Exhibit 10.1

 

SECOND AMENDMENT TO LEASE

 

THIS SECOND AMENDMENT TO LEASE (“Amendment”) is made and entered into as of
November 11, 2019 (the “Amendment Date”), by and between ROIB2 BRECKINRIDGE,
LLC, a Delaware limited liability company (“Lessor”) and APPLIED
OPTOELECTRONICS, INC., a Delaware corporation (“Lessee”).

 

WHEREAS, Lessor and Lessee are parties to that certain Lease dated November 5,
2015, as amended by that certain First Amendment to Lease dated as of October 8,
2018 (collectively, the “Lease”) whereby Lessor has leased to Lessee certain
premises known as Suite 130, consisting of approximately 2,983 rentable square
feet (the “Existing Premises”) located within the commercial project known as
“Breckinridge Exchange” (the “Existing Project”) in the office building located
at 3025 Breckinridge Blvd., Duluth, GA (the “Existing Building”), as set forth
more fully in the Lease;

 

WHEREAS, Lessor and Lessee have agreed to extend the Term, to relocate the
Premises to that certain space known as Suite 112 consisting of approximately
6,253 rentable square feet, as depicted on the floor plan set forth in Schedule
1 to this Amendment (the “Relocation Premises”) within the commercial office
project known as “Breckinridge Center”, described more fully in Schedule 2 to
this Amendment (the “Relocation Project”), in the office building located at
3305 Breckinridge Blvd., Duluth, GA (the “Relocation Building”), and to
implement such other revisions as are set forth more fully below.

 

NOW, THEREFORE, for and in consideration of the herewith provided conditions,
the parties agree as follows:

 

1.All capitalized terms not otherwise defined in this Amendment are to be given
the meaning set forth in the Lease.

 

2.Expiration Date. The Lease is hereby amended to reflect that the term
“Expiration Date” shall mean December 31, 2023. The Term of the Lease shall
continue until, and shall expire, at 11:59 p.m. on the Expiration Date.

 

3.Relocation Effective Date. As used herein, the term “Relocation Effective
Date” shall mean the earlier of (i) the date on which Lessee’s Work (defined
below) is Substantially Complete (defined below), and (ii) January 1, 2020.
Following the Relocation Effective Date, within ten (10) days of written request
by Lessor, Lessee shall execute a letter confirming the Relocation Effective
Date, Expiration Date, Base Rent schedule, and other matters requested by
Lessor. Effective as of the Relocation Effective Date:

 

a.the floor plan attached to the Lease as Exhibit A shall be deleted, and
Schedule 1 attached to this Amendment shall be substituted therefor;

b.the legal description attached to the Lease as Exhibit B shall be deleted, and
Schedule 2 attached to this Amendment shall be substituted therefor;

c.all references in the Lease to the “Premises” shall mean the Relocation
Premises, as depicted on Schedule 1 and defined herein;

d.all references in the Lease to the “Project” shall mean the Relocation
Project, as defined herein;

e.all references in the Lease to the “Building” shall mean the Relocation
Building, as defined herein; and

f.Paragraph 1 of the Lease is hereby amended to reflect that the rentable area
of the Premises is 6,253 square feet.

 

4.Delivery of Relocation Premises. Lessee acknowledges and agrees that Lessee is
accepting the Relocation Premises in “as-is”, “where-is” condition and that
Lessor shall have no obligation whatsoever to furnish or perform any work,
labor, fixture, material, decoration, or equipment in order to prepare the
Relocation Premises for Lessee’s occupancy. Lessor shall not be liable for any
delay in delivering possession of the Relocation Premises. Notwithstanding the
foregoing, Lessor represents that the HVAC system, plumbing system, electrical
system and docks which exclusively serve the Relocation Premises are in good
working order as of the Relocation Effective Date, and notwithstanding the
provisions of Section 9 of the Lease, Lessor shall be responsible for all
repairs, maintenance, and replacement of the HVAC system exclusively serving the
Relocation Premises during the first twelve (12) months following the Relocation
Effective Date. Lessee shall remain responsible for maintaining a maintenance
contract for the HVAC system at all times during the Term, in accordance with
the requirements of Section 9 of the Lease.

 

 

 

 

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5.Lessee’s Work.

