EXHIBIT 10.1

 

AMENDMENT NUMBER ONE TO CREDIT AGREEMENT

 

This Amendment Number One to Credit Agreement (this “Amendment”) is entered into
as of March 24, 2014, by and among, on the one hand, the lenders identified on
the signature pages hereof (such lenders, together with their respective
successors and permitted assigns, are referred to hereinafter each individually
as a “Lender” and collectively as the “Lenders”), and WELLS FARGO BANK, NATIONAL
ASSOCIATION, a national banking association, as administrative agent for each
member of the Lender Group and the Bank Product Providers (in such capacity,
together with its successors and assigns in such capacity, “Agent”) and Q2
Holdings, Inc., a Delaware corporation (“Parent”) and Q2 Software, Inc., a
Delaware corporation (“Borrower”), on the other hand, in light of the following:

 

A.                                    Parent, Borrower, Agent and Lenders are
parties to that certain Credit Agreement, dated as of April 11, 2013 (as amended
and modified, from time to time, the “Agreement”).

 

B.                                    Parent anticipates closing the initial
public offering of its common stock on March 25, 2014 (the “IPO”).

 

C.                                    Borrower, Agent and Lenders desire to
amend the Agreement as provided for and on the conditions herein.

 

NOW, THEREFORE, the parties hereby amend and supplement the Agreement as
follows:

 

1.                                      DEFINITIONS.  All initially capitalized
terms used in this Amendment shall have the meanings given to them in the
Agreement unless specifically defined herein.

 

2.                                      AMENDMENTS.

 

2.1                               The definition of “Change in Control” set
forth in Schedule 1.1 to the Agreement is hereby amended to read as follows:

 

“Change in Control” means that:

 

(a)                                 intentionally omitted;

 

(b)                                 any Person or two or more Persons acting in
concert (other than Permitted Holders), shall have acquired beneficial
ownership, directly or indirectly, of Equity Interests of Parent (or other
securities convertible into such Equity Interests) representing 30% or more of
the combined voting power of all Equity Interests of Parent entitled (without
regard to the occurrence of any contingency) to vote for the election of members
of the Board of Directors of Parent;

 

(c)                                  any Person or two or more Persons acting in
concert (other than Permitted Holders), shall have acquired by contract or
otherwise, or shall have entered into a contract or arrangement that, upon
consummation thereof, will result in its or their acquisition of the power to
exercise, directly or indirectly, a controlling influence over the management or
policies of Parent or control over

 

1

--------------------------------------------------------------------------------

 

the Equity Interests of such Person entitled to vote for members of the Board of
Directors of Parent on a fully-diluted basis (and taking into account all such
Equity Interests that such Person or group has the right to acquire pursuant to
any option right) representing 30% or more of the combined voting power of such
Equity Interests;

 

(d)                                 during any period of 24 consecutive months
commencing on or after Closing Date, the occurrence of a change in the
composition of the Board of Directors of Parent such that a majority of the
members of such Board of Directors are not Continuing Directors; and

 

(e)                                  Parent fails to own and control, directly
or indirectly, 100% of the Equity Interests of each other Loan Party.

 

3.                                      REPRESENTATIONS AND WARRANTIES.  Parent
and Borrower hereby affirm to Agent, for the benefit of the Lender Group, that,
giving effect to this Amendment, all of their representations and warranties set
forth in the Agreement are true, complete and accurate in all material respects
as of the date hereof (except those which specifically relate to an earlier
date).

 

4.                                      RELEASE.

 

4.1                               In consideration of the agreements of Agent
and Lenders contained herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, each of Parent and
Borrower, on behalf of itself, and its successors, assigns and other legal
representatives (Parent and Borrower and all such other persons being
hereinafter referred to collectively as “Releasors” and individually as a
“Releasor”), hereby absolutely, unconditionally and irrevocably releases,
remises and forever discharges Agent, each Lender, and its successors and
assigns, and its present and former shareholders, affiliates, subsidiaries,
divisions, predecessors, directors, officers, attorneys, employees, agents and
other representatives (Agent, each Lender and all such other persons being
hereinafter referred to collectively as “Releasees” and individually as a
“Releasee”), of and from all demands, actions, causes of action, suits,
covenants, contracts, controversies, agreements, promises, sums of money,
accounts, bills, reckonings, damages and any and all other claims,
counterclaims, defenses, rights of set off, demands and liabilities whatsoever
(individually, an “Indemnified Claim” and collectively, “Indemnified Claims”) of
every name and nature, known or unknown, suspected or unsuspected, both at law
and in equity, which Releasors may now or hereafter own, hold, have or claim to
have against Releasees or any of them for, upon, or by reason of any
circumstance, action, cause or thing whatsoever which arises at any time on or
prior to the day and date of this Amendment, for or on account of, or in
relation to, or in any way in connection with any of the Agreement or any of the
other Loan Documents or transactions thereunder or related thereto.

