Exhibit 10.6
LEASE AGREEMENT
This Lease, executed in duplicate at Palo Alto, California, this 6th
day of December 1996, by and between:
PARTIES Zappettini Investment Co.
and
Iridex Corporation
hereinafter called respectively Lessor and
Lessee, without regard to number or gender,
PREMISES 1. WITNESSETH: That Lessor hereby
leases to Lessee, and Lessee hires from
Lessor, those certain premises, hereinafter
in this lease designated as "the Premises",
with the appurtenances, situated in the City
of Mountain View, County of Santa ▇▇▇▇▇,
State of California, and more particularly
described as follows, to-wit:
An appropriate 37,166 square foot industrial
building located on 2.69 acre lot and
commonly referred to as ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇.
USE 2. The Premises shall be used and
occupied by Lessee for design, testing,
manufacturing, assembly, sales, office,
administration, research and development and
other legal uses ancillary thereto and for
no other purpose without the prior written
consent of Lessor.
TERM 3. The term shall be for 5 (five)
years, commencing on the 1st day of March,
1997, (the "Commencement Date") and ending
on the 28th day of February, 2002.
RENTAL 4. Rent shall be payable to the
Lessor without deduction or offset at such
place or places as may be designated from
time to time by the Lessor as follows:
Thirty Three Thousand One Hundred Eighty Two
and 60/100ths Dollars ($33,182.60) upon
execution of this Lease representing rental
due March 1, 1997. $33,182.60 shall be due
on April 1, 1997 and on the 1st day of each
and every succeeding month through August
1st 1997. Forty Thousand Eight Hundred
Eighty Two and 60/100ths ($40,882.60) shall
be due on September l, 1997 and on the 1st
day of each and every succeeding month
through February 1, 1999. Forty
Two Thousand Seven Hundred Forty and
90/100ths Dollars ($42,740.90) shall be due
on March 1, 1999 and on the 1st day of each
and every succeeding month through February
1, 2000. Forty Four Thousand Five Hundred
Ninety Nine and 20/100ths dollars
($44,599.20) shall be due on March 1, 2000
and on the 1st day of each and every
succeeding month through February 1, 2001.
Forty Six Thousand Four Hundred Fifty Seven
and 50/100ths Dollars ($46,457.50) shall be
due on March 1, 2001 and on the 1st day of
each and every succeeding month through
February 1, 2002.
SECURITY DEPOSIT 5. Lessee has deposited with Lessor
$46,457.50 as security for the full and
faithful performance of each and every term,
provision, covenant and condition of this
Lease. In the event Lessee defaults in
respect of any of the terms, provisions,
covenants or conditions of this Lease,
including, but not limited to the payment of
rent, Lessor may use, apply or retain the
whole or any part of such security for the
payment of any rent in default or for any
other sum which Lessor may spend or be
required to spend by reason of Lessee's
default. Should Lessee faithfully and fully
comply with all of the terms, provisions,
covenants and conditions of this Lease, the
security of any balance thereof shall be
returned to Lessee or, at the option of
Lessor, to the last assignee of Lessee's
interest in this Lease at the expiration of
the term hereof. Lessee shall not be
entitled to any interest on said security
deposit.
POSSESSION 6. If Lessor, for any reason
whatsoever, cannot deliver possession of the
Premises to Lessee at the commencement of
the said term, as hereinbefore specified,
this Lease shall not be void or voidable,
nor shall Lessor, or Lessor's agents, be
liable to Lessee for any loss or damage
resulting therefrom; but in that event the
commencement and termination dates of the
Lease and all other dates affected thereby
shall be revised to conform to the date of
Lessor's delivery possession.(*) (*) See
Addendum attached
7. By entry hereunder, the Lessee
ACCEPTANCE OF accepts the Premises as being in good and
PREMISES AND CONSENT satisfactory condition, unless within
TO SURRENDER forty-five (45) days after such entry Lessee
shall give Lessor written notice specifying
in reasonable detail the respects in which
the Premises were not in satisfactory
condition.(*) The Lessee agrees on the last
day of the term hereof, or on sooner
termination of this Lease, to surrender the
premises, together with all alterations,
additions, and improvements which may have
been made in, to, or on the Premises by
Lessor or Lessee, unto Lessor in the same
good condition as at Lessee's entry into the
Premises excepting for such wear and tear as
would be normal for the period of the
Lessee's occupancy and
casualty. The Lessee, on or before the end
of the term or sooner termination of this
Lease, shall remove all Lessee's personal
property and trade fixtures from the
premises and all property not so removed
shall be deemed to be abandoned by the
Lessee. If the Premises be not surrendered
at the end of the term or sooner termination
of this Lease, the Lessee shall indemnify
the Lessor against loss or liability
resulting from delay by the Lessee in so
surrendering the Premises including, without
limitation, any claims made by any
succeeding tenant founded on such delay. (*)
(*) See Addendum attached
USES PROHIBITED 8. Lessee shall not commit, or
suffer to be committed, any waste upon the
Premises, or any nuisance, or other act or
thing which may disturb the quiet enjoyment
of any other tenant in or around the
buildings in which the Premises may be
located, or allow any sale by auction upon
the Premises, or allow the Premises to be
used for any improper, immoral, unlawful or
objectionable purpose, or place any loads
upon the floor, walls, or roof which
endanger the structure, or place any harmful
liquids in the drainage system of the
building. No waste materials or refuse shall
be dumped upon or permitted to remain upon
any part of the Premises outside of the
building proper. No materials, supplies,
equipment, finished products or
semi-finished products, raw materials or
articles of any nature shall be stored upon
or permitted to remain on any portion of the
Premises outside of the buildings proper.
