Document:

Exhibit 10.9A

 

RINGCENTRAL, INC.

 

BONUS PLAN

1.Purposes of the Plan. This Bonus Plan (the “Plan”) is intended to increase shareholder value and the success of the Company by motivating Employees to (a) perform to the best of their abilities, and (b) achieve the Company’s objectives. 

2.Definitions.

(a)“Affiliate” means any corporation or other entity (including, but not limited to, partnerships and joint ventures) controlled by the Company.

(b)“Actual Award” means as to any Performance Period, the actual award (if any) payable to a Participant for the Performance Period, subject to the Committee’s authority under Section 3(d) to modify the award.

(c)“Board” means the Board of Directors of the Company.  

(d)“Bonus Pool” means the pool of funds available for distribution to Participants.  Subject to the terms of the Plan, the Committee establishes the Bonus Pool for each Performance Period.

(e)“Code” means the Internal Revenue Code of 1986, as amended.  Reference to a specific section of the Code or regulation thereunder will include such section or regulation, any valid regulation promulgated thereunder, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.

(f)“Committee” means the committee appointed by the Board (pursuant to Section 5) to administer the Plan.  Unless and until the Board otherwise determines, the Board’s Compensation Committee will administer the Plan.  

(g)“Company” means RingCentral, Inc., or any successor thereto.

(h)“Disability” means a permanent and total disability determined in accordance with uniform and nondiscriminatory standards adopted by the Committee from time to time.

(i)“Employee” means any executive or key employee of the Company or of an Affiliate, whether such individual is so employed at the time the Plan is adopted or becomes so employed subsequent to the adoption of the Plan.

(j)“Participant” means as to any Performance Period, an Employee who has been selected by the Committee for participation in the Plan for that Performance Period.

(k)“Performance Period” means the period of time for the measurement of the performance criteria that must be met to receive an Actual Award, as determined by the Committee in its sole discretion.  A Performance Period may be divided into one or more shorter periods if, for example, but not by way of limitation, the Committee desires to measure some performance criteria over 12 months and other criteria over 3 months.

(l)“Plan” means this Bonus Plan, as set forth in this instrument and as hereafter amended from time to time. 

 

 

(m)“Target Award” means the target award, at 100% performance achievement, payable under the Plan to a Participant for the Performance Period, as determined by the Committee in accordance with Section 3(b).

(n)“Termination of Service” means a cessation of the employee-employer relationship between an Employee and the Company or an Affiliate for any reason, including, but not by way of limitation, a termination by resignation, discharge, death, Disability, retirement, or the disaffiliation of an Affiliate, but excluding any such termination where there is a simultaneous reemployment by the Company or an Affiliate.

3.Selection of Participants and Determination of Awards. 

(a)Selection of Participants.  The Committee, in its sole discretion, will select the Employees who will be Participants for any Performance Period.  Participation in the Plan is in the sole discretion of the Committee, on a Performance Period by Performance Period basis.  Accordingly, an Employee who is a Participant for a given Performance Period in no way is guaranteed or assured of being selected for participation in any subsequent Performance Period or Periods.  

(b)Determination of Target Awards.  The Committee, in its sole discretion, will establish a Target Award for each Participant, which generally will be a percentage of a Participant’s average annual base salary for the Performance Period.  

(c)Bonus Pool.  Each Performance Period, the Committee, in its sole discretion, will establish a Bonus Pool.  Actual Awards will be paid from the Bonus Pool.  

(d)Discretion to Modify Awards.  Notwithstanding any contrary provision of the Plan, the Committee may, in its sole discretion and at any time, (i) increase, reduce or eliminate a Participant’s Actual Award, and/or (ii) increase, reduce or eliminate the amount allocated to the Bonus Pool.  The Committee may determine the amount of any increase or reduction on the basis of such factors as it deems relevant, and will not be required to establish any allocation or weighting with respect to the factors it considers.  

(e)Discretion to Determine Criteria.  Notwithstanding any contrary provision of the Plan, the Committee will, in its sole discretion, determine the performance goals applicable to any Target Award which requirement may include, without limitation, (i) cash flow, (ii) cash position, (ii) earnings (which may include earnings before interest and taxes, earnings before taxes and net earnings), (iii) earnings per share, (iv) net income, (v) net profit, (vi) net sales, (vii) operating cash flow, (xxiv) operating expenses, (xxv) operating income, (xxvi) operating margin, (xxvii) overhead or other expense reduction, (xxviii) product defect measures, (xxix) product release timelines, (xxx) productivity, (xxxi) profit, (xxxii) return on assets, (xxxiii) return on capital, (xxxiv) return on equity, (xxxv) return on investment, (xxxvi) return on sales, (xxxvii) revenue, (xxxviii) revenue growth, (xxxix) sales results, (xl) sales growth, (xli) stock price, (xlii) time to market, (xliii) total stockholder return, (xliv) working capital, and individual objectives such as peer reviews or other subjective or objective criteria.  As determined by the Committee, the performance goals may be based on GAAP or Non-GAAP results and any actual results may be adjusted by the Committee for one-time items or unbudgeted or unexpected items when determining whether the performance goals have been met.  The goals may be on the basis of any factors the Committee determines relevant, and may be on an individual, divisional, business unit or Company-wide basis.  The performance goals may differ from Participant to Participant and from award to award.  The Committee may, in its discretion, determine to set forth the applicable performance goals in writing from time-to-time, which writing shall be attached hereto as Appendix A.  Failure to meet the goals will result in a failure to earn the Target Award, except as provided in Section 3(d).  

