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STAMPS.COM INC
FORM 10-K
(Annual Report)
Filed 03/14/12 for the Period Ending 12/31/11
Address 12959 CORAL TREE PLACE
LOS ANGELES, CA 90066-7020
Telephone 3104825800
CIK 0001082923
Symbol STMP
SIC Code 5961 - Catalog and Mail-Order Houses
Industry Retail (Catalog & Mail Order)
Sector Services
Fiscal Year 12/31
http://www.edgar-online.com
© Copyright 2012, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

Table of contents

  • Page 1
    ... INC FORM 10-K (Annual Report) Filed 03/14/12 for the Period Ending 12/31/11 Address Telephone CIK Symbol SIC Code Industry Sector Fiscal Year 12959 CORAL TREE PLACE LOS ANGELES, CA 90066-7020 3104825800 0001082923 STMP 5961 - Catalog and Mail-Order Houses Retail (Catalog & Mail Order) Services 12...

  • Page 2
    ... No.) 12959 Coral Tree Place Los Angeles, California 90066 (Address of Principal Executive Offices and Zip Code) Registrant's Telephone Number, Including Area Code: (310) 482-5800 Securities registered pursuant to Section 12(b) of the Act: Title of each class Common Stock, $.001 par value...

  • Page 3
    upon the closing price for shares of the Registrant's Common Stock as reported by The NASDAQ Stock Market on that date). As of February 29, 2012, ... 2012 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission are incorporated by reference in Part III of this Form 10-K.

  • Page 4
    ... 41 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. EXECUTIVE COMPENSATION. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. PRINCIPAL ACCOUNTING FEES AND SERVICES. 41...

  • Page 5
    ..., envelopes, flats and packages, using a wide range of United States Postal Service (the "USPS") mail classes, including First Class Mail®, Priority Mail®, Express Mail®, Media Mail®, Parcel Post®, and others. Our customers include individuals, small businesses, home offices, medium-size...

  • Page 6
    ...PC Postage service enables users to print "electronic stamps" directly onto envelopes, plain paper, or labels using only a standard personal computer, printer and Internet connection. Our service currently supports a variety of USPS and international mail classes. Customers can also add USPS Special...

  • Page 7
    ...the post office; (2) generating mass mailings quickly and easily by printing the address and postage together in a single step process; (3) using our software as an integrated package with most small business productivity applications such as word processors, financial applications and address books...

  • Page 8
    ... with Hidden Postageâ„¢, which hides the actual amount paid for postage (a useful feature for e-commerce companies that may not want the recipient to see actual shipping cost information); (2) reducing customer support costs by automatically generating and sending package delivery status e-mails to...

  • Page 9
    ... the USPS flat rate legal envelopes, the new First Class Package Services with free delivery confirmation and support for the new Express Mail Flat Rate box. • Enhance our Enterprise Solutions Marketing Efforts . Customers continue to be attracted to our enterprise solution versus a postage meter...

  • Page 10
    ...based service for printing a single label for use in shipping a package that does not require a monthly subscription fee, in partnership with eBay. Pitney Bowes offers a customized postage offering (branded ZazzleStamps) through a partnership with Zazzle.com, Inc., a small, private U.S. company that...

  • Page 11
    ... provider with an integration partnership with Amazon.com serving their Marketplace users, we support more address books than any other PC Postage software, and we are the only company that offers the additional customer choice of our Themed and Photo NetStamps labels. Based on USPS data and our own...

  • Page 12
    ...process postage purchases using secure technology that meets USPS security requirements. Our service currently uses a Windows-based client application that supports a variety of label and envelope options and a wide range of printers. In addition, our application employs an internally-developed user...

  • Page 13
    ...executive offices are located at 12959 Coral Tree Place, Los Angeles, California, 90066, and our telephone number is (310) 4825800. Available Information We make available on our website (www.stamps.com), free of charge, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports...

  • Page 14
    ...a large base of active customers. In order to attract customers in the future, we may run special promotions and offers, such as trial periods, discounts on fees, postage and supplies, and other promotions. In addition, we may offer new pricing plans for new and existing customers. We cannot be sure...

  • Page 15
    ... widespread distribution and use of our services and products, we must develop and execute costeffective marketing campaigns and sales programs. We currently rely on a combination of marketing techniques to attract new customers including direct mail, online marketing and business partnerships. We...