ALTERATIONS AND ADDITIONS 9. The lessee shall make no
alternations, additions or improvements to
the Premises or any part thereof without
first obtaining the prior written consent of
the Lessor, which consent shall not be
unreasonably withheld or delayed. The Lessor
may impose as a condition to the aforesaid
consent such requirements as Lessor may deem
necessary in Lessor's sole discretion
including without limitation thereto, a
right of approval of the contractor by whom
the work is to be performed which approval
shall not be unreasonably withheld or
delayed, the times during which it is to be
accomplished, and the requirement that upon
written request of Lessor prior to the
expiration or earlier termination of the
Lease, Lessee will remove any or all
improvements or additions to the Premises
installed at Lessee's expense.(*) All such
alterations, additions or improvements not
specified to be removed shall at the
expiration of earlier termination of the
lease become the property of the Lessor and
remain upon and be surrendered with the
Premises. All movable furniture, business
and trade fixtures, and machinery and
equipment shall remain the property of the
Lessee and may be removed by the Lessee at
any time during the Lease term when Lessee
is not in default hereunder. Items which are
not to be deemed as movable
furniture, business and trade fixtures, or
machinery and equipment shall include
heating, lighting, electrical systems, air
conditioning, permanent partitioning,
carpeting, or any other installation which
has become an integral part of the
Premises.(**) The Lessee will at all times
permit notices of non-responsibility to be
posted and to remain posted until the
completion of alterations or additions which
have been approved by the Lessor. (*) & (**)
SEE ADDENDUM ATTACHED
MAINTENANCE OF PREMISES 10. Lessee shall, at Lessee's sole
cost, keep and maintain the Premises and
appurtenances and every part thereof,
including but not limited to, glazing,
sidewalks, parking areas, including
resealing the parking lot approximately
every three (3) years, plumbing, electrical
systems, heating and air conditioning
installations, any store front, roof
covering - unless it is not feasible to
repair the existing roof covering and a new
roof covering is required, and the interior
of the Premises in good order, condition,
and repair. Lessor at Lessor's sole cost and
expense shall maintain the exterior of the
walls, and structural portions of the roof,
foundations, walls, and floors except for
any repairs caused by the wrongful act of
the Lessee and Lessee's agents. The Lessor
will replace the roof covering if repairs to
said covering are no longer economically
feasible in the judgment of roofing experts,
and provided that said replacement is not
made necessary by acts of the Lessee and
Lessee's agents. The Lessee shall water,
maintain and replace, when necessary, any
shrubbery and landscaping provided by the
Lessor on the Premises. The Lessee expressly
waives the benefits of any statute now or
hereafter in effect which would otherwise
afford the Lessee the right to make repairs
at Lessor's expense or to terminate this
lease because of Lessor's failure to keep
the Premises in good order, conditions or
repair. (***) (***) SEE ADDENDUM ATTACHED
INSURANCE 11. Lessee shall not use, or permit
the Premises, or any part thereof, to be
used, for any purposes other than that for
which the Premises are hereby leased; and no
use shall be made or permitted to be made on
the Premises, nor acts done, which will
cause a cancellation of any insurance policy
covering said building, or any part thereof,
nor shall Lessee sell or permit to be kept,
used or sold, in or about the Premises, any
article which may be prohibited by the
standard form of fire insurance policies.
Lessee shall, at his sole cost and expense,
comply with any and all requirements,
pertaining to the Premises, of any insurance
organization or company, necessary for the
maintenance of reasonable fire and public
liability insurance, covering said building
and appurtenances.
11.1 Lessee shall, at its expense,
obtain and keep in force
during the term of this Lease a policy of
comprehensive public liability insurance
insuring Lessee, Lessor, and any third
parties named by Lessor which may include
Lessor's lender, against liability for
personal injury, bodily injury, death and
damage to property arising out of the
condition, use, occupancy or maintenance of
the Premises. Such insurance policy shall
have a combined single limit for both bodily
injury and property damage in an amount not
less than One Million Dollars
($1,000,000.00). The limits of said
insurance shall not limit the liability of
Lessee hereunder.
11.2 Lessee shall, at its expense,
keep in force during the term of this Lease,
a policy of fire and property damage
insurance in an "all risk" form with a
sprinkler leakage endorsement, insuring
Lessee's inventory, fixtures, equipment and
personal property within the Premises for
the full replacement value thereof.
11.3 Lessor shall maintain a policy
or policies of fire and property damage
insurance in an "all risk" form, with
sprinkler and, at the option of the Lessor,
earthquake endorsements, covering loss or
damage to the building, including Lessee's
leasehold improvements installed with the
written consent of the Lessor for the full
replacement cost thereof.
11.4 Lessee shall pay to Lessor as
additional rent, during the term hereof,
upon receipt of an invoice therefore, 100
percent of the premiums for any insurance
obtained by Lessor pursuant to 11.3 above.
Lessor may obtain such insurance for the
Building separately, or together with other
buildings and improvements which Lessor
elects to insure together under blanket
policies of insurance. In such case Lessee
shall be liable for only such portion of the
premiums for such blanket policies as are
allocable to the Premises. It is understood
and agreed that Lessee's obligation under
this paragraph shall be prorated to reflect
the Commencement Date and Expiration Date of
the Lease. If Lessor carries earthquake
insurance, Lessee's obligation to reimburse
Lessor for premiums shall not exceed
$20,000.00 annually.
