EXHIBIT 10.09
AMENDMENT TO LEASE
This AMENDMENT TO LEASE (this "Agreement") is made and entered in to as of May
21, 1999 by and between Optical Networks, Incorporated ("Tenant") and Cilker
Revocable Trust of October 9, 1990 ("Landlord) and effective May 1, 1999.
RECITALS
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A. The Cilker Revocable Trust of October 9, 1990 ("Landlord"), as Landlord, and
JT Storage, Inc. ("JTS"), as tenant, executed a lease dated June 15, 1995 (the
"Lease"), a copy of which is attached hereto as Exhibit "A", pursuant to which
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Landlord leased to JTS, and JTS leased from Landlord certain properties
identified in Paragraph 2 of the Lease and other provisions cross-referenced in
such Paragraph 2 ("Premises").
B. By means of certain ASSIGNMENT OF LEASE, a copy of which is attached hereto
as Exhibit "B" ("Assignment of Lease"), JTS assigned to Tenant the portion of
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the premises identified in the Lease Assignment Exhibit "B" without any cross or
diagonal hatching (the "Original First Level Space").
C. Landlord desires that Tenant expand, and Tenant desires to expand, the Lease
Assignment to include that portion of the first level of the Premises not
currently occupied by Tenant pursuant to the Lease Assignment (the "Additional
First Level Space") as well as the entire second level of the Premises (Exhibit
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"B" Second Level).
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Therefore, for good and valuable consideration, the receipt and adequacy of
which are acknowledged, Landlord and Tenant agree as follows:
1. First Level. The Lease Assignment is expanded to include the Additional
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First Level Space. The terms and conditions of the Lease Assignment for the
Additional First Level Space shall be in all respects identical to the terms and
conditions for the Original First Level Space pursuant to the Lease Assignment,
including Base Rent of $1.70 psf/month NNN.
II. Second Level. The Lease Assignment is also expanded to include the Second
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Level Space. The terms and conditions for the Second Level Space shall be in all
respects identical to the terms and conditions for the Original First Level
Space and the Additional First Level Space, except that, in lieu of Base Rent,
upon execution of the Investment Representation Letter attached hereto as
Exhibit C by Landlord, Tenant shall issue Fifty Thousand (50,000) shares of its
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Series E Preferred Stock to Landlord.
III. Term. The term of the Lease covering the Original First Level Space, the
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Additional First Level Space and the Second Level Space (collectively, the
"Tenant Premises) shall terminate on August 17, 2000 unless earlier terminated
in accordance with the terms of the Lease or the Lease Assignment.
IV. Renewal Option.
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a) Landlord hereby grants to Tenant two (2) option(s) [the "Option(s)"]
to extend the term of the Lease, each for an additional term of two (2)
years, commencing when the then-existing term expires, upon the terms and
conditions set forth in this Section.
b) Exercise of Option. Tenant may exercise such option by giving Landlord
written notice (the "Exercise Notice") of its intention not less than six
(6) months prior to the expiration of the then-existing term of the Lease.
c) Extended Term Rent. If this Option is exercised, the Base Rent per sq.
ft. for the Tenant Premises shall be adjusted to an amount not less than
the Base Rent payable for the month immediately preceding the commencement
date of the term of the Option(s) or equal to ninety-seven and one-half
percent (97 1/2%) of the then current fair market monthly rent ("Fair
Market Rent"), whichever is greater, for the Tenant Premises as of the
commencement date of the applicable extended term as determined by the
agreement of the parties; provided however, that the base rent per sq. ft.
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for the Second Level Space shall be treated as identical to, and shall be
payable on the same terms as, the Base Rent for the remainder of the Tenant
Premises. The Fair Market Rent for the Tenant Premises shall not include
the value, if any, attributable to Alterations to the Premises made at the
cost of Tenant*. The total rent shall include the Base Rent plus the
Additional rent. If the parties are unable to agree on the Fair Market Rent
for the Tenant Premises within sixty (60) days after the Exercise notice,
Tenant shall be entitled to require the Fair Market Rent be determined by
arbitration, as set forth below. All other terms and conditions of the
Lease shall remain in full force and effect and shall apply during the
Option term.
* The total rent shall include the base rent plus the additional rent.
** d) Arbitration.
(i) Promptly following notice to Landlord from Tenant, each party
shall appoint a qualified, licensed real estate appraiser experienced
in appraising office space in San Jose, California to act as an
arbitrator. The two (2) appraises so appointed shall determine the
Fair Market Rent pursuant to the terms and conditions of the Lease
within sixty (60) days of Tenant's initial notice, and they shall
notify the parties of the determination in writing.
(ii) If the two (2) appraises do not agree on the Fair Market Rent,
they shall appoint a third, similarly qualified appraiser. Within
thirty (30) days of his appointment, the third appraiser shall select,
from the proposals submitted by the first two appraisers, the proposal
that most closely approximates the third appraiser's determination of
Fair Market Rent, and that figure shall be deemed the Fair Market Rent
for purposes of the Lease. The third appraiser shall have no right to
compromise or modify either of the proposals submitted by the first
two appraisers.
(iii) Each party shall pay all charges and expenses of the appraiser
appointed by that party, and one-half of any charges and expenses
incurred by the third appraiser.
(iv) If either party to select an appraiser as provided herein, or if
either of the appraisers fails to present a determination within the
required time period, the
** The combined areas of the First Level Space and Second Level Space shall be
increased from 52,000 to 53,012 sq.ft. which is the area measured to the
outside of the outer walls as per BOMA standards as adopted by AIA.
determination presented by the appraiser appointed by the other
party shall be considered final and binding upon both parties.
VI. Successors and Assigns. This Agreement shall be binding and inure to the
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benefit of the parties to it, their heirs, executors, administrators, successors
in interest, and assigns.
VII. Governing Law. This Agreement shall be governed by and construed in
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accordance with California law.
The parties have executed this Agreement as of the date first above written.
LANDLORD: TENANT:
CILKER REVOCABLE TRUST OF OPTICAL NETWORKS, INCORPORATED
OCTOBER 9, 1990
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx Name: Xxxxxxxx X. Xxxxxx
Title: CFO
V. The subleasing conditions will be modified to read: Lessee shall pay to
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Lessor, as additional rent hereunder, 50% of the excess of each such payment of
rent or additional consideration by Lessee after deducting Lessee's reasonable
cost for marketing and reasonable real estate commission to be mutually agreed
upon and applicable only to the increase portion of the rent.