  • Page 16
    ...agreements with many integration partners in the high volume shipping area of our business. These partners integrate our PC Postage services into their offerings. The termination of any of these agreements by us or our partners could result in lost customers, reduced postage printed and lost revenue...

  • Page 17
    ... secure transmission of postage and other confidential information. Advances in computer capabilities, new discoveries in security technology, or other events or developments may result in a compromise or breach of the algorithms we use to protect customer transaction data. Should someone circumvent...

  • Page 18
    ... overnight First Class Mail, and (iii) eliminate Saturday delivery. Any such changes actually approved and implemented may adversely affect the products and services we are able to offer our customers and could therefore seriously harm our business. USPS regulations or fee assessments may cause...

  • Page 19
    ... software. If any more providers become authorized, or if Pitney Bowes or Endicia.com provide enhanced offerings, our operations could be adversely impacted. We also compete with other forms of postage, including traditional postage meters provided by companies such as Pitney Bowes, postage stamps...

  • Page 20
    ... the SEC on April 2, 2008. On July 22, 2010, our Board of Directors suspended the NOL Protective Measures by approving a waiver from the NOL Protective Measures to all persons and entities, including companies and investment firms. As a result, as of the date of filing of this Annual Report on Form...

  • Page 21
    ... market price of their securities. This type of litigation, if directed at us, could result in substantial costs and a diversion of management's attention and resources. ITEM 1B. None. ITEM 2. PROPERTIES. UNRESOLVED STAFF COMMENTS. Our corporate headquarters are located in Los Angeles, California...

  • Page 22
    ... in several purported class-action lawsuits, filed in the U.S. District Court for the Southern District of New York. The lawsuits alleged violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 in connection with our initial public offering and a secondary offering of our...

  • Page 23
    Table of Contents ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. 19

  • Page 24
    ... fourth quarter of 2010. See "Dividend Policy" below for additional information. Recent Share Prices The following table sets forth the closing sales prices per share of our common stock on The NASDAQ Stock Market on (i) December 31, 2011 and (ii) February 29, 2012. Closing Price $ 26.13 $ 25.85 20...

  • Page 25
    ...2006 to December 31, 2011 to the cumulative total return over such period of (i) NASDAQ Market Index and (ii) Morgan Stanley Internet Index, an equal-dollarweighted index composed of 23 leading companies involved in Internet commerce, service and software. The graph assumes that $100 was invested on...

  • Page 26
    ... date. Future declaration and payment of dividends will be in the discretion of our Board of Directors and will be dependent upon our future earnings, financial condition and capital requirements. Securities Authorized for Issuance under Equity Compensation Plans Equity Compensation Plan Information...

  • Page 27
    ...73,036 11,876 - 84,912 $ 2011 Statement of Operations Data: PC postage revenue PhotoStamps revenue Other revenue Total revenues Cost and expenses: Cost of sales Research and development Sales and marketing General and administrative Legal settlements Income from operations Interest and other income...

  • Page 28
    ..., envelopes, flats and packages, using a wide range of United States Postal Service (the "USPS") mail classes, including First Class Mail®, Priority Mail®, Express Mail®, Media Mail®, Parcel Post®, and others. Our customers include individuals, small businesses, home offices, medium-size...

  • Page 29
    ... the enhanced promotion channel, we work with various companies to advertise our service in a variety of sites on the Internet. These companies typically offer an additional promotion (beyond what we typically offer) directly to the customer in order to get the customer to try our service. Over time...

  • Page 30
    ...to (1) higher monthly fees from our high volume shipping and enterprise customer segments, (2) an increase in the average store revenue per paid customer driven by the increased usage of our service and (3) an increase in insurance purchases driven by our focus on shipping and new insurance features...

  • Page 31
    ... five sources: (1) service and transaction fees related to our PC Postage service; (2) product revenue from the direct sale of consumables and supplies through our Supplies Store; (3) insurance revenue from our branded insurance offering; (4) PhotoStamps revenue from our PhotoStamps business; and...

  • Page 32
    ... our Mailing & Shipping Supplies Store and the related costs of shipping and handling. The cost of insurance revenue principally consists of parcel insurance offering costs. Cost of PhotoStamps revenue principally consists of the face value of postage, image review costs and printing and fulfillment...

  • Page 33
    ...direct mail, and online advertising. Sales and marketing expense increased 11% to $34.6 million in 2011 from $31.2 million in 2010. The increase is primarily due to increased marketing expenditures to acquire new small business, enterprise and shipping customers, which increased 15% in 2011 compared...