11.5 Notwithstanding anything to
the contrary in this Lease, Lessee and
Lessor each hereby waives any and all rights
of recovery against the other, or against
the officers, directors, employees,
partners, agents and representatives of the
other, for loss of or damage to the property
of the waiving party or the property of
others under its control, to the extent such
loss or damage is insured against under any
insurance policy carried by Lessor or Lessee
hereunder. Each party shall notify their
respective insurance carriers of this
waiver.
ABANDONMENT 12. Lessee shall not abandon the
Premises at any time during the term; and if
Lessee shall abandon, or surrender the
premises, or be dispossessed by process of
law, or otherwise, any personal property
belonging to Lessee and left on the Premises
shall be deemed to be abandoned, at the
option of Lessor.
FREE FROM LIENS 13. Lessee shall keep the Premises
and the property in which the premises are
situated, free from any liens arising out of
any work performed, materials furnished, or
obligations incurred by Lessee.
COMPLIANCE WITH GOVERNMENTAL
REGULATIONS 14. Lessee shall, at his sole cost
and expense, comply with all of the
requirements of all Municipal, State and
Federal authorities now in force, or which
may hereafter be in force, pertaining to the
Premises, and shall faithfully observe in
the use of the Premises all Municipal
ordinances and State and Federal statutes
now in force or which may hereafter be in
force. The judgment of any court of
competent jurisdiction, or the admission of
Lessee in any action or proceeding against
Lessee, whether Lessor be a party thereto or
not, that Lessee has violated any such
ordinance or statute in the use of the
Premises, shall be conclusive of that fact
as between Lessor and Lessee.(*) SEE
ADDENDUM ATTACHED.
INDEMNIFICATION 15. The Lessee, as a material part
OF LESSOR AND of the consideration to be rendered to the
LESSEE'S LIABILITY Lessor, hereby waives all claims against the
INSURANCE Lessor for damages to goods, wares and
merchandise, and all other personal property
in, upon, or about the Premises and for
injuries to persons in or about the
Premises, from any cause arising at any
time, excepting claims arising from the
Lessor's negligence and willful misconduct
or breach of this Lease and the Lessee will
hold the Lessor exempt and harmless from any
damage or injury to any person, or to the
goods, wares and merchandise and all other
personal property of any person, arising
from the use of the Premises by the Lessee,
or from the failure of the Lessee to keep
the Premises in good condition and repair,
as herein provided.
ADVERTISEMENTS AND SIGNS 16. Lessee will not place or permit
to be placed, in, upon or about the Premises
any unusual or extraordinary signs, or any
signs not approved by the city or other
governing authority. The Lessee will not
place, or permit to be placed, upon the
Premises, any signs, advertisements or
notices without the written consent of the
Lessor first had and obtained.(*) Any sign
so placed on the Premises shall be so placed
upon the understanding and agreement that
Lessee will remove same at the termination
of the tenancy herein created and repair any
damage or injury to the Premises caused
thereby, and if not so removed by Lessee
then Lessor may have same so removed at
Lessee's expense. (*) SEE ADDENDUM ATTACHED
UTILITIES 17. Lessee shall pay for all water,
gas, heat, light, power, telephone service
and all other service supplied to the
Premises.
ATTORNEY'S FEES 18. In case suit should be brought
for the possession of the Premises, for the
recovery or any sum due hereunder, or
because of the breach of any other covenant
herein, the losing party shall pay to the
prevailing party a reasonable attorney's
fee, which shall be deemed to have accrued
on the commencement of such action and shall
be enforceable, whether or not such action
is prosecuted to judgment.
DEFAULT 19. In the event of any breach of
this Lease by the Lessee, or an abandonment
of the Premises by the Lessee, the Lessor
has the option of 1) removing all persons
and property from the Premises and
repossessing the Premises in which case any
of the Lessee's property which the Lessor
removes from the Premises may be stored in a
public warehouse or, elsewhere at the cost
of, and for the account of Lessee, or 2)
allowing the Lessee to remain in full
possession and control of the Premises. If
the Lessor chooses to repossess the
Premises, the Lease will automatically
terminate in accordance with provisions of
the California Civil Code, Section 1951.2.
In the event of such termination of the
Lease, the Lessor may recover from the
Lessee: 1) the worth at the time of award of
the unpaid rent which had been earned at the
time of termination including interest at 7%
per annum; 2) the worth at the time of award
of the amount by which the unpaid rent which
would have been earned after termination
until the time of award exceeds the amount
of such rental loss that the Lessee proves
could have been reasonably avoided including
interest at 7% per annum; 3) the worth at
the time of award of the amount by which the
unpaid rent for the balance of the term
after the time of award exceeds the amount
of such rental loss that the Lessee proves
could be reasonably avoided; and 4) any
other amount necessary to compensate the
Lessor for all the detriment proximately
caused by the Lessee's failure to perform
his obligations under the Lease or which in
the ordinary course of things would be
likely to result therefrom. If the Lessor
chooses not to repossess the Premises, but
allows the Lessee to remain in full
possession and control of the Premises, then
in accordance with provisions of the
California Civil Code, Section 1951.4, the
Lessor may treat the Lease as being in full
force and effect, and may collect from the
Lessee all rents as they become due through
the termination date of the lease as
specified in the lease. For the purposes of
this paragraph, the following do not
constitute a termination of Lessee's
right to possession:
a) Acts of maintenance or preservation or
efforts to relet the property.
b) The appointment of a receiver on the
initiative of the Lessor to protect his
interest under this Lease. (*)
(*) SEE ADDENDUM ATTACHED
LATE CHARGES 20. Lessee hereby acknowledges that
late payment by Lessee to Lessor of rent and
other sums due hereunder will cause Lessor
to incur costs not contemplated by this
lease, the exact amount of which will be
extremely difficult to ascertain. Such costs
include, but are not limited to, processing
and accounting charges, and late charges
which may be imposed on Lessor by the terms
of any mortgage or trust deed covering the
Premises. Accordingly, if any installment of
rent or any other sum due from Lessee shall
not be received by Lessor or Lessor's
designee within ten (10) days after such
amount shall be due, Lessee shall pay to
Lessor a late charge equal to seven and one
half percent (7.5%) of such overdue amount.
