EXHIBIT 10.16(a)
FIFTH AMENDMENT TO OFFICE LEASE AGREEMENT
This FIFTH AMENDMENT TO OFFICE LEASE AGREEMENT (this "AMENDMENT") is
entered as of January 1, 2004, by and between WA - SUNSET NORTH BELLEVUE,
L.L.C., a Washington limited liability company formerly known as EOP - Sunset
North Bellevue, L.L.C. ("LANDLORD"), and BSQUARE CORPORATION, a Washington
corporation ("TENANT").
RECITALS
A. WRC Sunset North LLC, a Washington limited liability company
("WRC"), and Tenant entered into that certain Office Lease Agreement dated as of
January 15, 1999 (the "ORIGINAL LEASE"), and that certain First Amendment to
Office Lease Agreement dated as of July 27, 1999 (the "FIRST AMENDMENT").
B. Landlord, as successor to WRC, and Tenant further amended the
Original Lease (as amended by the First Amendment) by entering into that certain
Second Amendment dated as of January 3, 2001, and that certain Third Amendment
dated as of April 2, 2001, and that certain Fourth Amendment dated as of
September 13, 2002, and that certain Rent Deferral Agreement dated as of
December 30, 2003 (the "RENT DEFERRAL AGREEMENT"). The Original Lease and the
First Amendment, collectively with the foregoing described amendments, is
defined herein as the "LEASE." The Lease relates to premises located in the City
of Bellevue, State of Washington, consisting of a portion of Building 4 of the
Sunset North Corporate Campus, as more particularly described in the Lease (the
"PREMISES"). Capitalized terms used in this Amendment and not otherwise defined
herein shall have the meanings assigned to them in the Lease.
C. The Lease Term is scheduled to expire on December 31, 2004.
D. Pursuant to the terms of the Lease, Landlord holds a Security
Deposit in the total amount of $2,900,000.00, consisting of (i) cash in the
amount of $135,000.00 (THE "CASH SECURITY DEPOSIT"), and (ii) Letter of Credit
No. 577173-41, dated as of October 1, 2002, issued by Comerica Bank - California
in the amount of $2,765,000 (the "LETTER OF CREDIT").
E. Contemporaneously herewith, Tenant, as tenant, and XX-000
Xxxxxx Xxxxx, L.L.C., a Delaware limited liability company (the "ATRIUM
LANDLORD"), an affiliate of Landlord, as landlord, are entering into that
certain Office Lease Agreement (the "ATRIUM LEASE") dated as of the same date as
this Amendment, for space located at 000 Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx, as
more particularly described in the Atrium Lease (the "ATRIUM PREMISES"). The
Atrium Lease is contingent upon Landlord and Tenant entering into this
Amendment.
F. Landlord and Tenant now desire to amend the Lease according to
the terms and conditions set forth herein.
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree
as follows:
1.
1. DEFERRAL, REDUCTION AND FORGIVENESS OF RENT AND TERMINATION
PAYMENT. Notwithstanding anything in the Lease to the contrary:
1.1 All Rent otherwise payable under the Lease for the
period commencing on January 1, 2004 and ending on December 31, 2004 (as such
Rent may be adjusted pursuant to the third-to-last sentence of Section 3.1
below), together with any Termination Payments (as defined in Section 3.2 below)
payable to Landlord pursuant to Section 3.2 below (collectively, the "DEFERRED
RENT"), shall be deferred until the date, if any (the "DEFERRAL DATE"), which is
the earlier to occur of (a) the date, if any, on which Tenant defaults in the
payment of rent under the Atrium Lease beyond any applicable notice or cure
period, or (b) the date, if any, as of which the Atrium Lease is terminated by
reason of or on the grounds of: (i) any default by Tenant (other than in the
payment of rent) under the Atrium Lease, or (ii) the occurrence of a Casualty
(as defined in Section 16 of the Atrium Lease) or a Taking (as defined in
Section 17 of the Atrium Lease), except where (x) such termination results from
Landlord's exercise of a right of termination (as distinguished, for instance,
from a case where such termination results from Tenant's exercise of a right of
termination or occurs automatically by operation of the Atrium Lease or by
operation of law), and (y) in the case of a Taking, less than the entire
Premises is the subject of the Taking, or (iii) Tenant's exercise of any right
it may have to terminate the Atrium Lease pursuant to Section 3.02 thereof. On
the Deferral Date, if any, the then-remaining balance of the Deferred Rent shall
immediately become due and payable in full (subject to Sections 1.2, 1.3 and 1.4
below).
