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EXHIBIT 10.11
[LOGO - Renault & Handley]
INDUSTRIAL & COMMERCIAL REAL ESTATE
THIS LEASE, executed in duplicate at Palo Alto, California,
this 6th day of December, 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 Clara, 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 1212 Terra Bella,
Mountain View, California.
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 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 ($4,599.20) 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 Dollar ($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.
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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.
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
OF as being in good and satisfactory condition, unless within
PREMISES forty-five (45) days after such entry Lessee
AND shall give Lessor written notice specifying in reasonable
CONSENT TO detail the respects in which the Premises were not in
SURRENDER 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 onto 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 first
ADDITIONS 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
requirement 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
MAINTE- 10. Lessee shall, at Lessee's sole cost, keep and
NANCE OF maintain the Premisesand appurtenances and every part thereof,
PREMISES including but not limited to, glazing, sidewalks, parking
areas,* 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 termination this lease because of Lessor's
failure to keep the Premises in good order, conditions or
repair. *** See Addendum attached *including resealing the
parking lot approximately every three (3) years.
FIRE AND 11.
EXTENDED
COVERAGE
INSURANCE
AND
SUBROGATION
*Language indicated as being shown by strike out in the typeset document is
enclosed in brackets "[" and "]" in the electronic format.
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SEE REVISED INSURANCE CLAUSE ATTACHED
ABANDON- 12. Lessee shall not vacate or abandon the Premises at
MENT any time during the term; and if Lessee shall abandon, vacate
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, [except such property as
may be] mortgaged to 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 faithfully
REGULA- observe in the use of the Premises all Municipal ordinances
TIONS 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 against
LESSOR AND the Lessor for damages to goods, wares and merchandise, and
LESSEE'S all other personal property in, upon, or about the Premises
LIABILITY and for injuries to persons in or about the premises, from
INSURANCE 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.
SEE REVISED INSURANCE CLAUSE ATTACHED
ADVERTISE- 16. Lessee will not place or permit to be placed, upon or
MENTS AND about the Premises any unusual or extraordinary signs, or any
SIGNS signs not approved by the city or other governing authority.
The Lessee will not place, or permit to be placed, upon the
Premises, 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.
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:
*Language indicated as being shown by strike out in the typeset document is
enclosed in brackets "[" and "]" in the electronic format.
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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 in 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 (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
pro-rated 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 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 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 forthwith
PREMISES 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) [ninety (90)] 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 50 (fifty)% 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.* As a condition for
granting its consent to any subletting the Lessor may require
the Lessee to agree to pay 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 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
*Language indicated as being shown by strike out in the typeset document is
enclosed in brackets "[" and "]" in the electronic format.
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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.***
* Lessor agrees not to unreasonably withhold consent
to sublet or assign.
**See Addendum attached
*** 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 thereto, 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 thereto 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,* and it shall be deemed and construed,
without further agreement between the parties and the purchase
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. *provided that Lessor transfers the
security deposit to the transferee and the transferee assumes
in writing Lessor's obligations hereunder.
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 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 executed as 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 covenant s and conditions herein contained shall,
AND subject to the provisions as to assignment, apply to and bind
ASSIGNS the heirs, successors, executors, administrators and
assigns of all 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 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 & HANDLEY IS NOT AUTHORIZED TO
GIVE LEGAL AND TAX ADVICE. NO REPRESENTATION OR
RECOMMENDATION IS MADE BY RENAULT & HANDLEY OR ITS
AGENTS OR EMPLOYEES AS TO LEGAL SUFFICIENCY, LEGAL
EFFECT OR TAX CONSEQUENCES OF THIS
*Language indicated as being shown by strike out in the typeset document is
enclosed in brackets "[" and "]" in the electronic format.
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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/ George O. McKee /s/ Ted Boutacoff
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*Language indicated as being shown by strike out in the typeset document is
enclosed in brackets "[" and "]" in the electronic format.
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REVISED INSURANCE CLAUSE
This Lease Clause replaces the Insurance Clause (11.) in the Renault &
Handley Net Lease Form.
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* 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 premises 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 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.**
___________________
* liability for personal injury, bodily injury, death and damage to property
** 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.
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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 Iridex Corporation, Lessee, covering premises at 1212 Terra Bella, Mountain
View, California.
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 Clara
Fire Department, the Santa Clara County Health Department, the Regional Water
Quality Control Board, the State of California or the Federal Government.
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
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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 March 1, 1997, Lessee 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, 1996 the 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 all patching,
cleaning and repainting if necessary.
Additions 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 repaid, 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.
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1. If Lessee is required to replace on 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 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 withhold 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.
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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 be 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.