EXHIBIT 10.14(a)
LEASE CANCELLATION, TERMINATION,
AND RELEASE AGREEMENT
("AGREEMENT")
This Agreement is entered into as of June 23, 2003 ("Reference Date"),
by and between the undersigned TENANT-IN-COMMON OWNERS ("Landlord") and BSQUARE
CORPORATION, A WASHINGTON CORPORATION ("Tenant"), with reference to the
following recitals and matters set forth hereinafter, as follows:
RECITALS:
A. WHEREAS, the Premises are currently leased to Tenant pursuant to
that certain "Single-Tenant Commercial Space Lease (NNN)" as of December 1, 2000
("Lease" or "Master Lease"), and consists of an approximately 20,000 square foot
free-standing building commonly known by the street address of ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (the "Premises").
B. WHEREAS, the Premises is currently subleased ("Sublet Premises") to
SUNEXT DESIGN, INC., A CALIFORNIA CORPORATION ("Sublessee") pursuant to that
certain "Sublease Agreement" dated as of May _____, 2003 ("Sublease").
C. WHEREAS, the term of the Sublease is scheduled to expire on November
30, 2005, as to the Sublet Premises, and the term of the Lease as to the
Premises is also scheduled to expire on November 30, 2005.
D. WHEREAS, Tenant has delivered a cash deposit of $105,000.00 to
Landlord and a letter of credit ("Letter of Credit") in the amount of
$592,800.00 (collectively "Security Deposit") pursuant to the provisions of
Sections 1.8 and 3.6 of the Lease in the total amount of $697,800.00.
E. WHEREAS, Tenant has requested, and Landlord and Tenant are agreeable
to, a termination of the Lease and a mutual release upon the terms and
conditions set forth hereinafter.
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AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants, recitals, and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and to induce each
other to enter into this Agreement, Tenant and Landlord agree and covenant as
follows:
1. RECITALS INCORPORATED. The foregoing recitals are incorporated
herein by reference as though set forth at length.
2. LEASE TERMINATION. Effective as of 11:59 p.m. on June 30, 2003
("Lease Termination Date"), this Agreement terminates all of Tenant's
obligations under the Lease, including, without limitations, the obligations to
pay rent, utilities, real property taxes, real property insurance, and other
expenses due or to become due under the Lease .
3. TENANT'S LEASE TERMINATION CONSIDERATION. As consideration for
termination of the Lease by Landlord, Tenant agrees to provide, pay and deliver
to Landlord and to do the following enumerated items on or prior to the Lease
Termination Date.
a) Tenant agrees to pay to Landlord the sum of $697,800.00
("Lease Termination Payout") to be paid on the Lease
Termination Date. The parties acknowledge that pursuant to
Section 1.8 and 3.6 of the Lease that Tenant has delivered to
Landlord a cash deposit of $105,000.00 and a Letter of Credit
of $592,800.00. Effective as of the Lease Termination Date,
Tenant directs Landlord to apply such sum against the Lease
Termination Payout due Landlord set forth above. Tenant agrees
and acknowledges that no part of the Security Deposit shall be
restored to Tenant.
b) On or prior to the Lease Termination Date, Tenant shall
inform Sublessee in writing that the Sublease has been or will
be assigned to Landlord as of July 1, 2003, and that from that
date forward, for the duration of the Sublease, Sublessee
shall make all payments due under the Sublease to Tenant to
Landlord. Tenant hereby assigns all right, title and interest
in the Sublease to Landlord (a copy of the Sublease is
attached hereto as EXHIBIT A) which assignment of Sublease
shall become effective at 12:01 a.m. on July 1, 2003. Tenant
shall remain responsible for all of its obligations to
Sublessee under the Sublease incurred prior to and through the
Lease Termination Date.
c) Tenant hereby agrees to issue and deliver to Landlord on
the Lease Termination Date, a
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warrant ("Warrant") to purchase 400,000 shares of common stock
of Tenant, or its successor, pursuant to, and in accordance
with the terms of, a warrant agreement in the precise form as
that attached hereto as EXHIBIT B ("Warrant Agreement").
d) Tenant shall assign to Landlord on the Lease Termination
Date, all of Tenant's right, title and interest in Sublessee's
$45,000.00 non-revocable letter of credit ("Sublease LOC")
referred to in paragraph 7 of the Sublease and agrees to do
those things necessary, if any (but without taking on any
liability), to assist Sublessee and the issuer of such
Sublease LOC in the transfer thereof to Landlord. Tenant shall
also transfer to Landlord any prepaid base rent received by
Tenant from Sublessee.
