EXHIBIT 10.16
FOURTH AMENDMENT
THIS FOURTH AMENDMENT (the "Amendment") is made and entered into as of
the 13th day of September, 2002, by and between EOP-SUNSET NORTH BELLEVUE,
L.L.C., A WASHINGTON LIMITED LIABILITY COMPANY ("Landlord"), and BSQUARE
CORPORATION, A WASHINGTON CORPORATION ("Tenant").
RECITALS
A. Landlord (as successor in interest to WRC Sunset North LLC, a Washington
limited liability company) and Tenant are parties to that certain lease
dated as of January 15, 1999, which lease has been previously amended by
instruments dated October 19, 1999 ("Commencement Letter"), July 27, 1999
(the "First Amendment"), January 3, 2001 (the "Second Amendment") and April
2, 2001 (the Third Amendment") (collectively, the "Lease"). Pursuant to the
Lease, Landlord has leased to Tenant space currently containing
approximately 149,487 rentable square feet (the "Original Premises") on ▇▇▇
▇▇▇, ▇▇▇, ▇▇▇, ▇▇▇ and 5th floors of the building commonly known as Building
4 of the Sunset North Corporate Campus located at the Northeast corner of
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and Southeast 32nd Street, Bellevue, Washington (the
"Building").
B. The Term is scheduled to expire on September 30, 2009 (the "Stated
Termination Date"). Tenant desires to surrender portions of the Premises to
Landlord, in stages as more fully set forth below, containing approximately
25,803 rentable square feet described as Suite No. 100 on the 1st floor of
the Building ("First Reduction Space") and 30,921 rentable square feet
described as Suite No. 200 on the 2nd floor of the Building ("Second
Reduction Space"), all as more fully shown on EXHIBIT A hereto
(collectively, the "Reduction Spaces") and further desires to terminate the
Lease prior to the Stated Termination Date. Landlord has agreed that, if
Landlord obtains another tenant ("New Tenant") interested in leasing the
Reduction Spaces with an effective date on or about the respective First and
Second Reduction Effective Dates and the Early Termination Date (as defined
below) to be evidenced by a formal lease agreement between Landlord and New
Tenant (the "New Tenant Agreement"), then Landlord shall agree to the
reduction and early termination of the Lease on the terms and conditions
contained in this Amendment.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant agree as
follows:
I. REDUCTION.
A. (i) Tenant shall vacate the First Reduction Space in accordance with
the terms of the Lease on or prior to September 30, 2002, which
is the date immediately preceding the First Reduction Effective
Date (defined in Section I.B.(i) below) and Tenant shall fully
comply with all obligations under the Lease respecting the First
Reduction Space up to the First Reduction Effective Date,
including those provisions relating to the condition of the First
Reduction Space and removal of Tenant's Property therefrom,
subject to the following: (i) Tenant shall have no obligation to
remove any of the furniture to be transferred to New Tenant
pursuant to any agreement between Tenant and New Tenant, a
schedule of which furniture (the "Furniture") is attached as
EXHIBIT E, and incorporated herein; (ii) all Leasehold
Improvements and other changes, improvements, additions and/or
alterations made to the First Reduction Space by or for Tenant
(except as set forth in (iii) below) shall remain with the
Building and shall not be required to be removed upon vacation of
the First Reduction Space by Tenant, except to the extent Tenant
and New Tenant agree in writing that a corridor for Tenant access
to the dock area is required in which case Tenant shall bear the
cost (to be reasonable in amount) for the installation and
demolition thereof; (iii) Tenant shall have the right to remove
from the First Reduction Space, and to retain as Tenant's
property (subject to the terms of EXHIBIT B attached hereto),
those items listed on EXHIBIT B, attached hereto and incorporated
herein by this reference, and (iv) in leasing the First Reduction
Space to the New Tenant, or others, Landlord shall except from
the definition of "premises" in any such lease the exclusive use
of the electrical and telecommunications rooms, the first floor
elevator lobby, elevators, and exclusive access to the loading
dock, which access shall be only as agreed to by New Tenant and
Tenant and
1
cause all of such areas to be and remain limited common areas,
reasonably accessible by Tenant on a non-exclusive basis through
the Early Termination Date or earlier termination of Tenant's
Lease, in connection with Tenant's use of Tenant's Premises.
Notwithstanding the foregoing, no later than 30 days prior to the
First Reduction Effective Date, Tenant shall permit New Tenant,
free and unlimited (except as expressly provided herein) access
to the entire First Reduction Space (except for the mail room,
which Tenant shall continue to have access to only until a mail
room area is constructed on garage level A which is expected to
occur on or about October 1, 2002, as discussed below) for the
purpose of refurbishing the First Reduction Space, completing
tenant improvements, installing furniture, fixtures and
equipment, cabling and telephone installations, which access
shall not be deemed an early termination of the Lease and Tenant
shall be responsible for all obligations under the Lease through
and including the First Reduction Effective Date. To the extent
not caused by Tenant, Landlord hereby releases Tenant from and
against all damages, claims and causes of action arising out of
or relating to any breach of the Lease caused by the New Tenant
in connection with its occupancy of the First Reduction Space
prior to the First Reduction Effective Date (in the case of any
breach of the Lease caused by both Tenant and New Tenant, the
release set forth above shall not constitute a release of Tenant
for a breach of the Lease caused by Tenant).
Effective on or before the First Reduction Effective Date,
Landlord will (i) install and make available to Tenant and
others, mailboxes in the Building at a location reasonably
acceptable to the Postal Service and accessible and usable by
Tenant, which is anticipated to be located in garage level A,
(ii) locate and designate a delivery parking area, in an area
reasonably selected by Landlord, for UPS, FedEx, and other
suppliers and deliveries for use by and for Tenant and others,
and will make reasonable access to the Building available to all
such delivery persons for such deliveries, (iii) provide standard
building signage in the Building lobby identifying the floors
Tenant is occupying, and (iv) require that New Tenant allow
Tenant reasonable and limited access to and use of the loading
dock as reasonably needed by Tenant for deliveries to and from
Tenant's Premises (which is anticipated to be approximately once
a month), and for final move out by Tenant at the expiration of
the Lease, which access and use shall be agreed to solely and
directly by and between Tenant and New Tenant and for which
Landlord shall have no liability for any alleged or actual loss,
claim or damage incurred by either Tenant or New Tenant unless
due to the gross negligence or willful misconduct of Landlord.