 

4.2                               It is the intention of Parent and Borrower
that this Amendment and the release set forth above shall constitute a full and
final accord and satisfaction of all claims that may have or hereafter be deemed
to have against Releasees as set forth herein.  In furtherance of this
intention, each of Parent and Borrower, on behalf of itself and each other
Releasor, expressly waives any statutory or common law provision that would
otherwise prevent the release set forth above from extending to claims that are
not currently known or suspected to exist in any Releasor’s favor at the time of
executing this Amendment and which, if known by Releasors, might have materially
affected the agreement as provided for hereunder.  Each of Parent and Borrower,
on behalf of itself and each other Releasor, acknowledges that it is familiar
with Section 1542 of California Civil Code:

 

2

--------------------------------------------------------------------------------

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

 

Each of Parent and Borrower, on behalf of itself and each other Releasor, waives
and releases any rights or benefits that they may have under Section 1542 to the
full extent that they may lawfully waive such rights and benefits, and each of
Parent and Borrower, on behalf of itself and each other Releasor, acknowledges
that it understands the significance and consequences of the waiver of the
provisions of Section 1542 and that it has been advised by counsel as to the
significance and consequences of this waiver.

 

4.3                               Parent and Borrower understand, acknowledge
and agree that the release set forth above may be pleaded as a full and complete
defense and may be used as a basis for an injunction against any action, suit or
other proceeding which may be instituted, prosecuted or attempted in breach of
the provisions of such release.

 

4.4                               Parent and Borrower agree that no fact, event,
circumstance, evidence or transaction which could now be asserted or which may
hereafter be discovered shall affect in any manner the final, absolute and
unconditional nature of the release set forth above.

 

5.                                      COVENANT NOT TO SUE.  Each of Parent and
Borrower, on behalf of itself and its successors, assigns and other legal
representatives, hereby absolutely, unconditionally and irrevocably, covenants
and agrees with and in favor of each Releasee that it will not sue (at law, in
equity, in any regulatory proceeding or otherwise) any Releasee on the basis of
any claim released, remised and discharged by Parent and Borrower pursuant to
Section 4 above.  If either Parent or Borrower or any of their successors,
assigns or other legal representations violates the foregoing covenant, each of
Parent and Borrower, for itself and each other Releasor, agrees to pay, in
addition to such other damages as any Releasee may sustain as a result of such
violation, all attorneys’ fees and costs incurred by any Releasee as a result of
such violation.

 

6.                                      NO DEFAULTS.  Parent and Borrower hereby
affirm to the Lender Group that, giving effect to this Amendment, no Event of
Default has occurred and is continuing as of the date hereof.

 

7.                                      CONDITIONS PRECEDENT.  The effectiveness
of this Amendment is expressly conditioned on (a) receipt by Agent of a copy of
this Amendment duly executed by Parent, Borrower, Lenders and Agent, and (b) the
closing of the IPO.

 

8.                                      COSTS AND EXPENSES.  Borrower shall pay
to Agent all of Agent’s documented out-of-pocket costs and expenses (including,
without limitation, the reasonable fees and expenses of their counsel, which
counsel may include any local counsel deemed necessary, search fees, filing and
recording fees, documentation fees, appraisal fees, travel expenses, and other
reasonable fees) arising in connection with the preparation, execution, and
delivery of this Amendment and all related documents.

 

9.                                      COUNTERPARTS; EFFECTIVENESS.  This
Amendment may be executed in any number of counterparts and by different parties
on separate counterparts, each of which when so executed and delivered shall be
deemed to be an original.  All such counterparts, taken together, shall
constitute but one and the same Amendment.  This Amendment shall become
effective upon the execution of a counterpart of this Amendment by each of the
parties hereto and satisfaction of the conditions set forth in Section 7
hereof.  Delivery of an executed counterpart of this Amendment by telefacsimile
or electronic

 

3

--------------------------------------------------------------------------------

 

mail shall be equally as effective as delivery of an original executed
counterpart of this Amendment.  Any party delivering an executed counterpart of
this Amendment by telefacsimile or electronic mail also shall deliver an
original executed counterpart of this Amendment, but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Amendment.

