Exhibit 10.38
AMENDMENT No. 1 TO
REVOLVING EQUIPMENT LEASE
This is Amendment No. 1 (this "Amendment") to that certain
Revolving Equipment Lease ("Lease"), effective August 1, 2001, by
and between PLEXUS DATA INC. ("Lessor") and VITALSTREAM, INC.
("Lessee"). The effective date of this Amendment ("Effective Date")
shall be the date upon which Lessee executes this Amendment.
RECITALS
A. Lessee has
requested that certain changes be made to the Lease, and Lessor is
willing to make such changes in return for certain changes to the
Lease that Lessor desires;
B. The parties
hereto desire to enter into this Amendment in order to set forth
the terms, provisions and conditions agreed upon between them with
respect to amending the Lease.
(All capitalized terms used
but not defined herein shall have the respective meanings given to
them in the Lease.)
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Amendment, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Existing Equipment
Schedule. The Listed Equipment set forth on the Equipment Schedule
prior to the Effective Date hereof shall be paid in accordance with
Exhibit A attached hereto and incorporated herein by this
reference.
2. New Credit Limit.
The Maximum Credit Limit set forth in Section 1.1 of the Lease
shall be increased to Two Hundred Fifty Thousand Dollars
($250,000).
3. Additional
Equipment. After the Effective Date hereof, the Lease Cost of any
Listed Equipment added to the Equipment Schedule pursuant to
Section 1.4.1 of the Lease shall be subject to a mark-up equal to
ten percent (10%) of Lessor's acquisition cost for such Listed
Equipment (prior to taxes being added) as shown on Lessor's invoice
therefor.
4. New Lease Rate. For
any Lease Payments made on any Listed Equipment added to the
Equipment Schedule pursuant to Section 1.4.1 of the Lease after the
Effective Date hereof, the interest rate used to determine the
applicable Interest Payment for said Listed Equipment pursuant to
clause (B) of Section 1.2 of the Lease shall be changed to the
following: either seven percent (7%) or (ii) the percent equal to
the prime interest rate charged by Wells Fargo Bank, plus one (1)
percentage point, whichever is greater.
5. New Amortization.
For any Lease Payments made on any Listed Equipment added to the
Equipment Schedule pursuant to Section 1.4.1 of the Lease after the
Effective Date hereof, the percentage of Lease Cost used to
determine the amount of Principal Payment pursuant to clause (A) in
the first sentence of Section 1.2 shall be changed from "one-tenth
(1/10th)" to one-eighteenth (1/18th). Similarly, the percentage of
Lease Cost used to determine Applied Amount pursuant to the second
sentence of Section 1.2 shall be changed to one-eighteenth
(1/18th), instead of "one-tenth (1/10th)".
6. Location of
Equipment. The term "Lessee's Premises," as provided in Section 3.4
of the Lease, shall be defined hereinafter collectively as 1
Jenner, Suite 100, Irvine, California 92618 and/or 1200 West 7th
Street, #LL1-160, Los Angeles, California 90017.
7. Warrant. Upon
execution of this Amendment by Lessor, Lessee shall cause to be
issued to Lessor or its designee a Warrant to purchase 25,000
shares of the common stock, par value $0.001 per share, of Lessee's
parent company, VitalStream Holdings, Inc., with an exercise price
per share equal to the lesser of thirty-eight cents ($0.38) or the
closing price of such stock on the date this Amendment is fully
executed by the parties and with an exercise period which commences
on the date the Warrant is issued and expires three (3) years
thereafter.
8. Option to Purchase.
It is agreed that throughout the period prior to the Effective Date
hereof, service charges, as provided in Section 1.6 of the Lease,
have accumulated to total no less than $20,430. The parties
acknowledge and agree that Lessor is hereby waiving Lessor's rights
to said accrued service charges as a sign of goodwill, and that the
words "and has never been in default" in the first sentence of
Section 4.2 of the Lease shall be deemed to have been satisfied by
Lessee up to the Effective Date hereof. In addition, after the
Effective Date hereof, the words "and has never been" in the first
sentenc
