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EXHIBIT
10.16
SECOND
AMENDMENT
THIS SECOND AMENDMENT
(the “ Amendment ”) is made and entered into as
of August 11, 2005, by and between OR-5800 AND 6000
MEADOWS, L.L.C., a Delaware limited liability company (“
Landlord ”), and TUT SYSTEMS, INC., a Delaware
corporation (“ Tenant ”).
RECITALS
| A. |
Landlord (as successor in interest to Kruse Way Office
Associates Limited Partnership, an Oregon Limited Partnership) and
Tenant (as successor by merger to VideoTele.com, Inc., an Oregon
corporation) are parties to that certain lease dated April 28,
2000 (the “ Original Lease ”), as amended by a
First Lease Amendment dated as of May 9, 2000 (the “
First Amendment ” and together with the Original
Lease, the “ Lease ”). Pursuant to the Lease,
Landlord has leased to Tenant space currently containing
approximately 22,450 rentable square feet (the “
Premises ”) described as Suite No. 200 on the
second floor of the building commonly known as 6000 Meadows located
at 6000 SW Meadows Road, Lake Owego, Oregon (the “
Building ”). |
| B. |
The Lease by its terms shall expire on October 16, 2005
(“ Prior Termination Date ”), and the parties
desire to extend the Term of the Lease, all on the following terms
and conditions. |
NOW, THEREFORE , in
consideration of the above recitals which by this reference are
incorporated herein, the mutual covenants and conditions contained
herein and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant
agree as follows:
| 1. |
Extension. The term of the Lease is hereby
extended for a period of 26 months and 15 days and shall expire on
December 31, 2007 (“ Extended Termination Date
”), unless sooner terminated in accordance with the terms of
the Lease. That portion of the term commencing the day immediately
following the Prior Termination Date (“ Extension Date
”) and ending on the Extended Termination Date shall be
referred to herein as the “ Extended Term
”. |
| 2. |
Basic Rent. As of the Extension Date, the
schedule of Basic Rent payable with respect to the Premises during
the Extended Term is the following: |
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Period |
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Annual Rate Per Square Foot |
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Monthly Basic Rent |
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10/17/2005 –
11/16/2006
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$26.00 |
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$48,641.67 |
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11/17/2006 –
12/31/2007
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$26.78 |
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$50,100.92 |
All such Basic Rent shall be
payable by Tenant in accordance with the terms of the
Lease.
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3.01. |
Subject to the terms of Section 7 of the Original Lease,
effective as of the Extension Date, and provided that no Default
(beyond any applicable notice and cure or grace period) is then
existing under the Lease, as amended hereby, Tenant shall have the
right to reduce the amount of the Security Deposit so that the new
Security Deposit amount will be $50,000.00 as of the Extension
Date. If Tenant is entitled to a reduction in the Security Deposit,
Tenant shall provide Landlord with written notice requesting that
the Security Deposit be reduced as provided above (the “
Reduction Notice ”). If Tenant provides Landlord with
a Reduction Notice, and Tenant is entitled to reduce the Security
Deposit as provided herein, Landlord shall refund the applicable
portion of the Security Deposit to Tenant within 30 days after the
later to occur of (a) Landlord’s receipt of the
Reduction Notice, or (b) the date upon which Tenant is
entitled to a reduction in the Security Deposit as provided
above. |
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3.02. |
The ultimate sentence of Section 1(m) of the Original
Lease is hereby deleted in its entirety and shall be of no further
force or effect. |
1
| 4. |
Operating Costs / Remeasurement of the
Building. |
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4.01. |
Remeasurement of Building. Landlord has remeasured the
Building and as a result of the remeasurement, the “
Rentable Square Feet in the Project ” as defined in
Section 1(o) of the Original Lease is deemed to be 110,189
square feet, effective as of the Extension Date. |
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4.02. |
Tenant’s Percentage . For the period commencing
with the Extension Date and ending on the Extended Termination
Date, Tenant’s Percentage with respect to the Premises is
deemed to be 20.3741% . For the period commencing on
January 1, 2007 and ending on the Extended Termination Date,
Tenant shall pay for Tenant’s Percentage of Operating Costs
in accordance with the terms of the Lease, as amended hereby,
provided, however, during such period, the Base Service Year for
the computation of Tenant’s Percentage of Operating Costs is
amended from 2000 to 2006. Nothing set forth in this
Section 4.02 shall be deemed to modify Tenant’s
obligations with regard to payment of Tenant’s Percentage of
Operating Costs accruing for the period prior to the Extension
Date. |
| 5. |
Improvements to Premises. |
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5.01. |
Condition of Premises . Tenant is in possession of the
Premises and accepts the same “as is” without any
agreements, representations, understandings or obligations on the
part of Landlord to perform any alterations, repairs or
improvements, except as may be expressly provided otherwise in this
Amendment. |
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5.02. |
Responsibility for Improvements to Premises. Landlord
shall perform improvements to the Premises in accordance with the
Work Letter attached hereto as Exhibit A . |
| 6. |
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: |
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6.01. |
Growth Acceleration Option . |
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A. |
Tenant shall have the right (the “ Growth Acceleration
Option ”) to accelerate the Extended Termination Date of