4. CONDITION OF PREMISES. Landlord accepts delivery by Tenant of the
Premises in their "AS IS" Condition, "WITH ALL FAULTS," as of the Lease
Termination Date.
5. LANDLORD'S LEASE TERMINATION CONSIDERATION. As consideration for
termination of the Lease by Tenant and other considerations of Tenant as set
forth in paragraphs 3 and 4, Landlord agrees as follows:
a) Landlord agrees to accept an early termination of the
Lease.
b) Landlord agrees to assume all obligations and duties under
the Sublease for matters occurring and performance required by
Sublessor thereunder as of 12:01 a.m. on July 1, 2003 and
thereafter.
6. FULL SATISFACTION OF CLAIMS. Subject to all of the terms hereof,
Landlord and Tenant hereby agree that the payments required under the Agreement
and the performance of other obligations of Tenant set forth above by Tenant to
Landlord, will be in full and final accord and satisfaction of all liabilities
owed by Tenant to Landlord.
7. RELEASE. Effective as of the Lease Termination Date, Landlord hereby
releases and discharges Tenant and its affiliates and past, present and future
officers, directors, shareholders, employees, agents, successors and assigns
(collectively, the "Tenant Parties") from all manner of action, cause and causes
of action, suits, debts, sums of money, accounts, covenants, controversies,
agreements, promises, damages, judgments, executions, costs, expenses, rights,
claims or demands whatsoever, at law or in equity, existing at the date thereof,
at any time before the date thereof, or thereafter arising, both anticipated and
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unanticipated, known and unknown, contingent and non-contingent, liquidated and
non-liquidated, that Landlord has had, now has, then has or may in the future
have against Tenant or any of the Tenant Parties by reason of any cause or
thing, arising or to arise, out of the lease of the Premises and any and all
agreements or other arrangements, written or oral, with respect to the
relationship between Tenant and Landlord, other than the provisions of this
Agreement.
8. WAIVER. Subject to all of the terms hereof, Landlord hereby
irrevocably waives its rights under any applicable statute, rule, regulation,
legal principle or legal doctrine that provides that a general release does not
extend to claims which a releasing party does not know or suspect to exist in
its favor at the time of executing such release, which if known by the releasing
party would have materially affected its settlement with the released party,
including, without limiting the generality of the foregoing, the provisions of
Section 1542 of the California Civil Code, to the extent deemed applicable,
which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
INITIALS OF EACH LANDLORD PARTY: INITIALS OF TENANT
_________________________________________ _________________________
ON BEHALF OF ONE SOUTH PARK INVESTORS
_________________________________________
ON BEHALF OF ▇▇▇▇ ENTERPRISES
_________________________________________
ON BEHALF OF FKLM
9. DEFAULTS. In the event that Tenant shall fail to fully or timely pay
and perform any of its obligations under this Agreement, Landlord shall be
entitled to immediately proceed to enforce its rights and remedies under this
Agreement, including, without limitation, the right to immediately pursue all
other
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rights and remedies that Landlord may have at law and in equity under this
Agreement.
10. ACKNOWLEDGMENTS. In executing this Agreement, each party hereto
acknowledges that it has consulted with and received the advice and counsel of
attorneys or has elected not to seek such advice and that the parties have
executed this Agreement after independent investigation and without fraud,
duress, or undue influence.