(ii) Tenant shall vacate the Second Reduction Space in accordance with
the terms of the Lease on or prior to December 31, 2002, which is
the date immediately preceding the Second Reduction Effective
Date (defined in Section I.B.(ii) below) and Tenant shall fully
comply with all obligations under the Lease respecting the Second
Reduction Space up to the Second Reduction Effective Date,
including those provisions relating to the condition of the
Second Reduction Space and removal of Tenant's Property
therefrom, subject to the following: (i) Tenant shall have no
obligation to remove any of the Furniture; (ii) all Leasehold
Improvements and other changes, improvements, additions and/or
alterations made to the Second Reduction Space by or for Tenant
(except as set forth in (iii) below) shall remain with the
Building and shall not be required to be removed upon vacation of
the Second Reduction Space by Tenant, except to the extent Tenant
and New Tenant agree a corridor for Tenant access to the dock
area is required in which case Tenant shall bear the reasonable
cost for the installation and demolition thereof; and (iii)
Tenant shall have the right to remove from the Second Reduction
Space, and to retain as Tenant's property, those items listed on
EXHIBIT B, attached hereto and incorporated herein by this
reference. Notwithstanding the foregoing, no later than 30 days
prior to the Second Reduction Effective Date, Tenant shall permit
New Tenant, free and unlimited (except as expressly provided
herein) access to the entire Second Reduction Space for the
purpose of refurbishing the Second Reduction Space, completing
tenant improvements, installing furniture, fixtures and
equipment, cabling and telephone installations, which access
shall not be deemed an early
2
termination of the Lease and Tenant shall be responsible for all
obligations under the Lease through and including the Second
Reduction Effective Date. To the extent not caused by Tenant,
Landlord hereby releases Tenant from and against all damages,
claims and causes of action arising out of or relating to any
breach of the Lease caused by the New Tenant in connection with
its occupancy of the Second Reduction Space prior to the Second
Reduction Effective Date (in the case of any such breach of the
Lease caused by both Tenant and New Tenant, the release set forth
above shall not constitute a release of Tenant for a breach of
the Lease caused by Tenant.
Effective on or before the Second Reduction Effective Date,
Landlord will modify the standard Building signage in the
Building lobby identifying the floors Tenant is occupying.
B. (i) Effective as of October 1, 2002 (the "First Reduction Effective
Date"), the Premises is decreased from 149,487 rentable square
feet on the 1st, 2nd, 3rd, 4th and 5th floors to 123,684 rentable
square feet on the 2nd, 3rd, 4th and 5th floors by the
elimination of the First Reduction Space. As of the First
Reduction Effective Date, the First Reduction Space shall be
deemed surrendered by Tenant to Landlord, the Lease shall be
deemed terminated with respect to the First Reduction Space, and
the "Premises", as defined in the Lease, shall be deemed to mean
the Original Premises, less the First Reduction Space; provided,
if Tenant shall violate any provision hereof or if Tenant's
representations herein shall be false or materially misleading,
Landlord shall have the right, in its sole discretion, to declare
this Amendment null and void and to reinstate the Lease with
respect to the First Reduction Space in addition to, and not in
lieu of, any other rights or remedies available to Landlord.
(ii) Effective as of January 1, 2003 (the "Second Reduction Effective
Date"), the Premises is decreased from 123,684 rentable square
feet on the 2nd, 3rd, 4th and 5th floors to 92,763 rentable
square feet on the 3rd, 4th and 5th floors by the elimination of
the Second Reduction Space. As of the Second Reduction Effective
Date, the Second Reduction Space shall be deemed surrendered by
Tenant to Landlord, the Lease shall be deemed terminated with
respect to the Second Reduction Space, and the "Premises", as
defined in the Lease, shall be deemed to mean the Original
Premises, less the Reduction Spaces; provided, if Tenant shall
violate any provision hereof or if Tenant's representations
herein shall be false or materially misleading, Landlord shall
have the right, in its sole discretion, to declare this Amendment
null and void and to reinstate the Lease with respect to the
Second Reduction Space in addition to, and not in lieu of, any
other rights or remedies available to Landlord.
C. If Tenant shall holdover in the First Reduction Space or Second
Reduction Space beyond the day immediately preceding the First Reduction
Effective Date or Second Reduction Effective Date, respectively, Tenant
shall be liable for Base Rental, Additional Base Rent and other charges
respecting the First Reduction Space and/or Second Reduction Space, as
applicable, equal to twice the amount in effect under the Lease prorated
on a per diem basis and on a per square foot basis for the First
Reduction Space and/or Second Reduction Space, respectively, and which
shall control over any provision for holdover rent set forth in Article
31 of the Lease. Such holdover amount shall not be in limitation of
Tenant's liability for consequential or other damages arising from
Tenant's holding over nor shall it be deemed permission for Tenant to
holdover in the Reduction Spaces. If Landlord shall install a wall
separating the Reduction Spaces from the balance of the Premises or
otherwise incur expense in installing separate utility meters or
effecting similar separations, Tenant, upon demand, shall reimburse
Landlord's reasonable costs in connection therewith.
3
II. BASE RENTAL.
A. FIRST REDUCTION EFFECTIVE DATE. As of the First Reduction Effective
Date, the schedule of Base Rental contained in the Lease is deleted,
and the following is substituted therefor:
ANNUAL RATE ANNUAL MONTHLY
PERIOD PER SQUARE FOOT BASE RENTAL BASE RENTAL
----------------- --------------- ----------- ------------
10/1/2002 -- 9/30/2004 $22.00 $2,721,048.00 $226,754.00
10/1/2004 -- 12/31/2004
(THE EARLY TERMINATION
DATE, DEFINED BELOW) $23.00 $2,844,732.00 $237,061.00
B. SECOND REDUCTION EFFECTIVE DATE. As of the Second Reduction
Effective Date, the schedule of Base Rental contained in the Lease
is deleted, and the following is substituted therefor:
ANNUAL RATE ANNUAL MONTHLY
PERIOD PER SQUARE FOOT BASE RENTAL BASE RENTAL
----------------- --------------- ----------- ------------
1/1/2003 -- 9/30/2004 $22.00 $2,040,786.00 $170,065.50
10/1/2004 -- 12/31/2004
(THE EARLY TERMINATION DATE,
DEFINED BELOW) $23.00 $2,133,549.00 $177,795.75
All such Base Rental shall be payable by Tenant in accordance with the
terms of the Lease.
III. TENANT'S PRO RATA SHARE. For the period commencing on the First
Reduction Effective Date and ending on the day prior to the Second
Reduction Effective Date, Tenant's Pro Rata Share is decreased from
32.1469% to 26.5980%. For the period commencing on the Second Reduction
Effective Date and ending on the Early Termination Date (as defined
below), Tenant's Pro Rata Share is decreased from 26.5980% to 19.9485%.
