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Exhibit 10.6
This Lease, executed in duplicate at Palo Alto, California, this 6th
PARTIES day of December, by and between
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 approximate 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 five (5) 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 1, 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 5. Lessee has deposited with Lessor, $46,457.50 as
DEPOSIT 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.
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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 of possession.* * SEE
ADDENDUM ATTACHED
ACCEPTANCE 7. By entry hereunder, the Lessee accepts the Premises as
OF being in good and satisfactory condition, unless within
PREMISES forty-five (45) days after such entry Lessee shall give
AND Lessor written notice specifying in reasonable detail the
CONSENT TO respects in which the Premises were not in satisfactory
SURRENDER 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. 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 8. Lessee shall not commit, or suffer to be committed,
PROHIBITED 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 9. The Lessee shall make no alterations, additions or
AND improvements to the Premises or any part thereof without
ADDITIONS 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 ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇
▇
▇▇▇▇▇▇- ▇▇. Lessee shall, at Lessee's sole cost, keep and
▇▇▇▇▇ OF maintain the Premises and appurtenances and every part
PREMISES 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
FIRE AND 11. Lessee shall not use, or permit the Premises, or any
EXTENDED part thereof, to be used, for any purposes other than
COVERAGE that for which the Premises are hereby leased, and no use
INSURANCE shall be made or permitted to be made on the Premises,
AND nor acts done, which will cause a cancellation of any
SUBROGATION 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 of 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.
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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 13. Lessee shall keep the Premises and the property in
LIENS which the Premises are situated, free from any liens
arising out of any work performed, materials furnished,
or obligations incurred by Lessee.
COMPLIANCE 14. Lessee shall, at his sole cost and expense, comply
WITH with all of the requirements of all Municipal, State and
GOVERN- Federal authorities now in force, or which may hereafter
MENTAL be in force, pertaining to the Premises, and shall
REGULATIONS 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
INDEMNI- 15. The Lessee, as a material part of the consideration
FICATION OF to be rendered to the Lessor, hereby waives all claims
LESSOR AND against the Lessor for damages to goods, wares and
LESSEE'S merchandise, and all other personal property in, upon, or
LIABILITY about the Premises and for injuries to persons in or
INSURANCE 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.
ADVERTISE- 16. Lessee will not place or permit to be placed in, upon
MENTS AND or about the Premises any unusual or extraordinary signs,
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 18. In case suit should be brought for the possession of
FEES the Premises, for the recovery of 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.
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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 20. Lessee hereby acknowledges that late payment by
CHARGES 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 21. The voluntary or other surrender of this Lease by
OF LEASE 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 this paragraph will be
prorated to reflect the commencement and termination
dates of this Lease.
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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 24. Lessee shall permit Lessor and his agents to enter
LESSOR 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 25. In the event of a partial destruction of the Premises
OF during the said term from any cause, Lessor shall
PREMISES 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 interface 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 26. The Lessee shall not assign, transfer, or hypothecate
AND SUBLET- the leasehold estate under this Lease, or any interest
TING 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 give 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
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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.*** ** AND *** SEE
ADDENDUM ATTACHED
CONDEM- 27. If any part of the Premises shall be taken for any
NATION 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 28. The term "Lessor" as used in this Lease, means only
CONVEYANCE 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.
SUBORDI- 29. Lessee agrees that this Lease may, at the option of
NATION 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 this
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
mortgage, 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
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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 of acceptance of such rent.
HOLDING 31. Any holding over after the expiration of the said
OVER 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 32. The covenants and conditions herein contained shall,
AND subject to the provisions as to assignment, apply to and
ASSIGNS 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 34. The marginal headings or titles to the paragraphs of
CAPTIONS 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
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/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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ADDITIONAL PARAGRAPHS
These additional paragraphs are hereby made a part of that certain Lease dated
December 6, 1996 by and between Zappettini Investment Co., Lessor, and lRIDEX
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 lst 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 lst 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, judgments,
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.
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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."
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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 Premises 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
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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
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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.
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