1.2 Provided that Tenant has not previously defaulted
under the Atrium Lease beyond any applicable notice or cure period, on the first
day of each of the 120 consecutive calendar months beginning with September
2004, a portion of the Deferred Rent equal to the lesser of (i) 1/120th of the
original amount of Deferred Rent or (ii) the then-remaining amount of the
Deferred Rent, shall be forgiven.
1.3 In addition, if Landlord enters into any Replacement
Lease (as defined in Section 3.1 below) with any Replacement Tenant (as defined
in Section 3.1 below) with respect to all or any portion of any Termination
Space (as defined in Section 3.1 below) following the termination of the Lease
with respect to such Termination Space pursuant to Section 3.1 below, then the
Deferred Rent shall automatically be reduced to the extent of the amount of any
rent that is actually payable under such Replacement Lease with respect to
calendar year 2004 (after giving effect to any adjustment to such amount
provided for in such Replacement Lease based on any early or late delivery of
possession of the leased premises or any portion thereof) ("ALLOCABLE
REPLACEMENT RENT"). Landlord shall provide Tenant with written notice of the
amount of any such Allocable Replacement Rent within twenty (20) days after the
applicable Replacement Tenant takes possession of the leased premises.
1.4 If, pursuant to Section 1.1 above, the Deferral Date
is triggered by the occurrence of a Casualty, then, provided that Tenant is not
then in default under the Atrium Lease beyond any applicable notice or cure
period, the Deferred Rent shall be reduced by (and, within 30 days after such
Deferral Date, Landlord shall reimburse Tenant to the extent of) the amount of
any insurance proceeds to which Landlord may be entitled as a result of such
Casualty
2.
under any policy of rent interruption insurance maintained by Landlord, but
solely to the extent that such insurance proceeds are fairly allocable to the
Atrium Premises. In addition, if: (a) pursuant to Section 1.1 above, the
Deferral Date is triggered by the occurrence of a Taking; and (b) Tenant is not
then in default under the Atrium Lease beyond any applicable notice or cure
period; and (c) a court of competent jurisdiction determines, in a final and
non-appealable judgment rendered in a legal proceeding commenced by Tenant not
later than 30 days after such Deferral Date, that a portion of the condemnation
award received by Landlord is fairly allocable to the outstanding balance of the
rent to be paid under the Atrium Lease as of the date of such Taking, then the
Deferred Rent shall be reduced by (and, within 15 days after the date of such
judgment, Landlord shall reimburse Tenant to the extent of) the amount of such
portion of such condemnation award.
1.5 Tenant's obligation to pay the Deferred Rent as
provided in this Section 1, together with all of Landlord's rights and remedies
under the Lease (including, without limitation, under the applicable provisions
of Articles 25, 26, 28, 30, 33 and 34) relating to the enforcement of such
obligation, shall survive the termination of the Lease.
2. REDUCTION OF SECURITY DEPOSIT. Notwithstanding anything in the
Lease to the contrary, but without limiting any other provisions of the Lease
permitting reductions in the amount of the Security Deposit, if any Allocable
Replacement Rent is payable by any Replacement Tenant pursuant to any
Replacement Lease, and if Tenant is not then in default under the Lease beyond
any applicable notice or cure period, then, effective as of the date on which
Tenant receives Landlord's written notice pursuant to Section 1.3 above, the
Security Deposit shall be reduced by the amount of such Allocable Replacement
Rent. Such reduction shall be applied, first, to the Cash Security Deposit, and,
second, to the Letter of Credit. Landlord agrees to cooperate reasonably with
Tenant so that Tenant may effect such reduction.