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4.Payment of Awards.

(a)Right to Receive Payment.  Each Actual Award will be paid solely from the general assets of the Company.  Nothing in this Plan will be construed to create a trust or to establish or evidence any Participant’s claim of any right other than as an unsecured general creditor with respect to any payment to which he or she may be entitled.  

(b)Timing of Payment.  Payment of each Actual Award shall be made as soon as practicable as determined by the Committee after the end of the Performance Period during which the Actual Award was earned, but in no event later than the fifteenth day of the third month of the Fiscal Year following the date the Participant’s Actual Award is no longer subject to a substantial risk of forfeiture.  Unless otherwise determined by the Committee, a Participant must be employed by the Company or any Affiliate on the last day of the Performance Period to receive a payment under the Plan.

It is the intent that this Plan comply with the requirements of Code Section 409A so that none of the payments to be provided hereunder will be subject to the additional tax imposed under Code Section 409A, and any ambiguities herein will be interpreted to so comply.

(c)Form of Payment.  Each Actual Award will be paid in cash (or its equivalent) in a single lump sum.  

(d)Payment in the Event of Death or Disability.  If a Participant dies or becomes Disabled prior to the payment of an Actual Award earned by him or her prior to death or Disability for a prior Performance Period, the Actual Award will be paid to his or her estate or to the Participant, as the case may be, subject to the Committee’s discretion to reduce or eliminate any Actual Award otherwise payable.

5.Plan Administration.

(a)Committee is the Administrator.  The Plan will be administered by the Committee or, if no Committee has been appointed, the Plan shall be administered by the Board.  The Committee will consist of not less than two (2) members of the Board.  The members of the Committee will be appointed from time to time by, and serve at the pleasure of, the Board.

(b)Committee Authority.  It will be the duty of the Committee to administer the Plan in accordance with the Plan's provisions.  The Committee will have all powers and discretion necessary or appropriate to administer the Plan and to control its operation, including, but not limited to, the power to (i) determine which Employees will be granted awards, (ii) prescribe the terms and conditions of awards, (iii) interpret the Plan and the awards, (iv) adopt such procedures and subplans as are necessary or appropriate to permit participation in the Plan by Employees who are foreign nationals or employed outside of the United States, (v) adopt rules for the administration, interpretation and application of the Plan as are consistent therewith, and (vi) interpret, amend or revoke any such rules.  

(c)Decisions Binding.  All determinations and decisions made by the Committee, the Board, and any delegate of the Committee pursuant to the provisions of the Plan will be final, conclusive, and binding on all persons, and will be given the maximum deference permitted by law.  

(d)Delegation by Committee.  The Committee, in its sole discretion and on such terms and conditions as it may provide, may delegate all or part of its authority and powers under the Plan to one or more directors and/or officers of the Company.  

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(e)Indemnification.  Each person who is or will have been a member of the Committee will be indemnified and held harmless by the Company against and from (i) any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan or any award, and (ii) from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such claim, action, suit, or proceeding against him or her, provided he or she will give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification will not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Articles of Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or under any power that the Company may have to indemnify them or hold them harmless.

6.General Provisions. 

(a)Tax Withholding.  The Company will withhold all applicable taxes from any Actual Award, including any federal, state and local taxes (including, but not limited to, the Participant’s FICA and SDI obligations).  

(b)No Effect on Employment or Service.  Nothing in the Plan will interfere with or limit in any way the right of the Company to terminate any Participant's employment or service at any time, with or without cause.  For purposes of the Plan, transfer of employment of a Participant between the Company and any one of its Affiliates (or between Affiliates) will not be deemed a Termination of Service.  Employment with the Company and its Affiliates is on an at-will basis only.  The Company expressly reserves the right, which may be exercised at any time and without regard to when during a Performance Period such exercise occurs, to terminate any individual’s employment with or without cause, and to treat him or her without regard to the effect that such treatment might have upon him or her as a Participant.  

(c)Participation.  No Employee will have the right to be selected to receive an award under this Plan, or, having been so selected, to be selected to receive a future award.  

(d)Successors.  All obligations of the Company under the Plan, with respect to awards granted hereunder, will be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business or assets of the Company.  

(e)Beneficiary Designations.  If permitted by the Committee, a Participant under the Plan may name a beneficiary or beneficiaries to whom any vested but unpaid award will be paid in the event of the Participant's death.  Each such designation will revoke all prior designations by the Participant and will be effective only if given in a form and manner acceptable to the Committee.  In the absence of any such designation, any vested benefits remaining unpaid at the Participant's death will be paid to the Participant's estate.  

