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EXHIBIT 10.6
LEASE
This Lease is made and entered into this 31st day of March, 1993, by
and between Kowashoji, USA, Inc. a California corporation ("Landlord") and
Orange Empire Brewing Company, A California Corporation ("Tenant").
WITNESSETH:
1. USE.
The Landlord hereby leases to Tenant and Tenant hereby hires from
Landlord those certain premises with appurtenances described as hereinafter set
forth in this lease, for the purpose of conducting thereon only the following
use: Restaurant/Brew Pub.
2. PREMISES.
The premises leased to Tenant, together with those appurtenances
constructed by Landlord as specifically set forth in this Lease, are situated in
the City of Riverside, State of California at 3397 Seventh Street, and are the
premises described as 1st floor, consisting of approximately 7,029 feet, more or
less, as cross-hatched on the plot plan attached hereto as Exhibit "A".
Tenant acknowledges that areas of the structure and site in their
existing condition may not be in compliance with the American Disabilities Act,
and the Tenant holds Landlord harmless for all actions brought by employees from
and against all claims, damages, losses and expenses, including reasonable
attorney fees.
3. TERM.
(A) The term of this lease shall be for a period of Ten (10) years plus
any partial month if this lease commences on a day other than the first day of a
month ("Initial Lease Term"). This lease shall commence on August 15, 1993 or
sooner as hereinafter specified.
(B) If Landlord, for any reason whatsoever, cannot deliver possession
of the Leased Premises to Tenant at the commencement of the term, this lease
shall not be void or voidable except as hereinafter set forth, nor shall
Landlord be liable to Tenant for any loss or damage resulting therefrom, so long
as Landlord exercises reasonable diligence to deliver possession, but in such
event there shall be a daily pro rata deduction for rent covering the period
between the designated commencement of the term and the actual time when
Landlord delivers possession, the duration of the term remaining unaffected.
(C) Commencement of Term. The term shall commence sooner than the date
set forth in Section 3(a) above upon issuance of the Certificate of Occupancy by
the city of Riverside or ninety (90) days from approval of Tenant improvement
plans by the City of Riverside, whichever occurs first. Tenant agrees to
diligently pursue necessary approvals by city. In the event possession is taken
prior to July 1,1993, rent shall be prorated for such fractional month. Tenant
shall be granted early possession to complete Tenant improvements. Landlord and
Tenant shall confirm in writing the Commencement Date of this lease. If Tenant
occupies the premises pursuant to this paragraph (c), such occupancy shall be
subject to all provisions of this lease and shall not change the termination
date.
(D) Option to Extend Term. Provided that Tenant is not in default under
any of the terms and conditions of this lease, Tenant shall have an exclusive
option to extend the term of this lease for two (2) additional periods of Five
(5) years each upon giving written notice to Landlord not later than sixty (60)
days prior to the expiration of the Existing term.
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Revised 3/10/93
Should Tenant fail to give written notice to Landlord of Tenant's
intent to exercise the aforesaid options by the dates specified, this option
clause shall be deemed null and void.
The amount of the base rent to be paid during each option period shall
be adjusted as of the beginning of the option period so as to reflect changes in
the cost of living index calculated in accordance with the provisions of Article
27. All other terms, shall remain in full force and effect during the extended
lease term.
4. RENTAL.
(A) Base Monthly Rental. Tenant shall pay to Landlord, during the term
of this lease from and after the Commencement Date, base rent for the Leased
Premises the sum of Six Thousand and No/100 Dollars ($6,000.00) per month, which
sum shall be paid in advance on the first day of each calendar month. In the
event the Commencement date does not occur on the first day of a calendar month,
the Tenant shall pay the rental for the fractional month on the Commencement
Date on a per diem basis (calculated on a thirty-day month). Provided Tenant is
not in default under the terms hereof, the following months shall be rent free:
1, 13, 25, 37, 49, 61, and 73. In the event Tenant defaults after receiving any
free rent hereunder, any amount waived shall be immediately due and payable. The
term default as referred to herein is defined in paragraph 21 of said lease.
(B) Operating Expense. Tenant shall pay to Landlord during the term
hereof, in addition to the base rent Tenant's Share, as hereinafter defined, of
the amount by which all Operating Expenses, as hereinafter defined, for each
Comparison Year exceeds the amount of all Operating Expenses for the Base Year,
such excess being hereinafter referred to as the "Operating Expense" in
accordance with the following provisions: (as referenced herein, Office Building
= The Project)
(a) Building and project expenses shall be subject to a 1993
"Base Year". Any variable expenses in the Base year shall be
adjusted based on a 100% occupied project . Variable expenses
in comparison years shall be adjusted to reflect the greater
of 100% or actual building occupancy. Lessee shall pay, as
additional rent, Lessee's pro rata share of all actual
expenses over and above the said "Base Year" expenses.
Excluded from operating expenses are capital improvements and
brokerage commissions.
(b) "Comparison Year" is defined as each calendar year during
the term of this Lease subsequent to the Base Year; provided, however,
Tenant shall have no obligation to pay a share of the Operating Expense
increase applicable to the first twelve (12) months of the Lease Term
(other than such as are mandated by a governmental authority, as to
which government mandated expenses Tenant shall pay Tenant's Share,
notwithstanding they occur during the first twelve (12) months.
Tenant's share of the Operating Expense Increase for the first and last
Comparison Years of the Lease Term shall be prorated according to that
portion of such Comparison Year as to which Tenant is responsible for a
share of such increase.
(c) "Operating Expense" is defined, for purposes of this
Lease, to include all costs, if any, incurred by Landlord in the
exercise of its reasonable discretion, for:
( i ) The operation, repair, maintenance, and
replacement, in neat, clean, safe, good order and
condition, of the Office Project, including but not
limited to, the following:
(aa) The Exterior Common Areas, including
parking areas, loading and unloading areas,
trash areas, roadways, sidewalks, walkways,
stairways, parkways, driveways,
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landscaped areas, striping, bumpers,
irrigation systems, Common Area lighting
facilities, building exteriors and roofs,
fences and gates;
(ii) Trash disposal and security services;
(iii) Any other service to be provided by Landlord
that is elsewhere in this Lease stated to be an
"Operating Expense";
(iv) The cost of the premiums for the liability and
property insurance policies to be maintained by
Landlord;
(v) The amount of the real property taxes to be paid
by Landlord;
(vi) Reasonable management fee not to exceed 6%.
(vii) Replacing and/or adding improvements mandated
by any governmental agency and any repairs or
removals necessitated thereby amortized over its
useful life according to Federal income tax
regulations or guidelines for depreciation thereof
(including interest on the unamortized balance as is
then reasonable in the judgment of Landlords
accountants), pertaining to Leased Premises only.
(ix) Replacements of equipment or improvements that
have a useful life for depreciation purposes
according to Federal income tax guidelines of five
(5) years or less, as amortized over such life.
(e) Operating Expenses shall not include the costs of
replacements of equipment or improvements that have a useful
life for Federal income tax purposes in excess of five (5)
years unless it is of the type described in Paragraph 4(C) (d)
(viii) in which case their costs shall be included as above
provided.
(f) Operating Expenses shall not include any expenses
paid by any Tenant directly to their parties, or as to which
Landlord is otherwise reimbursed by any third party, other
tenant, or by insurance proceeds.
(g) Notwithstanding the foregoing, Landlord to be
responsible for all base year taxes, insurance and common area
maintenance. Tenant responsible for all utilities and
janitorial service.
(h) Tenant's Share of Operating Expense Increase shall be
payable by Tenant within twenty (20) days after a reasonably
detailed statement of actual expenses is presented to Tenant
by Landlord. At Landlord's option, however, an amount may be
estimated by Landlord from time to time in advance of Tenant's
Share of the Operating Expense Increase for any Comparison
Year, and the same shall be payable monthly or quarterly, as
Landlord shall designate, during each Comparison Year, during
each Comparison Year of the Lease term, on the same day as the
Base Rent is due hereunder. In the event that Tenant pays
Landlord's estimate of Tenant's Share of Operating Expense
Increase as aforesaid, Landlord shall deliver to Tenant within
sixty (60) days after the expiration of each Comparison Year a
reasonably detailed statement showing Tenant's Share of the
actual Operating Expense Increase incurred during such year.