  • Page 34
    ... the small business economic environment can return to pre-recession levels. We expect that PC Postage revenue for customers acquired through the enhanced promotion channel will continue to decrease in 2012 compared to 2011 and consistent with the trends we saw in 2011. We expect PhotoStamps revenue...

  • Page 35
    ... 2010 was $85.5 million, an increase of 4% from $82.1 million in 2009. PC Postage revenue, including service revenue, product revenue and insurance revenue, in 2010 was $78.4 million, an increase of 6% compared to $73.6 million in 2009. PhotoStamps revenue in 2010 was $7.2 million, a decrease of 16...

  • Page 36
    ... added to our Supplies Store; and (4) growth in postage printed, which helps drive sales of consumable supplies such as labels. Total postage printed by customers using our service during 2010 was $447 million, a 26% increase from $354 million in 2009. Store orders increased by 18% in 2010 compared...

  • Page 37
    ... 2010 and 2009. Cost of service revenue increased 12% to $13.3 million in 2010 from $11.9 million in 2009. The increase is primarily attributable to an increase in promotional expenses, which include free postage and free digital scale offered to new customers. Promotional expenses were $2.7 million...

  • Page 38
    ... rates and lower investment balances, as we sold certain investments and used the cash to pay a one-time special dividend of $2.00 per share and repurchase shares of our common stock. Provision (Benefit) for Income Taxes In 2010 we had an income tax benefit of approximately $3.9 million compared...

  • Page 39
    ... purchase of two adjacent buildings in El Segundo, California for an aggregate purchase price of $13.4 million that will serve as the Company's future headquarters. We are currently engaged in a renovation and construction project on the property at a cost of approximately $10.0 million and expect...

  • Page 40
    ... reliably estimated. This includes free postage and a free digital scale and is expensed in the period in which a customer qualifies using estimated redemption rates based on historical data. Promotional expense, which is included in cost of service, is incurred as customers qualify and thereby may...

  • Page 41
    ... are not subject to administrative fees on unredeemed boxes and have no expiration date. PhotoStamps retail boxes sales are recorded as deferred revenue. Prior to the second quarter of 2011, revenue was recognized only on boxes that were actually redeemed on our website. During the second quarter of...

  • Page 42
    ... on our assessment and those criteria, management, including our Chief Executive Officer and Chief Financial Officer, concluded that our internal control over financial reporting was effective as of December 31, 2011. Ernst & Young, LLP, the independent registered public accounting firm who also...

  • Page 43
    ... 31, 2011, there has been no change in our internal control over financial reporting (as defined in Rule 13a15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. None. 39 OTHER INFORMATION.

  • Page 44
    ...statements of income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2011 of Stamps.com Inc. and Subsidiary and our report dated March 14, 2012 expressed an unqualified opinion thereon. /s/ ERNST & YOUNG LLP Los Angeles, California March 14, 2012 40

  • Page 45
    ... OFFICERS AND CORPORATE GOVERNANCE. The information required under this item is incorporated by reference herein to our proxy statement for our 2012 annual meeting of stockholders, which will be filed with the SEC by not later than 120 days after our fiscal year end. ITEM 11. EXECUTIVE COMPENSATION...

  • Page 46
    ...the Company and its directors and officers.(1) Patent License and Settlement Agreement dated December 19, 2003 by and between Stamps.com Inc. and Pitney Bowes Inc. (8) Agreement dated July 14, 2004 by and between Stamps.com Inc., eBay Inc. and PayPal, Inc. (9) Form of Notice of Grant of Stock Option...

  • Page 47
    ... Incentive Plan.(13) Form of Stock Option Agreement.(14) Settlement Agreement among the Company, Kara Technology Incorporated and Salim Kara.(15) Agreement of Purchase And Sale and Joint Escrow Instructions.(16) Code of Ethics.(10) List of Subsidiaries: PhotoStamps Inc., a California corporation...

  • Page 48
    ... on December 22, 2003 Incorporated herein by reference to the Company's Form 8-K filed with the Securities and Exchange Commission on July 16, 2004. Incorporated herein by reference to the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2008...

  • Page 49
    ... treatment has been requested for certain confidential portions of this exhibit pursuant to Rule 24b-2 under the Exchange Act. In accordance with Rule 24b-2, these confidential portions have been omitted from this exhibit and filed separately with the Securities and Exchange Commission. 45

  • Page 50
    ... 31, 2011, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 14, 2012 expressed an unqualified opinion thereon. /s/ ERNST & YOUNG LLP Los Angeles, California March 14...