3. EARLY TERMINATION; TERMINATION PAYMENT. Notwithstanding
anything in the Lease to the contrary:
3.1 At any time after March 1, 2004 and before December
31, 2004, Landlord may deliver written notice to Tenant (a "TERMINATION NOTICE")
that Landlord is willing to: (a) terminate the Lease with respect to any one or
more full floors of the Premises (a "TERMINATION SPACE") as of a date (an "EARLY
TERMINATION DATE") specified by Landlord in such notice, and (b) upon such
termination, enter into a lease (a "REPLACEMENT LEASE") with respect to such
Termination Space with a new tenant (a "REPLACEMENT TENANT") designated by
Landlord in such Termination Notice, which Replacement Lease shall provide: (i)
that its commencement date shall occur on the date immediately following such
Early Termination Date (provided, however, that such commencement date may be
delayed as a result of any failure by Landlord to deliver possession of such
Termination Space to such Replacement Tenant as a result of any holdover or
unlawful possession of such Termination Space by any party); (ii) for the
payment of a total amount of Allocable Replacement Rent which (assuming that
Landlord will deliver such Termination Space to such Replacement Tenant on the
date immediately following such Early Termination Date) is not less than an
amount specified by Landlord in such Termination Notice; and (iii) for such
other terms and conditions as Landlord may approve in its
3.
sole and absolute discretion (but not inconsistent with the terms described in
the preceding clauses (i) and (ii)). Upon receipt of such Termination Notice,
Tenant may, in its sole and absolute discretion, by written notice to Landlord
delivered not later than ten (10) business days before the applicable Early
Termination Date, elect to terminate the Lease with respect to such Termination
Space, effective as of such Early Termination Date, but subject to the condition
that Landlord and the applicable Replacement Tenant shall mutually execute and
deliver the applicable Replacement Lease, and Landlord shall provide Tenant with
written notice of such execution and delivery, in each case at least five (5)
business days before such Early Termination Date. If Tenant timely delivers such
notice to Landlord, then, provided that Landlord and the applicable Replacement
Tenant mutually execute and deliver the applicable Replacement Lease (it being
agreed that Landlord shall have no obligation to cause such Replacement Tenant
to execute and deliver such Replacement Lease), and further provided that
Landlord provides Tenant with written notice of such execution and delivery, in
each case at least five (5) business days before the applicable Early
Termination Date, the Lease shall be deemed terminated as to such Termination
Space effective as of such Early Termination Date. In such event, Tenant shall,
on or before the Early Termination Date, fulfill all covenants and obligations
of Tenant under the Lease (as amended hereby) with respect to the Termination
Space applicable to the period prior to and including the Early Termination Date
and completely vacate and surrender the Termination Space to Landlord in
accordance with the terms of the Lease, including those provisions relating to
the condition of the Termination Space and removal of Tenant's Property
therefrom; provided, however, that if the applicable Termination Notice
identifies one or more Required Removables located in the Termination Space and
states that, upon the termination of the Lease with respect to the Termination
Space, Landlord agrees to waive Tenant's obligation under the Lease to remove
such identified Required Removables, then, notwithstanding anything to the
contrary in the Lease, Tenant shall not be required to remove such identified
Required Removables upon such termination. Notwithstanding anything in this
Section 3.1 to the contrary, Landlord and Tenant shall remain liable for all
year-end adjustments with respect to Additional Base Rental for the Termination
Space for that portion of the calendar year up to and including the Early
Termination Date. Except as otherwise provided in Section 1 above, such
adjustments shall be paid at the time, in the manner and otherwise in accordance
with the terms of the Lease. Article 18 of the Lease shall survive the
termination of the Lease with respect to any Termination Space pursuant to this
Section 3.1, but, as to such Termination Space, shall apply only to matters
occurring, arising or existing on or before the applicable Early Termination
Date.
3.2 Notwithstanding anything herein or in the Lease to
the contrary, but subject to the second sentence of this Section 3.2 below, if
the Lease is terminated with respect to any Termination Space pursuant to
Section 3.1 above, Tenant shall pay to Landlord, by cashier's or certified check
or by wire transfer of immediately available funds to an account designated by
Landlord, an amount (a "TERMINATION PAYMENT") equal to the amount of Rent that
Tenant would have been obligated to pay to Landlord under the Lease with respect
to such Termination Space, in the absence of such termination, for the portion
of calendar year 2004 which follows the applicable Early Termination Date.