(f)Nontransferability of Awards.  No award granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will, by the laws of descent and distribution, or to the limited extent provided in Section 6(e).  All rights with respect to an award granted to a Participant will be available during his or her lifetime only to the Participant.  

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7.Amendment, Termination, and Duration.

(a)Amendment, Suspension, or Termination.  The Board, in its sole discretion, may amend or terminate the Plan, or any part thereof, at any time and for any reason. The amendment, suspension or termination of the Plan will not, without the consent of the Participant, alter or impair any rights or obligations under any Actual Award theretofore earned by such Participant.  No award may be granted during any period of suspension or after termination of the Plan.  

(b)Duration of Plan.  The Plan will commence on the date specified herein, and subject to Section 7(a) (regarding the Board's right to amend or terminate the Plan), will remain in effect thereafter.

8.Legal Construction.  

(a)Gender and Number.  Except where otherwise indicated by the context, any masculine term used herein also will include the feminine; the plural will include the singular and the singular will include the plural.  

(b)Severability.  In the event any provision of the Plan will be held illegal or invalid for any reason, the illegality or invalidity will not affect the remaining parts of the Plan, and the Plan will be construed and enforced as if the illegal or invalid provision had not been included.  

(c)Requirements of Law.  The granting of awards under the Plan will be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.  

(d)Governing Law.  The Plan and all awards will be construed in accordance with and governed by the laws of the State of California, but without regard to its conflict of law provisions.  

(e)Bonus Plan.  The Plan is intended to be a “bonus program” as defined under U.S. Department of Labor regulation 2510.3-2(c) and will be construed and administered in accordance with such intention.  

(f)Captions.  Captions are provided herein for convenience only, and will not serve as a basis for interpretation or construction of the Plan. 

 

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APPENDIX A-2014

To RingCentral, Inc. Bonus Plan

2014 Performance Goals

(Effective as of January 1, 2014)

	
1.
	
2014 Performance Period and Performance Goals.  For calendar year 2014, there are four quarterly Performance Periods, ending on March 31, June 30, September 30 and December 31 (each, a “2014 Performance Period”).  For each 2014 Performance Period, there are two equally weighted (50% each) performance goals (each, a “2014 Performance Goal”): Revenue and Operating Margin (each as defined below).   The chart below set forth the Revenue and Operating Margin Performance Goals for each of the 2014 Performance Periods.

 

	
2014 Performance Period
	
Revenue Performance Goal

(in millions)
	
Operating Margin Performance Goal

	
Q1
	
$48.6
	
(18.5%)

	
Q2
	
$52.2
	
(17.1%)

	
Q3
	
$57.0
	
(13.4%)

	
Q4
	
$61.8
	
(10.2%)

   “Revenue” means as to any 2014 Performance Period, the Company’s net revenues generated from third parties, including both services revenues and product revenues as defined in the Company’s  Form 10-K filed for the fiscal year ended December 31, 2013.  Net revenue is defined as gross sales less any pertinent discounts, refunds or other contra-revenue amounts, as presented on the Company’s press releases reporting its quarterly financial results.

   “Operating Margin” means as to any 2014 Performance Period, the Company’s non-GAAP operating income divided by its Revenue.  Non-GAAP operating income means the Company’s Revenues less cost of revenues and operating expenses, excluding the impact of stock-based compensation expense, amortization of acquisition related intangibles, legal settlement related charges and as adjusted for certain acquisitions, as presented on the Company’s press releases reporting its quarterly financial results.  The Operating Margin Performance Goal for each 2014 Performance Period assumes that the Company will have negative Operating Margin in each quarter.

	
2.
	
Funding of 2014 Bonus Pool.  Subject to the terms of the Plan, including but not limited to Section 3(d) of the Plan, following the end of each 2014 Performance Period, the Committee will determine the extent to which each of the 2014 Performance Goals are achieved in accordance with the following guidelines.

a.If the Company does not achieve Revenue in a 2014 Performance Period that is equal to at least the lowest amount of Revenue in the range forecast that has been publicly disclosed by the Company for such 2014 Performance Period (“Revenue Floor”), the 2014 Bonus Pool for such 2014 Performance Period will not fund. 

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b.If the Company does not achieve Operating Margin in a 2014 Performance Period that is equal to at least eighty percent (80%) of the lowest amount of Operating Margin in the range forecast that has been publicly disclosed by the Company for such 2014 Performance Period (“Operating Margin Floor”), the 2014 Bonus Pool for such 2014 Performance Period will not fund. 

c.If the Company achieves Revenue that is at least equal to the Revenue Floor and achieves Operating Margin that is at least equal to the Operating Margin Floor, the 2014 Bonus Pool for such 2014 Performance Period will fund as follows with respect to each 2014 Performance Goal during such 2014 Performance Period based on the applicable Percentage Goal Achievement.  The chart below illustrates examples of the funding multiple that will apply to each Performance Goal.

