EXHIBIT 10.11
LEASE BETWEEN
Keith Engineering, Inc.
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TENANT
AND
Scripps Center Associates
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LANDLORD
FOR SPACE AT
Scripps Center
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2995 Red Hill Avenue
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Costa Mesa, CA
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August 16, 1989
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DATE
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TABLE OF CONTENTS
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SECTION PAGE
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1.1 Definitions
1.2 Schedules and Addenda
2.1 Lease of Premises
2.2 Prior Occupancy
3.1 Rent
3.2 Base Rent Adjustment
3.3 Deposit; Prepaid Rent
3.4 Operating Costs
3.5 Taxes
4.1 Construction Conditions
4.2 Commencement of Possession
5.1 Project Services
5.2 Interruption of Services
6.1 Use of Leased Premises
6.2 Insurance
6.3 Repairs
6.4 Assignment and Subletting
6.5 Estoppel Certificate
6.6 Brokerage Commissions
7.1 Substitute Premises
7.2 Additional Rights Reserved to Landlord
8.1 Casualty and Untenantability
9.1 Condemnation
10.1 Waiver of Certain Claims
10.2 Waiver of Subrogation
10.3 Limitation of Landlord's Liability
11.1 Tenant's Default
11.2 Remedies of Landlord
12.1 Surrender of Leased Premises
12.2 Hold Over Tenancy
13.1 Quiet Enjoyment
13.2 Accord and Satisfaction
13.3 Severability
13.4 Subordination and Attornment
13.5 Applicable Law
13.6 Binding Effect; Gender
13.7 Time
13.8 Entire Agreement
13.9 Notices
Execution
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LIST OF SCHEDULES
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1. Description of Premises and Floor Plan
2. Rules and Regulations
3. Utility Services
4. Maintenance Services
5. Parking
6. Work Letter
7. Certificate of Acceptance
8. Boma Standards
9. Sign Program
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LEASE
This Lease made August 16, 1989 between Scripps Center Associates, A California
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General Partnership ("Landlord") and Keith Engineering, Inc. DBA The Keith
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Companies ("Tenant").
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ARTICLE ONE
DEFINITIONS, SCHEDULES AND ADDENDA
1.1 DEFINITIONS:
a. LEASED PREMISES shall mean 2995 RED HILL AVENUE as described in SCHEDULE 1.
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b. BUILDING shall mean a 2 STORY BUILDING located at 2995 RED HILL AVENUE,
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COSTA MESA, CALIFORNIA, SOMETIMES REFERRED TO AS BUILDING C.
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c. PROJECT shall mean SCRIPPS CENTER located at THE SOUTHWEST CORNER OF KALMUS
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AND RED HILL AVENUE, COSTA MESA, CALIFORNIA, consisting of 3 buildings.
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d. TENANT'S SQUARE FOOTAGE shall mean 70,000 rentable square feet; TOTAL
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SQUARE FOOTAGE of the Building shall mean 87,722 rentable square feet, and TOTAL
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SQUARE FOOTAGE of the Project shall mean 230,196 rentable square feet, which may
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be adjusted pursuant to paragraph 7.2 (iii) below, subject to adherence to BOMA
standard as attached hereto in Schedule 8.
e. LEASE COMMENCEMENT DATE shall mean 02/01/90, which may be adjusted
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pursuant to the provisions of this Lease; LEASE EXPIRATION DATE shall mean
O1/31/2000; LEASE TERM shall mean the period between Lease Commencement Date and
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Lease Expiration Date.
f. BASE RENT shall mean those amounts pursuant to Article 14.1 of the Addendum
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payable in monthly installments plus applicable sales tax, if any; the total
Base Rent payable over the entire Lease Term is $8,736,000.00.
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g. TENANT'S PRO RATA SHARE OF BUILDING OPERATING COSTS shall mean 79.8%, which
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may be adjusted pursuant to paragraph 7.2 (iii) below. TENANT'S PRO RATA SHARE
OF PROJECT OPERATING COSTS shall mean 30.41%, which may be adjusted pursuant to
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paragraph 7.2 (iii) below. Tenant's Pro Rata Share of Project Operating Costs
for the first year of the Lease Term is estimated to be $118,300.00 ($1.69 per
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square foot of Tenant's Square Footage) payable in monthly installments of $
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9,858.33 subject to adjustment pursuant to Article 3.4 b and c below.