Notwithstanding anything in this Amendment to the contrary, Tenant shall
remain liable for all year-end adjustments with respect to Tenant's
Pro-Rata Share of Basic Costs and Taxes applicable to the Reduction
Spaces for that portion of the calendar year preceding the First
Reduction Effective Date, Second Reduction Effective Date and the Early
Termination Date (defined below). Such adjustments shall be paid at the
time, in the manner and otherwise in accordance with the terms of the
Lease, unless otherwise specified herein.
IV. ADDITIONAL SECURITY DEPOSIT. On or before the date the first installment
of the Termination Fee is due and payable pursuant to Section V.F below,
Tenant shall pay Landlord the sum of $2,096,666.67 (the "Additional
Security Deposit") which is added to and becomes part of the Security
Deposit currently held by Landlord as provided under Section 9 of the
Lease as security for payment of Rent and the performance of the other
terms and conditions of the Lease by Tenant, other than those
obligations arising out of the Termination Fee payable by Tenant
hereunder, as defined below. Accordingly, the Security Deposit shall be
increased from $803,333.33 (which is in the form of (x) an irrevocable
Letter of Credit in the amount of $668,333.33, which Letter of Credit
shall immediately be extended, by amendment, for no less than 60 days
and then substituted or consolidated into a single letter of credit with
the Additional Letter of Credit (defined below), and (y) cash in the
amount of $135,000.00) to $ 2,900,000.00. The Additional Security
Deposit shall be in the form of an irrevocable letter of credit (the
"Additional Letter of Credit"), which Additional Letter of Credit shall:
(a) be in the amount of $2,096,666.67; (b) be issued on substantially
the form attached hereto as EXHIBIT C; (c) name Landlord as its
beneficiary; and (d) be drawn on an FDIC insured financial institution
reasonably satisfactory to the Landlord. The Additional Letter of Credit
(and any renewals or replacements thereof) shall be for a term of not
less than 1 year or for a term expiring 45 days after the Early
Termination Date, if less than one year remains on the Lease. Tenant
agrees that it shall from time to time, as necessary, whether as a
result of a draw on the Additional Letter of Credit by Landlord pursuant
to the terms hereof or as a result of the expiration of the Additional
Letter of Credit then in effect, renew or replace the original and any
subsequent Additional Letter of Credit so that an Additional
4
Letter of Credit, in the amount required hereunder, is in effect until a
date which is at least 45 days after the Early Termination Date of the
Lease. If Tenant fails to furnish such renewal or replacement Additional
Letter of Credit at least 45 days prior to the stated expiration date of
the Additional Letter of Credit then held by Landlord, Landlord may draw
upon such Additional Letter of Credit and hold the proceeds thereof (and
such proceeds need not be segregated) as a Security Deposit pursuant to
the terms of Section 9 of the Lease. Any renewal or replacement of the
original or any subsequent Additional Letter of Credit shall meet the
requirements for the original Additional Letter of Credit as set forth
above, except that such replacement or renewal shall be issued by an
FDIC insured financial institution reasonably satisfactory to the
Landlord at the time of the issuance thereof.
Subject to the remaining terms of this Section IV, and provided Tenant
has timely paid all Rent due under this Lease during the period
immediately preceding the effective date of any reduction of the
Security Deposit, Tenant shall have the right to reduce the amount of
the Security Deposit (i.e., the Additional Letter of Credit and existing
Letter of Credit) so that the total reduced Security Deposit secured by
the Letter of Credit and Additional Letter of Credit amounts will be as
follows: (i) $2,200,000.00 effective as of April 1, 2004; (ii)
$1,475,000.00 effective as of July 1, 2004; and (iii) $750,000.00
effective as of October 1, 2004. If Tenant is not entitled to reduce the
Security Deposit (i.e., the Letter of Credit and the Additional Letter
of Credit) as of a particular reduction effective date due to Tenant's
failure to timely pay all Rent during the months prior to that
particular reduction effective date, then any subsequent reduction(s)
Tenant is entitled to hereunder shall be reduced by the amount of the
reduction Tenant would have been entitled to had Tenant timely paid all
Rent during the months prior to that particular earlier reduction
effective date. Notwithstanding anything to the contrary contained
herein, if Tenant has been in default under this Lease at any time prior
to the effective date of any reduction of the Security Deposit and
Tenant has failed to cure such default within any applicable cure
period, then Tenant shall have no further right to reduce the amount of
the Security Deposit (i.e. the Letter of Credit and the Additional
Letter of Credit) as described herein. Any reduction in the Letter of
Credit and the Additional Letter of Credit shall be accomplished by
Tenant providing Landlord with a substitute letter of credit in the
reduced amount.
V. TERMINATION.
A. Effective as of December 31, 2004 (the "Early Termination Date") and
subject to the agreements, representations, warranties and
indemnities contained in this Amendment, including, without
limitation, payment of the Termination Fee described in Section V.F
below, the Lease is terminated and the Term of the Lease shall
expire with the same force and effect as if the Term was, by the
provisions thereof, fixed to expire on the Early Termination Date.
B. Effective as of the Early Termination Date, Tenant 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 Tenant forever releases and
discharges Landlord from any and all claims, demands or causes of
action whatsoever against Landlord or its successors and assigns
arising out of or in connection with the Premises or the Lease and
forever releases and discharges Landlord from any obligations to be
observed or performed by Landlord under the Lease after the Early
Termination Date, except for those obligations of Landlord arising
prior to the Early Termination Date and which survive or cannot be
performed until thereafter (e.g. return of any security deposit and
refund of any overpayment of Basic Costs, if any).
C. Subject to the agreements, representations, warranties and
indemnities contained in this Amendment, Landlord agrees to accept
the surrender of the Lease and the Premises from and after the Early
Termination Date and, effective as of the Early Termination Date,
forever releases and discharges Tenant from any obligations to be
observed and performed by Tenant under the Lease after the Early
Termination Date, provided that Tenant has satisfied, performed and
fulfilled all of the agreements set forth in this Termination
Agreement, and each of the representations and warranties set forth
in Section V.E below are true and correct.
5
D. On or prior to the Early Termination Date, Tenant shall:
1. Fulfill all covenants and obligations of Tenant under the Lease
applicable to the period prior to and including the Early
Termination Date.
2. No later than 30 days prior to the Early Termination Date,
completely vacate and surrender the Premises to Landlord in
accordance with the terms of the Lease. Without limitation,
Tenant shall leave the Premises in a broom-clean condition and
free of all movable furniture and equipment and shall deliver
the keys to the Premises to Landlord or Landlord's designee.