 

	
Performance Goal Achievement

Revenue (Positive)
	
2014 Bonus Pool Funding Multiple for Revenue*
	
Performance Goal Achievement 

Operating Margin (Negative)
	
2014 Bonus Pool Funding Multiple for Operating Margin*

	
80%
	
.80x
	
125.0%
	
.80x

	
90%
	
.90x
	
111.1%
	
.90x

	
92%
	
.92x
	
108.7%
	
.92x

	
94%
	
.94x
	
106.4%
	
.94x

	
96%
	
.96x
	
104.2%
	
.96x

	
98%
	
.98x
	
102.0%
	
.98x

	
100%
	
1.00x
	
100.0%
	
1.00x

	
102%
	
1.02x
	
98.0%
	
1.02x

	
104%
	
1.04x
	
96.2%
	
1.04x

	
106%
	
1.06x
	
94.3%
	
1.06x

	
108%
	
1.08x
	
92.6%
	
1.08x

	
110%
	
1.10x
	
90.9%
	
1.10x

	
112%
	
1.12x
	
89.3%
	
1.12x

	
114%
	
1.14x
	
87.7%
	
1.14x

	
116%
	
1.16x
	
86.2%
	
1.16x

	
118%
	
1.18x
	
84.7%
	
1.18x

	
120%
	
1.20x
	
83.3%
	
1.20x

* “x” equals the target bonus amount at achievement of 100% of the respective 2014 Performance Goals.  The lowest Funding Multiple for Revenue set forth above assumes that the achievement of the 2014 Performance Goal for Revenue (Positive) is equal to at least the Revenue Floor required to fund the 2014 Bonus Plan, and the lowest Funding Multiple for Operating Margin set forth above assumes that the achievement of the 2014 Performance Goal for Operating Margin (Negative) is equal to at least the Operating Margin Floor required to fund the 2014 Bonus Plan.

Illustration 

For example, if the Company achieves its Revenue at 93% (positive) of the 2014 Performance Goal for Revenue and achieves its Operating Margin at 111.1% (negative) of the 2014 Performance Goal for Operating Margin, the 2014 Bonus Pool will fund as to 91.5%, determined as follows:

	
-
	
46.5% on achievement of the Revenue 2014 Performance Goal (50% weighted target * .93x)

	
-
	
45% on achievement of the Operating Margin 2014 Performance Goal (50% weighted target * .90x)

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3.
	
Annual 2014 Bonus Pool

In addition to the funding of the quarterly 2014 Bonus Pools described above, and subject to the terms of the Plan, including but not limited to Section 3(d) of the Plan, an annual Bonus Pool shall fund as follows:

In the event that the Company achieves Revenue in fiscal year 2014 (“2014 Revenue”) of at least $219.6 million (the “Annual Revenue Goal”), then the annual Bonus Pool shall fund in an amount equal to the difference between (1) the product of (a) the portion of the aggregate target Bonus Pool funded on achievement of the 2014 Performance Goals for Revenue (Positive) (i.e. 50%) for all quarterly 2014 Performance Periods (the “Revenue Bonus Pool”) multiplied by (b) a funding multiple equal to two times (2x) the percentage of the total dollar amount by which the 2014 Revenue exceeds the Annual Revenue Goal, less (2) the total amount of the quarterly Revenue 2014 Bonus Pools that have already funded.  The chart below illustrates examples of the funding multiple that will apply.

 

	
Performance Goal Achievement

Revenue (Positive)
	
2014 Annual Bonus Pool Funding Multiple for Revenue*

	
102%
	
1.04x

	
104%
	
1.08x

	
106%
	
1.12x

	
108%
	
1.16x

	
110% 
	
1.20x

* “x” equals the aggregate Revenue target bonus amount at achievement of 100% of the 2014 Performance Goals for Revenue for all quarterly 2014 Performance Periods.  

Illustration 

For example, if the Company achieves 105% of its Annual Revenue Goal (i.e., $230.58 million), and the Revenue 2014 Bonus Pools have funded as to a total of 103% of the total target Revenue Bonus Pools, then the annual Bonus Pool will fund as follows:

Target Revenue Bonus Pool for all quarterly 2014 Performance Periods x (1.10 – 1.03)

	
4.
	
Timing of Bonus Payments.  Quarterly bonuses earned under this 2014 Bonus Plan shall be paid in the quarter following the quarter in which earned.  The Q4 Bonus and Annual 2014 Bonus, if earned, shall be paid no later than March 15, 2015.  

 

-8-Exhibit 10.12A

LEASE TERMINATION AGREEMENT

 

THIS LEASE TERMINATION AGREEMENT (this "Agreement") is made as of February 25, 2015 by and between CENTURY CENTRE INVESTORS LLC, a Delaware limited liability company ("Landlord"), and RING CENTRAL, INC., a Delaware corporation (“Tenant”).