  • Page 51
    Table of Contents STAMPS.COM INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) December 31, 2011 2010 Assets Current assets: Cash and cash equivalents Restricted cash Short-term investments Accounts receivable, net Other current assets Total current assets ...

  • Page 52
    ... 16,369 2011 Revenues: Service Product Insurance PhotoStamps Other Total revenues Cost of revenues: Service Product Insurance PhotoStamps Total cost of revenues Gross profit Operating expenses: Sales and marketing Research and development General and administrative Legal settlements Total operating...

  • Page 53
    ...compensation expense Return of capital Dividend Exercise of stock options Shares issued under the ESPP Stock repurchase Balance... Comprehensive income Stock-based compensation expense Exercise of stock options Shares issued under the ESPP Stock repurchase Balance at December 31, 2011 17,242 - - ...

  • Page 54
    The accompanying notes are an integral part of these consolidated financial statements. F-4

  • Page 55
    ...: Dividend payment Return of capital Proceeds from exercise of stock options Issuance of common stock under ESPP Repurchase of common stock Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash...

  • Page 56
    ..., envelopes, flats and packages, using a wide range of United States Postal Service (the "USPS") mail classes, including First Class Mail®, Priority Mail®, Express Mail®, Media Mail®, Parcel Post®, and others. Our customers include individuals, small businesses, home offices, medium-size...

  • Page 57
    ...% of the total accounts receivable balance as of December 31, 2011 and 2010, respectively. Inventories Inventories consist of finished product sold through our supplies store and are accounted for using the lower of cost (first-in, first-out method) or market. Inventories reported as a component of...

  • Page 58
    ... primarily derived from monthly subscription fees and is recognized in the period that services are provided. Product sales, net of return allowances, are recorded when the products are shipped and title passes to customers. Sales of items, including PhotoStamps, sold to customers are made pursuant...

  • Page 59
    ... represents the gross amount charged to the customer for purchasing insurance and the related cost represents the amount paid to the insurance broker, Parcel Insurance Plan. We recognize revenue on insurance purchases upon the ship date of the insured package. PhotoStamps Retail Boxes We have been...

  • Page 60
    ... of parcel insurance offering costs. Promotional Expense New PC Postage customers are typically offered promotional items that are redeemed using coupons that are qualified for redemption after a customer is successfully billed beyond an initial trial period. We account for our promotional expense...

  • Page 61
    ... principally consists of compensation and related costs for executive and administrative personnel, fees for legal and other professional services, depreciation of equipment and software used for general corporate purposes and amortization of intangible assets. Income Taxes We account for income...

  • Page 62
    ... differ from those estimates. Compensation expense recognized for all employee stock options granted is recognized using the straight-line method over their respective vesting periods of three to five years. During the fourth quarter of 2010, in connection with our special dividend of $2.00 per...

  • Page 63
    ...the fair value of share-based payment awards on the date of grant, which requires us to make a number of highly complex and subjective assumptions, including stock price volatility, expected term, risk-free interest rates and actual and projected employee stock option exercise behaviors. In the case...

  • Page 64
    ... software and hardware are capitalized based on our capitalization policy. These capitalized costs are amortized based on their estimated useful life. Administrative costs related to the maintenance and development of our website are expensed as incurred. Recent Accounting Pronouncements In May 2011...

  • Page 65
    ... we will not collect all contractual cash flows. We did not record any OTTI during 2011 after evaluating a number of factors including, but not limited to How much fair value has declined below amortized cost The financial condition of the issuers Significant rating agency changes on the issuers...

  • Page 66
    ...escrow for the purchase of our new corporate headquarters building. See Note 13 - Subsequent Events for further discussion. The following table summarizes contractual maturities of our marketable fixed-income securities as of December 31, 2011 (in thousands): Amortized Cost $ 1,400 13,091 - $ 14,491...

  • Page 67
    ... is based on the market values obtained from an independent pricing service that were evaluated using pricing models that vary by asset class and may incorporate available trade, bid and other market information and price quotes from well established independent pricing vendors and broker-dealers...