11. REPRESENTATIONS. Landlord represents, warrants, and covenants to
Tenant that no person or entity other than the parties signing this Agreement as
"Landlord" has any right, title, or interest in the Lease. Each of the parties
to this Agreement hereby represents, warrants and covenants that (i) it has the
full and unrestricted right, power, capacity and authority to enter into,
deliver, execute and perform its respective obligations under this Agreement;
and (ii) this Agreement is a valid and binding obligation of each party,
enforceable against each party in accordance with its terms. Each person
executing this Agreement represents and warrants that no further consents or
approvals are required for the entities on whose behalf they have signed or
agreed to enter into, deliver, execute and perform their respective obligations
under this Agreement.
12. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement of
the parties concerning the subject matter hereof. No modification or waiver of
rights under this Agreement shall be effective unless it is in writing and
signed by the parties hereto.
13. FURTHER ASSURANCES. Each of the parties to this Agreement, without
further consideration, shall execute and deliver such other documents and take
such other action as may be reasonably requested by the other party hereto to
consummate more effectively the intent of the parties as relates to the subject
matter of this Agreement.
14. GOVERNING LAW AND SEVERABILITY. This Agreement is made and entered
into in the State of California and shall in all respects be interpreted,
enforced and governed under California law. If any
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provision of this Agreement is deemed invalid, then the remaining provisions
will continue in full force and effect, and will be construed as if the invalid
provision had not been a part of this Agreement. Any action brought to interpret
or enforce this Agreement shall be filed in a Court of competent jurisdiction in
Santa ▇▇▇▇▇ County, California.
15. ATTORNEY'S FEES. If either party to this Agreement shall commence
any action or legal proceeding against the other with respect to the
interpretation or enforcement of any term or condition herein, the prevailing
party shall be entitled to recover as a part of such action or proceeding, or in
a separate action for that purpose, reasonable attorneys' fees, court costs, and
all reasonable expenses associated therewith. "Prevailing party" as used in this
paragraph includes, without limitation, a party who dismisses an action for
recovery hereunder in exchange for sums allegedly due, performance of provisions
allegedly breached or other relief sought in the action.
16. ASSIGNMENTS. Each party hereto represents to the other that it has
not assigned or otherwise transferred any right, title and/or interest in the
Lease or the Premises to any person or entity other than Sublessee, and that no
other person or entity has any interest whatsoever therein except Landlord. This
Agreement shall be binding upon and shall inure to the benefit of the parties
and their respective successors, legal representatives, and permitted assigns.
17. COSTS. The parties hereto shall each bear their own costs,
attorneys' fees, and other fees incurred in connection with preparation and
performance of this Agreement.
18. VOLUNTARY EXECUTION OF AGREEMENT. This Agreement is executed
voluntarily and without any duress or undue influence on the part or behalf of
the parties hereto. The parties acknowledge that (a) they have read this
Agreement; (b) they understand the terms and consequences of this Agreement; and
(c) they are fully aware of the legal and binding effect of this Agreement.
19. EXECUTION. This Agreement is effective only when it has been
executed in writing by Landlord
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and Tenant.
20. EXHIBITS. The following Exhibits to this Agreement are hereby
incorporated herein and by this reference made a part hereof:
EXHIBIT A SUBLEASE AGREEMENT
EXHIBIT B WARRANT AGREEMENT
21. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which, taken
together, shall constitute one and the same instrument. Furthermore, this
Agreement may be executed and delivered by the exchange of electronic facsimile
copies of counterparts of the signed documents, which facsimile copies or
counterparts shall be binding on the parties and such execution and delivery
shall have the same force and effect as any other delivery of a manually signed
original of this Agreement.
22. CAPTIONS. The captions contained in this Agreement are for the
convenience of the parties hereto and shall not be deemed or construed as in any
way limiting or extending the language of the provisions to which such captions
refer.
23. EFFECTIVE DATE. This Agreement shall be effective only when it has
been executed in writing by all of the parties hereto, when such Agreement has
been delivered by Landlord and Tenant to each other and on such date when the
last signatory necessary to execute this Agreement shall have executed it.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.