 

RECITALS:

 

A.Pursuant to that certain Office Lease dated as of April 1, 2011 (the “Original Lease”), by and between 1400 FASHION ISLAND LLC, a Delaware limited liability company (“Original Landlord”), Landlord’s predecessor-in-interest as landlord under the Original Lease, and Tenant, as amended pursuant to that certain First Amendment to Lease dated August 28, 2011 by and between Original Landlord and Tenant (“First Amendment”), as further amended by that certain Second Amendment to Lease dated November 1, 2012 by and between Original Landlord and Tenant (“Second Amendment”) and as further amended by that certain Third Amendment to Lease dated March 19, 2014 by and between Original Landlord and Tenant (“Third Amendment”), Tenant is leasing from Landlord Suites 700, 602 and 603 (the “Premises”) in that certain office building commonly known as Century Centre II located at 1400 Fashion Island Boulevard, San Mateo, California (the “Project”).  The Original Lease, First Amendment, Second Amendment and Third Amendment are referred to herein collectively as the “Lease”.  Capitalized terms used herein but not otherwise defined shall have the meanings given to such terms in the Lease.  

 

B.The Term of the Lease is scheduled to expire on May 31, 2017 (the “Scheduled Expiration Date”), and the parties have agreed to terminate the Lease prior to the Scheduled Expiration Date upon and subject to the terms and conditions contained in this Agreement.

 

C.The Additional Premises Term with respect to Suite 310 previously expired and Tenant has returned Suite 310 to Landlord in accordance with the Third Amendment, so all references in this Agreement to “Premises” shall exclude Suite 310.

 

NOW, THEREFORE, in consideration of the above recitals which by this reference are incorporated herein, the mutual covenants and conditions contained herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.Effective Termination Date.  Effective as of 11:59 P.M. San Mateo time on April 30, 2015 (the "Effective Termination Date") and subject to the conditions, contingencies, covenants, representations, warranties, indemnities, releases and other agreements contained in this Agreement, including, without limitation, performance of the covenants set forth in Paragraph 5 below, and the provisions of Paragraph 9 hereof, the Lease is hereby terminated as of the Effective Termination Date and the Term of the Lease shall expire with the same force and effect as if the Term was, by the provisions of the Lease, fixed to expire on the Effective Termination Date rather than the Scheduled Expiration Date.  Notwithstanding anything herein to the contrary, if the Conditions to Effectiveness (defined in Paragraph 9 below) are not all satisfied on or prior to the dates specified in Paragraphs 9(a) through 9(c), then this Agreement shall automatically terminate and the Lease shall be deemed to have remained in full force and effect as if this Agreement had not been entered into.

 

2.Release of Landlord.  Effective as of the Effective Termination Date, Tenant hereby forever (a) remises, releases, quitclaims and surrenders to Landlord, its successors and assigns, the Lease and all of the estate and rights of Tenant in and to the Lease and the Premises, and (b) waives, and releases and discharges Landlord and its past and present partners and affiliates, and their respective past and present trustees, members, principals, beneficiaries, shareholders, beneficial owners, partners, officers, directors, employees, mortgagee(s), managers, representatives and agents, and their respective successors 

 

and assigns (collectively, the “Landlord Parties”) from, any and all claims, demands or causes of action whatsoever, including, without limitation, any and all rights, obligations, liabilities, indebtedness, breaches of contract, breaches of duty or any relationship, acts, omissions, misfeasance, malfeasance, debts, defenses, sums of money, accounts, compensations, contracts, controversies, promises, damages, costs, losses and expenses of every type, kind, nature, description or character, and irrespective of how, why, or by reason of what facts, whether heretofore or now existing, or that could, might, or may be claimed to exist, of whatever kind or name, whether known or unknown, suspected or unsuspected, liquidated or unliquidated, claimed or unclaimed, whether based on contract, tort, breach of any duty, or other legal or equitable theory of recovery, each as though fully set forth herein at length, arising or accruing out of or in connection with the Premises or the Lease.  Notwithstanding the foregoing, nothing contained herein shall release Landlord from its obligations and agreements under this Agreement.

 

The foregoing release under this Paragraph 2 shall be subject to the Conditions to Effectiveness all being satisfied on or prior to the dates specified in Paragraphs 9(a) through 9(c) below; and the foregoing release shall neither be effective nor survive the termination of this Agreement if the Conditions to Effectiveness are not so satisfied.

 

3.Release of Tenant.  Subject to the conditions subsequent set forth below in this Paragraph 3 and the provisions of this Agreement, including but not limited to Paragraph 9, (a) Landlord agrees to accept the surrender of the Lease and the Premises from and after the Effective Termination Date, and (b) effective as of the Effective Termination Date, Landlord waives, and releases and discharges Tenant and its past and present partners and affiliates, and their respective past and present trustees, members, principals, beneficiaries, shareholders, beneficial owners, partners, officers, directors, employees, mortgagee(s), managers, representatives and agents, and their respective successors and assigns (collectively, the “Tenant Parties”) from, any and all claims, demands or causes of action whatsoever, including, without limitation, any and all rights, obligations, liabilities, indebtedness, breaches of contract, breaches of duty or any relationship, acts, omissions, misfeasance, malfeasance, debts, defenses, sums of money, accounts, compensations, contracts, controversies, promises, damages, costs, losses and expenses of every type, kind, nature, description or character, and irrespective of how, why, or by reason of what facts, whether heretofore or now existing, or that could, might, or may be claimed to exist, of whatever kind or name, whether known or unknown, suspected or unsuspected, liquidated or unliquidated, claimed or unclaimed, whether based on contract, tort, breach of any duty, or other legal or equitable theory of recovery, each as though fully set forth herein at length, arising or accruing out of or in connection with the Premises or the Lease.  Notwithstanding the foregoing, nothing contained herein shall release the Tenant Parties from their respective obligations and agreements under this Agreement.