the Lease, with respect to the entire Premises only, to the date
(the “ Growth Accelerated Termination Date ”)
immediately preceding the commencement date of the New Lease
(defined below), if: |
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(1) |
Tenant enters into a new lease (a) with Landlord or an
affiliate of Landlord (promptly following Tenant’s written
request, Landlord shall confirm whether a proposed landlord under a
New Lease is an affiliate of Landlord), (b) for space in the
Building or any other building owned by Landlord or an affiliate of
Landlord located in the Portland, Oregon metropolitan area, which
space has a rentable square footage of not less than 125% of the
rentable square footage of the Premises (as determined as of the
Growth Accelerated Termination Date), (c) for an initial term
having (i) a commencement date (or, if the commencement date
is not a fixed date, then a target commencement date) occurring not
earlier than 2 months after the expiration of the 12 full calendar
month of the Extended Term, and (ii) a duration of not less
than 60 months (without any option on the part of Tenant to
terminate such lease or reduce the square footage of such space
during such initial term) (a “ New Lease
”); |
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(2) |
Landlord receives written notice of acceleration (“
Growth Acceleration Notice ”) not earlier than the
date on which negotiation of the New Lease is commenced and not
later than the earlier of (a) 5 Business Days before the
date of full execution and delivery of the New Lease, or
(b) 60 days before the commencement date (or, if the
commencement date is not a fixed date, then the target commencement
date) of the New Lease; |
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(3) |
as of the
date Tenant provides Landlord with the Growth Acceleration Notice
and as of the Growth Accelerated Termination Date: (a) Tenant
is not in default (beyond any applicable notice
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and cure or grace period)
under the Lease; (b) no part of the Premises is sublet for a
term extending past the Growth Accelerated Termination Date; and
(c) the Lease has not been assigned; and
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(4) |
as of the date Tenant provides Landlord with the Growth
Acceleration Notice: (a) the party originally named as
Landlord under the Lease, or an affiliate thereof, continues to own
all of the landlord’s right, title and interest in and to the
Lease; and (b) no Landlord’s Mortgage exists (except for
any Landlord’s Mortgage that encumbers, in addition to the
Building, any and all other building(s) containing space covered by
the New Lease). |
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B. |
If Tenant exercises its Growth Acceleration Option, then,
simultaneously with delivery of the Growth Acceleration Notice,
Tenant shall pay to Landlord, as a fee in connection with the
acceleration of the Extended Termination Date and not as a penalty,
an amount (the “ Growth Acceleration Fee ”)
equal to the unamortized portion (as determined using an interest
rate of 8% per annum) of any concessions, commissions,
allowances or other expenses incurred by Landlord in connection
with the space that is subject to acceleration hereunder. Tenant
shall remain liable for all Base Rent, Additional Rent and other
sums due under the Lease up to and including the Growth Accelerated
Termination Date even though billings for such may occur subsequent
to the Growth Accelerated Termination Date. |
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C. |
As of the date Tenant provides Landlord with an Growth
Acceleration Notice, any unexercised rights or options of Tenant to
renew the term of the Lease or to expand the Premises (whether
expansion options, rights of first or second refusal, rights of
first or second offer, or other similar rights), and any
outstanding tenant improvement allowance not claimed and properly
utilized by Tenant in accordance with the Lease as of such date,
shall immediately be deemed terminated and no longer available or
of any further force or effect. |
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D. |
Nothing in this Section 6.01 shall be deemed to create any
obligation on the part of Landlord to (i) negotiate or enter
into any New Lease, or (ii) refrain from transferring title to
the Property, or from executing any Landlord’s Mortgage, in
favor of any party on any terms acceptable to Landlord in its sole
and absolute discretion. |
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6.02. |
Acceleration Option . |
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A. |
Tenant shall have the right to accelerate the Extended
Termination Date (“ Acceleration Option ”) of
the Lease, with respect to the entire Premises only, from
January 16, 2008 to January 16, 2007 (the “
Accelerated Termination Date ”), if: |
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(1) |
Tenant is not in default (beyond any applicable notice and cure
or grace period) under the Lease at the date Tenant provides
Landlord with an Acceleration Notice (hereinafter defined);
and |
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(2) |
no part of the Premises is sublet for a term extending past the
Accelerated Termination Date; and |
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(3) |
the Lease has not been assigned; and |
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(4) |
Landlord receives notice of acceleration (“
Acceleration Notice ”) not later than July 16,
2006. |
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B. |
If Tenant
exercises its Acceleration Option, Tenant, simultaneously with
delivery of the Acceleration Notice shall pay to Landlord the sum
of (i) the unamortized portion of any concessions,
commissions, allowances or other expenses incurred by Landlord in
connection with this Amendment, plus (ii) 5 months’ Base
Rent at the rate in effect for the 15th month of the Extended Term
(collectively, the “ Acceleration Fee ”) as a
fee in connection with the acceleration of the Extended Termination
Date and not as a penalty, pro
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