The parties hereby agree that such late
charge represents a fair and reasonable
estimate of the costs Lessor will incur by
reason of late payment by Lessee. Acceptance
of such late charge by Lessor shall in no
event constitute a waiver of Lessee's
default with respect to such overdue amount,
nor prevent Lessor from exercising any of
the other rights and remedies granted
hereunder.
SURRENDER OF LEASE 21. The voluntary or other
surrender of this Lease by Lessee, or a
mutual cancellation thereof, shall not
work a merger, and shall, at the option
of Lessor, terminate all or any existing
subleases or subtenancies, or may, at the
option of Lessor, operate as an assignment
to him of any or all such subleases or
subtenancies.
TAXES 22. The Lessee shall be liable for
all taxes levied against personal property
and trade or business fixtures. The Lessee
also agrees to pay, as additional rental,
during the term of this Lease and any
extensions thereof, all real estate taxes
plus the yearly installments of any special
assessments which are of record or which may
become of record during the term of this
lease. If said taxes and assessments are
assessed against the entire building and
building site, and this Lease does not cover
the entire building or building site, the
taxes and assessment installments allocated
to the Premises shall be prorated on a
square footage or other equitable basis, as
calculated by the Lessor. It is understood
and agreed that the Lessee's obligation
under his paragraph will be pro-rated to
reflect the commencement and termination
dates of this Lease. Real estate taxes shall
not include taxes assessed on the net income
of Lessor or any gift, franchise or
inheritance taxes.
NOTICES 23. All notices to be given to
Lessee may be given in writing personally or
by depositing the same in the United States
mail, postage prepaid, and addressed to
Lessee at the said Premises, whether or not
Lessee has departed from, abandoned or
vacated the Premises.
ENTRY BY LESSOR 24. Lessee shall permit Lessor and
his agents to enter into and upon the
Premises at all reasonable times for the
purpose of inspecting the same or for the
purpose of maintaining the building in which
the Premises are situated, or for the
purpose of making repairs, alterations or
additions to any other portion of said
building, including the erection and
maintenance of such scaffolding, canopies,
fences and props as may be required without
any rebate of rent and without any liability
to Lessee for any loss of occupation or
quiet enjoyment of the Premises thereby
occasioned; and shall permit Lessor and his
agents, at any time within ninety days prior
to the expiration of this Lease, to place
upon the Premises any usual or ordinary "For
Sale" or "To Lease" signs and exhibit the
Premises to prospective tenants at
reasonable hours.
DESTRUCTION OF PREMISES 25. In the event of a partial
destruction of the Premises during the said
term from any cause, Lessor shall forthwith
repair the same, provided such repairs can
be made within one hundred twenty (120) days
under the laws and regulations of State,
Federal, County or Municipal authorities,
but such partial destruction shall in no way
annul or void this Lease, except that Lessee
shall be entitled to a proportionate
reduction of rent while such repairs are
being made, such proportionate reduction to
be based upon the extent to which the making
of such repairs shall interfere with the
business carried on by Lessee in the
Premises. If such repairs cannot be made in
one hundred twenty (120) days, Lessor may,
at his option, make same within a reasonable
time, this Lease continuing in full force
and effect and the rent to be
proportionately reduced as aforesaid in this
paragraph provided. In the event that Lessor
does not so elect to make such repairs which
cannot be made in one hundred twenty (120)
days, or such repairs cannot be made under
such laws and regulations, this Lease may be
terminated at the option of either party. In
respect to any partial destruction which
Lessor is obligated to repair or may elect
to repair under the terms of this paragraph,
the provision of Section 1932, Subdivision
2, and of section 1933, Subdivision 4, of
the Civil Code of the State of California
are waived by Lessee. In the event that the
building in which the Premises may be
situated be destroyed to the extent of not
less than fifty percent (50%) of the
replacement cost thereof, Lessor may elect
to terminate this Lease, whether the
Premises be injured or not. A total
destruction of the building in which the
Premises may be situated shall terminate
this Lease. In the event of any dispute
between Lessor and Lessee relative to the
provisions of this paragraph, they shall
each select an arbitrator, the two
arbitrators so selected shall select a third
arbitrator and the three arbitrators so
selected shall hear and determine the
controversy and their decision thereon shall
be final and binding upon both Lessor and
Lessee, who shall bear the cost of such
arbitration equally between them.