 

a.                   Plans and Permits. Promptly following the Amendment Date,
Lessee shall submit to Lessor Lessee’s plans and specifications (“Lessee’s
Plans”) for the construction and installation of the fixtures and leasehold
improvements Lessee desires to make in connection with Lessee’s use and
occupancy of the Premises (collectively, “Lessee’s Work”). Lessee shall also
give Lessor written notice of the identity of the contractor Lessee intends to
retain to perform the Lessee’s Work. Lessor shall have the right to approve the
contractor selected by Lessee and any subsequent substitution of said
contractor, such approval not to be unreasonably withheld. Lessee’s Plans shall
be prepared by an architect licensed to practice in the state where the Project
is located and shall be approved by Lessor in writing prior to the performance
of any Lessee’s Work. Lessee shall, at its sole cost and expense, be responsible
for obtaining all final unappealable permits, licenses, certificates and
approvals (including without limitation, all building permits and permits for
signage) required for Lessee’s Work and for the operation of the Premises as
provided in the Lease (collectively, the “Lessee Permits”). Lessee shall apply
for and diligently pursue obtaining all Lessee Permits within ten (10) days
after Lessor has approved Lessee’s Plans.

 

b.                   Performance. Lessee shall, at Lessee’s sole cost and
expense, commence construction of Lessee’s Work and shall diligently pursue
Lessee’s Work to completion. All construction work by Lessee’s contractors
and/or subcontractors must be coordinated with Lessor in a manner reasonably
approved by Lessor such that it will not cause any interference with Lessor’s
operation of, or with the use by other lessees or occupants of, the Project.
Lessee shall install Lessee’s Work in a good and workmanlike manner and in
compliance with all applicable laws, codes, ordinances and regulations. As used
herein, the term “Substantially Complete” shall mean the date on which Lessee
has completed Lessee’s Work in accordance with Lessee’s Plans, subject to minor
“punch-list” items which do not materially prevent Lessee from the use and
occupancy of the Premises, and Lessee has obtained a temporary or permanent
certificate of occupancy for the Premises.

 

c.                    Lessee’s Allowance. Provided no Event of Default has
occurred and is continuing, Lessor shall reimburse Lessee for Lessee’s
construction of Lessee’s Work, in the amount equal to the lesser of (i) $6.00
per rentable square foot of the Premises, or (ii) the actual cost incurred by
Lessee to complete Lessee’s Work (the lesser amount being referred to herein as
“Lessee’s Allowance”). Provided Lessee has complied with the obligations set
forth in this paragraph and no Event of Default has occurred and is continuing
at the time any such installment is due, Lessee’s Allowance shall be paid to
Lessee within thirty (30) days after Lessee has (i) provided Lessor copies of
paid invoices documenting the actual cost incurred by Lessee to complete
Lessee’s Work (excluding trade fixtures, equipment and inventory) within the
Premises, (ii) delivered to Lessor a final lien waiver with respect to the
Premises from any general contractor, subcontractors, or materialmen who have
performed work on, or furnished materials to, the Premises as part of Lessee’s
Work, and (iii) delivered to Lessor a copy of a valid certificate of occupancy
for the Premises, issued by the applicable governmental authorities, allowing
Lessee to commence operations within the Premises. Lessee must complete the
items in subsections (i) through (iii) on or before the date that is nine (9)
months following the Amendment Date, and if Lessee fails to do so, Lessor shall
have no further obligation to pay Lessee’s Allowance under this paragraph.
Notwithstanding anything to the contrary contained herein, Lessor reserves the
right to offset against Lessee’s Allowance (i) any delinquent amounts which have
accrued and are owing by Lessee hereunder; (ii) all costs and/or expenses
incurred by Lessor to repair any damage to the Project caused by Lessee or
Lessee’s contractor during the performance of Lessee’s Work; or (iii) a credit
against the rentals accruing hereunder. In the event the Lease shall be
terminated for any reason prior to the natural expiration of the Term of the
Lease, Lessee shall pay to Lessor the unamortized portion of Lessee’s Allowance,
said amortization to be computed based upon a term equal to the remaining Term
of this Lease following the Relocation Effective Date, and an annual interest
rate of eight percent (8%).

 

 

 

 

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d.                   Early Access. Beginning on the Amendment Date, Lessee shall
be entitled to enter the Premises for purpose of performing Lessee’s Work,
provided that (i) Lessee shall not in any way disturb or interfere with the use
and operation of the Project by Lessor and/or all other lessees and occupants of
the Project, and (ii) Lessee shall comply with all provisions of the Lease
during any use or occupancy of the Premises before the Relocation Effective
Date, provided that Lessee shall have no obligation to pay rent for the
Relocation Premises during this period.