  • Page 68
    ... $3.7 million based on the following discrete events: (1) our attainment of three consecutive years of taxable income and (2) indication from the USPS that the market test for our PhotoStamps business, which constituted 21% of total revenue in 2007, would be extended for another year into 2009. F-18

  • Page 69
    ... offset 100% of our state income tax liability through the use of our research and development tax credits. During 2011 we were in a taxable loss position for tax reporting purposes and as a result we did not use any tax credits. We recorded a current tax provision for corporate alternative minimum...

  • Page 70
    ...Additions for tax position of the current year Settlement Balance at December 31, 2011 Our policy is to recognize interest and penalties expense, if any, related to unrecognized tax benefits as a component of income tax expense. As of December 31, 2011, we have not recorded any interest and penalty...

  • Page 71
    ... a study to understand the status of net operating losses. Based on that study, we believe that we have not undergone an Internal Revenue Code (IRC) Section 382 change of ownership that would trigger an impairment of the use of our NOLs since our secondary offering in December 1999. Under IRC...

  • Page 72
    ... were transferred to the 1999 Plan, and no further option grants were made under the 1998 Plan. All outstanding options under the 1998 Plan continue to be governed by the terms and conditions of the existing option agreements for those grants, unless our compensation committee decides to extend one...

  • Page 73
    ...2010 and 2009 using the Black-Scholes valuation method are as follows: 2011 Weighted-average fair value of stock options with an exercise price equal to the market price on the grant date $ Weighted-average fair value of stock options with an exercise price greater than the market price on the grant...

  • Page 74
    ... our closing stock price of $26.13 at December 31, 2011, the last trading day of 2011, which would have been received by award holders had all award holders exercised their awards that were in-the-money as of that date. The weighted average grant date fair value of options granted during 2011, 2010...

  • Page 75
    ...on each semi-annual purchase date. The purchase price per share is equal to 85% of the fair market value per share on the participant's entry date into the offering period or, if lower, 85% of the fair market value per share on the semi-annual purchase date. Upon adoption of the plan, 150,000 shares...

  • Page 76
    ... in several purported class-action lawsuits, filed in the U.S. District Court for the Southern District of New York. The lawsuits alleged violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 in connection with our initial public offering and a secondary offering of our...

  • Page 77
    ... purchase of two adjacent buildings in El Segundo, California for an aggregate purchase price of $13.4 million that will serve as the Company's future headquarters. We are currently engaged in a renovation and construction project on the property at a cost of approximately $10.0 million and expect...

  • Page 78
    ... record date. The Company incurred compensation expense of $3.4 million in the fourth quarter related to the special dividend as described in Note 2 "Summary of Significant Accounting Policies - Stock Based Compensation". (3) During the second quarter of 2011 we recognized $2.2 million of retail box...

  • Page 79
    ... this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Los Angeles, State of California, on the 14th day of March 2012. STAMPS.COM INC. By: /s/ KENNETH MCBRIDE Kenneth McBride Chief Executive Officer Pursuant to the requirements of...

  • Page 80
    ...., a California limited liability company (" Seller "), and STAMPS.COM INC., a Delaware corporation (" Buyer "). Recitals A. Seller owns certain improved real property commonly known as 1970 and1990 East Grand Avenue and located in the City of El Segundo (" City "), County of Los Angeles (" County...

  • Page 81
    ... Company 700 S. Flower Street, Ste. 800 Los Angeles, CA 90017 Attn: Terri Gervasi Chicago Title Company 700 S. Flower Street, Ste. 3305 Los Angeles, CA 90017 Attn: Dave Balassi Thirteen Million Three Hundred Fifty Thousand Dollars ($13,350,000.00). 2 VII. Title Company : VIII. Purchase Price...

  • Page 82
    ... available funds, the balance of the Purchase Price, and such other funds as may be necessary in accordance with the terms hereof to pay for Buyer's share of closing costs and charges set forth in Paragraph 10 below and taking into account Buyer's debits or credits from prorations set forth on the...

  • Page 83
    ... Title Policy dated October 3, 2011, with such other changes as Buyer and the Title Company agree, attached as Exhibit K (the " Proforma Policy "). 6. Buyer's Title Insurance . At the Close of Escrow, the " Title Company " shall issue to Buyer a 2006 Form ALTA Extended Coverage Owner's Policy of...

  • Page 84
    ... subject to the timely satisfaction or written waiver of the following conditions precedent for Buyer's benefit by the dates designated below: 7.2.1 Seller's Deliveries . At least one (1) business day prior to the Closing Date, Seller shall have delivered to Escrow Holder the documents described in...