If Tenant's payments under this paragraph during said
Comparison Year exceed Tenant's Share as indicated on said
statement, Tenant shall be entitled to the credit the amount
of such overpayment against Tenant's Share of Operating
Expense Increase next falling due. If Tenant's payments under
this paragraph during said Comparison Year were less
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than Tenant's Share as indicated on said statement, Tenant
shall pay Landlord the amount of the delinquency within twenty
(20) days after delivery by Landlord of said statement. Even
though the term of this lease has expired and Tenant has
vacated the Leased Premises, when the final determination is
made of Tenant's Share of said expenses for the year in which
this lease terminates, Tenant shall immediately pay any
increase due over the estimated payments previously made by
Tenant and, conversely, any overpayments shall be immediately
paid by Landlord to Tenant. Alternatively, Landlord may elect
to bill Tenant its pro rata share after the expenses have been
incurred in which event Tenant's pro rata share shall be based
on actual expenses at such intervals as Landlord shall
determine.
(I) Neither Tenant's nor it's patrons shall park in others
reserved parking areas and if so, their vehicles are subject
to towing by Landlord. Landlord may charge Tenant, without
prior notice, Ten Dollars ($10.00) per day per vehicle parked
in other than a designated area. All amounts shall be paid
within ten (10) days after demand. Additionally, Landlord is
authorized to cause any such vehicle parked in other than a
designated area to be towed away. Tenant shall hold Landlord
harmless from any liability relating thereto and within ten
(10) days after demand for payment shall pay the cost of
towing and storage if not paid by the employee.
(j) In addition to other rules and regulations for the
property, or as part of such rules and regulations, Landlord
may adopt from time to time rules and regulations for the
orderly and proper operation of said parking and common areas.
Such rules and regulations may include, but shall not be
limited to, the following: (I) the restricting of employee
parking to a limited, designated area or areas or prohibiting
parking by employees as above provided; (ii) the establishment
of certain limited areas as exclusive parking areas for
certain tenants; and (iii) the restriction of loading,
unloading and deliveries to specified times and areas.
(C) All rental to be paid by Tenant to Landlord shall be in lawful
money of the United States of America and shall be paid without deduction or
offset, prior notice or demand at the address designated in Section R of Article
30.
5. REAL PROPERTY TAXES.
(A) Payment of Taxes. Landlord shall pay the real property tax, as
defined in paragraph 5(C), applicable to the Office Building Project subject to
reimbursement by Tenant of Tenant's Share of such taxes in accordance with the
provisions of paragraph 4(B) except as otherwise provided in paragraph 5(B).
(B) Additional Improvements. Tenant shall not be responsible for
paying any increase in real property tax specified in the tax assessor's records
and work sheets as being caused by additional improvements placed upon the
Office Building Project by other Tenants or by Landlord for the exclusive
enjoyment of any other Tenant. Tenant shall, however, pay to Landlord at the
time that Operating Expenses are payable under paragraph 4(B) the entirety of
any increase in real property tax if assessed solely by reason of additional
improvements placed upon the Premises by Tenant or at Tenant's request.
(C) Definition of "Real Property Tax". As used herein, the term "real
property tax" shall include any form of real estate tax or assessment, general,
special, ordinary or extraordinary, and any license fee, commercial rental tax,
improvement bond or bonds, levy or tax (other than inheritance, personal income
or estate taxes) imposed on the Office Building Project o any portion thereof by
any authority having the direct or indirect power to tax, including any city,
county, state or federal government, or any school, agricultural, sanitary,
fire, street, drainage or other improvement district thereof, as against any
legal or equitable interest of Landlord in the Office Building Project or in any
portion thereof, as against Landlord's right to rent or other income therefrom.
The term "real property tax"
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shall also include any tax, fee, levy, assessment or charge to the extent it is
(I) in substitution of, partially or totally, any tax, fee, levy, assessment or
charge hereinabove included within the definition of "real property tax", or
(ii) the nature of which was hereinbefore included within the definition of
"real property tax", or (iii) which is imposed for a service or right not
charged prior to June 1, 1978, or, if previously charged, has been increased
since June 1, 1978, or (iv) which is imposed as a result of a change in
ownership, as defined by applicable local statutes for property tax purposes, of
the Office Building Project or which is added to a tax or charge hereinbefore
included within the definition of real property tax by reason of such change of
ownership, or (v) which is imposed by reason of this transaction, any
modifications or changes hereto, or any transfers hereof.
(D) Joint Assessment. If the improvements or property, the taxes for
which are to be paid separately by Tenant under paragraph 5(B) or 6 are not
separately assessed, Tenant's portion of that tax shall be equitably determined
by Landlord from the respective valuation assigned in the assessor's work sheets
or such other information (which may include the cost of construction) as may be
reasonably available. Landlord's reasonable determination thereof, in good
faith, shall be conclusive.
6. PERSONAL PROPERTY TAXES.
(A) Tenant shall pay prior to delinquency all taxes assessed
against and levied upon trade fixtures, furnishings, equipment and all other
personal property of Tenant contained in the Premises or elsewhere.
(B) If any of Tenant's said personal property shall be assessed
with Landlord's real property, Tenant shall pay to Landlord the taxes
attributable to Tenant within ten (10) days after receipt of a written statement
setting forth the taxes applicable to Tenant's property.
7. PARKING AND COMMON AREAS.
(A) The terms "parking" and "common areas" as used herein shall mean
those portions of the premises that are from time to time established by
Landlord as automobile parking areas, roadways, walkways, landscaped areas,
malls, service areas, courtyard and the like. The common areas shall at all
times be subject to the exclusive control and management of Landlord. During the
term of this lease and any extension thereof, Landlord gives to Tenant for the
use and benefit of Tenant, its agents, employees, customers, licensees and
subtenants a non-exclusive license in common with Landlord and other present and
future owners and tenants and their agents, employees, customers, licensees and
subtenants, and others authorized y Landlord to use the parking and common areas
of the premises for ingress, egress and automobile parking, provided that the
condemnation or other taking by any public authority, or sale in lieu of
condemnation, of any or all of such parking and common areas shall not
constitute a violation of this covenant. Landlord reserves the right in its sole
and absolute discretion (without which right Landlord would not have entered
into this lease) to change the location of buildings and the entrances, exits,
traffic lanes, parking stalls, landscaped areas, the direction and flow of
traffic, and the size, boundaries, location, and configuration of the parking
and common areas, to create temporary and permanent kiosks, and to annex
additional property by Landlord. The license shall be automatically revoked to
the extent portions of the property are deleted by Landlord from the parking and
common areas and shall be deemed expanded to the extent areas are added. Nothing
herein contained shall be deemed to prevent Landlord from using or authorizing
others to use said parking and common areas for utility lines and appurtenances,
pickups and deliveries to and from buildings, construction, and other similar
purposes. Notwithstanding the foregoing, Tenant shall be entitled to twenty (20)
assigned parking spaces in addition to common parking. Notwithstanding the
foregoing, material parking and access modifications shall be subject to lessees
reasonable approval.
(B) During the entire term hereof, Landlord shall keep or cause to be
kept the parking and common areas as same are established by Landlord in a good,
neat, clean and
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orderly condition, and shall repair any damage to the facilities
thereof. Tenant hereby acknowledges that Landlord shall have no obligation
whatsoever to provide guard service or other security measures for the benefit
of the Premises o the Office Building Project. Tenant assumes all responsibility
for the protection of Tenant, its agents, and invitees and the property of
Tenant and of Tenant's agents and invitees from acts of third parties. Nothing
herein contained shall prevent Landlord, at Landlord's sole option, from
providing security protection for the Office Building Project or any part
thereof, in which event the cost thereof shall be included within the definition
of Operating Expenses, as set forth in paragraph 4(B).