ASSIGNMENT AND SUBLETTING 26. The Lessee shall not assign,
transfer, or hypothecate the leasehold
estate under this Lease, or any interest
therein, and shall not sublet the Premises,
or any part thereof, or any right or
privilege appurtenant thereto, or suffer any
other person or entity to occupy or use the
Premises, or any portion thereof, without,
in each case, the prior written consent of
the Lessor. Lessor agrees not to
unreasonably withhold consent to sublet or
assign. As a condition for granting its
consent to any subletting the Lessor may
require the Lessee to agree to pay to the
Lessor, as additional rental, 50% of all
rents received by the Lessee from its
Sublessee after deductions for brokerage
commissions which are in excess of the
amount payable
by the Lessee to the Lessor hereunder. The
Lessee shall, by thirty (30) days written
notice, advise the Lessor of its intent to
sublet the Premises or any portion thereof
for any part of the term hereof. Within
thirty (30) days after receipt of Lessee's
notice, Lessor shall either given approval
or disapproval to Lessee to sublease the
portion of the Premises described in
Lessee's notice. If the Lessor approves a
subletting, the Lessee may sublet
immediately after receipt of the Lessor's
written approval. In the event Lessee is
allowed to assign, transfer or sublet the
whole or any part of the Premises, with the
prior written consent of Lessor, no
assignee, transferee or sublessee shall
assign or transfer this Lease, either in
whole or in part, or sublet the whole or any
part of the Premises, without also having
obtained the prior written consent of the
Lessor. A consent of Lessor to one
assignment, transfer, hypothecation,
subletting, occupation or use by any other
person shall not release Lessee from any of
Lessee's obligations hereunder or be deemed
to be a consent to any subsequent similar or
dissimilar assignment, transfer,
hypothecation, subletting, occupation or use
by any other person. Any such assignment,
transfer, hypothecation, subletting,
occupation or use without such consent shall
be void and shall constitute a breach of
this Lease by Lessee and shall, at the
option of Lessor exercised by written notice
to Lessee, terminate this Lease. The
leasehold estate under this Lease shall not,
nor shall any interest therein, be
assignable for any purpose by operation of
law without the written consent of Lessor.
As a condition to its consent, Lessor may
require Lessee to pay all expense in
connection with the assignment, and Lessor
may require Lessee's assignee or transferee
(or other assignees or transferees) to
assume in writing all of the obligations
under this Lease. (*)
(*) SEE ADDENDUM ATTACHED
CONDEMNATION 27. If any part of the premises
shall be taken for any public or
quasi-public use, under any statute or by
right of eminent domain or private purchase
in lieu thereof, and a part thereof remains
which is susceptible of occupation
hereunder, this Lease shall, as to the part
so taken, terminate as of the date title
shall vest in the condemnor or purchaser,
and the rent payable hereunder shall be
adjusted so that the Lessee shall be
required to pay for the remainder of the
term only such portion of such rent as the
value of the part remaining after such
taking bears to the value of the entire
Premises prior to such taking; but in such
event Lessor shall have the option to
terminate this Lease as of the date when
title to the part so taken vests in the
condemnor or purchaser. If all of the
premises, or such part thereof be taken so
that there does not remain a portion
susceptible for occupation hereunder, this
Lease shall thereupon terminate. If a part
or all of the Premises be taken, all
compensation awarded upon such taking shall
go to the Lessor and the Lessee shall have
no claim thereto, except that Lessee shall
have the right to receive that portion of
the condemnation proceeds based upon the
value of all personal property that Lessee
shall have the right to remove from the
Premises.
EFFECT OF CONVEYANCE 28. The term "Lessor" as used in
this Lease, means only the owner for the
time being of the land and building
containing the Premises, so that, in the
event of any sale of said land or building,
or in the event of a lease of said building,
the Lessor shall be and hereby is entirely
freed and relieved of all covenants and
obligations of the Lessor hereunder,
provided that Lessor transfers the security
deposit to the transferee and the transferee
assumes in writing Lessor's obligations
hereunder, and it shall be deemed and
construed, without further agreement between
the parties and the purchaser at any such
sale, or the Lessee of the building, that
the purchaser or lessee of the building has
assumed and agreed to carry out any and all
covenants and obligations of the Lessor
hereunder. If any security be given by the
Lessee to secure the faithful performance of
all or any of the covenants of this Lease on
the part of the Lessee, the Lessor may
transfer and deliver the security, as such,
to the purchaser at any such sale or the
lessee of the building, and thereupon the
Lessor shall be discharged from any further
liability In reference thereto.
SUBORDINATION 29. Lessee agrees that this Lease
may, at the option of Lessor, be subject and
subordinate to any mortgage, deed of trust
or other instrument of security which has
been or shall be placed on the land and
building or land or building of which the
Premises form a part, and thus subordination
is hereby made effective without any further
act of Lessee. The Lessee shall, at any time
hereinafter, on demand, execute any
instruments, releases, or other documents
that may be required by any mortgagee,
mortgagor, or trustor or beneficiary under
any deed of trust for the purpose of
subjecting and subordinating this Lease to
the lien of any such mortgage, deed of trust
or other instrument of security, and the
failure of the Lessee to execute any such
instruments, releases or documents, shall
constitute a default hereunder. Lessee shall
not be required to execute any documents
subordinating this Lease unless the holder
of any such Lien executes a Non-Disturbance
Agreement in favor of Lessee.
WAIVER 30. The waiver by Lessor of any
breach of any term, covenant or condition,
herein contained shall not be deemed to be a
waiver of such term, covenant or condition
or any subsequent breach of the same or any
other term, covenant or condition therein
contained. The subsequent acceptance of rent
hereunder by Lessor shall not be deemed to
be a waiver of any preceding breach by
Lessee of any term, covenant or condition of
this Lease, other than the failure of Lessee
to pay the particular rental so accepted,
regardless of Lessor's knowledge of such
preceding breach at the time or acceptance
of such rent.