  • Page 85
    ... from the Seller Estoppel or (ii) twelve months (12) after Closing. 7.2.7 The Title Company shall have irrevocably committed to issue and shall concurrently with the Close of Escrow issue the Title Policy subject only to the Approved Title Conditions. 7.2.8 There shall have been no material adverse...

  • Page 86
    ... are subject to the timely satisfaction or written waiver of the following conditions precedent for Seller's benefit by the dates designated below: 8.1 Buyer's Deliveries . At least one (1) business day prior to the Closing Date, Buyer shall have delivered to Escrow Holder the documents described in...

  • Page 87
    ... instruments and documents as may be reasonably requested by the Title Company and/or Escrow Holder (including, without limitation, with respect to Seller's authority). 9.2 Deliveries by Buyer . At least one (1) business day prior to the Close of Escrow, Buyer shall deposit or cause to be deposited...

  • Page 88
    ... which occurs after the Closing, provided that Seller shall be responsible for the costs of tenant improvement work, tenant improvement allowances and third-party leasing commissions relating to the initial term of those Leases executed as of the Opening of Escrow. In connection with the preceding...

  • Page 89
    ... any period after the Closing Date. Buyer shall bill and use reasonable efforts to collect rent and other arrearages that related to periods prior to the Close of Escrow in the ordinary course of business, but shall not be obligated to engage a collection agency or take legal action to collect any...

  • Page 90
    ...order set forth. 12.1 Disburse Funds . Escrow Holder shall credit all matters stated to be credited in Paragraphs 3 and 10 and prorate all matters addressed in Paragraph 11 based upon the Proration and Expense Schedule and disburse the balance of the Purchase Price... FIRPTA Certificate executed by ...

  • Page 91
    ... Authority; Enforceability . The individuals executing this Agreement and the instruments referenced herein on behalf of Seller and the partners of Seller, if any, have the legal power, right, and actual authority to bind Seller to the terms and conditions hereof and thereof. This Agreement...

  • Page 92
    ...joint venture, association, joint stock company, trust, trustee, estate, limited liability company, unincorporated organization, real estate investment trust, government or any agency or political subdivision thereof, or any other form of entity (collectively, a " Person ") with whom a United States...

  • Page 93
    ... warranties shall be automatically limited to account for the Representation Matter. If, prior to the Closing Date, Buyer discovers or is notified of a Representation Matter that is not true and correct, Buyer shall have the right to terminate this Agreement and obtain a refund of the Deposit , by...

  • Page 94
    ...the legal power, right and authority to enter into this Agreement and the instruments referenced herein, and to consummate the transaction contemplated by this Agreement. 13.3.2 Requisite Action . All requisite action (corporate, trust, partnership or otherwise) has been taken by Buyer in connection...

  • Page 95
    ... of (A) an "employee benefit plan" as defined in Section 3(3) of ERISA or (B) a "plan" as defined in Section 4975 of the Code (each of which has been identified to the Seller in writing pursuant to this Section 13.2.7 at least ten (10) business days prior to the Closing Date), but the use of such...

  • Page 96
    ... 1 et. Seq., the International Emergency Economic Powers Act, 50 U.S.C. Section 1701 et. Seq., and the sanction regulations promulgated pursuant thereto by the OFAC, as well as laws relating to prevention and detection of money laundering in 18 U.S.C. Sections 1956 and 1957. To the best of Seller...

  • Page 97
    ... OF THE DATE OF THE CLOSE OF ESCROW WITH RESPECT TO ANY FACTS, CIRCUMSTANCES, CONDITIONS AND DEFECTS ; (B) EXCEPT FOR SELLER'S EXPRESS REPRESENTATIONS AND WARRANTIES HEREUNDER, SELLER HAS NO OBLIGATION TO REPAIR OR CORRECT ANY SUCH FACTS, CIRCUMSTANCES, CONDITIONS OR DEFECTS OR COMPENSATE BUYER FOR...

  • Page 98
    ..., without limitation, those relating to land use, subdivision, zoning, Hazardous Substances, occupational health and safety, handicapped access, water, earthquake hazard reduction, and building and fire codes) of any governmental or quasi-governmental body or agency claiming jurisdiction over...

  • Page 99
    ... thereafter as necessary to cover any claims of damages suffered by persons or property resulting from any acts or omissions of Buyer, Buyer's employees, agents, contractors, suppliers, consultants or other related parties. Such policy of insurance shall have liability limits of not less than Two...