 

10.                               FURTHER ASSURANCES.  Parent and Borrower shall
execute and deliver all agreements, documents and instruments, in form and
substance reasonably satisfactory to Agent, and take all actions as Agent may
reasonably request from time to time to perfect and maintain the perfection and
priority of the security interests of Agent in the Collateral and to consummate
fully the transactions contemplated under this Amendment and the other Loan
Documents.

 

11.                               EFFECT ON LOAN DOCUMENTS.

 

11.1                        The Agreement, as amended hereby, and each of the
other Loan Documents, as amended as of the date hereof, shall be and remain in
full force and effect in accordance with their respective terms and hereby are
ratified and confirmed in all respects.  The execution, delivery, and
performance of this Amendment shall not operate, except as expressly set forth
herein, as a waiver of, consent to, or a modification or amendment of, any
right, power, or remedy of Agent or any Lender under the Agreement or any other
Loan Document.  Except for the amendments to the Agreement expressly set forth
herein, the Agreement and the other Loan Documents shall remain unchanged and in
full force and effect.  The consents, waivers and modifications set forth herein
are limited to the specifics hereof, shall not apply with respect to any facts
or occurrences other than those on which the same are based, shall neither
excuse future non-compliance with the Loan Documents nor operate as a waiver of
any Default or Event of Default, shall not operate as a consent to any further
or other matter under the Loan Documents and shall not be construed as an
indication that any future waiver of covenants or any other provision of the
Agreement will be agreed to, it being understood that the granting or denying of
any waiver which may hereafter be requested by any Loan Party remains in the
sole and absolute discretion of the Agent and the Lenders.

 

11.2                        Upon and after the effectiveness of this Amendment,
each reference in the Agreement to “this Agreement”, “hereunder”, “herein”,
“hereof” or words of like import referring to the Agreement, and each reference
in the other Loan Documents to “the Agreement”, “thereunder”, “therein”,
“thereof” or words of like import referring to the Agreement, shall mean and be
a reference to the Agreement as modified and amended hereby.

 

11.3                        To the extent that any of the terms and conditions
in any of the Loan Documents shall contradict or be in conflict with any of the
terms or conditions of the Agreement, after giving effect to this Amendment,
such terms and conditions are hereby deemed modified or amended accordingly to
reflect the terms and conditions of the Agreement as modified or amended hereby.

 

11.4                        This Amendment is a Loan Document.

 

11.5                        Headings and numbers have been set forth herein for
convenience only.  Unless the contrary is compelled by the context, everything
contained in each Section applies equally to this entire Amendment.

 

11.6                        Neither this Amendment nor any uncertainty or
ambiguity herein shall be construed against Agent, any member of the Lender
Group, the Bank Product Providers or any Loan Party, whether under any rule of
construction or otherwise.  This Amendment has been reviewed by all parties and
shall be construed and interpreted according to the ordinary meaning of the
words used so as to accomplish fairly the purposes and intentions of all parties
hereto.

 

4

--------------------------------------------------------------------------------

 

11.7                        The pronouns used herein shall include, when
appropriate, either gender and both singular and plural, and the grammatical
construction of sentences shall conform thereto.

 

11.8                        Unless the context of this Amendment clearly
requires otherwise, references to the plural include the singular, references to
the singular include the plural, the terms “includes” and “including” are not
limiting, and the term “or” has, except where otherwise indicated, the inclusive
meaning represented by the phrase “and/or”.  The words “hereof”, “herein”,
“hereby”, “hereunder”, and similar terms in this Amendment refer to this
Amendment as a whole and not to any particular provision of this Amendment. 
Section, subsection, clause, schedule, and exhibit references herein are to this
Amendment unless otherwise specified.  Any reference in this Amendment to any
agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements, thereto and thereof, as applicable (subject to any
restrictions on such alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements
set forth herein).  The words “asset” and “property” shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts, and contract
rights.  Any reference herein or in any other Loan Document to the satisfaction
or repayment in full of the Obligations shall mean the repayment in full in cash
or immediately available funds (or, in the case of Letters of Credit or Bank
Products, providing Letter of Credit Collateralization or Bank Product
Collateralization, as applicable) of all Obligations other than unasserted
contingent indemnification Obligations and other than any Bank Product
Obligations that, at such time, are allowed by the applicable Bank Product
Provider to remain outstanding and that are not required by the provisions of
this Agreement to be repaid or cash collateralized.  Any reference herein to any
Person shall be construed to include such Person’s successors and assigns.  Any
requirement of a writing contained herein shall be satisfied by the transmission
of a Record.