LANDLORD: TENANT:
ONE SOUTH PARK INVESTORS, BSQUARE CORPORATION, A WASHINGTON
A CALIFORNIA CORPORATION CORPORATION
By: ________________________ By:
Print Name: ________________ Print Name:
Its: _______________________ Its:
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Dated: __________, 2003 Dated: __________, 2003
▇▇▇▇ ENTERPRISES, A CALIFORNIA
GENERAL PARTNERSHIP
By: ________________________
Print Name: ________________
Its:
Dated: _____________, 2003
FKLM, A CALIFORNIA GENERAL PARTNERSHIP
By: ________________________
Print Name: ________________
Its:
Dated: _____________, 2003
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EXHIBIT "A"
(SEE ATTACHED SUBLEASE)
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EXHIBIT "B"
FORM OF WARRANT
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES OR BLUE
SKY LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE
ASSIGNED EXCEPT (1) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT
TO SUCH SECURITIES FILED UNDER THE ACT OR (2) PURSUANT TO AN AVAILABLE EXEMPTION
FROM REGISTRATION UNDER THE ACT AND UNDER APPLICABLE STATE SECURITIES AND BLUE
SKY LAWS RELATING TO THE DISPOSITION OF SECURITIES, PROVIDED THAT AN OPINION OF
COUNSEL TO SUCH EFFECT IS PROVIDED TO THE COMPANY IN CONNECTION THEREWITH.
No.__
BSQUARE CORPORATION
WARRANT TO PURCHASE COMMON STOCK
This certifies that, for value received, ___________________, or its
permitted and registered assigns ("Holder"), is entitled, subject to the terms
set forth below, to purchase from Bsquare Corporation, a Washington corporation
(the "Company"), 400,000 shares of the Company's common stock (such shares
referred to herein as the "Common Stock"), upon surrender hereof, at the
principal office of the Company referred to below, with the subscription form
attached hereto duly executed, and simultaneous payment therefor in lawful money
of the United States or otherwise as hereinafter provided, at the Exercise Price
as set forth in Section 2 below. The number, character and Exercise Price of
such shares of Common Stock are subject to adjustment as provided below.
1. TERM OF WARRANT. Subject to the terms and conditions set forth
herein, this Warrant shall be exercisable, in whole or in part, at any time
after all or such portion of it shall have vested as provided in Section 3 below
and thereafter until 5:00 p.m. Pacific Time on June 30, 2008.
2. EXERCISE PRICE. The Exercise Price at which this Warrant may
be exercised shall be $_____ per share [120% of the average closing price of the
Company's Common Stock over the 20 trading days ending immediately prior to June
30, 2003 (this bracketed note will be deleted when number can be calculated and
inserted into the document)], as adjusted from time to time pursuant to Section
11 hereof.
3. EXERCISE OF WARRANT. This Warrant shall be exercisable by
Holder in whole or in part, at any time, or from time to time, during the term
hereof as described in Section 1 above, by the surrender of this Warrant and the
Notice of Exercise attached hereto duly completed and executed on behalf of the
Holder, at the office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the Holder at the address of
the Holder appearing on the books of the Company), upon payment of the purchase
price of the shares to be purchased in cash or by check acceptable to the
Company. This Warrant shall be deemed to have been exercised immediately prior
to the close of business on the date of its surrender for exercise as provided
above, and the person
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entitled to receive the shares of Common Stock issuable upon such exercise shall
be treated for all purposes as the holder of record of such shares as of the
close of business on such date. As promptly as practicable on or after such date
and in any event within 10 days thereafter, the Company at its expense shall
issue and deliver to the person or persons entitled to receive the same a
certificate or certificates for the number of shares issuable upon such
exercise. In the event that this Warrant is exercised in part, the Company at
its expense will execute and deliver a new Warrant of like tenor exercisable for
the number of shares for which this Warrant has not been exercised.
4. NO FRACTIONAL SHARES. No fractional shares shall be issued
upon the exercise of this Warrant. In lieu of any fractional share to which the
Holder would otherwise be entitled, the Company shall make a cash payment equal
to the Exercise Price multiplied by such fraction.
5. REPLACEMENT OF WARRANT. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and substance to the Company
or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor and amount.