8. USES PROHIBITED.
Tenant shall not use, or permit the Leased Premises, or any part thereof, to be
used for any purpose or purposes other than the express purpose or purposes for
which the Leased Premises are hereby leased pursuant to Article 1. No use shall
be made or permitted to be made of the Leased Premises, nor acts done, other
than normal usage permitted under Paragraph 1, which will increase the existing
rate of insurance upon the building or the parking and common areas (once said
rate is established), or cause a cancellation of any insurance policy covering
said building or any part thereof or the parking and common areas. Tenant shall
not sell or permit to be kept, used, displayed or sole in or about the Leased
Premises (I) pornographic or sexually explicit books, magazines, literature,
films or other printed material, sexual paraphernalia, o other material which
would be considered lewd, obscene or licentious, (ii) any article which may be
prohibited by standard forms of fire insurance policies. Tenant shall not use,
or permit to b used, the Leased Premises or any part thereof for the
installation or on- premises use of any vending machine, gaming machine or video
or arcade game except as incidental to Tenant's operation as a restaurant/brew
pub. No use shall be made or permitted which conflicts with any recorded
document. Tenant shall, at his sole cost, comply with any and all requirements,
pertaining to the use of the Leased Premises, of any insurance organization or
company necessary for the maintenance of reasonable fire and public liability
insurance, covering the building of which the Leased Premises are a part and
appurtenances. In the event Tenant's use of the Leased Premises results in a
rate increase of any kind, Tenant shall pay annually on the anniversary date of
this lease, as additional rent, a sum equal to that of the additional premium
occasioned by said rate increase.
Tenant shall not commit, or suffer to be committed, any waste upon the
Leased Premises, or any nuisance or other act or thing which may disturb the
quiet enjoyment of any other tenants or occupants. Tenant further agrees to keep
all windows of the Leased Premises clean at all times and washroom and toilet
facilities in a neat and sanitary condition. Tenant shall not conduct or permit
to be conducted any sale by auction in, upon or from the Leased Premises,
whether said auction be voluntary, involuntary, pursuant to any assignment for
the payment of creditors, or pursuant to any bankruptcy or other solvency
proceeding. Tenant shall not advertise, solicit business or give out literature
or materials within the parking and common areas without Landlord's prior
written consent. Tenant shall not use any advertising media, such as
loudspeakers, phonographs, broadcasting or other sound devices which can be
heard outside the Leased Premises. In addition, Tenant shall not use a
representation (photographic or otherwise) of the building or the building
project or their name(s) in connection with Tenant's business.
9. ALTERATIONS AND FIXTURES.
Tenant shall not make, or suffer to be made, any alterations of the
Leased Premises, or any part thereof, or change the appearance of the Leased
Premises without the prior written consent of Landlord, and any alterations to
the Leased Premises, except movable furniture and trade fixtures, shall become
at once a part of the realty and shall at the expiration or earlier termination
of this lease belong to Landlord. Any alterations to the Leased Premises shall
be made by a contractor currently licensed in the State of California. Other
than signage which shall be subject to city approval, and Landlord's reasonable
consent, Tenant shall not in any event make any changes to the exterior of the
Leased Premises. Any such alterations shall be in conformance with the
requirements of
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all municipal, state, federal, and other governmental authorities, including
requirements pertaining to the health, welfare or safety of employees of the
public and in conformance with reasonable rules and regulations of Landlord.
Landlord may require that any such alterations be removed prior to the
expiration of the term hereof. Any removal of alterations or furniture and trade
fixtures shall be at Tenant's expense and accomplished in a good and workmanlike
manner. Any damage occasioned by such removal shall be repaired at Tenant's
expense so that the Leased Premises can be surrendered in a good, clean and
sanitary condition as required by Article 10 hereof.
10. MAINTENANCE AND REPAIR.
(A) Landlord's Obligations. Landlord shall keep the office
Building Project, including the Premises, interior and exterior walls, roof, and
common areas, and the equipment whether used exclusively foe the Premises or in
common with other premises, in good condition and repair. Except as otherwise
provided herein, there shall be no abatement of rent or liability of Tenant on
account of any injury or interference with Lessee's business with respect to any
improvements alterations or repairs made by Landlord to the Office Building
Project or any part thereof.
(B) Tenant's Obligations. On the last day of the term hereof, or
on any sooner termination, Tenant shall surrender the Premises to Landlord in
the same condition as received, ordinary wear and tear excepted, clean and free
of debris. Any damage or deterioration of the Premises shall not be deemed
ordinary wear and tear if the same could have been prevented by good maintenance
practices by Tenant. Tenant shall repair any damage to the Premises occasioned
by the installation or removal of Tenant's trade fixtures, alterations,
furnishings and equipment. Except as otherwise stated in this Lease, Tenant
shall leave the air lines, power panels, electrical distribution systems,
lighting fixtures, air conditioning, ceilings and plumbing on the Premises and
in good operating condition.
11. COMPLIANCE WITH LAWS.
Tenant 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 use of the Leased Premises,
and shall faithfully observe in said use all municipal ordinances, sate and
federal statutes, or other governmental regulations now in force or which shall
hereinafter be in force and all covenants, conditions and restrictions presently
or hereafter of record. Tenant's violation of law not cured within 10 days of
written notice shall constitute an incurable default under this lease. The
judgment of any court of competent jurisdiction, or the admission of Tenant in
any action or proceeding against Tenant, whether Landlord be a party thereto or
not, that Tenant has violated any such order or statue in said use, shall be
conclusive of that fact as between the Landlord and Tenant.
12. INSURANCE.
(A) Liability Insurance-Tenant. Tenant shall, at Tenant's expense,
obtain and keep in force during the term of this Lease a policy of Comprehensive
General Liability insurance utilizing an Insurance Services or equivalent, in an
amount of not less than $1,000,000 per occurrence of bodily injury and property
damage combined or in a greater amount as reasonably determined by Landlord and
shall insure Tenant with Landlord as an additional insured against liability
arising out of the use, occupancy or maintenance of the Premises. Compliance
with the above requirement shall not, however, limit the liability of Tenant
hereunder.
(B) Liability Insurance-Landlord. Landlord shall obtain and keep in
force during the term of this Lease a policy of Combined Single Limit Bodily
Injury and Broad Form Property Damage Insurance, plus coverage against such
other risks Landlord deems advisable from time to time, insuring Landlord, but
not Tenant, against liability arising out of the ownership, use, occupancy or
maintenance of the Office Building Project in an amount not less than
$5,000,000.00 per occurrence.
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(C) Property Insurance-Tenant. Tenant shall, at Tenant's expense obtain
and keep in force during the term of this Lease for the benefit of Tenant,
replacement cost fire and extended coverage insurance, with vandalism, malicious
mischief, plate glass, sprinkler leakage and earthquake sprinkler leakage
endorsements, in an amount sufficient to cover the reasonable replacement cost,
as the same may exist from time to time, of all of Tenant's personal property,
fixtures, equipment or Tenant improvements.
(D) Property Insurance-Landlord. Landlord shall obtain and keep in
force during the term of this Lease a policy or policies of insurance covering
loss or damage to the Office Building Project improvements, but not the amount
of the reasonable replacement cost thereo, as the same may exist from time to
time, utilizing Insurance Services Office standard form, or equivalent providing
protection against all perils included within the classification of fire,
extended coverage, vandalism, malicious mischief, plate glass, and such other
perils as Landlord deems advisable or may be required by a lender having a lien
on the Office Building Project. In addition, Landlord shall obtain and keep in
force, during the term of this Lease, a policy of rental value insurance
covering a period of one year, with loss payable to Landlord, which insurance
shall also cover all Operating Expenses for said period. Tenant will not be
named in any such policies carried by Landlord and shall have no right to any
proceeds therefrom. The policies required by these paragraphs 12(B) and 12(D)
shall contain such deductibles as Landlord or the aforesaid lender may
determine. In the event that the Premises shall suffer an insured loss covered
under said policy, the deductible amounts under the applicable insurance
policies shall be deemed an Operating Expense. Tenant shall not do or permit to
be done anything which shall invalidate the insurance policies carried by
Landlord. Tenant shall pay the entirety of any increase in the property
insurance premium for the Office Building Project over what it was immediately
prior to the commencement of the term of this Lease if the increase is specified
y Landlord's insurance carrier as being caused by the nature of Tenant's
occupancy (except normal use of premises pursuant to Paragraph 1) or any act or
omission of Tenant.
(E) Insurance Policies. Tenant shall deliver to Landlord copies of
liability insurance policies required under paragraph 12(A) or certificates
evidencing the existence and amounts of such insurance within seven (7) days
prior to the Commencement Date of this Lease. Landlord to be named as additional
insured on Tenant's policy. No such policy shall be cancelable or subject to
reduction of coverage or other modification except after thirty (30) days prior
written notice to Landlord. Tenant shall, at least thirty (30) days prior to the
expiration of such policies, furnish Landlord with renewals thereof.
(F) No Representation of Adequate Coverage. Landlord makes no
representation that the limits or forms of coverage of insurance specified in
this paragraph 12 are adequate to cover Tenant's property or obligations under
this Lease.