 

Notwithstanding the foregoing, nothing contained herein shall release Tenant from its obligations under this Agreement.  

 

4.Waiver.  With respect to the releases set forth in Paragraphs 2 and 3 above, the parties acknowledge that they have been advised by legal counsel and are familiar with the provisions of California Civil Code Section 1542 which provides as follows:

 

“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.”

 

THE UNDERSIGNED, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVE ALL RIGHTS THEY MAY HAVE THEREUNDER, AS WELL AS ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT PERTAINING TO THE RELEASES SET FORTH HEREIN.

 

 

Tenant and Landlord each specifically acknowledges that it has carefully reviewed the provisions of this Agreement, including without limitation, Paragraphs 2 and 4 hereof, and discussed their import with skilled legal counsel, and further acknowledge that the provisions of Paragraphs 2 and 4 are a material part of this Agreement. 

 

 

		
	
__/s/ Clyde Hosein___________________

Tenant
	
  /s/ Caleb Brenneman______

Landlord

 

5.Certain Covenants.

a.Tenant covenants that, subject to the timely satisfaction of all Conditions to Effectiveness, on or prior to the Effective Termination Date, it and all subtenants and other persons claiming by, through or under Tenant shall (i) completely vacate and surrender the Premises to Landlord free of all tenant trade fixtures, furnishings and equipment, including Tenant Wiring, in broom clean and good working order and condition, normal wear and tear excepted, (ii) repair any damage caused by any such removal, (iii) remove the Freeway Sign (and any other Tenant signs in the Premises or the Project), and (iv) make commercially reasonable efforts to deliver all keys and access cards to the Premises to Landlord or Landlord's designee.  Compliance with the requirements of this Paragraph 5(a) is in lieu of, and not in addition to, any removal, restoration or other surrender obligations under the Lease. 

b.Tenant further covenants that Tenant shall continue to pay to Landlord all unpaid amounts due and payable under the Lease allocable to Tenant’s tenancy for the period up to the Effective Termination Date, as such amounts become due, including, but not limited to, Monthly Rent, Additional Rent (including escalations of Taxes and Operating Expenses) which accrue under the Lease through the Effective Termination Date, including but not limited to any such charges made in accordance with the Lease but not received by Tenant until after the Effective Termination Date.  For the avoidance of doubt, the cost of any vehicle valet service provided for the Premises shall be considered an amount due and payable under the Lease.  As valet costs are passed-through to Tenant based on use and due and payable in arrears, the amount owed by Tenant for valet service for the month of April 2015 will not be known until after the Effective Termination Date.  In light of the foregoing, Tenant agrees to pay to Landlord, within ten (10) days after receipt of an invoice therefore, an estimate of April 2015 valet costs allocable to Tenant, which shall be calculated based upon the cost of Tenant’s average daily valet usage during the months of January, February and March 2015, multiplied by the number of days in the month of April for which valet service is made available.  In the event that the actual amount owed by Tenant for valet services for the month of April 2015 varies from the amount paid by Tenant pursuant to the immediately preceding sentence, Landlord and Tenant agree to reconcile the difference by payment within thirty (30) days of the Effective Termination Date.  

 

c. Tenant hereby further covenants to indemnify, defend and hold harmless the Landlord Parties from any and all claims, demands or causes of action whatsoever that may be incurred or suffered by, or brought against any of the Landlord Parties, by reason of or as a result of Tenant’s gross negligence, fraud or willful misconduct prior to the Effective Termination Date.

 

d.Landlord hereby covenants to indemnify, defend and hold harmless the Tenant Parties from any and all claims, demands or causes of action whatsoever that may be incurred or suffered by, or brought against any of the Tenant Parties, by reason of or as a result of Landlord’s gross negligence, fraud or willful misconduct prior to the Effective Termination Date.

 

e.Landlord confirms that the amount of Tenant’s Security Deposit is Two Hundred Ninety-Eight Thousand Ninety-Eight and 65/100ths Dollars ($298,098.65), and that Landlord presently knows of no reason why the Security Deposit should not be returned in full to Tenant after Tenant 

 

surrenders the Premises in accordance with this Agreement.  Landlord covenants to return the Security Deposit to Tenant within twenty (20) days after the Effective Termination Date, subject only to Landlord’s right to deduct from the Security Deposit for loss, damage and costs that Landlord suffers or that Landlord reasonably estimates it will suffer as a result of Tenant’s breach within twenty (20) days after the Effective Termination Date of any covenant set forth in Section 5(a)(i), (ii) and (iii) below and/or Tenant’s failure on or prior to such date to timely pay any amounts due pursuant to Section 5(b) above.  If Tenant maintains possession of the Premises beyond the Effective Termination Date, Landlord’s obligation to return the Security Deposit to Tenant shall be extended by the number of days which Tenant maintains possession of the Premises past the Effective Termination Date.