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h. DEPOSIT shall mean $45,500; PREPAID RENT shall mean $49,000.00, of which
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$49,000.00 represents the first monthly installment of Base Rent, and $0
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represents the estimated last monthly installment(s) of Base Rent.
i. PERMITTED PURPOSE shall mean GENERAL OFFICE USE.
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j. AUTHORIZED NUMBER OF PARKING SPACES shall mean 280 spaces at a rate of $0.
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Which is a ratio of four spaces per 1000 rentable square feet.
k. MANAGING AGENT shall mean COLDWELL BANKER MANAGEMENT SERVICES whose address
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is 4040 MACARTHUR BOULEVARD, NEWPORT BEACH, CALIFORNIA 92660.
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l. BROKER OF RECORD shall mean COLDWELL BANKER COMMERCIAL REAL ESTATE
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SERVICES.
m. LANDLORD'S MAILING ADDRESS: SCRIPPS CENTER ASSOCIATES C/O ALLSTATE
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INSURANCE COMPANY, ALLSTATE PLAZA, BUILDING E-4, NORTHBROOK, ILLINOIS 60062
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ATTEN: REAL ESTATE INVESTMENT DIVISION.
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n. TENANT'S MAILING ADDRESS: PRIOR TO COMMENCEMENT DATE, 200 BAKER STREET,
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COSTA MESA CALIFORNIA, 92626. AFTER LEASE COMMENCEMENT DATE 2995 RED HILL
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AVENUE, COSTA MESA CALIFORNIA, 92626.
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1.2 SCHEDULES AND ADDENDA: The schedules and addenda listed below are
incorporated into this lease by reference unless lined out. The terms of
schedules, exhibits and typewritten addenda, if any, attached or added hereto
shall control over any inconsistent provisions in the paragraphs of this Lease.
a. Schedule 1: Description of Premises and Floor Plan
b. Schedule 2: Rules and Regulations
c. Schedule 3: Utility Services
d. Schedule 4: Maintenance Services
e. Schedule 5: Parking
f. Schedule 6: Work Letter
g. Schedule 7: Certificate of Acceptance
ARTICLE TWO
PREMISES
2.1 LEASE OF PREMISES: In consideration of the Rent and the provisions of
this Lease, Landlord leases to Tenant and Tenant accepts from Landlord the
Leased Premises. Tenant's Square Footage is an amount based on The BOMA
standards as attached hereto in Schedule 8.
2.2 PRIOR OCCUPANCY: Tenant shall not occupy the Leased Premises prior to
Lease Commencement Date except with the express prior written consent of
Landlord. If with Landlord's consent Tenant occupies the Leased Premises,
Tenant shall pay Landlord for the period from the first day of such occupancy
rent in the amount specified in Article 1.1 to be payable on the first day of
such occupancy and thereafter on the first day of every calendar month until the
first day of the Lease Term. A prorated monthly installment shall be paid for
the fraction of the month if Tenant's occupancy of the Leased Premises commences
on any day other than the first day of the month. If Tenant shall occupy the
Leased Premises prior to Lease Commencement Date, all covenants
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and conditions of this Lease shall be binding on the parties commencing at such
prior occupancy.
ARTICLE THREE
PAYMENT OF RENT AND OPERATING COSTS
3.1 RENT: Tenant shall pay each monthly installment of Base Rent in advance
on the first calendar day of each month, together with each monthly installment
of Tenant's Pro Rata Share of Project Operating Costs. Monthly installments for
any fractional calendar month, at the beginning or and of the Lease Term, shall
be prorated based on the number of days in such month. Base Rent, Tenant's Pro
Rata Share of Building Operating Costs and Tenant's Pro Rata Share of Project
Operating Costs, together with all other amounts payable by Tenant to Landlord
under this Lease, including, without limitation, any late charges and interest
due Landlord for Rent not paid when due, shall be sometimes referred to
collectively as "Rent". Tenant shall pay all Rent, without deduction or set-off,
to Landlord or Managing Agent at a place specified by Landlord. Rent not paid
when due shall bear interest until paid, at the rate of 2% per month from the
date when due. Tenant shall also pay a late charge of $50 with each late payment
of rent, if rent is not paid within ten days of the due date.