(G) Food Preparation. Tenant, if involved in food preparation and sales
as a cafe, restaurant, or similar use, and/or food takeout service, shall
install at Tenant's expense any fire protective systems in grill, deep fry, and
cooking areas which are required by city, county and state fire ordinances, and
such system when installed shall qualify for full fire protective credits
allowed by the fire insurance rating and regulatory body in whose jurisdiction
the Demised Premises are located.
13. INDEMNIFICATION OF LANDLORD.
Tenant, as a material pat of the consideration to be rendered to
Landlord under this lease, hereby waives all claims against Landlord for damage
to equipment or other personal property, trade fixtures, or leasehold
improvements, in, upon or about the Leased Premises and for injuries to persons
in or about the Leased Premises, from any cause arising at any time (including
but not limited to the police or security system for the Building); and Tenant
will indemnify and hold harmless Landlord and its agents, partners and lenders,
if any, from and against any and all claims for damage to the person or property
of anyone or any entity arising from Tenant's use of the Office Building or from
the conduct of Tenant's business or from any activity, work or things done,
permitted or
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suffered by Tenant in or about the Premises or elsewhere and shall further
indemnify and hold harmless Landlord from and against any and all claims, costs
and expenses arising from any reach or default in the performance of any
obligation on Tenant's part to e performed under the terms of this Lease, or
arising from any act or omission of Tenant, or any of Tenant's agents,
contractors, employees, or invitees and from and against all costs, attorney's
fees, expenses and liabilities incurred by Landlord as the result of any such
use, conduct, activity, work, things done, permitted or suffered, breach,
default or negligence and in dealing reasonable therewith, including but not
limited to the defense or pursuit of any claim or any action or proceeding
involved therein; and in case any action or proceeding be brought against
Landlord by reason of any such matter.
Exemption of Landlord from Liability. Tenant hereby agrees that
Landlord shall not be liable for injury to Tenant's business or any loss of
income therefrom or for loss of or damage to the property of Tenant, Tenant's
employees, invitees, customers or any other person in or about the Premises or
the Office Building, nor shall Landlord be liable for injury to the person of
Tenant, Tenant's employees, agents or contractors, whether such damage or injury
is caused by or results from theft, fire, steam, electricity, gas, water or
rain, or from the breakage, leakage, obstruction or other defects of pipes,
sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures
or from any other cause whether said damage or injury results from conditions
arising upon the Premises or upon other portions of the Office Building Project
or from other sources or places or from new construction or the repair,
alteration or improvement of any part of the Office Building Project or of the
equipment, fixtures or appurtenances applicable thereto, and regardless of
whether the cause of such damage or injury or the means of repairing the same is
inaccessible, Landlord shall not be liable for any damages arising from any act
or neglect of any other Tenant, occupant or user of the Office Building Project,
nor from the failure of Landlord to enforce the provisions of any other lease of
any other Tenant of the Office Building Project.
14. FREE FROM LIENS.
Tenant shall do all things reasonably necessary to prevent the filing
of any mechanic's, tax, or other liens of any kind or nature whatsoever against
the Leased Premises, or any part thereof, by reason of work, labor, services or
materials supplied or claimed to have been supplied to Tenant, or anyone holding
the Leased Premises or any part thereof through or under Tenant, or by reason of
unpaid taxes, or otherwise. If any such lien shall at any time be filed against
the Leased Premises, Tenant shall either cause the same to be discharged of
record within twenty (20) days after the date of filing of the same, or if
Tenant , in Tenant's discretion and in good faith, determines that such lien
should be contested, Tenant shall furnish such security as may be necessary or
required to prevent any foreclosure proceedings against the Leased Premises
during the pendency of such contest. If Tenant shall fail to discharge such lien
within such period or fail to furnish such security, then, in addition to any
other right or remedy of Landlord resulting from Tenant's said default, Landlord
may but shall not be obligated to, discharge the same either by paying the
amount claimed to be due or by procuring the discharge of such lien by giving
security or in such other manner as is or may be prescribed by law. Tenant shall
repay to Landlord, as additional rental, on demand, all sums disbursed or
deposited by Landlord pursuant to this paragraph,
including Landlord's costs, expenses and reasonable attorneys' fees incurred by
Landlord in connection therewith.
15. ABANDONMENT.
Tenant shall not vacate or abandon the Leased Premises at any time
during the term of this lease; and if Tenant shall abandon, vacate or surrender
the Leased Premises or be dispossessed by process of law, or otherwise, any
personal property belonging to Tenant and left on the Leased Premises shall be
deemed to be abandoned, at the option of Landlord, except such property as may
be mortgaged to Landlord.
16. SIGNS.
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Tenant shall not place or permit to be placed any sign upon the exterior in the
windows of the Leased Premises without compliance with established sign criteria
y the City of Riverside. Landlord to approve size and location of said sign,
Landlord's approval shall not be unreasonably withheld. Landlord may at its
option, install a directory(ies) listing the names of the individual Tenants,
the cost of which shall be shared equally by all tenants. Landlord agrees to
refrain from placing any broker leasing or for sale signs in the area identified
on the attached Exhibit B.
17. UTILITIES.
(A) Tenant shall pay for all HVAC, water, gas, heat, light, power,
telephone, janitorial and other utilities and services specially or exclusively
supplied and/or metered exclusively to the Premises to Tenant, together with any
taxes thereon. If any such services are not separately metered to the Premises,
Tenant shall pay at Landlord's option, either Tenant's Share or a reasonable
proportion to be determined by Landlord of all charges jointly metered with
other premises in the Building.
18. ENTRY AND INSPECTION.
Tenant shall permit Landlord and his agents to enter into and upon the
Leased Premises at all reasonable times for the purpose of inspecting the same
or for the purpose of maintaining the building in which the Leased 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, canopy, fences and props as may be required, or for the purpose of
posting notices of nonliability for alterations, additions or repairs, Landlord
shall be permitted to do any of the above without any rebate of rent and without
any liability to Tenant for any loss of occupation or quiet enjoyment of the
Leased Premises thereby occasioned. Tenant shall permit Landlord, at any time
within two (2) months prior to the expiration of this lease, to place upon the
Leased Premises any usual or ordinary "For Lease" signs, and during such two (2)
month period Landlord or his agents may, during normal business hours, enter
upon said Leased Premises and exhibit same to prospective tenants. Landlord
shall attempt to minimize effect on Tenant's business while making repairs or
showing Premises.
19. DAMAGE AND DESTRUCTION OF PREMISES.
In the event of (a) partial or total destruction of the Leased Premises
or the building containing same during the term of this lease which requires
repairs to either the Leased Premises or said building, or (b) the Leased
Premises or said building being declared unsafe or unfit for occupancy by any
authorized public authority for any reason other than Tenant's act, use or
occupation, which declaration requires repairs to either the Leased Premises or
said building, Landlord shall forthwith make said repairs provided Tenant gives
to Landlord thirty (30) days written notice as to declarations requiring repair
and the necessity therefore. No such partial destruction (including any
destruction necessary in order to make repairs required by any declaration made
by any public authority) shall in any way annul or void this lease except that
Tenant shall be entitled to a proportionate reduction of base 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 Tenant in the Leased Premises. However, if during the last twelve (12) months
of the term of this lease the Leased Premises and/or said building are damaged
as a result of fire or any other insured casualty to an extent in excess of
fifty percent (50%) of the then replacement cost, (excluding foundations),
Landlord may within thirty (30) following the date such damage occurs terminate
this lease by written notice to Tenant. If Landlord, however, elects to make
said repairs, and provided Landlord uses due diligence in making said repairs,
this lease shall continue in full force and effect, and base rent shall be
proportionately reduced while such repairs are being made as hereinabove
provided. Not withstanding the foregoing, Tenant shall be entitled to terminate
said Lease with the occurrence of both of the following conditions: 1. A
diminution of use by more than 50% and; 2. Continuation of said diminution of
use for more than 6 months.
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The foregoing to the contrary notwithstanding, if the Leased Premises
or said building is damaged or destroyed at any time during the term hereof to
an extent of more than twenty-five percent (25%) of the then replacement cost
Landlord may within thirty (30) days following the date of such destruction
terminate this lease upon written notice to Tenant. If Landlord does not elect
to terminate because of said uninsured casualty, Landlord shall promptly rebuild
and repair the Leased Premises and/or the building and the base rent shall be
proportionately reduced while such repairs are being made as hereinabove
provided.