Notwithstanding the foregoing, the payment of such Termination Payment shall be
deferred and forgiven as and to the extent provided in Section 1 above.
4.
4. CONTINGENCY; RENT DEFERRAL AGREEMENT.
4.1 Notwithstanding anything herein to the contrary, this
Amendment is contingent upon the Atrium Landlord and Tenant contemporaneously
herewith entering into the Atrium Lease. If the Atrium Landlord and Tenant fail
to enter into the Atrium Lease contemporaneously herewith, then either Landlord
or Tenant may terminate this Amendment by providing written notice thereof to
the other party on or before the earlier of (i) the fifth (5th) business day
after the date on which this Amendment is fully executed and delivered, or (ii)
the date of mutual execution and delivery of the Atrium Lease by the Atrium
Landlord and Tenant, whereupon, notwithstanding anything herein to the contrary,
this Amendment shall be null and void and of no force or effect.
4.2 This Amendment shall supersede the Rent Deferral
Agreement.
5. MISCELLANEOUS.
5.1 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, conveyance, pledge or hypothecation
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 arising out of or in connection with
Tenant's occupancy of the Premises; and (d) there are no outstanding contracts
for the supply of labor or material and no work has been done or is being done
in, to or about the Premises which has not been fully paid for and for which
appropriate waivers of mechanic's liens have not been obtained. The foregoing
representation and warranty shall be deemed to be remade by Tenant in full as of
any Early Termination Date.
5.2 Tenant hereby represents to Landlord that Tenant has
dealt with no broker in connection with this Amendment. 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 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 harmless from all claims of any brokers claiming to have represented
Landlord in connection with this Amendment.
5.3 The Lease, as amended by this Amendment, is hereby
ratified by Landlord and Tenant and Landlord and Tenant hereby agree that the
Lease, as so amended, shall continue in full force and effect.
5.4 This Amendment may be signed in two or more
counterparts. When at least one such counterpart has been signed by each party,
this Amendment shall be deemed to have been fully executed, each counterpart
shall be deemed to be an original, and all counterparts shall be deemed to be
one and the same agreement.
5.
5.5 This Amendment sets 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.
5.6 In the case of any inconsistency between the
provisions of the Lease and this Amendment, the provisions of this Amendment
shall govern and control.
5.7 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.
5.8 Each party to this Amendment represents hereby that
the person signing as signatory for such party has the authority to execute and
deliver the same on behalf of such party.
6.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as
of the date first written above.
LANDLORD:
WA - SUNSET NORTH BELLEVUE, L.L.C.,
a Washington limited liability company
By: EQUITY OFFICE MANAGEMENT, L.L.C.,
a Delaware limited liability company, its
non-member manager
By: _______________________
Its: M. Xxxxxxx Xxxxxxxx
Title: Senior Vice President - Seattle Region
TENANT:
BSQUARE CORPORATION,
a Washington corporation
By: ______________________________
Name: ____________________________
Title: ___________________________
7.
STATE OF ____________)
COUNTY OF ___________) ss:
On this the ___ day of ________________, 20__, before me a Notary
Public duly authorized in and for the said County in the State aforesaid to take
acknowledgments personally appeared M. Xxxxxxx Xxxxxxxx, known to me to be a
Senior Vice President - Seattle Region of a Delaware limited liability company
known as Equity Office Management, L.L.C., the manager of one of the parties
described in the foregoing instrument, and acknowledged that being authorized so
to do, (s)he executed the foregoing instrument on behalf of said partnership by
subscribing the name of said partnership by himself/herself, as a free and
voluntary act, and as the free and voluntary act of said partnership, for the
uses and purposes therein set forth.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
______________________________
Notary Public
My Commission Expires: __________
8.
STATE OF ____________)
COUNTY OF ___________) ss:
On this the ___ day of ____________, 20__, 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, 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
My Commission Expires: ______________
9.
