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EXHIBIT 10.16
SECOND AMENDMENT TO LEASE
This Second Amendment to Lease is dated as of this 30th day of April,
1996 and is between Baytech Associates, a California general partnership
("Landlord"), and Verilink Corporation, a California corporation ("Tenant"),
with respect to the following facts:
RECITALS
Landlord and Tenant entered into that certain Lease (Single Tenant
Triple Net) dated February 27, 1986 (the "Lease") with respect to certain real
property commonly known as Building C located in The Stearns Research Center,
145 Baytech Drive, San Jose, California (the "Premises"). The Lease was amended
by a First Amendment to Lease dated January 22, 1989 ("First Amendment"). The
Lease and the First Amendment are collectively referred to herein as "the
Lease".
The Term Commencement Date (as defined in the Lease) was June 26, 1986
and the Term Expiration Date is June 25, 1996.
Landlord and Tenant desire to extend the Term Expiration Date to April
30, 2001, and to make certain other modifications to the Lease.
Landlord and Tenant now desire to amend the Lease, in the manner more
particularly hereinafter set forth.
AGREEMENT
1. Paragraph 4 of the Lease is hereby amended to provide that
the term of the Lease is extended to April 30, 2001.
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2. Paragraph 5 of the Lease is hereby amended to provide that
Monthly Rent, commencing on May 1, 1996, and continuing until April 30, 1999,
shall be $.65 per square foot of rentable area, or $35,653.15 per month.
Commencing May 1, 1999, and continuing until the end of the lease term on April
30, 2001, Monthly Rent shall be the Fair Market Monthly Rent for the Premises
determined as hereinafter provided.
3. Paragraph 5 B of the Lease ("Cost of Living Adjustments") is
hereby deleted.
4. The Side Letter dated February 28, 1986 between Landlord and
Tenant and the respective agreements and understandings of the parties thereto
are hereby terminated and of no further force or effect.
5. The term "Fair Market Monthly Rent" shall mean the amount of
rent payable on May 1, 1999 for like buildings with like improvements within a
five (5) mile radius of the Premises. Landlord and Tenant shall attempt to agree
upon the amount of Fair Market Monthly Rent. If they are unable to agree on or
before January 31, 1999, the Fair Market Monthly Rent shall be determined by
appraisal conducted as follows:
(a) Fair Market Monthly Rent shall be determined by three (3)
real estate appraisers, all of whom shall be members of the American Institute
of Real Estate Appraisers with not less than five (5) years experience
appraising real property (other than residential or agricultural property)
located in the San Jose area of Santa Clara County, California, in accordance
with the following procedures:
(b) The party demanding an appraisal (the "Notifying Party")
shall notify the other party (the "Non-Notifying Party") thereof by delivering a
written demand for appraisal, which demand, to be effective, must give the name,
address, and qualifications of a appraiser selected by the Notifying Party.
Within ten (10) days of receipt of said demand, the Non-Notifying Party shall
select its appraiser and notify the Notifying Party in writing of the name,
address, and qualifications of the appraiser selected by it. Failure by the
Non-Notifying Party to select a qualified appraiser within said ten (10) day
period shall be deemed a waiver of its right to select a second appraiser on its
own behalf and the Notifying Party shall select a second appraiser on
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behalf of the Non-Notifying Party within five (5) days after the expiration of
said ten (10 day period. Within ten (10) days from the date the second appraiser
shall have been appointed, the two (2) appraisers so selected shall appoint a
third appraiser. If the two appraisers fail to select a third qualified
appraiser, the third appraiser shall be selected by the American Arbitration
Association or, if it shall refuse to perform this function, then at the request
of either Landlord or Tenant, such third appraiser shall be promptly appointed
by the then Presiding Judge of the Superior Court of the State of California for
the County of Santa Clara.
(c) The three (3) appraisers so selected shall meet not later
than twenty (20) days following the selection of the third appraiser. At said
meeting the appraisers so selected shall attempt to determine the Fair Market
Monthly Rent of the Premises.
(d) If the appraisers so selected are unable to complete their
determinations in one meeting, they may continue to consult at such times as
they deem necessary for a fifteen (15) day period from the date of the first
meeting, in an attempt to have a least two (2) of them agree. If, at the initial
meeting or at any time during said fifteen (15) day period, two (2) or more of
the appraisers so selected agree on the Fair Market Monthly Rent of the
Premises, such agreement shall be determinative and binding on the parties
hereto, and the agreeing appraisers shall, in simple letter form executed by the
agreeing appraisers, forthwith notify both Landlord and Tenant of the amount set
by such agreement.
(e) If two (2) or more appraisers do not so agree within said
fifteen (15) day period, then each appraiser shall, within five (5) days after
the expiration of said fifteen (15) day period, submit his independent appraisal
in simple letter form to Landlord and Tenant stating his determination of the
Fair Market Monthly Rent of the Premises. The parties shall then determine the
Fair Market Monthly Rent for the Premises by determining the average of the Fair
Market Monthly Rent set by each of the appraisers. However, if the lowest
appraisal is less than eighty-five percent (85%) of the middle appraisal than
such lowest appraisal shall be disregarded and/or if the highest appraisal is
greater than one hundred fifteen percent (115%) of the middle appraisal then
such highest appraisal shall be disregarded. If the Fair Market Monthly Rent set
by any appraisal is so disregarded, then the average shall be determined by
computing the average set by the other appraisals that have not be disregarded.
(f) Nothing contained herein shall prevent Landlord and Tenant
from jointly selecting a single appraiser to determine the Fair Market Monthly
Rent of the Premises, in which event the determination of such appraisal shall
be conclusively deemed the Fair Market Monthly Rent of the Premises.
(g) Each party shall bear the fees and expenses of the appraiser
selected by or for it, and the fees and expenses of the third appraiser (or the
joint appraiser if one joint appraiser is used) shall be borne fifty percent
(50%) by Landlord and fifty percent (50%) by Tenant.
6. The Lease remains in full force and effect as hereby
modified.
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Second
Amendment to Lease effective as of May 1, 1996.
LANDLORD:
Baytech Associates, a California general
partnership
BY:/s/ Leigh S. Belden
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General Partner
BY:/s/ Steven C. Taylor
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General Partner
TENANT:
Verilink Corporation, a California corporation
BY:/s/ Timothy G. Conley
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Chief Financial Officer
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