If Landlord elects to terminate this lease, all rentals shall be
prorated between Landlord and Tenant as of the date of such destruction.
For purposes of this Article 19, the following definitions shall apply:
Partial Destruction - shall mean if the Building of which the premises
are a part is damaged or destroyed to the extent that the cost to repair is less
than fifty percent (50%) of the then replacement cost of the building (excluding
foundations).
Total Destruction - shall mean if the Building of which the premises
are a part is damaged or destroyed to the extent that the cost to repair is
fifty percent (50%) or more of the then replacement cost of the building
(excluding foundations).
Replacement Cost - shall mean the amount of money necessary to be spent
in order to repair or rebuild the damaged area to the condition that existed
immediately prior to the damage occurring, excluding all improvements made by
tenants, other than those installed by Landlord at Tenant's expense.
20. ASSIGNMENT AND SUBLETTING.
Tenant shall not sublet the Leased Premises or any part thereof, or any
right or privilege appurtenant thereto, without first obtaining the prior
written consent of Landlord, which Landlord may withhold in its sole and
absolute discretion. Tenant shall not assign this lease, or any interest
therein, without the prior written consent of Landlord, which consent shall not
be unreasonably withheld. Landlord may withhold its consent to any assignment to
a proposed assignee, and Tenant agrees that Landlord shall not be unreasonable
for doing so, unless all the following criteria are met: (a) The proposed
assignee's general financial condition is equal to or greater than of Tenant;
and (b) the proposed assignee is morally and financially responsible. Any such
assignment shall be subject to all of the terms and conditions of this lease,
and the proposed assignee shall assume the obligations of Tenant under this
lease in writing in form satisfactory to Landlord. Landlord may accept rent from
any person/entity other than Tenant pending approval or disapproval of such
assignment or subletting. Consent by Landlord to one assignment, subletting,
occupation or use by another person shall not be deemed to be a consent to any
subsequent assignment, subletting, occupation or use by another person. Consent
to an assignment shall not release the original named tenant from liability for
the continued performance of the terms, covenants and provisions on the part of
Tenant to be kept and performed, and the assignment and assumption documents
shall so provide. Thereafter, Landlord and the assignee may modify, amend,
change or supplement this lease without notice to or consent of the original
names tenant and without releasing the original named tenant from its
liabilities and obligations under this lease, to the extent of the obligations
of this Lease existing at the time of assignment which liabilities and
obligations shall remain in full force and effect and the original named tenant
shall thereafter be liable to perform such obligations. In the event of default
under this lease, Landlord may proceed directly against Tenant, any Guarantors,
Assignees or Sublessees without first exhausting Landlord's remedies against any
other person or entity responsible therefore to Landlord, or any security held
by Landlord or Tenant. Any assignment or subletting without the prior written
consent of Landlord shall be void, shall constitute a material breach of this
lease, and shall, at the option of Landlord, terminate this lease. The discovery
of the fact that any financial statement relied upon by Landlord in giving its
consent to an assignment or subletting was materially false shall, at
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Landlord's election, render The assignment null and void. Neither this lease nor
any interest therein shall be assignable as to the interest of Tenant by
operation of law.
Landlord shall be under no obligation to consider a request for
Landlord's consent to an assignment until Tenant shall have submitted in writing
to Landlord a request for Landlord's consent to such assignment together with
financial/credit information of the proposed assignee, and such other
information as required by Landlord to verity that the criteria for assignment
as se forth herein are met. Landlord shall, within twenty (20) days after
receiving such written request together with the other necessary information,
makes its decision concerning said assignment or subletting and shall notify
Tenant in writing of its decision.
By affixing their initials below, the parties acknowledge that the
provisions of this Article 20 have been freely negotiated, bargained for and
agreed to by Landlord and Tenant. Landlord and Tenant acknowledge that the
terms, limitations and restrictions on assignment and subletting are a material
consideration for Landlord and Tenant entering into this lease and that, but for
such terms, limitations and restrictions, they would not have entered into this
lease.
--------------------- ---------------------
"Landlord" "Tenant"
21. DEFAULT AND REMEDIES.
In addition to the defaults described elsewhere in this lease, the
occurrence of any one or more of the following events shall constitute a default
and breach of this lease by Tenant: (a) the failure to pay any rental or other
payment required hereunder to or on behalf of Landlord at the time or within the
times herein specified for such payment where such default shall continue for a
period of ten (10) days after written notice thereof from Landlord which notice
shall be deemed to be the statutory notice so long as such notice complies with
the statutory requirements; (b) the failure to perform any of Tenant's
agreements or obligations hereunder (exclusive of a default in the payment of
money) where such default shall continue for a period of fifteen (15) days after
written notice thereof from Landlord to Tenant which notice shall be deemed to
be the statutory notice so long as such notice complies with statutory
requirements; (c) the vacation or abandonment of the Leased Premises by Tenant;
(d) the making by Tenant of a general assignment for the benefit of creditors;
(e) the filing by Tenant of a voluntary petition in bankruptcy or the
adjudication of Tenant as a bankrupt; (f) the appointment of a receiver to take
possession of all or substantially all the assets of Tenant located at the
Leased Premises or of Tenant's leasehold interest in the Leased Premises; (g)
the filing by any creditor of Tenant of an involuntary petition in bankruptcy
which is not dismissed within sixty (60) days after filing; or (h) the
attachment, execution or other judicial seizure of all. or substantially all of
the assets of Tenant or Tenant's leasehold where such an attachment, execution
or seizure is not discharged within sixty (60) days. With respect to (a) above,
upon Tenants breach of this covenant on two occasions, Landlord may at its
option request that all future rents be paid in the form of cash or certified
funds. In addition, if any installment of rent remains past due 10 days from its
due date the Landlord shall have the right to charge a late fee equal to 6% on
said past due installment. The parties hereby agree that such late fee
represents a fair and reasonable estimate o the costs Landlord will incur by
reason of late payment by Tenant and shall be paid as additional rent hereunder.
Acceptance of such late fee by Landlord shall in no event constitute a waiver of
any other default by Tenant, nor prevent Landlord from exercising any of the
other rights and remedies granted hereunder. Tenant shall not be entitled to
more than 2 cure periods pursuant to Section A above in any calendar year.
In the event of any such default or breach by Tenant, Landlord may at
any time thereafter, without further notice or demand, rectify or cure such
default, and any sums expended by Landlord for such purposes shall be paid by
Tenant to Landlord upon demand and as additional rental hereunder. In the event
of any such default or breach by Tenant, Landlord shall have the right to
continue the lease in full force and effect and enforce all of its rights and
remedies under this lease, including the right to recover the
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rental as it becomes due under this lease or Landlord shall have the right at
any time thereafter to elect to terminate said lease and Tenant's right to
possession thereunder. Upon such termination, Landlord shall have the right to
recover from Tenant:
(a) The worth at the time of award of the unpaid rental which had been
earned at the time of termination;
(b) The worth at the time of award of the amount by which the unpaid
rental which would have been earned after termination until the time of
award exceeds the amount of such rental loss that the Tenant proves
could have been reasonably avoided;
(c) The worth at the time of award of the amount by which the unpaid
rental for the balance of the term after the time of award exceeds the
amount of such rental loss that the Tenant proves could be reasonably
avoided; and
(d) Any other amount necessary to compensate the Landlord for all the
detriment proximately caused by Tenant's failure to perform its
obligations under the lease or which in the ordinary course of things
would be likely to result therefrom.
The "worth at the time of award" of the amounts referred to in
subparagraphs A and B above shall be computed by allowing interest at
the rate of Ten Percent (10%) per annum but in no event greater than
the maximum rate permitted by law. The worth at the time of award of
the amount referred to in subparagraph C shall be computed by
discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent (1%), but
in no event greater than ten percent (10%).
As used herein "rental" shall include the base rental, other sums
payable hereunder which are designated "rental" or "additional rental" and any
other sums payable hereunder as agreed between the parties or paid on a regular
basis such as reimbursement for real estate taxes and assessments and expenses
for maintaining and operating the parking and common areas (such other sums to
be reasonably determined by Landlord).