 

Notwithstanding anything to the contrary contained in this Agreement, including but not limited to Paragraphs 3 and 4 hereof, Tenant’s obligation to comply with and perform Tenant’s covenants under this Agreement shall survive the termination of the Lease and remain as post-Effective Termination Date covenants.

6.Representations and Warranties.  Tenant represents and warrants, as of the date hereof and as of the Effective Termination Date, that: (a) Tenant is the owner of all of the Tenant's interest in the Lease; (b) Tenant has not made any disposition, assignment, sublease, or conveyance of the Lease or Tenant's interest therein; (c) no other person or entity has an interest in Tenant’s interest in the Lease; (d) there are no outstanding contracts for the supply of labor or material and no work has been done or is being done in, to or about the Premises which has not been fully paid for and for which appropriate waivers of mechanic's liens have not been obtained; (e) Tenant is duly formed, validly existing and in good standing under the laws of the State of California; (f) Tenant has the capacity, power and authority to enter into this Agreement, and Tenant’s representatives are duly authorized to execute and deliver this Agreement on behalf of Tenant, and generally to perform Tenant’s obligations hereunder; (g) this Agreement does not and, at the Effective Termination Date, will not violate any provision of any agreement or judicial order to which Tenant is a party or to which Tenant is subject or otherwise bound; and (h) Tenant has (i) not made a general assignment for the benefit of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the filing of any involuntary petition by Tenant’s creditors, (iii) suffered the appointment of a receiver to take possession of all, or substantially all, of Tenant’s assets, (iv) suffered the attachment or other judicial seizure of all, or substantially all, of Tenant’s assets, (vi) admitted in writing its inability to pay its debts as they come due, or (vii) made an offer of settlement, extension or composition to its creditors generally.

Landlord represents and warrants, as of the date hereof and as of the Effective Termination Date, that: (a) Landlord is the owner of all of the landlord’s interest in the Lease; (b) Landlord has not made any disposition, assignment, sublease or conveyance of the Lease or landlord’s interest therein (except with respect to Landlord’s lenders); (c)  no other person or entity has an interest in Landlord’s interest in the Lease; (d) Landlord is duly formed, validly existing and in good standing under the laws of the State of Delaware and is qualified to do business in and in good standing under the laws of the State of California; (e) Landlord has the capacity, power and authority to enter into this Agreement, and Landlord’s representatives are duly authorized to execute and deliver this Agreement on behalf of Landlord and generally to perform Landlord’s obligations hereunder.  

 

The foregoing representations and warranties shall be deemed to be remade by Tenant and Landlord in full as of the Effective Termination Date.

 

7.Confidentiality.  Tenant hereby acknowledges and agrees that neither Tenant nor any of the other Tenant Parties shall disclose any matters set forth in this Agreement, or disseminate or distribute any information concerning the terms, details or conditions hereof, to any person, firm or entity without obtaining the express written consent of Landlord; provided, however, that the foregoing prohibition shall not apply to (a) disclosures to its attorneys provided that such parties are informed of the confidential nature of the terms and conditions of this Agreement, and, provided further, that such parties are directed to treat such terms and conditions as confidential, or (b) disclosures required by any applicable law or regulation 

 

and, in such event, the disclosing party shall disclose only the specific matters set forth in this Agreement as are required by law.  Landlord acknowledges that Tenant’s shares are publicly traded, that Tenant previously filed a notice with the Securities and Exchange Commission (“SEC”) identifying the Lease as a material transaction, and that Tenant intends to make a further filing with the SEC upon execution of the Agreement (which filing may include a copy of this Agreement).  Notwithstanding any contrary provision of the Lease or this Agreement, Landlord approves such further filing by Tenant. 

 

8.Miscellaneous.

 

a.Voluntary Agreement.  The parties have read this Agreement and the releases contained in it, and on advice of counsel they have freely and voluntarily entered into this Agreement.

b.Attorneys’ Fees.  Each party shall bear their own attorneys’ fees and costs incurred in connection with the preparation and negotiation of this Agreement.  If either party commences an action against the other party arising out of or in connection with this Agreement, the prevailing party shall be entitled to recover from the losing party reasonable attorneys’ fees and costs of suit.

c.Successors.  This Agreement shall be binding upon and inure to the benefit of parties and their respective successors, heirs, representatives, assigns and related entities. 

d.Counterparts; Facsimile Signatures.  This Agreement may be executed in two or more counterparts, each of which shall be deemed to be a duplicate original, but all of which together shall constitute one and the same instrument.  The parties hereby agree that the facsimile signatures shall be binding upon the parties to this Agreement.

e.Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of California.

f.Additional Documents.  Each of the parties hereto specifically agrees to execute such other and further instruments and documents, as may be reasonably required to effectuate the terms, conditions and objectives of this Agreement.