3. No later than 30 days prior to the Early Termination Date,
Tenant shall permit New Tenant, free and unlimited access to the
entire Premises for the purpose of refurbishing the Premises,
completing tenant improvements, installing furniture, fixtures
and equipment, cabling and telephone installations, which access
shall not be deemed an early termination of the Lease and Tenant
shall be responsible for all obligations under the Lease through
and including the Early Termination Date, provided that to the
extent not caused by Tenant, Landlord hereby releases Tenant
from and against all damages, claims and causes of action
arising out of or relating to any breach of the Lease caused by
the New Tenant in connection with its occupancy of the Premises
prior to the Early Termination Date (in the case of any such
breach of the Lease caused by both Tenant and New Tenant, the
release set forth above shall not constitute a release of Tenant
for a breach of the Lease caused by Tenant).
E. Tenant represents and warrants that (a) Tenant is the rightful 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) Tenant has no knowledge of
any fact or circumstance which would give rise to any claim, demand,
obligation, liability, action or cause of action against Landlord or
the Landlord Related Parties arising out of or in connection with
Tenant's occupancy of the Premises; (d) no other person or entity
has an interest in the Lease, collateral or otherwise; and (e) there
are no outstanding contracts for the supply of labor or material and
no work has been done or is being done by, for, or at the direction
of Tenant, in, to or about the Premises which has not been fully
paid for and for which appropriate waivers of mechanics' liens have
not been obtained. The foregoing representation and warranty shall
be deemed to be remade by Tenant in full as of the Early Termination
Date.
F. Tenant agrees to pay to Landlord or Landlord's designee, by
cashier's or certified check or by wire transfer of immediately
available funds to an account designated by Landlord, pursuant to
the schedule set forth below, in consideration of the early
termination of the Lease and the reduction of the Premises as set
forth above, the sum of $4,348,106.96 ($2,065,559.44 of which shall
be allocated for the First Reduction Space and Second Reduction
Space and the balance of which shall be allocated to the Early
Termination Date) (the "Termination Fee"), which consists of (i)
$4,137,865.96 as consideration for the reduction of the Premises and
accelerated term of the Lease, (ii) $205,241.00 as a brokerage
commission for CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ and (iii) $5,000.00 as legal fees
due Landlord, payable in installments as follows:
6
INSTALLMENTS OF TERMINATION FEE
DUE DATE AMOUNT DUE
-------- ----------
1. Within two (2) business days following the date on
which Landlord notifies Tenant that the
contingencies contained in Section VIII(H) below,
have been met or waived. $1,780,241.00
2. Upon the later to occur of October 1, 2002, or the
date that is two (2) business days following the date
on which Landlord notifies Tenant that the
contingencies contained in Section VIII(H) below,
have been met or waived. $ 285,318.44
3. January 1, 2003 $ 285,318.44
4. April 1, 2003 $ 285,318.44
5. July 1, 2003 $ 285,318.44
6. October 1, 2003 $ 285,318.44
7. January 1, 2004 $ 285,318.44
8. April 1, 2004 $ 285,318.44
9. July 1, 2004 $ 285,318.44
10. October 1, 2004 $ 285,318.44
Any and all installments of the Termination Fee due and payable
subsequent to the execution of this Amendment, which shall not be
deemed Rent under the terms of the Lease, shall be reduced to and
evidenced in a promissory note in the form attached hereto as
EXHIBIT D (the "Promissory Note") and incorporated herein, which
Promissory Note shall be secured by the Termination Fee Letter of
Credit set forth below, and which Promissory Note shall be executed
and delivered by Tenant on or before the date the first installment
of the Termination Fee is due and payable.
G. Termination Fee Letter of Credit. Notwithstanding anything to the
contrary contained herein, Landlord acknowledges that in accordance
with Section IV above, upon the effective date of this Amendment and
to the extent Tenant has complied with the terms hereof, it will be
holding a security deposit in the amount of $2,900,000.00 which is
intended to secure the Rent and other financial obligations of
Tenant other than those obligations expressly arising from the
Termination Fee payable by Tenant as set forth above. On or before
the date the first installment of the Termination Fee is due and
payable, Tenant shall pay to Landlord a security deposit to further
secure the obligations of Tenant in the timely payment of the
Termination Fee required herein (the "Termination Fee Security
Deposit") which shall be in the form of a letter of credit (the
"Termination Fee Letter of Credit"), which Termination Fee Letter of
Credit shall: (a) be in the amount of $2,282,547.52 and if no prior
default has occurred under the Promissory Note, which amount shall
be reduced beginning after the first 120 days thereof, on a
quarterly calendar basis, to the principal amount then remaining due
and owing on the Promissory Note; (b) be in substantially the form
attached hereto as EXHIBIT C-1; (c) name Landlord, as its
beneficiary; (d) be drawn on an FDIC insured financial institution
reasonably satisfactory to Landlord upon which presentment may be
made in Seattle, Washington; (e) expressly allow Landlord to draw
upon it: (i) in the event that Tenant is in Default under the terms
of the Promissory Note by delivering to the issuer of the
Termination Fee Letter of Credit written notice that Landlord is
entitled to draw thereunder pursuant to the terms of this Lease; or
(ii) if Tenant, within 45 days prior to expiration of the
Termination Fee Letter of Credit then held by Landlord, fails to
provide Landlord with a replacement Termination Fee Letter of Credit
meeting the requirements herein; (f) expressly state that it will be
honored by the issuer without inquiry into the accuracy of any such
notice or statement made by Landlord; (g) expressly permit multiple
or partial draws up to the stated amount of the Termination Fee
Letter of Credit; (h) expressly provide that it is transferable to
any successor of Landlord at no cost to Landlord; and (i) expire no
earlier than 45 days after the due date of the final installment due
under the Promissory Note (cumulatively the "Termination Fee Letter
of Credit Conditions").
H. Section 18(a) of the Lease shall survive the termination of the
Lease pursuant to this Agreement.
VI. REPRESENTATIONS. Each party represents to the other that it has full
power and authority to execute this Amendment. Tenant represents that it
has not made any assignment,
7
sublease, transfer, conveyance of the Lease or any interest therein or
in the Reduction Spaces other than those explicitly recited herein and
further represents that there is not and will not hereafter be any
claim, demand, obligation, liability, action or cause of action by any
other party respecting, relating to or arising out of the Reduction
Spaces, and Tenant agrees to indemnify and hold harmless Landlord and
the Landlord Related Parties (as defined in the "Miscellaneous" Section
below) from all liabilities, expenses, claims, demands, judgments,
damages or costs arising from any of the same, including without
limitation, attorneys' fees. Tenant acknowledges that Landlord will be
relying on this Amendment in entering into leases for the Reduction
Spaces with other parties.