HOLDING OVER 31. Any holding over after the
expiration of the said term, with the
consent of Lessor, shall be construed to be
a tenancy from month to month, at a rental
to be negotiated by Lessor and Lessee prior
to the expiration of said term, and shall
otherwise be on the terms and conditions
herein specified, so far as applicable.
SUCCESSORS AND ASSIGNS 32. The covenants and conditions
herein contained shall, subject to the
provisions as to assignment, apply to and
bind the heirs, successors, executors,
administrators and assigns of all of the
parties hereto; and all of the parties
hereto shall be jointly and severally liable
hereunder.
TIME 33. Time is of the essence of this
lease.
MARGINAL CAPTIONS 34. The marginal headings or titles
to the paragraphs of this Lease are not a
part of this Lease and shall have no effect
upon the construction or interpretation of
any part thereof. This instrument contains
all of the agreements and conditions made
between the parties hereto and may not be
modified orally or in any other manner than
by an agreement in writing signed by all of
the parties hereto or their respective
successors in interest.
PARAGRAPHS #35 AND #36 AND ADDENDUM ATTACHED
HERETO ARE HEREBY MADE A PART OF THIS LEASE.
THIS LEASE HAS BEEN PREPARED FOR SUBMISSION
TO YOUR ATTORNEY WHO WILL REVIEW THE
DOCUMENT AND ASSIST YOU TO DETERMINE WHETHER
YOUR LEGAL RIGHTS ARE ADEQUATELY PROTECTED.
RENAULT & ▇▇▇▇▇▇▇ IS NOT AUTHORIZED TO GIVE
LEGAL AND TAX ADVICE. NO REPRESENTATION OR
RECOMMENDATION IS MADE BY RENAULT & ▇▇▇▇▇▇▇
OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL
SUFFICIENCY, LEGAL EFFECT OR TAX
CONSEQUENCES OF THIS DOCUMENT OR
ANY TRANSACTION RELATING THERETO. THESE ARE
QUESTIONS FOR YOUR ATTORNEY WITH WHOM YOU
SHOULD CONSULT BEFORE SIGNING THIS DOCUMENT.
IN WITNESS WHEREOF, Lessor and Lessee have executed these presents, the
day and year first above written.
LESSOR LESSEE
ZAPPETTINI INVESTMENT CO. IRIDEX CORPORATION
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------- --------------------------------
------------------------- --------------------------------
------------------------- --------------------------------
ADDITIONAL PARAGRAPHS
These additional paragraphs are hereby made apart of that certain Lease dated
December 6, 1996 by and between Zappettini Investment Co., Lessor, and Iridex
Corporation, Lessee, covering premises at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇.
35. Options to Renew. Lessor grants to Lessee two successive two year
options to renew this Lease. The first two year option shall commence, if at
all, on the termination date of this Lease and will terminate on February 29,
2004. The second option period shall commence, if at all, on March 1, 2004
providing that the first option has been exercised and shall terminate on
February 28, 2006. In no event can the 2nd option to renew be exercised unless
the 1st option to renew has been exercised. The option terms shall be governed
by all the terms and conditions as are contained in the Lease excepting that
there shall be no additional options and also excepting the basic monthly
rental. The basic monthly rent for each of the option terms shall be negotiated
by Lessor and Lessee at the time each option is exercised and shall be based on
98 percent of the then market rent for the Premises based on similar space
within a 1 mile radius of the subject property. In no event however, shall the
monthly rental for the first option term be less than $46,457.50 nor shall the
rental amount for the 2nd option term be less than that amount being paid for
the 1st option term. In order to exercise each option, the Lessee must give the
Lessor written notice a minimum of 90 days and a maximum of 120 days prior to
the termination of the immediately preceding term. At the option of the Lessor,
any of the above options to renew may be declared null and void if the Lessee is
in default under any of the terms or conditions of the Lease when said option is
exercised.
36. Lessor will indemnify, defend and hold Lessee harmless from and
against all costs of response, corrective action, remedial action, claims,
demands, losses and liabilities arising from any pre-existing environmental
contamination which may have occurred prior to the Lessee taking possession of
the Premises.
Lessee will only be responsible for contamination of the Premises or the soils
or ground water thereon or thereunder in violation of Hazardous Materials Laws,
that Is caused by Lessee or Lessee's agents, contractors or invitees during the
term as may be extended. All hazardous materials and toxic wastes that Lessee
brings on the Premises shall be stored according to Hazardous Materials Law.
All hazardous materials and toxic wastes that Lessee brings on the site shall be
stored according to all local, state and national government regulations.
Hazardous Materials shall be defined as those substances that are recognized as
posing a risk of injury to health or safety by the Santa ▇▇▇▇▇ Fire Department,
the Santa ▇▇▇▇▇ County Health Department, the Regional Water Quality Control
Board, the State of California or the Federal Government.
For purposes of this Lease, "Hazardous Materials Law" shall mean all local,
state and federal laws, statutes, ordinances, rules, regulations, judgements,
injunctions, stipulations, decrees, orders, permits, approvals, treaties or
protocols now or hereafter enacted, issued or promulgated by any governmental
authority which relate to any Hazardous Material or the use, handling,
transportation,
production, disposal, discharge, release, emission, sale or storage of, or the
exposure of any person to, a Hazardous Material.