 

6.Possession of the Existing Premises. Lessee shall have the right to remain in
possession of the Existing Premises subject to all terms and conditions of the
Lease until January 31, 2020 (the “Surrender Deadline”), provided that Lessee
shall not be obligated to pay Base Rent or Additional Rent with respect to the
Existing Premises following the Relocation Effective Date, except as provided in
this paragraph. Lessee shall surrender to Lessor the Existing Premises in
accordance with the terms of Section 28 of the Lease, and Section 3 of Exhibit
“D” of the Lease, and in a broom-clean condition, in good order, condition and
repair, ordinary wear and tear excepted, and shall surrender to Lessor all keys
to the Existing Premises. Thereafter, each of the parties shall be relieved of
their respective obligations under the Lease with respect to the Existing
Premises, except for those respective obligations and indemnifications which
arose in connection with the Existing Premises prior to the Relocation Effective
Date. In the event Lessee remains in possession of the Existing Premises beyond
the Surrender Deadline, Lessee shall be considered to have a holdover tenancy
and Lessee shall owe, for the period commencing on the Surrender Deadline and
continuing through and including the date of actual surrender of the Existing
Premises, in addition to all other monetary obligations of Lessee relating to
the Existing Premises, Base Rent for the Existing Premises in an amount equal to
two hundred percent (200%) of the Base Rent due and payable during the last full
calendar month that precedes the Relocation Effective Date, payable monthly and
in advance. Nothing in this Amendment shall be interpreted as giving Lessee the
right to possess the Existing Premises beyond the Surrender Deadline and any
possession of the Existing Premises by Lessee following the Surrender Deadline
shall be considered a holdover and Lessor shall be entitled to all rights and
remedies provided in the Lease.

 

7.Base Rent: The Lease is hereby amended to reflect that Base Rent shall be
payable in the following amounts for the following periods of time, and
otherwise in accordance with the terms set forth in the Lease:

 

Period Rate Annual Base Rent Monthly Base Rent Amendment Date – November 30,
2019 N/A N/A $2,983.00 December 1, 2019 – Relocation Effective Date N/A N/A
$3,072.49 Relocation Effective Date – December 31, 2020 $12.61 $78,850.33
$6,570.86 January 1, 2021 – December 31, 2021 $12.99 $81,215.84 $6,767.99
January 1, 2022 – December 31, 2022 $13.38 $83,652.32 $6,971.03 January 1, 2023
– December 31, 2023 $13.78 $86,161.88 $7,180.16

 

*Notwithstanding any provision herein to the contrary, provided that no Event of
Default has occurred under the Lease, Base Rent payable for the first one (1)
full calendar month following the Relocation Effective Date shall be abated (the
“Rent Abatement”). Lessee shall remain liable for all other amounts due under
the Lease. In the event an Event of Default shall occur following the Amendment
Date, Lessee shall forfeit all remaining Rent Abatement, without further action
by Lessor.

 

8.Security Deposit. Lessor is currently holding a security deposit equal to
$2,983.00 for the Existing Premises. Simultaneous with the execution of this
Amendment, Lessee shall pay to Lessor the sum of $3,587.86, for a combined total
security deposit of $6,570.86, which shall be held and applied by Lessor in
accordance with the terms of the Lease.

 

 

 