VII. OTHER PERTINENT PROVISIONS. Landlord and Tenant agree that, effective as
of the date of this Amendment (unless different effective date(s) is/are
specifically referenced in this Section), the Lease shall be amended in
the following additional respects:
A. NOTICE. The address for all notices to Landlord and the payment of
Rent and any other amounts due hereunder as set forth in Article
1(A)12 of the Lease is deleted in its entirety and the following
substituted therefor:
EOP-Sunset North Bellevue, L.L.C.
c/o Equity Office Properties Trust
▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Property Manager
With a copy to:
Equity Office Properties Trust
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Regional Counsel -- Seattle Region
Rent and other amounts due under the Lease shall be payable to
EQUITY OFFICE PROPERTIES at the following address:
EOP Operating Limited Partnership
as Agent for EOP-Sunset North Bellevue, L.L.C.
Dept. 13310, File #056403
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
The address for all notices to Tenant as set forth in Article 1(A)12
of the Lease is deleted in its entirety and the following
substituted therefor:
BSquare Corporation
▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
B. DEFINITIONS. The definitions set forth in Article 1(B)(2) "Broker",
is hereby deleted in its entirety and is of no further force or
effect.
C. PREMISES-OPTIONS. The Expansion Option contained in Article 5(B) of
the Lease, the Option to Extend contained in Article 5(C) of the
Lease, the Right of First Offer and Other Rights contained in
Article 5(D) of the Lease and the Termination Option contained in
Article 5(E) of the Lease are all hereby deleted in their entirety
and are null and void and of no further force or effect.
D. TENANT IMPROVEMENTS. The Refurbishment Allowance contained in
Article 6(E) of the Lease is hereby deleted in its entirety and is
null and void and is of no further force or effect.
E. LEASEHOLD IMPROVEMENTS. The second paragraph contained in Article 11
of the Lease granting Tenant certain rights to install a standby
generator is hereby deleted in its entirety and is null and void and
of no further force or effect.
8
F. PARKING RIGHTS. Effective as of the First Reduction Effective Date,
Article XV (Parking) contained in the Second Amendment is hereby
deleted in its entirety, is null and void and of no further force or
effect and as a result thereof, the parking rights set forth in
Section 5(f) of the Lease are hereby reduced by 94 unassigned
parking spaces.
G. EXTERIOR BUILDING SIGNAGE. Until the earlier of the Early
Termination Date or any sooner termination of the Lease pursuant to
the terms hereof, New Tenant shall be permitted to locate a sign
with specifications comparable to its existing sign, and no other
exterior sign, on the western exterior of the Building at a location
which is half-way between the sign of Tenant and the edge of the
Building (i.e. at a location which is approximately the same
distance from the center of the Building as is Tenant's sign).
VIII. MISCELLANEOUS.
A. This Amendment and the attached exhibits, which are hereby
incorporated into and made a part of this Amendment, set forth the
entire agreement between the parties with respect to the matters set
forth herein. There have been no additional oral or written
representations or agreements. Under no circumstances shall Tenant
be entitled to any Rent abatement (other than as expressly provided
in the Lease), improvement allowance, leasehold improvements, or
other work to the Premises, or any similar economic incentives that
may have been provided Tenant in connection with entering into the
Lease, unless specifically set forth in this Amendment. Tenant
agrees that neither Tenant nor its agents or any other parties
acting on behalf of Tenant shall disclose any matters set forth in
this Amendment 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. Except (i) to the extent required by any applicable
Securities and Exchange Commission requirements, or any applicable
Federal or State securities laws (collectively, the "Securities
Laws"), or (ii) to the extent necessary to be disclosed to Tenant's
accountant, banks, attorneys, advisors or others in connection with
Tenant's business, all of whom shall be subject to and bound by the
same confidentiality obligations contained herein, or (iii) to the
extent necessary to be disclosed in Tenant's financial statements,
or (iv) to the extent required by applicable law, court order or
other legal discovery, Tenant agrees that neither Tenant nor its
agents or any other parties acting on behalf of Tenant shall
disclose any matters set forth in this Amendment 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 and, if Tenant is required
by the Securities Laws or court order or subpoena or other legal
discovery to disclose any information contained in this Amendment,
Tenant will give Landlord written notice of such requirement
promptly upon Tenant becoming aware of same and in any event prior
to making any disclosure pursuant thereto, and Tenant will cooperate
with Landlord in Landlord's seeking (if Landlord chooses to do so) a
protective order or other appropriate relief as Landlord may
reasonably request. If Landlord is unable to obtain a protective
order or other remedy with respect to such disclosure prior to the
time Tenant is obligated to make any such disclosure, Tenant (or
such other persons to whom such disclosure request or requirement
applies) will disclose or otherwise furnish only the information
legally required to be disclosed, as advised by legal counsel. In
the event of any violation of the terms of this Section VIII.A, the
parties acknowledge and agree that, because of the difficulty of
ascertaining the exact amount of damages sustained by Landlord as a
result of such violation, Landlord shall be entitled to the sum of
$400,000.00 from Tenant as liquidated damages as Landlord's sole and
exclusive remedy for violation of this provision, which sum shall be
payable upon demand of Landlord. However, the foregoing shall in no
manner limit Landlord's rights, remedies or damages as a result of
Tenant's violation of any other term or condition of this Amendment.
B. Except as herein modified or amended, the provisions, conditions and
terms of the Lease shall remain unchanged and in full force and
effect.
C. In the case of any inconsistency between the provisions of the Lease
and this Amendment, the provisions of this Amendment shall govern
and control.
9
D. Submission of this Amendment by Landlord is not an offer to enter
into this Amendment but rather is a solicitation for such an offer
by Tenant. Landlord shall not be bound by this Amendment until
Landlord has executed and delivered the same to Tenant.
E. The capitalized terms used in this Amendment shall have the same
definitions as set forth in the Lease to the extent that such
capitalized terms are defined therein and not redefined in this
Amendment.
F. Tenant hereby represents to Landlord that Tenant has dealt with no
broker in connection with this Amendment other than ▇▇▇ ▇▇▇▇▇▇▇▇ of
CB ▇▇▇▇▇▇▇ ▇▇▇▇▇. Tenant agrees to indemnify and hold Landlord, its
members, principals, beneficiaries, partners, officers, directors,
employees, mortgagee(s) and agents, and the respective principals
and members of any such agents (collectively, the "Landlord Related
Parties") harmless from all claims of any brokers claiming to have
represented Tenant in connection with this Amendment. Landlord
hereby represents to Tenant that Landlord has dealt with no broker
in connection with this Amendment. Landlord agrees to indemnify and
hold Tenant, its members, principals, beneficiaries, partners,
officers, directors, employees, and agents, and the respective
principals and members of any such agents (collectively, the "Tenant
Related Parties") harmless from all claims of any brokers claiming
to have represented Landlord in connection with this Amendment.