Lessor hereby releases Lessee from and waives all claims, costs, losses, damages
and liabilities ("Claims") against Lessee, arising out of or in connection with
any Hazardous Material present at any time on, in, under or about the Premises
except to the extent that any such Claims results from the release, disposal,
emission or discharge of Hazardous Materials on or about the Premises by Lessee
by its agent, contractors or employees. In this regard, Lessor hereby waives the
benefits of California Civil Code Section 1542 which provides as follows: "A
general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release which if
known by him must have materially have affected his settlement with debtor."
ADDENDUM
ADDED TO THE END OF PARAGRAPH 6: *Notwithstanding anything to the contrary in
this Lease, (i) if possession of the Premises has not been delivered to Lessee
for any reason whatsoever on or before ▇▇▇▇▇ ▇, ▇▇▇▇, ▇▇▇▇▇▇ shall not be
obligated to pay rent for that period of time after the Rent Commencement Date
equal to the number of days that possession of the Premises is delayed beyond
March 1, 1997, and (ii) if possession of the Premises is not delivered to Lessee
for any reason whatsoever on or before April 30, 1997 then Lessee may terminate
this Lease by written notice to Lessor, whereupon any monies previously paid to
Lessor by Lessee shall be reimbursed to Lessee and neither party shall have any
further obligation to each other.
ADDITION TO PARAGRAPH 7:
*If Lessee notifies Lessor within such 45 day period that there are structural
defects in the Premises, Lessor shall, at its cost, repair such structural
defects.
ADDITIONS TO PARAGRAPH 9:
*Upon request, Lessor shall advise Lessee in writing whether it reserves the
right to require Lessee to remove any such alterations, additions or
improvements from the Premises upon expiration or sooner termination of this
Lease. If Lessor elects not to reserve such right, then Lessee shall not be
required to remove the initial tenant improvements which Lessee intends to
construct in the Premises.
** ;provided however, that Lessee shall have the right to remove at any time any
special purpose improvements installed in the Premises by Lessee at Lessee's
cost including, without limitation, supplementary heating, ventilation and air
conditioning systems and chillers for laboratory bench heat exchange. Lessee
shall, upon removal of such special purpose improvements, return the Promises to
its condition prior to their installation including all patching, cleaning and
repainting if necessary.
ADDITION TO PARAGRAPH 10:
***In the event of fire or other casualty, paragraph 25, rather than this
paragraph 10, shall govern the obligations of the parties with respect to the
repair, maintenance and replacement of the Premises. Notwithstanding anything to
the contrary in this Lease, Lessor, at its cost and expense, shall make any
repair, maintenance or improvement (i) required as a result of a construction
defect in the Premises as of the Commencement Date, and (ii) for which Lessor
has a right of reimbursement from others (including, without limitation,
insurers). Lessee shall have the benefit of any construction and/or equipment
warranties existing in favor of Lessor that would assist Lessee in discharging
Its obligations under this Lease.
1. If Lessee is required to replace an HVAC unit, plumbing line, main
electrical panel or generator, it may instead elect to require Lessor to perform
such Capital Repair.
2. The cost of any of the above replacements performed by Landlord,
which is reimbursable by Lessee, shall be amortized over the useful life of the
Capital Repair determined in accordance with generally accepted accounting
principles with interest on the unamortized balance at the then prevailing
market rate Lessor would pay if it borrowed funds to replace these units from an
institutional lender. Lessor shall inform Lessee of the monthly amortization
payment required to so amortize such costs, and shall also provide Lessee with
the information upon which such determination is made. Tenant shall pay such
amortized payment for each month during the term of the Lease after such
improvement is completed until the first to occur of (i) the resetting of rent
or the end of the term over which such costs were amortized. Such amortized
amount shall be due at the same time that rent is due.
3. The cost of any Capital Repair performed by Lessor shall be shared
by Lessee and Lessor as follows. Upon completion of the Capital Repair, Lessor
shall notify Lessee of the total cost incurred by Lessor to complete the work
and shall deliver to Lessee documentary support for such costs and lien waivers
(or lien release bonds) for such work. Lessee shall be responsible for that
portion of the cost incurred by Lessor for the Capital Repair times a fraction,
the numerator of which shall be equal to the lesser of the months in the Lease
term (a) until the resetting of monthly rent for the Premises based upon the
fair market value of the Premises as so repaired or improved, or (b) the useful
life of the capital repairs and the denominator shall be the months on the
useful life of the capital repair.
4. For the purposes of this paragraph, a Capital Repair shall not
include the resealing of the parking lot.
ADDITION TO PARAGRAPH 16:
*which consent shall not be unreasonably withheld or delayed. Lessee shall have
the right to place signs displaying the name and logo of Lessee in the present
sign locations and on the entry doorways.
ADDITION TO PARAGRAPH 19:
*Notwithstanding anything to the contrary in this Lease, (i) Lessee shall not be
deemed to be in default or breach of this Lease on account of Lessee's failure
to pay money to Lessor unless Lessee's failure to pay continues for ten (10)
days after the first day of each month, and (ii) Lessee shall not be in default
or breach of this Lease for failing to perform any covenant of this Lease (other
than a covenant to pay money to Lessor) unless Lessee's failure to perform such
covenant continues for a period of thirty (30) days after Lessee's receipt of
written notice of such failure, or such longer time as may be reasonably
required to cure the default so long as Lessee commences to cure such failure
within thirty (30) day period and diligently prosecutes such cure to completion.
ADDITION TO PARAGRAPH 24:
Lessor shall provide to Lessee twenty-four (24) hours' notice prior to its entry
onto the Premises (except in the event of an emergency) and such entry shall be
subject to Lessee's right to accompany Lessor at all times and Lessee's
reasonable security precautions. Lessor shall ensure that reasonable
access to the Premises is available to Lessee at all times and shall use
reasonable efforts to mitigate any interference with Lessee's business caused by
Lessor's entry and work.
