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Exhibit 10.16
LEASE AMENDMENT AGREEMENT #2
This Lease Amendment Agreement #2 ("Amendment") is made and entered into this
____ day of April 2--- by and between Mission West Properties, L. P. II, a
Delaware limited partnership ("Lessor") and Gadzoox Networks, Inc., a Delaware
corporation ("Lessee").
RECITALS
A. Lessee currently leases from Lessor approximately 64,805 square feet of
space located at 5850 Hellyer Avenue, San Jose, California ("Phase I" and
"Phase II") pursuant to lease dated August 13, 1998 and Amended under Lease
Agreement #1 dated December 20, 1998 (collectively referred to herein as
the "Lease").
B. The term of the Lease expires on November 30, 2005.
C. Lessee has elected and Lessor has agreed to amend the Lease subject to the
terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are acknowledged, the parties hereto agree to amend the Lease as
follows:
1) PREMISES: The Premises shall be increased to include approximately 73,312
square feet ("Phase III") at 5750 Hellyer Avenue, which is 100% of total
building as attached in Exhibit A. Phase III includes 250 unreserved
parking spaces at 5750 Hellyer Avenue.
2) MONTHLY BASE RENT AND ESTIMATED CAC: The monthly Base Rent for Phase III at
the Commencement Date payable in monthly installments to the nearest dollar
as follows:
<TABLE>
<S> <C> <C> <C>
Phase III Base Rent CAC* Total
November 1, 2000 - October 31, 2001 $146,624 $20,088* $166,712
</TABLE>
Monthly Base Rent for Phase III to increase by 4% over the prior year's rent on
the annual anniversary of the Commencement Date each year during the Lease Term.
*CAC charges are estimated and will be adjusted per terms of the Lease.
3) EXTENSION OF LEASE: The Lease for Premises located at 5850 Hellyer Avenue,
San Jose consisting of approximately 64,805 square feet of space is
extended to two (2) additional years. The starting Base Rent for Phase I
and Phase II for this two (2) year extension shall be at $2.43 per square
foot plus a 4% annual base rent increases for the second year of extension.
All other terms of the Lease, Lease Amendment #12 and Lease Amendment
Agreement #2 as incorporated including CAC charges shall apply during this
extension period.
4) SECURITY DEPOSIT: Lessee shall increase the security deposit by One Hundred
Sixty Six Thousand Seven Hundred and Twelve Dollars ($166,712) upon
execution of this Lease Amendment Agreement # 2.
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5) POSSESSION FOR PHASE III: Possession shall be deemed tendered and the term
shall commence for Phase III upon the first to occur of the following (the
"Commencement Date for Phase III"): i) the Premises for Phase III are
Substantially Complete for Phase III as provided for in the Lease or (ii)
Lessee occupies the Premises for Phase III and commences to conduct
business operations or (iii) if Lessor is prevented from or delayed in
completing its work under Section 2 of the Lease due to Lessee Delays, such
work will be deemed Substantially Complete for Phase III as of the date on
which it would have been Substantially Complete for Phase III had it not
been for such Lessee Delays. It is the intention of Lessee and Lessor that
November 1, 2000 shall be the Commencement Date for Phase III.
"Substantially Complete for Phase III" shall mean that: (i) Lessor has
tendered possession of the Premises for Phase III to Lessee, (ii) Lessor
has met all legal requirements for occupancy of the Premises for Phase III
and obtained a certificate of occupancy or final inspection for the entire
Phase III Premises, (iii) The Lessee Interior Improvements for Phase III
are complete per the approved plans, exclusive of punch list items and
there remains no incomplete or defective items of work which would
materially adversely affect Lessee's intended use of the Premises for Phase
III.
6) TERM: The term shall be eighty-four (84) months unless extended pursuant to
the Lease (the "Lease Term"), beginning on the Commencement Date for Phase
III, ending eighty-four (84) months thereafter.
7) BROKERAGE COMMISSION: Lessor and Lessee represent that they have not
utilized or contacted a real estate broker or finder with respect to this
Lease other than Blickman Turkus ("BT") and Lessee agreed to indemnify and
hold Lessor harmless against any claim, cost, liability or cause of action
asserted by any broker or finder claiming through Lessee other than BT.
Lessor shall at its sole cost and expense pay the brokerage commission per
Lessor's commission schedule to BT in connection with this transaction.
Lessor represents and warrants that it has not utilized or contacted a real
estate broker or finder with respect to this Lease other than BT and Lessor
agrees to indemnify and hold Lessee harmless against any claim, cost,
liability or cause of action asserted by any broker or finder claiming
though Lessor.
8) OPTION TO EXTEND: Lessor hereby grants to Lessee all terms and conditions
for option to extend as set forth under Section 35 of the Lease with
respect to those certain Premises commonly known as 5750 Hellyer Avenue.
9) EARTHQUAKE INSURANCE: As a condition of Lessor agreeing to waive the
requirement for earthquake insurance, Lessee agrees that it will pay, as
additional Rent, which shall be included in the monthly CAC, an amount not
to exceed Twenty Nine Thousand Two Hundred Dollars ($29,200) per year for
earthquake insurance if Lessor desires to obtain some form of earthquake
insurance in the future, if and when available, on terms acceptable to
Lessor as determined in the sole and absolute discretion of Lessor.
10) LESSEE'S IMPROVMENTS & BUILDING SHELL FOR PHASE III: The Lessee
Improvements and Building Shell for Phase III, as defined in Exhibit B of
the Lease shall be constructed in accordance with Section 2.0 through
Section 2.1.9 of the Lease dated August 13, 1998, except Lessor shall
contribute up to Two Million Five Hundred Sixty Five Thousand Nine Hundred
Twenty Dollars ($2,565,920) towards construction of the Lessee Interior
Program for Phase III (the "Phase III TI Allowance").
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11) AUTHORITY: Each party executing this Amendment represents and warrants that
he or she is duly authorized to execute and deliver this Amendment. If
executed on behalf of a corporation, that Amendment is executed in
accordance with the by-laws of said corporation (or partnership that this
Amendment is executed in accordance with the partnership agreement of such
partnership), that no other party's approval or consent to such execution
and delivery is required, and that this Amendment is binding upon said
individual, corporation (or partnership) as the case may be in accordance
with its terms.
12) WARRANTS: Lessee shall provide Lessor a warrant for five years to purchase
50,000 common shares at market value as of April 14, 2000, approximately
$26.375 per common share, on standard warrant terms including net exercise
provision.
13) RATIFICATION OF LEASE: Except as modified herein, the Lease is hereby
ratified, approved and confirmed upon all the terms, covenants, and
conditions.
MISSION WEST PROPERTIES, L.P. II GADZOOX NETWORKS, INC.
a Delaware Limited Partnership a Delaware corporation
By: Mission West properties, Inc. G.P.
By: /s/ Carl E. Berg By: /s/ ChristineE.Munson
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Carl E. Berg
Title: President of General Partner Title: CFO
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Date: April 23, 2000 Date: April 23, 2000
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