G. Each signatory of this Amendment represents hereby that he or she
has the authority to execute and deliver the same on behalf of the
party hereto for which such signatory is acting.
H. CONTINGENCIES. This Amendment is contingent upon the following:
1. Expedia Lease Agreement. Expedia Inc., a Washington corporation
("New Tenant" or "Expedia"), entering into a Lease Agreement
with Landlord to occupy space in the Building which includes the
Original Premises, commencing on the dates which are consistent
with the dates of the First and Second Reduction Effective
Dates, respectively and the Early Termination Date (the "Expedia
Lease"). If the Expedia Lease is not mutually executed and
delivered on or before September 13, 2002, then, at Landlord's
option, to be exercised by written notice delivered on or before
September 27, 2002, this Amendment shall be of no further force
or effect.
2. Tenant Furniture Transfer. Expedia entering into an agreement
with Tenant pursuant to which Tenant transfers ownership of the
Furniture. If Tenant and Expedia do not enter into such an
agreement on or before October 1, 2002, then, at Landlord's
option, to be exercised by written notice delivered on or before
October 4, 2002, this Amendment shall be of no further force or
effect.
3. Connectivity. Expedia obtaining fiber network telecommunications
and fiber data connectivity with Expedia's space in the building
("Building One") known as Sunset Corporate Campus, Building One
("Connectivity"). If Expedia is not satisfied that Connectivity
will be established on or before October 22, 2002, then, at
Landlord's option, to be exercised by written notice delivered
on or before October 4, 2002, this Amendment shall be of no
further force or effect.
4. If this Amendment terminates pursuant to Section VIII.H.1, 2, or
3, above, and if the New Tenant has modified Floors 1 and or 2
prior to termination of this Amendment, Landlord shall, if
requested by Tenant within 30 days of the date of termination of
this Amendment, restore Floors 1 and or 2 to substantially the
same condition prior to the work by New Tenant.
10
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this
Amendment as of the day and year first above written.
LANDLORD:
EOP-SUNSET NORTH BELLEVUE, L.L.C., A
WASHINGTON LIMITED LIABILITY COMPANY
By: EOP-Sunset North, L.L.C., a Delaware
limited liability company, its managing
member
By: EOP Operating Limited Partnership, a
Delaware limited partnership, its sole
member
By: Equity Office Properties Trust, a
Maryland real estate investment
trust, its general partner
By:
------------------------------
Name: M. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title Senior Vice President--
Seattle Region
TENANT:
BSQUARE CORPORATION, A WASHINGTON CORPORATION
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
11
LANDLORD ACKNOWLEDGMENTS
STATE OF ____________)
COUNTY OF __________) SS:
I, THE UNDERSIGNED, A NOTARY PUBLIC, IN AND FOR THE COUNTY AND STATE
AFORESAID, DO HEREBY CERTIFY THAT M ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, PERSONALLY KNOWN TO ME TO
BE THE SENIOR VICE PRESIDENT OF EQUITY OFFICE PROPERTIES TRUST, A MARYLAND REAL
ESTATE INVESTMENT TRUST, AND PERSONALLY KNOWN TO ME TO BE THE SAME PERSON WHOSE
NAME IS SUBSCRIBED TO THE FOREGOING INSTRUMENT, APPEARED BEFORE ME THIS DAY IN
PERSON AND ACKNOWLEDGED THAT AS SUCH OFFICER OF SAID ENTITY BEING AUTHORIZED SO
TO DO, (s)HE EXECUTED THE FOREGOING INSTRUMENT ON BEHALF OF SAID ENTITY, BY
SUBSCRIBING THE NAME OF SUCH ENTITY BY HIMSELF/HERSELF AS SUCH OFFICER, AS A
FREE AND VOLUNTARY ACT, AND AS THE FREE AND VOLUNTARY ACT AND DEED OF SAID
ENTITY, FOR THE USES AND PURPOSES THEREIN SET FORTH.
GIVEN UNDER MY HAND AND OFFICIAL SEAL THIS ___ DAY OF ___________, 20__.
_____________________________________
NOTARY PUBLIC
_____________________________________
PRINTED NAME
MY COMMISSION EXPIRES: __________
TENANT ACKNOWLEDGMENTS
STATE OF ____________)
COUNTY OF __________) SS:
ON THIS THE ___ DAY OF ____________, 2002, BEFORE ME A NOTARY PUBLIC
DULY AUTHORIZED IN AND FOR THE SAID COUNTY IN THE STATE AFORESAID TO TAKE
ACKNOWLEDGMENTS PERSONALLY APPEARED __________________________ KNOWN TO ME TO BE
____________ PRESIDENT OF BSQUARE CORPORATION, A WASHINGTON CORPORATION, ONE OF
THE PARTIES DESCRIBED IN THE FOREGOING INSTRUMENT, AND ACKNOWLEDGED THAT AS SUCH
OFFICER, BEING AUTHORIZED SO TO DO, (s)HE EXECUTED THE FOREGOING INSTRUMENT ON
BEHALF OF SAID CORPORATION BY SUBSCRIBING THE NAME OF SUCH CORPORATION BY
HIMSELF/HERSELF AS SUCH OFFICER AND CAUSED THE CORPORATE SEAL OF SAID
CORPORATION TO BE AFFIXED THERETO, AS A FREE AND VOLUNTARY ACT, AND AS THE FREE
AND VOLUNTARY ACT OF SAID CORPORATION, FOR THE USES AND PURPOSES THEREIN SET
FORTH.
IN WITNESS WHEREOF, I HEREUNTO SET MY HAND AND OFFICIAL SEAL.
_____________________________________
NOTARY PUBLIC
_____________________________________
PRINTED NAME
MY COMMISSION EXPIRES: __________
12
EXHIBIT B
LIST OF PERSONAL PROPERTY
1. All supplemental HVAC equipment and accessories installed by Tenant in
or above Rooms 2253 and 2255, after New Tenant's initial occupancy of
such rooms; Tenant may relocate such equipment and accessories to an
alternate location(s) on the 3rd, 4th or 5th floor of the Building
provided that (A) Tenant restore to Landlord's reasonable satisfaction
any damage to Rooms 2253 and/or 2255 caused by such removal or
restoration and (B) such equipment and accessories will, at the
expiration or termination of the Lease as provided for in the Amendment
attached hereto, become the property of Landlord.