  • Page 100
    ... LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677. THE FOREGOING SHALL NOT LIMIT SELLER'S REMEDIES WITH RESPECT TO BUYER'S OBLIGATIONS UNDER PARAGRAPHS 14 AND 17 OF THIS AGREEMENT OR THE ATTORNEYS' FEES PROVISION SET FORTH IN PARAGRAPH 18 BELOW. SELLER...

  • Page 101
    ... IN CONNECTION WITH AN ACTION FOR SPECIFIC PERFORMANCE. THE FOREGOING SHALL NOT LIMIT BUYER'S REMEDIES WITH RESPECT TO SELLER'S OBLIGATIONS UNDER PARAGRAPH 17 OF THIS AGREEMENT OR THE ATTORNEYS' FEES PROVISION SET FORTH IN PARAGRAPH 18 BELOW. NOTHING IN THIS SECTION SHALL LIMIT BUYER'S CLAIMS FOR...

  • Page 102
    ... is actually received, (d) or if given by certified mail, return receipt requested, postage prepaid, two (2) days after it is posted with the United States Postal Service, to the addresses specified in the Basic Provisions or (e) if given by e-mail, when received. Notices to Seller shall be...

  • Page 103
    ... to have elected not to terminate this Agreement, the parties shall proceed to the Closing Date without reduction in the Purchase Price other than by the amount of the deductible under Seller's insurance policy and all insurance proceeds paid or payable to Seller as a result of such casualty shall...

  • Page 104
    ...Estoppel Certificates . Seller shall use its commercially reasonable efforts to obtain prior to the Closing Date an estoppel certificate (in the form of that attached hereto as Exhibit J or in the form a tenant is required to deliver under its Lease if the tenant refuses to execute the form attached...

  • Page 105
    ...Seller agrees that it shall not market the Property for sale, solicit or negotiation with respect to any offers or enter into any agreement for sale with respect to the Property. 22.4 Computation of Time Periods . If the Closing Date or any other date or time period provided for in this Agreement is...

  • Page 106
    ... as required under applicable law; and (c) Buyer's and Seller's respective, attorneys, accountants, brokers, consultants, potential financial partners and lenders (subject to their agreement to abide by the terms of this paragraph). Except as set forth above, between the Execution Date and the Close...

  • Page 107
    ... any costs and expenses resulting from the review of exchange documents), (ii) such exchange delay or be a condition to the Closing, or (iii) either party hereto be required to take title to any real property other than the Property. 22.21 Counterparts . This Agreement may be executed in multiple...

  • Page 108
    ... executed counterparts of the foregoing Agreement of Purchase and Sale and Joint Escrow Instructions (the " Agreement ") and agrees to act as Escrow Holder under the Agreement and to be bound by and strictly perform the terms thereof as such terms apply to Escrow Holder. Dated Chicago Title Company...

  • Page 109
    EXHIBIT A LEGAL DESCRIPTION PARCEL 2, AS SHOWN ON PARCEL MAP NO. 10334, IN THE CITY OF EL SEGUNDO, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 94 PAGE 95 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT FROM SAID PARCEL, ALL OIL, GAS AND OTHER ...

  • Page 110
    ...Group, Inc. 406 Broadway, Suite 350G Santa Monica, California 90401 Attn: Gulwinder S. Singh MAIL TAX STATEMENTS TO: (Space above this line is for recorder's use) GRANT DEED In accordance with Section 11932 of the California Revenue and Taxation Code, Grantor has declared the amount of transfer tax...

  • Page 111
    IN WITNESS WHEREOF, the undersigned Grantor has executed this Grant Deed as of By: Its: EXHIBIT B 2

  • Page 112
    ... "A" TO GRANT DEED Legal Description PARCEL 2, AS SHOWN ON PARCEL MAP NO. 10334, IN THE CITY OF EL SEGUNDO, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 94 PAGE 95 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. EXCEPT FROM SAID PARCEL, ALL OIL, GAS...

  • Page 113
    ... that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. Signature of Notary (SEAL) CAPACITY CLAIMED BY SIGNER: o o o o Individual(s) Partner(s) Trustee(s) Corporate Officer(s) Title(s) Name...

  • Page 114
    ... BE MADE A PART OF THE PERMANENT RECORD IN THE OFFICE OF THE COUNTY RECORDER (Pursuant to Cal. Rev. & Tax. Code Section 11932) To Registrar-Recorder County of _____ Request is hereby made in accordance with the provisions of the Documentary Transfer Tax Act that the amount of tax due not be shown...