6. RIGHTS OF SHAREHOLDERS. Subject to Sections 9 and 11 of this
Warrant, the Holder shall not be entitled to vote or receive dividends or be
deemed the holder of Common Stock or any other securities of the Company that
may at any time be issuable on the exercise hereof for any purpose, nor shall
anything contained herein be construed to confer upon the Holder, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issuance of stock, reclassification of stock, change
of par value, or change of stock to no par value, consolidation, merger,
conveyance, or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights or otherwise until the Warrant shall have been
exercised as provided herein.
7. TRANSFER OF WARRANT.
(a) The Company will maintain a register (the "Warrant
Register") containing the names and addresses of each Holder. Any Holder may
change its address as shown on the Warrant Register by written notice to the
Company requesting such change. Any notice or written communication required or
permitted to be given to the Holder may be delivered or given by mail to such
Holder as shown on the Warrant Register and at the address shown on the Warrant
Register. Until this Warrant is transferred on the Warrant Register of the
Company, the Company may treat the Holder as shown on the Warrant Register as
the absolute owner of this Warrant for all purposes, notwithstanding any notice
to the contrary.
(b) The Company may, by written notice to the Holder,
appoint an agent for the purpose of maintaining the Warrant Register referred to
in Section 7(a) above, issuing the Common Stock or other securities then
issuable upon the exercise of this Warrant, exchanging this Warrant, replacing
this Warrant, or any or all of the foregoing. Thereafter, any such registration,
issuance, exchange, or replacement, as the case may be, shall be made at the
office of such agent.
(c) This Warrant may not be transferred or assigned in
whole or in part without compliance with all applicable federal and state
securities laws by the transferor and the transferee (including the delivery of
investment representation letters and legal opinions reasonably satisfactory to
the Company, if such are requested by the Company). Subject to the provisions of
this Warrant with respect to compliance with the Securities Act of 1933, as
amended (the "Act"), title to this Warrant may be transferred by endorsement (by
the Holder executing the Assignment Form attached hereto) and delivery in the
same manner as a negotiable instrument transferable by endorsement and delivery.
(d) On surrender of this Warrant for exchange, properly
endorsed on the Assignment Form and subject to the provisions of this Warrant
with respect to compliance with the Act and with the limitations on assignments
and transfers contained in this Section 7, the Company at its expense shall
issue to or on the order of
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the Holder a new warrant or warrants of like tenor, in the name of the Holder or
as the Holder (on payment by the Holder of any applicable transfer taxes) may
direct, for the number of shares issuable upon exercise hereof.
(e) (1) The Holder of this Warrant, by acceptance
hereof, acknowledges that this Warrant and the shares of Common Stock to be
issued upon exercise hereof are being acquired solely for the Holder's own
account and not as a nominee for any other party, and for investment, and that
the Holder will not offer, sell or otherwise dispose of this Warrant or any
shares of Common Stock to be issued upon exercise hereof except under
circumstances that will not result in a violation of the Act or any state
securities laws. Upon exercise of this Warrant, the Holder shall, if requested
by the Company, confirm in writing, in a form satisfactory to the Company, that
the shares of Common Stock so purchased are being acquired solely for the
Holder's own account and not as a nominee for any other party, for investment,
and not with a view toward distribution or resale.
(2) This Warrant and all shares of Common Stock
issued upon exercise hereof shall be stamped or imprinted with a legend in
substantially the form contained in the first paragraph of this Warrant, in
addition to any legend required by state securities laws.
(3) The Holder is an "accredited investor," as
such term is defined under the Act.
8. RESERVATION OF STOCK. The Company covenants that until such
time as this Warrant is fully exercised or has expired, the Company will reserve
from its authorized and unissued Common Stock a sufficient number of shares to
provide for the issuance of Common Stock upon the exercise of this Warrant. The
Company further covenants that all shares that may be issued upon the exercise
of rights represented by this Warrant and payment of the Exercise Price, all as
set forth herein, will be free from all taxes, liens and charges in respect of
the issue thereof (other than taxes in respect of any transfer occurring
contemporaneously or otherwise specified herein). The Company agrees that its
issuance of this Warrant shall constitute full authority to its officers who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for shares of Common Stock upon the exercise of this
Warrant.