ADDITION TO PARAGRAPH 25:
Landlord shall have the additional right to terminate the Lease in the
event of a casualty which is not required hereunder to be covered by insurance
or where insurance proceeds are not available to pay at least eighty percent
(80%) of the replacement cost of the Building. Tenant shall have the additional
right to terminate the Lease if restoration or repair of the Building would take
longer than one hundred twenty (120) days.
ADDITION TO PARAGRAPH 26:
*arising after the effective date of the transfer in question. Notwithstanding
anything to the contrary in this Lease, Lessee may, without Lessor's prior
written consent and without being subject to the terms of this paragraph 26
including, without limitation, Lessor's right to recapture the Premises and
participate in assignment and subletting proceeds, sublease the Premises or
assign the Lease to: (i) a corporation controlling, controlled by or under
common control with Lessee; (ii) a successor corporation related to Tenant by
merger, consolidation or nonbankruptcy reorganization; or (iii) a purchaser of
substantially all of the assets of Lessee.
ADDITION TO PARAGRAPH 14:
If Lessee is required to make any capital repairs to this paragraph 14 then the
provisions of paragraph 10 with regard to capital repairs shall apply. The
paragraph 14 shall not apply to any requirement regarding any Hazardous
Material.
[LETTERHEAD OF RENAULT & ▇▇▇▇▇▇▇]
January 15, 1997
Iridex Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
RE: That certain Lease dated December 6, 1996 by and between
Zappettini Investment Co and Iridex Corporation for ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
Dear ▇▇. ▇▇▇▇▇▇▇▇▇:
With reference to the above Lease, Lessor agrees that he will
(A) Repaint the exterior of the building
(B) Resurface and restripe the parking lot
(C) Replace the existing roof
(D) Trim trees on Shoreline side of property
(E) Lessor will advance to Lessee the sum of $16,000.00 for the
purpose of replacing T-Bar and tile in the clean room area.
(F) Lessor shall not be responsible for any fixer expenditures
other than those listed above, including those that may be
triggered by the City of Mountain View or any governing body
as a result of Lessors fulfilling the obligations listed
above. Should the Lessee be required by the City of Mountain
View to spend in excess of $25,000.00 in retrofitting the drop
ceiling for earthquake protection, Lessee may, at its option,
cancel the above Lease without further obligation to Lessor.
Lessee shall have until 5:00 p.m. January 31, 1997 to exercise
this option to cancel if these costs exceed $25,000.00. If the
Lessee does not inform Lessor by that time and date, then the
Lease shall continue in full force and effect.
Notwithstanding anything to the contrary contained in the above Lease
the commencement date will be 30 days after the building is vacated by ▇▇▇▇▇▇
and made available to Index Corporation.
Iridex Corporation
January 15, 1997
Page 2
In order for the enclosed Lease to be valid, it must be executed by
both parties before 12 noon, January 20, 1997.
Yours sincerely,
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Gen. Mgr. Partner
Zappettini Investment Co.
Read and Agreed:
IRIDEX CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Date: 1/20/97
-----------------------------
GOM:bg
Enclosures
[LETTERHEAD OF IRIDEX CORPORATION]
May 7, 1997
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ Investment Co.
▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: 1212 Terra Bella, Mountain View; waiver of part of paragraph
26 of the Lease
Dear ▇▇▇▇▇▇:
Per our phone conversation on Wednesday, April 30, you agreed to waive
the second sentence of paragraph 26 of the Lease (between Zappettini Investment
Co. and Iridex Corporation, dated the 6th day of December, 1996) and not require
Iridex Corporation to make any payments to Zappettini Investment Co. on account
of rents collected from a subtenant. The second sentence of Paragraph 26 states:
"As a condition for granting its consent to any subletting, the Lessor
may require the Lessee to agree to pay to Lessor, as additional rental,
50% of all rents received by the Lessee from its Sublessee after
deductions for brokerage commissions which are in excess of the amount
payable by the Lessee to the Lessor hereunder."
Please document your waiver of this sentence from the aforementioned
Lease by signing below* and returning a signed original of this letter to our
offices at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇.
Thank you for your attention to this matter.
Yours sincerely,
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President of Finance and Administration
*Agreement to Waiver:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
General Partner
Zappettini Investment Co.
November 26, 2001
EXERCISE OF OPTION
Re: Paragraph 35 (Additional Paragraphs) of that certain Lease dated
December 6th 1996 by and between Zappettini Investment Co., Lessor, Iridex
Corporation, Lessee, for an approximately 37,166 square foot industrial building
commonly referred to as ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇.
Lessee hereby exercises its option to renew the above described Lease
for an additional two (2) year term commencing March 1st 2002 and terminating on
February 29th 2004. All the terms and conditions of the original Lease shall be
in full force and effect excepting the rental amount which shall be as follows:
March 1, 2002 through February 28, 2003................. Fifty Five Thousand Seven Hundred Forty Nine and
No/100ths Dollars ($55,749.00).
March 1, 2003 through February 29th 2004................ Fifty Seven Thousand Six Hundred Seven and 30/100ths
Dollars ($57,607.30).
LESSOR: LESSEE:
ZAPPETTINI INVESTMENT CO. IRIDEX CORPORATION
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------ ----------------------------
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Date: November 26, 2001 Date: November 26, 2001
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