of Banks of the State of California, in the initial amount, in the aggregate, of Four Hundred Twenty Thousand Dollars ($420,000.00) (“Stated Amount”); provided, however, that, except as hereinafter provided, commencing on the first (1st) anniversary of the Expansion Commencement Date and on each annual anniversary of the Expansion Commencement Date thereafter (each, an “Adjustment Date”), the Stated Amount shall, subject to the and in compliance with Section 16.26 and all other applicable terms hereof, be reduced, in the aggregate, as follows: Initial Amount $ 420,000.00 Month 13 of Expansion Space Term $ 281,400.00 Month 25 of Expansion Space Term $ 188,538.00 Month 37 of Expansion Space Term $ 94,269.00 Month 49 of Expansion Space Term $ 0.00 However, if (i) a default (beyond the expiration of all applicable notice and cure periods) by Tenant occurs under the Lease (as modified by this First Amendment), or (ii) circumstances exist that would, with notice or lapse of time, or both, constitute a default by Tenant, and Tenant has failed to cure such default within the cure period permitted by Section 23 of the Lease or such lesser time as may remain before the relevant Adjustment Date as provided above, the Stated Amount shall not thereafter be reduced unless and until such default shall have been fully cured pursuant to the terms conditions of the Lease, at which time as amended by this Fourth Amendment. (b) For purposes of this Section 9, the Stated Amount may “Revenue Test” shall be reduced considered to have been satisfied if, taking into account the last four (4) full fiscal quarters immediately preceding the applicable Scheduled Adjustment Date (as hereinabove described. All of defined below), based on the terms and provisions of Section 5 of information contained in the Lease pertaining to unaudited financial statements set forth in the Existing Letter of Credit shall apply with full force to the Additional Letter of Credit except to the extent inconsistent most recent Form 10-Q and/or Form 10-K, as applicable, filed by Tenant with the terms hereofSecurities and Exchange Commission (the “SEC”) for each such fiscal quarter, Tenant’s total revenue (as determined in accordance with generally accepted accounting principles in the U.S. (“GAAP”)) equals or exceeds Two Hundred Twenty-Five Million and 00/100 Dollars ($225,000,000.00). In the event that, at any time, Tenant is an entity other than a publicly held company whose shares are traded on a national stock exchange, Tenant shall provide Landlord with a certified copy of its most recent audited financial statements within fifteen (15) business days after written demand from Landlord, and a reasonably equivalent criteria acceptable to Landlord shall be used to determine Tenant’s total revenue in a similar fashion, based on such audited annual financial statements. (c) For purposes of this Section 9, the “Adjusted EBITDA Margin Test” shall be deemed satisfied if, taking into account the last four (4) full fiscal quarters immediately preceding the applicable Scheduled Adjustment Date, based on the information contained in the unaudited financial statements set forth in the most recent Form 10-Q and/or Form 10-K, as applicable, filed by Tenant with the SEC for each such fiscal quarter, Tenant’s “Adjusted EBITDA” (as defined below) divided by total revenue (as determined in accordance with GAAP) is equal to or greater than 0.13. “Adjusted EBITDA” shall mean the following as determined in accordance with GAAP: Tenant’s net income (x) plus depreciation, amortization and stock based compensation, (y) adjusted for taxes and contingent consideration, if any, (z) less interest and other income (net). For the avoidance of doubt and notwithstanding the foregoing, if Tenant reports Adjusted EBITDA in any of its quarterly or annual earnings press releases (as filed by Tenant with the SEC on Form 8-K), the Adjusted EBITDA set forth in such press releases shall be deemed to be the Adjusted EBITDA to be used in calculating the Adjusted EBITDA Margin Test in this Section 9(d). In the event that, at any time, Tenant is an entity other than a publicly held company whose shares are traded on a national stock exchange, Tenant shall provide Landlord with a certified copy of its most recent audited financial statements within fifteen (15) business days after written demand from Landlord, and a reasonably equivalent criteria acceptable to Landlord shall be used to determine Tenant’s Adjusted EBITDA and total revenue in a similar fashion, based on such audited annual financial statements.