9. NOTICES.
(a) Whenever the Exercise Price or number of shares
purchasable hereunder shall be adjusted pursuant to Section 11 hereof, the
Company shall issue a certificate signed by its Secretary setting forth, in
reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated, and the Exercise
Price and number of shares purchasable hereunder after giving effect to such
adjustment, and shall cause a copy of such certificate to be mailed (by
first-class mail, postage prepaid) to the Holder of this Warrant.
(b) In case:
(1) the Company shall take a record of the
holders of its Common Stock (or other stock or securities at the time receivable
upon the exercise of this Warrant) for the purpose of entitling them to receive
any dividend or other distribution, or any right to subscribe for or purchase
any shares of stock of any class or any other securities, or to receive any
other right, or
(2) of any capital reorganization of the
Company, any reclassification of the capital stock of the Company, any
consolidation or merger of the Company with or into another corporation, or any
conveyance of all or substantially all of the assets of the Company to another
corporation, or
(3) of any voluntary dissolution, liquidation or
winding-up of the Company,
then, and in each such case, the Company will mail or cause to be mailed to the
Holder a notice specifying, as the case may be, (A) the date on which a record
is to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or right, or (B)
the date on which such reorganization, reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding-up is to take place, and the
time, if any is to be fixed, as of which the holders of record of Common Stock
(or such stock or securities at the time receivable upon the exercise of this
Warrant) shall be entitled to exchange their shares of Common Stock (or such
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other stock or securities) for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be mailed at least 5
days prior to the date therein specified.
(c) All such notices and communications shall be deemed
to have been received (1) in the case of personal delivery, on the date of such
delivery and (2) in the case of mailing, on the third business day following the
date of such mailing.
10. AMENDMENTS.
(a) Any term of this Warrant may be amended with the
written consent of the Company and the Holder. Any amendment effected in
accordance with this Section 10 shall be binding upon each each future holder of
this Warrant and the Company.
(b) No waivers of, or exceptions to, any term, condition
or provision of this Warrant, in any one or more instances, shall be deemed to
be, or construed as, a further or continuing waiver of any such term, condition
or provision.
11. ADJUSTMENTS. The Exercise Price and the number of shares
purchasable hereunder are subject to adjustment from time to time as follows:
(a) If at any time while this Warrant, or any portion
thereof, is outstanding and unexpired there shall be (1) a reorganization (other
than a combination, reclassification, exchange or subdivision of shares
otherwise provided for herein), (2) a merger or consolidation of the Company
with or into another corporation in which the Company is not the surviving
entity, or a reverse triangular merger in which the Company is the surviving
entity but the shares of the Company's capital stock outstanding immediately
prior to the merger are converted by virtue of the merger into other property,
whether in the form of securities, cash, or otherwise, or (3) a sale or transfer
of all or substantially all of the Company's properties and assets to any other
person, then, as a part of such reorganization, merger, consolidation, sale or
transfer, lawful provision shall be made so that the holder of this Warrant
shall thereafter be entitled to receive upon exercise of this Warrant, during
the period specified herein and upon payment of the Exercise Price then in
effect, the number of shares of stock or other securities or property of the
successor corporation resulting from such reorganization, merger, consolidation,
sale or transfer that a holder of the shares deliverable upon exercise of this
Warrant would have been entitled to receive in such reorganization,
consolidation, merger, sale or transfer if this Warrant had been exercised
immediately before such reorganization, merger, consolidation, sale or transfer,
all subject to further adjustment as provided in this Section 11. The foregoing
provisions of this Section 11 shall similarly apply to successive
reorganizations, consolidations, mergers, sales and transfers and to the stock
or securities of any other corporation that are at the time receivable upon the
exercise of this Warrant. If the per share consideration payable to the holder
hereof for shares in connection with any such transaction is in a form other
than cash or marketable securities, then the value of such consideration shall
be determined in good faith by the Company's Board of Directors. In all events,
appropriate adjustment (as determined in good faith by the Company's Board of
Directors) shall be made in the application of the provisions of this Warrant
with respect to the rights and interests of the Holder after the transaction, to
the end that the provisions of this Warrant shall be applicable after that
event, as near as reasonably may be, in relation to any shares or other property
deliverable after that event upon exercise of this Warrant.