Such efforts as Landlord may make to mitigate the damages caused by
Tenant's breach of this lease shall not constitute a waiver of Landlord's right
to recover damages against Tenant hereunder, nor shall anything herein contained
affect Landlord's right to indemnification against Tenant for any liability
arising prior to the termination of this lease for personal injuries or property
damage, and Tenant hereby agrees to indemnify and hold Landlord harmless from
any such injuries and damages, including all attorney's fees and costs incurred
by Landlord in defending any action brought against Landlord for any recovery
thereof, and in enforcing the terms and provisions of this indemnification
against Tenant.
Notwithstanding any of the foregoing, the breach of this lease by
Tenant, or an abandonment of the Leased Premises by Tenant, shall not constitute
a termination of this lease, or of Tenant's right of possession hereunder,
unless and until Landlord elects to do so, and until such time Landlord shall
have the right to enforce all of its right and remedies under this lease,
including the right to recover rent, and all other payments to be made by Tenant
hereunder, as they become due. Upon Tenant's breach or abandonment, Landlord
shall have the right to retake possession of the premises without terminating
the lease or being guilty of trespass and failure of Landlord to terminate this
lease shall not prevent Landlord from later terminating this lease or constitute
a waiver of Landlord's right to do so.
Upon any such breach or default, Landlord shall have the right at any
time thereafter, without notice except as provided for above, either in person,
by agent or by a receiver to be appointed by a court, enter and take possession
of the Leased Premises without being guilty of trespass and to collect such
rents, issues and profits, including those past due and unpaid, and apply the
same, less costs and expenses of operation and
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collection, including reasonable attorney's fees, upon any indebtedness secured
hereby, and in such order as Landlord may determine.
The parties hereto agree that acts of maintenance or preservation or
efforts to relet the Leased Premises, or the appointment of a receiver upon the
initiative of the
Landlord to protect its interests under this lease shall not constitute a
termination of Tenant's right of possession for the purposes of this Article
unless accompanied by a written notice from Landlord to Tenant of Landlord's
election o so terminate.
Acceptance of rental hereunder shall not be deemed a waiver of any
other default or a waiver of any of Landlord's remedies.
22. SURRENDER OF LEASE.
The voluntary or other surrender of this lease by Tenant, or a mutual
cancellation thereof, shall not work a merger, and shall, at the option of
Landlord, terminate all or any existing subleases or subtenancies, or may, at
the option of Landlord, operate as an assignment to it of any or all of such
subleases or subtenancies.
23. LANDLORD LIABILITY.
Anything in this lease to the contrary notwithstanding, Tenant agrees
that it shall look solely to the estate and property of Landlord in the land and
buildings comprising the office complex of which the Leased Premises are a part,
and, subject to prior rights of any mortgagee of the Leased Premises, for the
collection, satisfaction or enforcement of any judgment (or other judicial or
administrative process) requiring the payment of money, or the performance or
non-performance of certain acts by Landlord, in the event of any default or
breach by Landlord with respect to any of the terms, covenants and conditions of
this lease to be observed and/or performed by Landlord, and no other assets of
the Landlord will be subject to levy, execution or other procedures for the
satisfaction of any remedy, judgment or order of Tenant. In the event of any
sale of the Leased Premises by Landlord, Landlord shall be and is hereby
entirely freed and relieved of all liability under any and all of its covenants
and obligations contained in or derived from this lease arising out of any act,
occurrence or omission occurring after the consummation of such sale; and the
purchaser, at such sale or any subsequent sale of the Leased Premises, shall be
deemed without further agreement between the parties or their successors in
interest or between the parties and any such purchaser, to have assumed and
agreed to carry out any and all of the covenants and obligations of the Landlord
under this lease arising after the date of such sale.
24. TENANT'S PERFORMANCE. -- Intentionally Omitted
25. FORCE MAJEURE.
If either party hereto shall be delayed or prevented from the
performance of any act required hereunder by reason of Acts of God, strikes,
lockouts, labor troubles, inability to procure materials, restrictive
governmental laws or regulations or other cause without fault and beyond the
control of the party obligated (financial inability excepted), performance of
such act shall be excused for the period of the delay and the period for the
performance of any such act shall be extended for a period equivalent to the
period of such delay; provided, however, nothing in this Article 25 contained
shall excuse Tenant from the prompt payment of any rental or other charge
required of Tenant hereunder except as may be expressly provided elsewhere in
this lease.
26. ESTOPPEL CERTIFICATE.
If, as a result of a proposed sale, assignment, or hypothecation of the
Leased Premises or the land thereunder by Landlord, or at any other time, an
estoppel certificate and/or a current financial statement shall be requested of
Tenant, Tenant agrees, within twenty (20) days after receipt of such request, to
deliver such current financial statement certified by Tenant (or office of
Tenant if Tenant is a corporation), that the financial
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statement has been prepared in accordance with good accounting practices,
consistently applied and accurately reflects the financial condition of Tenant
as of the date of such financial statement, and to deliver such estoppel
certificate (in recordable form if requested) addressed to any existing or
proposed mortgagee or proposed purchaser, and to the Landlord, certifying the
requested information, including among other things the dates of commencement
and termination of this lease, the amounts of security deposits, the rental
currently payable hereunder and the date to which rental has been paid, and that
this lease is in full force and effect (if such be the case) and that there are
no differences, offsets or defaults of Landlord, or noting such differences,
offsets or defaults as actually exist. Tenant shall be liable for any loss or
liability resulting from any incorrect information certified, and such mortgagee
and purchaser shall have the right to rely on such estoppel certificate and
financial statement. Tenant shall in the same manner acknowledge the execute any
assignment of rights to receive rents as required by any mortgagee of Landlord.
27. COST OF LIVING ADJUSTMENT.
Upon each anniversary date of the Commencement Date, or if the
Commencement Date is not on the first day of a month, then on the first day of
the next calendar month, the base rent shall be adjusted in proportion to
changes in the Consumer Price Index. Such adjustment shall be made by
multiplying the original base rent by a fraction, the numerator of which is the
value of the Consumer Price Index for the calendar month three (3) months
preceding the calendar month for which such adjustment is to be made and the
denominator of which is the value of the Consumer Price Index for the same
calendar month immediately prior to Commencement Date. For example, if the
adjustment is to occur effective June 1, 1990, the index to be used for the
numerator is the index for the month of March 1990 and the index to be used for
the denominator is the index for the month of March preceding the Commencement
Date. However, in no event shall the rent be reduced below the base rent in
effect immediately preceding such adjustment. The "Consumer Price Index" to be
used in such calculation is the Consumer Price Index, Los Angeles - Anaheim -
Riverside, all Urban Consumers - All Items, published monthly by the United
States Department of Labor, in which 1989 equals 100. If both an official index
and one or more unofficial indexes are published, the official index shall be
used. If said Consumer Price Index is no longer published at the adjustment
date, it shall be constructed by conversion tables included in such new index.
If neither such Consumer Price Index nor conversion tables are published any
longer, then the most widely published all encompassing index of buying power in
the United States shall be used. If no such index is published, then the most
widely published, all encompassing commodity index for the United States shall
be used. In the event any moratorium is imposed on such increases in rent, such
that no regularly scheduled adjustment can be made or only a partial
adjustment may be made, an adjustment shall immediately take effect on the
lifting of such moratorium and regular adjustments thereafter shall be made
shall not be entitled to claim against Landlord for any portion of Landlord's
award and Tenant hereby expressly waives any right or claim to any part thereof.
Tenant shall, however, have the right to claim and recover, directly from the
condemning authority. If this lease is not terminated as above provided,
Landlord shall use a portion of condemnation award to restore the Leased
Premises.
29. BROKER'S FEE.
The brokers involved in this transaction are Grubb & Ellis as "listing
broker" and as "cooperating broker", licensed real estate broker(s). A
"cooperating broker" is defined as any broker other than the listing broker
entitled to a share of any commission arising under this Lease. Upon execution
of this Lease by both parties, Lessor shall pay to said brokers jointly, or in
such separate shares as they may mutually designate in writing, a fee as set
forth in a separate agreement between Lessor and said broker(s), or in the event
there is no separate agreement between Lessor and said broker(s), the sum of
$________, for brokerage services rendered by said broker(s) to Landlord in this
transaction.
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30. MISCELLANEOUS.
(A) Jurisdiction and Venue. The parties hereto agree that the State of
California is the proper jurisdiction for litigation of any matters relating to
this lease. The parties further agree that Riverside County, California is the
proper place for venue as to any such litigation.