g.Entire Agreement.  This Agreement constitute the entire understanding of the parties hereto with respect to the specific subject matter hereof, and supersedes all prior agreements, understandings, discussions, statements and negotiations of the parties relating to the specific subject matter herein contained.

h.Authority.  Each person signing this Agreement on behalf of the respective parties represents and warrants that he or she has the capacity and is authorized to execute and deliver this Agreement, and that this Agreement will thereby become binding upon such party, respectively.

i.Headings and Titles.  The headings and titles to the Paragraphs of this Agreement are for convenience only and shall have no effect on the interpretation of any part of this Agreement.

j.WAIVER OF RIGHT TO TRIAL BY JURY.  EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (a) ARISING UNDER THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY PRESENT OR FUTURE MODIFICATION HEREOF OR (b) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT (AS NOW OR HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, 

 

IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.  EACH PARTY HERETO CONSENTS TO THE JURISDICTION OF ANY FEDERAL OR STATE COURT WITHIN THE STATE OF CALIFORNIA, HAVING VENUE IN SAN MATEO COUNTY.

k.ADVICE OF COUNSEL.THE PARTIES REPRESENT AND DECLARE TO EACH OTHER THAT THEY HAVE CAREFULLY READ THIS AGREEMENT AND KNOW THE CONTENTS THEREOF, AND THAT THEY SIGN THE SAME FREELY AND VOLUNTARILY.  EACH OF THE SIGNATORIES HERETO WARRANTS AND REPRESENTS THAT THEY ARE EXECUTING THIS AGREEMENT AFTER HAVING RECEIVED FULL LEGAL ADVICE AS TO THEIR RESPECTIVE RIGHTS FROM THEIR ATTORNEYS.  THIS AGREEMENT IS THE PRODUCT OF NEGOTIATIONS AND PREPARATION BY AND AMONG EACH PARTY HERETO AND HIS, HER OR ITS RESPECTIVE COUNSEL.  THEREFORE, THE PARTIES HERETO ACKNOWLEDGE AND AGREE THAT THIS AGREEMENT SHALL NOT BE DEEMED PREPARED OR DRAFTED BY ONE PARTY OR ANOTHER AND SHALL BE CONSTRUED ACCORDINGLY.

l.Notwithstanding anything to the contrary contained herein, any provisions of the Lease which expressly state that they survive a termination of the Lease, shall survive the termination of the Lease hereunder.

m.Notwithstanding anything to the contrary in this Agreement, Tenant hereby agrees that recovery against Landlord or any Landlord Party for any breach or other action arising out of this Agreement shall be limited to Landlord’s interest in the Project or the proceeds from any disposition of such interest.

9.Conditions to Effectiveness.  Notwithstanding anything in this Agreement that may be construed to the contrary, this Agreement shall not be effective and shall not be binding upon Landlord and Tenant unless:

 

a.the current mortgagee for the Building (the “Lender”) approves in writing this Agreement and the transactions contemplated hereby on or before March 30, 2015;  

 

b.a valid and effective lease, absent conditions either precedent or subsequent to its effectiveness (except only the entering into of this Agreement) has been entered into, on or before February 28, 2015, for Suite 700 pursuant to which Asurion Corporation or other party agrees to lease Suite 700 from Landlord; and

 

c.on the Effective Termination Date Tenant is not in default under the Lease beyond any applicable notice and cure period.

 

In the event that any of the conditions set forth in this Paragraphs 9(a), 9(b) and 9(c) (collectively, “Conditions to Effectiveness”) are not satisfied to the reasonable satisfaction of Landlord by the dates specified above, then Landlord shall so notify Tenant in writing (the “Cancellation Notice”), and upon Tenant’s receipt of such Cancellation Notice,  (i) this Agreement shall thereupon terminate, and (ii) the Lease shall remain in full force and effect as if this Agreement had not been entered into by the parties hereof. 

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first above written.

 

Tenant:

 

RINGCENTRAL, INC., 

a Delaware corporation

 

 

By:_/s/ Clyde Hosein ____________________

Name:   Clyde Hosein      _________________

Title:   EVP and CFO       _________________

 

 

By:__/s/ Mitesh Dhruv ___________________

Name:  Mitesh Dhruv ____________________

Title:  VP Finance and Controller  __________

 

 

Landlord:

 

CENTURY CENTRE INVESTORS, LLC,

a Delaware limited liability company

 

By:CENTURY COMMONWEALTH, LLC, 

a Delaware limited liability company

Its:Managing Member

 

 

By:__/s/ Caleb Brenneman_______________

Name:  Caleb Brenneman________________

Title:_VP & Secretary___________________

 

Certificate of Tenant

 

I, Bruce Johnson, Assistant Secretary of Tenant, hereby certify that the officers executing the foregoing LEASE TERMINATION AGREEMENT on behalf of Tenant is/are duly authorized to act on behalf of and bind the Tenant.  

 

 

 

Date: 2/25/15_________/s/ Bruce Johnson___________

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