2. All free-standing shelving located in Room 1070 (Tenant's current
shipping room). In lieu of Tenant's removal of the existing built-in
counter top (the "Countertop") in Room 1070, at Tenant's request,
Landlord's agrees to replace, using comparable materials, the Countertop
in Room 1070 which shall be of approximately the same size and dimension
and located in Tenant's Premises, as designated by Tenant.
3. Security cameras located in:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
1st Floor East
1st Floor Shipping & Receiving/Loading Dock Room
1st Floor Lobby 1
1st Floor Lobby ▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ Loading (Outside)
2nd Floor Lobby 1
2nd Floor Lobby 2
1
EXHIBIT C
FORM OF LETTER OF CREDIT
Irrevocable Standby
Letter of Credit
No. ______________________
Issuance Date:_____________
Expiration Date:____________
Applicant:__________________
Beneficiary
EOP-Sunset North Bellevue, L.L.C.
▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Property Manager
Ladies/Gentlemen:
We hereby establish our Irrevocable Standby Letter of Credit in your
favor for the account of the above referenced Applicant in the amount of
____________________ U.S. Dollars ($____________________) available for payment
at sight by your draft drawn on us when accompanied by the following documents:
1. An original copy of this Irrevocable Standby Letter of Credit.
2. Beneficiary's dated statement purportedly signed by an authorized
signatory or agent reading: "This draw in the amount of
______________________ U.S. Dollars ($____________) under your
Irrevocable Standby Letter of Credit No. ____________________ represents
funds due and owing to us pursuant to the terms of that certain lease by
and between ______________________, as landlord, and _____________, as
tenant, and/or any amendment to the lease or any other agreement between
such parties related to the lease."
It is a condition of this Irrevocable Standby Letter of Credit that it
will be considered automatically renewed for a one year period upon the
expiration date set forth above and upon each anniversary of such date, unless
at least 60 days prior to such expiration date or applicable anniversary
thereof, we notify you in writing, by certified mail return receipt requested or
by recognized overnight courier service, that we elect not to so renew this
Irrevocable Standby Letter of Credit. A copy of any such notice shall also be
sent, in the same manner, to: Equity Office Properties Trust, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Treasury Department. In
addition to the foregoing, we understand and agree that you shall be entitled to
draw upon this Irrevocable Standby Letter of Credit in accordance with 1 and 2
above in the event that we elect not to renew this Irrevocable Standby Letter of
Credit and, in addition, you provide us with a dated statement purportedly
signed by an authorized signatory or agent of Beneficiary stating that the
Applicant has failed to provide you with an acceptable substitute irrevocable
standby letter of credit in accordance with the terms of the above referenced
lease. We further acknowledge and agree that: (a) upon receipt of the
documentation required herein, we will honor your draws against this Irrevocable
Standby Letter of Credit without inquiry into the accuracy of Beneficiary's
signed statement and regardless of whether Applicant disputes the content of
such statement; (b) this Irrevocable Standby Letter of Credit shall permit
partial draws and, in the event you elect to draw upon less than the full stated
amount hereof, the stated amount of this Irrevocable Standby Letter of Credit
shall be automatically reduced by the amount of such partial draw; and (c) you
shall be entitled to transfer your interest in this Irrevocable Standby Letter
of Credit from time to time and more than one time without our approval and
without charge. In the event of a transfer, we reserve the right to require
reasonable evidence of such transfer as a condition to any draw hereunder.
This Irrevocable Standby Letter of Credit is subject to the Uniform
Customs and Practice for Documentary Credits (1993 revision) ICC Publication No.
500.
We hereby engage with you to honor drafts and documents drawn under and
in compliance with the terms of this Irrevocable Standby Letter of Credit.
All communications to us with respect to this Irrevocable Standby Letter
of Credit must
2
be addressed to our office located at ______________________________________ to
the attention of __________________________________.
Very truly yours,
__________________________________
[name]
__________________________________
[title}
__________________________________
3
EXHIBIT C-1
FORM OF LETTER OF CREDIT
Irrevocable Standby
Letter of Credit
No. ______________________
Issuance Date:_____________
Expiration Date:____________
Applicant:__________________
Beneficiary
EOP-Sunset North Bellevue, L.L.C.
▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Property Manager
Ladies/Gentlemen:
We hereby establish our Irrevocable Standby Letter of Credit in your
favor for the account of the above referenced Applicant in the amount of
____________________ U.S. Dollars ($____________________) available for payment
at sight by your draft drawn on us when accompanied by the following documents:
1. An original copy of this Irrevocable Standby Letter of Credit.
2. Beneficiary's dated statement purportedly signed by an authorized
signatory or agent reading: "This draw in the amount of
______________________ U.S. Dollars ($____________) under your
Irrevocable Standby Letter of Credit No. ____________________ represents
funds due and owing to us pursuant to the terms of that certain
Promissory Note executed by BSQUARE CORPORATION, as Maker, and payable
to EOP-SUNSET NORTH BELLEVUE, L.L.C., as Payee, and/or any amendment,
modification or substitution of such Promissory Note."
It is a condition of this Irrevocable Standby Letter of Credit that it
will be considered automatically renewed for a one year period upon the
expiration date set forth above and upon each anniversary of such date, unless
at least 60 days prior to such expiration date or applicable anniversary
thereof, we notify you in writing, by certified mail return receipt requested or
by recognized overnight courier service, that we elect not to so renew this
Irrevocable Standby Letter of Credit. A copy of any such notice shall also be
sent, in the same manner, to: Equity Office Properties Trust, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Treasury Department. In
addition to the foregoing, we understand and agree that you shall be entitled to
draw upon this Irrevocable Standby Letter of Credit in accordance with 1 and 2
above in the event that we elect not to renew this Irrevocable Standby Letter of
Credit and, in addition, you provide us with a dated statement purportedly
signed by an authorized signatory or agent of Beneficiary stating that the
Applicant has failed to provide you with an acceptable substitute irrevocable
standby letter of credit in accordance with the terms of the above referenced
lease. We further acknowledge and agree that: (a) upon receipt of the
documentation required herein, we will honor your draws against this Irrevocable
Standby Letter of Credit without inquiry into the accuracy of Beneficiary's
signed statement and regardless of whether Applicant disputes the content of
such statement; (b) this Irrevocable Standby Letter of Credit shall permit
partial draws and, in the event you elect to draw upon less than the full stated
amount hereof, the stated amount of this Irrevocable Standby Letter of Credit
shall be automatically reduced by the amount of such partial draw; and (c) you
shall be entitled to transfer your interest in this Irrevocable Standby Letter
of Credit from time to time and more than one time without our approval and
without charge. In the event of a transfer, we reserve the right to require
reasonable evidence of such transfer as a condition to any draw hereunder.