(B) Partial Invalidity. If any term, covenant, condition or provision
of this lease is held by a court of competent jurisdiction to be invalid, void,
or unenforceable, the remainder of the provisions hereof shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
(C) Consents, Approvals, and Agreements of Landlord. All consents and
approvals hereunder, unless specifically stated herein to the contrary, shall be
in the respective parties reasonable discretion. The agreements and obligations
of Landlord are specifically stated in this lease, and no further agreements,
covenants, promises, or obligations are to be implied, and Tenant expressly
waives any such implied agreements, covenants, promises or obligations.
(D) Interest. Any sum to be paid pursuant to the terms of this lease
not paid when due shall bear interest from and after five (5) days after the due
date (unless otherwise stated) until paid at a rate equal to Ten Percent (10%)
per annum, but not in excess of the maximum rate permitted by law in which case
interest shall be at the maximum rate allowed by law at the time the sum became
due. Any interest due hereunder shall be deemed additional rent.
(E) Holding Over. Any holding over after the expiration of the term of
this lease, with the consent of Landlord, express or implied, shall be construed
to be a tenancy from month to month, cancelable upon thirty (30) days written
notice, and at a rental equal to one hundred fifty percent (150%) of the last
applicable base rent and upon terms and conditions as existed during the last
year of the term hereof.
(F) Successors in Interest. The covenants herein contained shall,
subject to the provisions as to assignment, apply to and bind 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.
(G) No Oral Agreements. This lease covers in full each and every
agreement of every kind or nature whatsoever between the parties hereto
concerning this lease, and all preliminary negotiations and agreements of
whatsoever kind or nature are merged herein, and there are no oral agreements.
Tenant acknowledges that no representations or warranties of any kind or nature
not specifically set forth herein have been made by Landlord or its agents or
representatives.
(H) Authority. In the event that Tenant is a corporation or a
partnership, each individual executing this lease on behalf of said corporation
or said partnership, as the case may be, represents and warrants that he or she
is duly authorized to execute and deliver this lease on behalf of said
corporation or partnership, in accordance with a duly adopted resolution of the
Board of Directors, if a corporation, or in accordance with the Partnership
Agreement, if a partnership, and that this lease is binding upon said
corporation or partnership in accordance with its terms, Tenant agrees to
deliver forthwith to Landlord a certified copy of such resolution of the
Corporation, if Tenant be a corporation, or a copy of the Partnership Agreement
and a copy of the Certificate of Limited Partnership or Statement of
Partnership, if the Tenant be a partnership.
(I) Time. Time is of the essence of this lease.
(J) Parking Surcharge. In the event that a parking surcharge or
regulatory fee, however designated, is imposed upon or levied or assessed
against the Landlord on account of the parking spaces thereon by any
governmental agency or authority pursuant
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to the "Clean Air Act" or any plan implemented pursuant to such Act, or any
enactment amendatory or in substitution thereof, Tenant agrees that Landlord
may, at Landlord's option and Landlord shall not be obligated so to do,
institute a system of pay parking charging the occupants of the Buildings or
such other system required by the governmental agency or authority and, in such
event, the proceeds of such system will be used to pay any such surcharge or fee
and the cost of implementing and administering such system. Tenant shall comply
with any rules and regulations established by Landlord relating thereto.
(K) Landlord's Default. Landlord shall not be in default unless
Landlord fails to perform obligations required of Landlord within a reasonable
time, but in no event later than thirty (30) days after written notice by Tenant
to Landlord and to the holder of any first mortgage or deed of trust covering
the Leased Premises whose name and address shall have theretofore been furnished
to Tenant in writing, specifying wherein Landlord has failed to perform such
obligation; provided, however, that if the nature of Landlord's obligation is
such that more than thirty (30) days are required for performance then Landlord
shall not be deemed in default if Landlord commences performance within a (30)
day period and thereafter diligently prosecutes the same to completion.
(L) Hazardous Materials. Tenant shall not cause or permit any Hazardous
Materials (as herein defined) to be brought upon, kept or used in or
about t the Premises by Tenant, its agents, employees, contractors or
invitees, except in such quantities as legally permitted. Tenant
further agrees to comply with all federal, state and local laws,
ordinances and regulations relating to hygiene and all environmental
conditions of the Premises, including but not limited to, soil and
ground water condition. Tenant shall promptly notify Landlord and
appropriate governmental or quasi-governmental agencies of any
discharge by Tenant of any Hazardous Materials on the Premises and in
such event, shall take all remedial steps recommended or ordered by any
governmental or quasi-governmental agency having jurisdiction over the
Premises, at the sole cost and expense of Tenant. Landlord shall have
the option, but not the responsibility, to conduct or cause to be
conducted periodic inspections of the Premises and Tenant's operations
to ensure that Tenant is complying with requirements of this section.
Landlord's election to conduct such inspections shall not be construed
as approval of Tenant's use of the Premises or any activities conducted
thereon, and shall in no way constitute an assumption by Landlord of
any responsibility whatsoever of Tenant's use of the Premises. For
purposes of this Section , "Hazardous Materials" shall include but not
be limited to substances defined as "hazardous substances", "hazardous
materials", or "toxic substances" in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C.
Section 6901 et seq.; and those substances defined as "hazardous
wastes" in Section 25117 of the California Health and Safety Code or as
"hazardous substances" in Section 25316 of the California Health and
Safety Code; and in the regulations adopted and publications
promulgated pursuant to said laws.
(N) Rules and Regulations. Tenant shall faithfully observe and comply
with the rules and regulations that Landlord shall from time to time promulgate
and/or modify. The rules and regulations shall be binding upon the Tenant upon
delivery of a copy of them to Tenant. Landlord shall not be responsible to
Tenant for the nonperformance of any said rules and regulations by any other
tenants or occupants. Such rules and regulations shall apply and be enforced as
to all tenants on a uniform basis.
(O) Easements. Landlord reserves to itself the right, from time to
time, to grant such easements, rights and dedications that Landlord deems
necessary or desirable, and to cause the recordation of Parcel Maps and
restrictions, so long as such easements, rights, dedications, Maps and
restrictions do not unreasonably interfere with the use of the Premises by
Tenant. Tenant shall sign any of the aforementioned documents upon request of
Landlord and failure to do so shall constitute a material default of this Lease.
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The obstruction of Tenant's view, air, or light by any structure
erected in the vicinity of the Building, whether by Landlord or third parties,
shall in no way affect this Lease or impose any liability upon Landlord.
(P) Attorney's Fees. In the case of a breach or default by Landlord or
Tenant of any of the terms hereof, the nonprevailing party in any action or
claim resulting from said default or breach shall pay the prevailing party all
expenses incurred by reason thereof, including but not limited to reasonable
attorney's fees. Such amounts shall be payable upon demand and shall bear
interest at the rate of ten percent (10%) per annum from the date of such demand
until fully paid.
(Q) Waiver. No waiver of any default of Tenant hereunder by Landlord
shall be implied from any omission of Landlord to take any action on account of
such default, if such default persists or is repeated, and no express waiver
shall affect any default other than the default specified in the express waiver,
and that only for the time and to the extent therein stated. The acceptance by
Landlord of rent with knowledge of the breach of any of the covenants of this
lease by Tenant shall not be deemed a waiver of any such breach, other than the
failure of Tenant to pay the particular rent so accepted. The consent or
approval by Landlord to or of any act by Tenant requiring Landlord's consent or
approval shall not be deemed to waive or render unnecessary Landlord's consent
or approval to or of any subsequent similar acts of Tenant.
( R ) Notices. Any notices or demands which are required to be given
hereunder or which either party hereto may desire to give to the other shall be
given in writing, and, in lieu of personal service, may be served by mailing the
same by registered, certified United States mail, or overnight express courier
postage prepaid, return receipt requested, addressed to the other party at the
address shown below, or in the case of notices or demands to Tenant after the
term of this lease shall have commenced, o the address below and the address of
the Leased Premises. Either Party may, from time to time, designate by notice as
herein provided such other mailing address as such party desires. Such notices
and demands shall be deemed served forty-eight (48) hours following the day of
mailing, addressed as follows:;
TO: LANDLORD TO: TENANT
Kowashoji USA, Inc. Orange Empire Brewing Company
17451 Bastanchury Rd 2025 Chicago St., Suite A-4
Suite 202 Riverside, CA 92507
Yorba Linda, CA 92686 ATTN: John Barnicoat
(714) 528-4790 (909) 682-5465
Either party may change such address by written notice by certified mail to the
other.