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9.Renewal Term. Provided that no Event of Default has occurred and is
continuing, Lessee shall have the option to extend the Term for one (1) period
of thirty-six (36) months (the “Renewal Term”), subject to the terms of this
paragraph. The term “Term” in the Lease shall be deemed to mean the initial
Term, and the Renewal Term, if the same is validly exercised under this
paragraph. Lessee may exercise its option for a Renewal Term only by giving
written notice to Lessor at least three (3) months prior to the end of the Term.
Each Renewal Term shall be upon the same terms and conditions as the Lease,
except that the Base Rent during the first twelve (12) months of the Renewal
Term shall be the prevailing market rent for comparable space in the Building
and comparable buildings in the vicinity of the Building, taking into account
the size of the Premises, the length of the renewal term, market escalations and
the credit of Lessee (the “Fair Market Rent”). In no event shall the Fair Market
Rent during the first twelve (12) months of the Renewal Term be less than 103%
of the Base Rent in effect for the period immediately preceding the commencement
of the Renewal Term. Base Rent during each subsequent twelve (12) month period
during the Renewal Term shall increase by not less than 3% annually until the
expiration of the Renewal Term. Within a reasonable time after Lessor’s receipt
of the Lessee’s notice of election to exercise its option for a Renewal Term,
Lessor shall inform Lessee of Lessor’s determination of the Fair Market Rent for
the first twelve (12) months of the Renewal Term and annual escalations
thereafter. If Lessee does not approve Lessor’s determination, Lessee may elect
to revoke its election to proceed with a Renewal Term, by written notice to
Lessor prior to the expiration of the then-current Term. The Base Rent for the
Renewal Term shall not be reduced by reason of any costs or expenses saved by
Lessor by reason of Lessor’s not having to find a new Lessee for such premises
(including, without limitation, brokerage commissions, costs of improvements,
rent concessions or lost rental income during any vacancy period).

 

10.Notice: Section 29 of the Lease is hereby amended to reflect that Lessor’s
address for purposes of delivery of written notice is 504 Rhett Street, Suite
200, Greenville, SC 29601, Attn: Property Management, with a copy to Hartman
Simons & Wood, LLP, 6400 Powers Ferry Road NW, Suite 400 Atlanta, GA 30339,
Attn: Lana H. Sims IV. Section 2 of Exhibit D of the Lease is hereby amended to
reflect that Lessor’s address for purposes of payment of rent is 504 Rhett
Street, Suite 200, Greenville, SC 29601, or otherwise as directed by Lessor from
time to time.

 

11.Brokers: Lessor and Lessee acknowledge that NAI Brannon Goddard has acted as
agent for Lessor in connection with this Amendment (the "Broker").  Lessor and
Lessee each represent to the other that it has not engaged or worked with any
real estate brokers or agents other than the Broker in connection with this
Amendment or the extension of the term of the Lease.  Lessor agrees to pay the
commission due to the Brokers in connection with this Amendment pursuant to the
terms of a separate agreement.  Lessor and Lessee each shall indemnify and hold
harmless the other and their respective agents from and against any and all
claims for commissions or other compensation, and any liabilities, damages and
costs related thereto, including, without limitation, attorneys’ fees, that may
be asserted by any person or entity other than to the Brokers to the extent the
indemnifying party has engaged such person or such claim results from any action
of the indemnifying party.

 

12.Ratification of Lease: Except as otherwise specifically stated herein, the
Lease shall remain in full force and effect, with the terms, covenants and
conditions of the Lease hereby ratified by the parties hereto. Lessee
acknowledges that as of the Amendment Date that there are no defaults by Lessor
under the Lease, and any demising or other lessee improvement work required to
be performed by Lessor has been duly performed in accordance with the Lease.

 

13.Miscellaneous: Each party to this Amendment shall execute all instruments and
documents and take such further action as may be reasonably required to
effectuate the purposes of this Amendment. This Amendment may be modified only
by a written agreement executed by the parties hereto. This Amendment may be
executed in multiple counterparts, each of which shall be deemed as an original,
and all such counterparts shall together constitute one and the same instrument.
The invalidity of any portion of this Amendment shall not have any effect on the
balance hereof. This Amendment shall be binding upon the parties hereto, as well
as their successors, heirs, executors and assigns. This Amendment shall be
governed by, and construed in accordance with the laws of the state where the
Premises is located.

 

 

 

[Signature page to follow.]

 

 

 

 

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IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of the
date first written above.

 

 

LESSOR:

 

ROIB2 BRECKINRIDGe, LLC,

a Delaware limited liability company

 

 

By:                                                                 

Name:                                                            

Its:                                                                 

 

 

 

LESSEE:

 

APPLIED OPTOELECTRONICS, INC.,

a Delaware corporation

 

 

By:                                                                 

Name:                                                            

Its:                                                                 

 

 

 

 

 

 

 

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Schedule 1

 

Floor Plan of Relocation Premises

 

[image_001.jpg] 

 

 

 

 

 

 

 

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Schedule 2

 

Legal Description of Project

TRACT 1:

 

[image_002.jpg]

 

 

--AND--

 

 

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TRACT 2:

 

[image_003.jpg] 

 

 

 

 

 

 

 

 

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