(b) If the Company, at any time while this Warrant, or
any portion hereof, remains outstanding and unexpired by reclassification of
securities or otherwise, shall change any of the securities as to which purchase
rights under this Warrant exist into the same or a different number of
securities of any other class or classes, this Warrant shall thereafter
represent the right to acquire such number and kind of securities as would have
been issuable as the result of such change with respect to the securities that
were subject to the purchase rights under this Warrant immediately prior to such
reclassification or other change and the Exercise Price therefor shall be
appropriately adjusted, all subject to further adjustment as provided in this
Section 11.
(c) If the Company at any time while this Warrant, or any
portion hereof, remains outstanding and unexpired shall split, subdivide or
combine the securities as to which purchase rights under this Warrant exist,
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into a different number of securities of the same class, the Exercise Price for
such securities shall be proportionately decreased in the case of a split or
subdivision or proportionately increased in the case of a combination.
(d) Upon the occurrence of each adjustment or
readjustment pursuant to this Section 11, the Company at its expense shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof and furnish to each Holder of this Warrant a certificate setting forth
such adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Company shall, upon the written
request, at any time, of any such Holder, furnish or cause to be furnished to
such Holder a like certificate setting forth: (1) such adjustments and
readjustments; (2) the Exercise Price at the time in effect; and (3) the number
of shares and the amount, if any, of other property that at the time would be
received upon the exercise of the Warrant.
14. GOVERNING LAW. This Warrant shall be governed by and construed
in accordance with the laws of the State of Washington, excluding that body of
law relating to conflict of laws.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized.
Dated: June 30, 2003.
BSQUARE CORPORATION
By: _______________________
Its: ______________________
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NOTICE OF EXERCISE
To: Bsquare Corporation
(1) The undersigned hereby elects to purchase shares of Common
Stock of Bsquare Corporation. pursuant to the provisions of Section 3 of the
attached Warrant, and tenders herewith payment of the purchase price for such
shares in full.
(2) In exercising this Warrant, the undersigned hereby confirms
and acknowledges that the shares of Common Stock are being acquired solely for
the account of the undersigned and not as a nominee for any other party, and for
investment, and that the undersigned will not offer, sell or otherwise dispose
of any such shares of Common Stock except under circumstances that will not
result in a violation of the Securities Act of 1933, as amended, or any
applicable state securities laws.
(3) Please issue a certificate or certificates representing said
shares of Common Stock in the name of the undersigned or in such other name as
is specified below:
_______________________________
(Name)
_______________________________
(Name)
(4) Please issue a new Warrant for the unexercised portion of the
attached Warrant in the name of the undersigned or in such other name as is
specified below:
_______________________________
(Name)
_______________________________ _______________________________
(Date) (Signature)
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ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned registered owner of this Warrant
hereby sells, assigns and transfers unto the Assignee named below all of the
rights of the undersigned under the within Warrant, with respect to the number
of shares of Common Stock set forth below:
NAME OF ASSIGNEE ADDRESS NO. OF SHARES
and does hereby irrevocably constitute and appoint as my Attorney-in-fact
_______________________ , to make such transfer on the books of Bsquare
Corporation., maintained for the purpose, with full power of substitution in the
premises.
The undersigned also represents that, by assignment hereof, the
Assignee acknowledges that this Warrant and the shares of stock to be issued
upon exercise hereof or conversion thereof are being acquired for investment and
that the Assignee will not offer, sell or otherwise dispose of this Warrant or
any shares of stock to be issued upon exercise hereof or conversion thereof
except under circumstances which will not result in a violation of the
Securities Act of 1933, as amended, or any state securities laws. Further, the
Assignee has acknowledged that upon exercise of this Warrant, the Assignee
shall, if requested by the Company, confirm in writing, in a form satisfactory
to the Company, that the shares of stock so purchased are being acquired for
investment and not with a view toward distribution or resale.
_____________________________
(Name)
_________________________ _____________________________
(Date) (Signature)
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