  • Page 115
    ...iii); and Transferor's U.S. employer or tax (social security) identification number is _____. The office address of Transferor is _____. Transferor understands that this Certification may be disclosed to the Internal Revenue Service by Transferee and that any false statement contained herein could...

  • Page 116
    ... harmless from and against any claim, demand, cause of action, cost or expense (including reasonably attorneys' fees and costs) arising from any claim by any Tenant under any Lease where such claim relates to facts and circumstances first arising after the Close of Escrow. Assignor shall indemnify...

  • Page 117
    ...' fees and costs. This Assignment may be executed simultaneously in counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument. This Assignment shall be binding upon and inure to the benefit of the successors, assignees, personal...

  • Page 118
    ... items of tangible personal property owned by Assignor and affixed or attached to or used at the Property (all of such properties and assets being collectively called the " Assigned Properties "). Agreement NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which...

  • Page 119
    ... to have and recover of and from the other party all costs and expenses of the action or suit, including reasonable attorneys' fees. This Assignment shall be binding upon and inure to the benefit of the successors, assignees, personal representatives, heirs and legatees of all the respective parties...

  • Page 120
    SCHEDULE "1" EXHIBIT E 3

  • Page 121
    ... lease and your security deposit (if any) have been assigned, to _____ (" New Owner "). All future rental and other payments under your lease shall be paid to New Owner, in accordance with the terms of your lease, to the following address: Very truly yours, Prior Owner: By: Name: Title: EXHIBIT F 1

  • Page 122
    EXHIBIT G SCHEDULE OF LITIGATION EXHIBIT G 1

  • Page 123
    ...for premises located at ___ E. Grand Avenue, El Segundo, California referred to as Suite ___. Tenant agrees that Landlord, Buyer and Buyer's lender may rely upon the same: 1. 2. A true correct a complete copy of the Lease and all amendments are attached as Exhibit A to this Estoppel Certificate. The...

  • Page 124
    ...Landlord. 10. The Tenant certifies that it is required to pay a ____% of real property taxes and insurance, as well as a pro rata share of the common area expenses. The Tenant currently pays to Landlord $_____ for real property taxes and operating expenses [on a monthly/annual basis]. 11. The Tenant...

  • Page 125
    Dated: September ____, 2011 Very truly yours, a By: Its: EXHIBIT J 3

  • Page 126
    ... financial statements of Stamps.com Inc. and subsidiary and the effectiveness of internal control over financial reporting of Stamps.com Inc. and subsidiary, included in this Annual Report (Form 10-K) for the year ended December 31, 2011. /s/ ERNST & YOUNG LLP Los Angeles, California March 14, 2012

  • Page 127
    ..., in any and all capacities, to sign any and all Annual Reports on Form 10-K and any amendments thereto, for the year ended December 31, 2011, of Stamps.com Inc., a Delaware corporation, under the Securities Exchange Act of 1934, as amended, and to file the same, with exhibits thereto, and other...

  • Page 128
    ..., in any and all capacities, to sign any and all Annual Reports on Form 10-K and any amendments thereto, for the year ended December 31, 2011, of Stamps.com Inc., a Delaware corporation, under the Securities Exchange Act of 1934, as amended, and to file the same, with exhibits thereto, and other...

  • Page 129
    ..., in any and all capacities, to sign any and all Annual Reports on Form 10-K and any amendments thereto, for the year ended December 31, 2011, of Stamps.com Inc., a Delaware corporation, under the Securities Exchange Act of 1934, as amended, and to file the same, with exhibits thereto, and other...

  • Page 130
    Exhibit 31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, Ken McBride, certify that: 1. I have reviewed this annual report on Form 10-K of Stamps.com Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a ...

  • Page 131
    Exhibit 31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, Kyle Huebner, certify that: 1. I have reviewed this annual report on Form 10-K of Stamps.com Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a...

  • Page 132
    ... OF 2002 In connection with the Annual Report of Stamps.com Inc. (the "Company") on Form 10-K for the period ended December 31, 2011 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Ken McBride, Chief Executive Officer of the Company, certify, pursuant to 18...

  • Page 133
    ...OF 2002 In connection with the Annual Report of Stamps.com Inc. (the "Company") on Form 10-K for the period ended December 31, 2011 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Kyle Huebner, Chief Financial Officer of the Company, certify, pursuant to 18...