 

11.9                        All of the annexes, schedules and exhibits attached
to this Amendment shall be deemed incorporated herein by reference.

 

12.                               ENTIRE AGREEMENT.  This Amendment, and the
terms and provisions hereof, the Agreement and the other Loan Documents
constitute the entire understanding and agreement between the parties hereto
with respect to the subject matter hereof and supersede any and all prior or
contemporaneous amendments or understandings with respect to the subject matter
hereof, whether express or implied, oral or written.

 

13.                               REAFFIRMATION OF OBLIGATIONS.  Each of Parent
and Borrower hereby (a) acknowledges and reaffirms its obligations owing to
Agent, the Bank Product Providers, and each other member of the Lender Group
under each Loan Document to which it is a party, and (b) agrees that each of the
Loan Documents to which it is a party is and shall remain in full force and
effect.  Each of Parent and Borrower hereby (i) further ratifies and reaffirms
the validity and enforceability of all of the Liens and security interests
heretofore granted, pursuant to and in connection with the Guaranty and Security
Agreement or any other Loan Document, to Agent, on behalf and for the benefit of
the Lender Group and the Bank Product Providers, as collateral security for the
obligations under the Loan Documents in accordance with their respective terms,
and (ii) acknowledges that all of such Liens and security interests, and all
Collateral heretofore pledged as security for such obligations, continue to be
and remain collateral for such obligations from and after the date hereof
(including, without limitation, from after giving effect to this Amendment). 
Each Guarantor hereby reaffirms, acknowledges, agrees and confirms that it has
granted a perfected security interest in the Collateral pursuant to and in
connection with the Guaranty and Security Agreement to Agent in order to secure
all of its present and future Guarantied Obligations (as defined in the Guaranty
and Security Agreement).

 

5

--------------------------------------------------------------------------------

 

14.                               RATIFICATION.  Each of Parent and Borrower
hereby restates, ratifies and reaffirms each and every term and condition set
forth in the Agreement and the Loan Documents effective as of the date hereof
and as amended hereby.  All Obligations (including the Guarantied Obligations,
as applicable) owing by each of Parent and Borrower are unconditionally owing by
Parent and Borrower, as applicable,  to Agent and the Lenders, without offset,
defense, withholding, counterclaim or deduction of any kind, nature or
description whatsoever.

 

15.                               SEVERABILITY.  In case any provision in this
Amendment shall be invalid, illegal or unenforceable, such provision shall be
severable from the remainder of this Amendment and the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

 

16.                               GUARANTORS.  Guarantor hereby consents to the
amendment of the Agreement as set forth in this Amendment and any waivers
granted herein.  Although Guarantor has been informed of the matters set forth
herein and has agreed to the same, Guarantor understands that none of Agent or
any Lender has any obligation to inform it of such matters in the future or to
seek its acknowledgment or agreement to future amendments, and nothing herein
shall create such a duty.

 

[The remainder of this page left blank intentionally, signatures to follow]

 

6

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
date first set forth above.

 

 

PARENT:

Q2 HOLDINGS, INC.,

 

a Delaware corporation

 

 

 

 

 

By:

/s/ Jennifer Harris

 

Name:

Jennifer Harris

 

Title:

Chief Financial Officer

 

 

 

 

BORROWER:

Q2 SOFTWARE, INC.,

 

a Delaware corporation

 

 

 

 

 

By:

/s/ Matthew Flake

 

Name:

Matthew Flake

 

Title:

Chief Executive Officer

 

Amendment Number One to Credit Agreement

 

--------------------------------------------------------------------------------

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

as Agent and a Lender

 

 

 

 

 

By:

/s/ Nichol Shuart

 

Name:

Nichol Shuart

 

Title:

Director

 

Amendment Number One to Credit Agreement

 

--------------------------------------------------------------------------------