This Irrevocable Standby Letter of Credit is subject to the Uniform
Customs and Practice for Documentary Credits (1993 revision) ICC Publication No.
500.
We hereby engage with you to honor drafts and documents drawn under and
in compliance with the terms of this Irrevocable Standby Letter of Credit.
All communications to us with respect to this Irrevocable Standby Letter
of Credit must
4
be addressed to our office located at ________________________________________
to the attention of __________________________________.
__________________________________
[name]
__________________________________
[title}
__________________________________
5
EXHIBIT D
PROMISSORY NOTE
Holder's Note
Straight Installment
Fixed Rate
Secured
$2,567,865.96 Seattle, Washington
________________, 2002
FOR VALUE RECEIVED, the undersigned, BSQUARE CORPORATION, A WASHINGTON
CORPORATION (the "Maker"), promises to pay to the order of EOP-SUNSET NORTH
BELLEVUE, L.L.C., A WASHINGTON LIMITED LIABILITY COMPANY (the "Payee"), the
principal sum of TWO MILLION FIVE HUNDRED SIXTY SEVEN THOUSAND EIGHT HUNDRED
SIXTY FIVE AND 44/100 DOLLARS ($2,567,865.96), together with interest thereon,
all as hereinafter provided and upon the following agreements, terms and
conditions:
1. Payment. Maker shall pay principal in substantially equal consecutive
quarterly installments as follows:
NUMBER OF INSTALLMENTS: NINE (9)
AMOUNT OF EACH INSTALLMENT: $285, 318.44
FIRST INSTALLMENT PAYABLE ON OCTOBER 4, 2002
and subsequent quarterly installments on the like day of each successive
quarter beginning on January 1, 2003 and each subsequent April, July,
October and January until this Note shall be paid in full; provided,
however, that the last such installment shall be in an amount necessary
to repay in full the unpaid principal amount of this Note and all unpaid
interest accrued thereon, if any. Each payment shall be applied first to
interest accrued to the installment payment date, if any, and then to
principal. All payments shall be payable in lawful money of the United
States of America which shall be the legal tender for public and private
debts at the time of payment. All payments shall be made to the holder
hereof at ______________________________, or at such other place as the
holder may specify in writing from time to time.
2. Interest. This Note shall bear no interest unless Maker is in Default,
as defined below. In the event of any default as hereinafter defined,
all sums then and thereafter owing hereon shall bear interest at a rate
(the "Default Rate") per annum, which shall be Twelve percent (12%). On
the first day of each quarter and on the like day of each quarter
thereafter, all interest then accrued but unpaid hereon shall be
computed and determined and shall thereupon be added to the principal
sum hereunder and thereafter bear interest at the applicable rate set
forth above.
3. Prepayment. Maker may prepay any sums now or hereafter owing hereon at
any time. Notwithstanding any prepayment, the Maker shall continue to
make all succeeding installment or other payments as they become due,
and the prepayment shall be applied upon installments in the inverse
order of their due date.
4. Late Payment Charge. If any installment of principal or interest shall
not be paid when due and such failure continues for five (5) business
days following written notice from Payee or the current holder of this
Note, the Maker agrees to pay a late charge equal to Five percent (5 %)
of the delinquent payments. This is in addition to and not in lieu of
any other rights or remedies the holder of this Note may have by virtue
of any breach or default.
5. Security Instrument. This Note and the sums evidenced hereby are secured
by an Irrevocable Letter of Credit dated _____________, 2002 (the
"Security Instrument"), executed and delivered by, or caused to be
executed and delivered by, the Maker hereof to the original holder of
this Note. The Maker agrees to perform and comply with, or to cause to
be performed and complied with, all of the agreements, terms, and
conditions of the Security Instrument.
6. Default; Attorneys' Fees, and Other Costs and Expenses. In the event of
any default, at the option of the holder of this Note, all sums owing
and to become owing hereon shall
6
become immediately due and payable and shall bear interest thereafter at
the Default Rate per annum. A "Default" shall mean any failure to pay
any sum then owing hereon when due, and such failure continues for a
period of five (5) business days following written notice from Payee or
the current holder of this Note, or the failure to pay any other sum
which may become due and payable pursuant to the Security Instrument, or
any breach of warranty in or the failure to perform or comply with any
of the agreements, terms or conditions of the Security Instrument. The
Maker agrees to pay all costs and expenses which the holder of this Note
may incur by reason of any default and to a determination of any rights
or remedies of the holder under this Note or under the Security
Instrument, and all reasonable attorneys' fees relating thereto, whether
or not any actions or proceedings are commenced, and including, without
limitation, all those relating to any actions or proceedings which the
holder of this Note may institute or in which the holder may appear or
participate and in any reviews thereof and appeals therefrom, and all
such sums shall be secured by the Security Instrument. Any judgment
recovered by the holder hereon shall bear interest at the Default Rate
per annum. Maker agrees that the venue of any action hereon may be laid
in King County, state of Washington, at the option of the holder of this
Note, and Maker agrees to submit to the personal jurisdiction of the
courts of the state of Washington in any actions or proceedings arising
out of, or in connection with, or relating to, this Note.
7. Liability. All persons signing this Note as Maker and, in the case of a
partnership Maker, all partners thereof, agree that they have actual
authority to execute this Note in their representative capacity as an
authorized representative of Maker and they waive demand, presentment
for payment, protest and notice of protest and nonpayment. Each such
person agrees that any modification or extension of the terms of payment
made by the holder of this Note, or forbearance in enforcing any of the
provisions of this Note or the Security Instrument, with or without
notice, at the request of any person liable hereon or owning an interest
in any property, real or personal, described in the Security Instrument,
or a release of any party liable for this obligation, or a release of
property, real or personal, or any part thereof from the lien of the
Security Instrument, shall not diminish or impair his or their liability
for the payment hereof.
8. Maximum Interest. Notwithstanding any other provisions of this Note or
of the Security Instrument, interest, fees, and charges payable by
reason of the indebtedness evidenced hereby shall not exceed the
maximum, if any, permitted by any governing law. Maker hereby represents
and warrants that the transaction giving rise to the indebtedness
evidenced by this Note is primarily for agricultural, commercial,
investment or business purposes and is not primarily for personal,
family or household purposes.
9. Applicable Law. This Note shall be construed according to the laws of
the state of Washington.
10. Oral Agreements Not Enforceable. ORAL AGREEMENTS OR ORAL COMMITMENTS TO
LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A
DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
BSQUARE CORPORATION, A WASHINGTON CORPORATION
By: ___________________________________________
Name: _________________________________________
Title: ________________________________________
Date: _________________________________________
7
EXHIBIT E
FURNITURE
1