(S) Security Deposit. Tenant contemporaneously with the execution of
this lease, has deposited with Landlord the sum of Six Thousand and NO/100
DOLLARS ($6,000.00), receipt of which is hereby acknowledged by Landlord, said
deposit being given to secure the faithful performance by the Tenant of all
terms, covenants, and conditions of this lease by the Tenant to be kept and
performed during the term hereof. Tenant agrees that if the Tenant shall fail to
pay the rent herein reserved or any other sum required hereby promptly when due,
said deposit may, at the option of the Landlord (but Landlord shall not be
required to) be applied to any rent or other sum due and unpaid, and if the
Tenant violates any of the other terms, covenants, and conditions of this lease,
said deposit may, at Landlord's option, be applied to any damages suffered y
Landlord as a result of Tenant's default to the extent of the amount of the
damages suffered.
Nothing contained in this Section (S) shall in any way
diminish or be construed as waiving any of the Landlord's other remedies as
provided in Article 21 hereof, or by law or in equity. Should the entire
security deposit, or any portion thereof, be appropriated and applied by
Landlord for the payment of overdue rent or other sums due and payable to
Landlord by Tenant hereunder, the Tenant shall, on the written demand of
Landlord, forthwith remit to Landlord a sufficient amount in cash to said
security deposit to its original amount, and Tenant's failure to do so within
ten (10) days
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after receipt of such demand shall constitute a breach of this lease. Should
Tenant comply with all of the terms, covenants, and conditions of this lease and
promptly pay all of the rental herein provided for as it falls due, and all
other sums payable by Tenant to Landlord hereunder, said security deposit shall
be returned in full to Tenant at the end of the term of this lease, or upon the
earlier termination of this lease pursuant to the provisions of Article 19
hereof, except in the event the Leased Premises are sold as a result of the
exercise of any power of sale under any mortgage or deed of trust, in which
event this lease shall be automatically amended to delete any reference to this
Section (S), and Tenant shall be entitled to immediate reimbursement of its
security deposit from the part then holding said deposit. In the event landlord
sells the property described herein, said security deposit to be refunded to
Tenant.
(T) Representation. Each of the parties hereto warrants and represents
to the other (I) that each of the provisions hereof has been negotiated between
the parties, (ii) that each provision hereof is consideration for every other
provision, (iii) that is has read the entire lease and (iv) that it agrees to
each and every provision hereof.
(U) Quiet Enjoyment. Landlord covenants, warrants, and represents that,
to the best of its knowledge, it has full right and power to execute this lease
and to grant the estate demised herein and that Tenant, upon payment of the
rents herein reserved, and performance of all of the terms, conditions and
covenants herein contained, shall peacefully and quietly have, hold, and enjoy
the Leased Premises during the full term of this lease. To the best of
Landlord's knowledge, no mortgage or deed of trust is filed against the leased
premises at the time of execution of this lease and Landlord agrees to hold
Tenant harmless for any liens existing at the time of execution of said lease.
(V) Sale of Premises. In the event of any sale or exchange of the
Premises by Landlord and the assignment of this lease to the purchaser thereof,
Landlord shall be and is hereby relieved of all. liability (except for that
liability that may have already accrued (whether known or unknown) prior to said
sale or exchange, under any and all of its covenants and obligations contained
or derived from this Lease arising out of any act, occurrence or omission
occurring after the consummation of such sale or exchange and assignment; and
the purchaser and assignee at such sale or exchange or any subsequent sale or
exchange of the Premises, shall be deemed, without further agreement between the
parties in any such purchase, to have assumed and agreed to carry out any and
all of the covenants and obligations of Landlord under this Lease.
(W) Impartial Construction. Both parties certify to their full
familiarity with the provisions hereof, and acknowledge that this Lease was
extensively negotiated by both parties each of which was afforded the
opportunity to consult with counsel should they elect to do so.
(X) Memorandum. Memorandum of Lease to be prepared, executed and
recorded by the parties hereto.
(Y) Addendum. The attached addendum is incorporated herein by reference
and made a part of this agreement.
IN WITNESS WHEREOF, the parties have duly executed this lease together
with the herein referred to Exhibits which are attached hereto, on the day and
year first above written in California.
KOWASHOJI U.S.A., INC. a California Corporation
By:
Its:
"Landlord"
ORANGE EMPIRE BREWING COMPANY, a California Corporation
By:
Its:
"Tenant"
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CONFIRMATION OF COMMENCEMENT
OF
LEASE TERM
It Is Hereby Agreed That:
The lease dated March 31, 1993, by and between Kowashoji USA, Inc.,
Landlord, and Orange Empire Brewing Company, Tenant, for the space known as 3397
Seventh Street, Riverside, California has a commencement date of August 15,
1993.
This confirmation is made pursuant to Paragraph 3 (C) of the
above-referenced lease.
LANDLORD TENANT
Kowashoji USA, Inc. Orange Empire Brewing Company
BY: BY:
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ADDENDUM
To that certain lease dated March 1, 1993, by and between KOWASHOJI
USA, INC., as Landlord, and Orange Empire Brewing Company, as Tenant, for the
property located at 3397 Seventh Street, Riverside California.
Said additional terms are as follows:
1. Tenant shall, at Tenant's sole cost and expense, provide all Tenant
Improvements, subject to Paragraph 9 of said Lease. Tenant at its cost,
shall have the right to make non-structural alterations to the interior
of the building constituting a part of the Premises that Tenant
requires in order to conduct its business on the Premises. In making
any alterations, Tenant shall comply with the following:
(a) Tenant shall submit reasonably detailed final
plans and specifications and working drawings of the
proposed alterations and the name of its contractor
at least fifteen (15) days before the date it intends
to commence the alterations for Landlord's approval
which approval shall not be unreasonably withheld or
delayed; provided, however, that Landlord may, in its
sole discretion, withhold its consent to any
alterations which will increase the exterior height
elevations of the building or other improvements.
Concurrently with the submission of the plans and
specifications, Tenant shall deliver a written
statement as to the expected cost of said
alterations. Landlord's failure to approve within 15
days shall be deemed approval.
(b) The alterations shall not be commenced until
seven (7) business days after Landlord has received
written notice from Tenant stating the date the
alterations are to commence so that Landlord can post
and record an appropriate Notice of Non-
Responsibility.
(c) The alterations shall be approved by all
appropriate governmental agencies, and all applicable
permits and authorizations shall be obtained before
commencement of the alterations and copies thereof
shall be delivered to Landlord prior to commencement
of any alterations.
(d) All alterations shall be completed with due
diligence in substantial compliance with the approved
plans and specifications and working drawings and all
applicable laws.
(e) Tenant's contractor shall be a bondable,
currently licensed contractor within the state of
California.
(f) Before commencing the alterations and at all
times during construction, Tenant's contractor shall
maintain insurance as provided herein naming Landlord
as an additional insured, a copy of the construction
contract and the certificate of insurance shall be
provided to Landlord prior to commencing the
alterations.
(g) Notwithstanding anything to the contrary
contained herein, the alterations shall not result in
the diminution of the value of the Premises.
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Revised 3/10/93
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2. Landlord to deliver the premises and the existing mechanical system
in good working order.
3. Any restaurant equipment existing on the leased premises is
taken "As- is" without warranty of any kind.
4. Tenant to be responsible for obtaining all necessary approvals
by all required agencies, including City Planning and County Health Department
at Tenant's sole cost and expense.
5. Tenant to pay to Landlord upon delivery of possession the sum
of $7,500 to be applied to Landlord's buyout of lease with existing Tenant.
6. This Lease may be terminated by Tenant without damages in the
event Landlord fails to provide both on the following dates specified:
A. Written evidence of agreement with existing tenant to
terminate their lease (said agreement to be provided by
Landlord no later than April 1, 1993).
B. Delivery of possession to Orange Empire Brewing Company for
purposes of commencing tenant improvement work no later than
May 1, 1993.
7. Landscaping, painting and sidewalks of the Leased Premises to be in
good general repair, including lawn mowing, general weeding and trimming, touch
up paint, as needed, and filling of sidewalk cracks, if any.
8. Orange Empire Brewing Company agrees to refrain from negotiating
directly with Landlord's existing Tenant and further agrees not to contact
Landlord's Tenant without prior authorization of Landlord.
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EXHIBIT A
PHOTO OF PARKING LOT