Exhibit 10.23
Stock Repurchase Plan Pursuant to SEC Rule 10b-18

1.   Corporation Purchasing: Keynote Systems Inc          .

2   Amount of total repurchase: As per chart below.       Trading Requirements
(Amount/Price/Date).

  a)   Broker shall effect a repurchase (each a “Purchase”) of shares of Common
Stock in accordance with the formula set forth below on each even day of the
month (e.g., 2, 4, 6, 8, 10, 12, 14, 16, 18, 20, 22, 24, 26, 28, 30) on which
NASDAQ Global Market is open for trading and the then applicable market price
for the Common Stock is a price of not more than $11.00 per share (the “Price
Limitation”). In the event of subsequent stock split or reverse stock split by
the Company, the Price Limitation shall also be proportionately adjusted by the
stock split ratio at the time the Board of Directors of the Company effects such
a stock split or reverse stock split.

OR
     Broker shall effect a repurchase (each a “Purchase”) of shares of Common
Stock in accordance with the formula set forth below on each even day (e.g., 2,
4, 6, 8, 10, 12, 14, 16, 18, 20, 22, 24, 26, 28, 30) on which NASDAQ National
Stock Market is open for trading and the then applicable market price for the
Common Stock is as set forth in the following table (the “Price Limitations”)
where each Maximum Purchase Amount limitation shall not be exceeded for
Purchases between the Minimum Price and the Maximum Price, and each Maximum
Purchase Amount shall be treated as an independent instruction:

                  Minimum   Maximum   Maximum Price   Price   Amount
 
  $ 11.00     1,000,000 shares

  b)   Broker shall purchase up to 1,000,000 shares of Common Stock on the
NASDAQ Global Market or in block purchases as defined in Rule 10b-18 subject to
(i) the Price Limitation, (ii) the termination provisions for this Instruction
as set forth in Section 2 below, and (iii) any other limitations as set forth in
this Instruction.     c)   Notwithstanding the foregoing, the total number of
shares of Common Stock to be purchased on any day shall not exceed either 10,000
shares per day (not including the allowable for cumulative catch up on days
where less than 10,000 shares were purchased) or the then applicable volume
limitation of Rule 10b-18 under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”). Broker agrees to provide confirmations of any purchases
hereunder promptly.

2.   Effective Date/Termination. The Instruction shall become effective on
February 1, 2007 and shall terminate upon the earlier of:

  a)   December 31, 2007     b)   Such time as the aggregate number of shares of
Common Stock purchased under this Instruction equals 1,000,000 shares;

 

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  c)   Upon receipt of written notice from the Issuer requesting the termination
of the Instruction; or     d)   Any time any trade contemplated hereunder shall
result in a violation of, or adverse change consequences under, applicable
securities laws.

3.   Commission to Craig-Hallum Capital Group: $.03 cents per share purchased
and no other fees will be assessed.

4.   Persons at Corporation authorized to give trading direction: Umang Gupta
and/or Andrew Hamer
(completed corporate resolution form should be attached)

5.   Persons at corporation to contact for settlement: Andrew Lee
(Andrew.lee@keynote.com, 650-403-3280), John Kim (John.Kim@keynote.com,
650-403-3431) and My Tran (My.Tran@keynote.com, 650-403-3356)

6.   Corporation understands that pursuant to SEC Rule 10b-18:

  a.   It may only effect transactions through a single broker dealer on any
given day.     b.   It may not have the opening transaction on a consolidated
quote system on any day.     c.   It may not purchase within either ten minutes
or thirty minutes of the scheduled close of trading on the Corporation’s
principal exchange as determined by the Corporation’s ADTV and Public Float.

                 
30 minutes before
  ADTV < $1 million   Public Float < $150 million
10 minutes before
  ADTV ³ $1 million   Public Float ³ $150 million

  d.   It may not purchase within one—half hour of the termination of the period
in which last sale prices are reported on the consolidated tape if the purchase
is made off NASDAQ.     e.   Its bid may not exceed the greater of the highest
independent bid or the last independent transaction price, quoted or reported in
the consolidated system.     f.   It must limit its purchases (other than block*
purchases) to an amount each day that does not exceed 25% of the average daily
trading volume reported on the consolidated tape for the four weeks preceding
the week of the bid or purchase.

 

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  g.   It will notify its affiliates (persons that directly or indirectly
control, are controlled by or are under common control with the corporation)
that if any affiliate themselves wish to purchase shares of the Corporation on a
day when the Corporation is purchasing through Craig-Hallum, the affiliates also
must use Craig-Hallum that day for their purchases.     h.   If Corporation’s
purchases may be material in relation to the number of outstanding shares or the
daily trading volume, it should consult with SEC counsel and consider issuing a
press release announcing the size of the authorized repurchase program.

Corporation understands that it is responsible for complying with the
requirements of SEC Rule 10b-18 and its responsibility to file all required
forms with the SEC to report any purchases of its stock, provided, however, that
Craig-Hallum shall not effect any trade that would cause the Corporation to
violate SEC Rule 10b-18 (assuming the Corporation has otherwise complied with
the above covenants).
Trade confirmation will be sent by fax to the Corporation the day of the trade
or no later than the following day. Corporation understands that it is
responsible to settle promptly (within three business days of trade date) by
wire or check, any purchases made on its behalf through Craig-Hallum.
Corporation understands that orders to purchase (including daily limits), to
stop purchasing, or to change order parameters, must be telephoned by
Corporation to Joe Geelan or Mike Qualen at Craig-Hallum (612-334-2889).
Corporation agrees to the above listed requirements for SEC Rule 10b-18
purchases through Craig-Hallum Capital Group LLC.
Keynote Systems Inc.

               
By:
  /s/ Andrew Hamer     By:   /s/ Patricia Bartholomew
Its:
 
 
Chief Financial Officer       
Its:
 
 
Managing Partner

 

*   A block purchase that is excluded from the volume limitations is a quantity
of stock that either (i) has a purchase price of $200,000 or more or (ii) is at
least 5,000 shares with a purchase price of at least $50,000 or (iii) is at
least 20 round lots and totals 150% or more of the average daily trading volume.
Block purchases excluded from the volume limitations do not include amounts that
a dealer has accumulated for purposes of selling to the issuer or which a dealer
has sold short to the issuer. An issuer is limited to one block purchase each
week and such purchase cannot be on the same day as other non-block purchases.