3.3 (Sic.) DEPOSIT; PREPAID RENT: Tenant has paid to Landlord the Deposit
and Prepaid Rent as security for performance of Tenant's obligations under this
Lease. In the event Tenant fully complies with all the terms and conditions of
this Lease, the Deposit shall be refunded to Tenant, without interest unless
otherwise required by law, upon expiration of this Lease. Landlord may, but is
not obligated to, apply a portion of the Deposit to cure any default hereunder
and Tenant shall pay on demand the amount necessary to restore the Deposit in
full within 10 days after notice by Landlord.
3.4 OPERATING COSTS: Tenant shall pay Tenant's Pro Rata Share of Building
Operating Costs and Project Operating Costs as follows:
a. "Building Operating Costs" shall mean all expenses relating to the
Leased Premises or the Building not for the exclusive use of the Tenant or
for the exclusive use of any other tenant, which are shared in common with
other tenants in the Building, including but not limited to: utilities not
separately metered to individual tenants; insurance premiums and (to the
extent used) deductibles; maintenance, repairs and replacements;
refurbishing and repainting; cleaning, janitorial and other services;
equipment, tools, materials and supplies; air conditioning, heating and
elevator service; security; employees and contractors; resurfacing and
restripping of walks, drives and parking areas; signs, directories and
markers; landscaping; and snow and rubbish removal. Building Operating
Costs shall not include expenses for legal services, real estate brokerage
and leasing commissions, Landlord's income taxes, income tax accounting,
interest, depreciation, general corporate overhead, or capital improvements
to the Building except for capital
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improvements installed for the purpose of reducing or controlling expenses,
or required by any governmental or other authority having or asserting
jurisdiction over the Building. If any expense, though paid in one year,
relates to more than one calendar year such expenses shall be
proportionately allocated among such related calendar years.
b. "Project Operating Costs" shall mean all expenses relating to the
Project which are shared in common with the Building and other buildings in
the Project not for the exclusive use of the Building and not exclusively
attributable to the Building or any other building in the Project,
including but not limited to: real estate taxes and assessments; gross
rents, sales, use, business, corporation, or other taxes (except income
taxes); utilities not separately paid by tenants; insurance premiums and
(to the extent used) deductibles; maintenance, repairs and replacements;
refurbishing and repainting; cleaning, janitorial and other service not
exclusively performed for other buildings; equipment, tools, materials and
supplies; property management including management fees comparable to those
being paid at similar buildings in the Costa Mesa area; security; employees
and contractors; resurfacing and restripping of walks, drives and parking
areas; signs, directories and markers; landscaping; and snow and rubbish
removal. Project Operating Costs shall not include expenses for legal
services, real estate brokerage and leasing commissions, Landlord's income
taxes, income tax accounting, interest, the depreciation, general corporate
overhead, or capital improvements to the Project except for capital
improvements installed for the purpose of reducing or controlling expenses,
or required by any governmental or other authority having or asserting
jurisdiction over the Project. If any expense, though paid in one year,
relates to more than one calendar year such expenses shall be
proportionately allocated among such related calendar years.
c. Tenant shall pay, in equal monthly installments, Tenant's Pro Rata
Share of Building Operating Costs and Project Operating Costs pursuant to
paragraph 1.1g above for each calendar year which falls (in whole or in
part) during the Lease Term (prorated for any partial calendar year at the
beginning or end of the Lease Term). Annually, or from time to time, based
on actual and good faith projections of Project Operating Cost data,
Landlord may adjust its estimate of Operating Costs upward or downward. All
monthly installments are due 15 days after notice to Tenant of a revised
estimate of Building Operating Costs and Project Operating Costs and shall
be in equal monthly amounts sufficient to result in the unpaid balance of
Tenant's Pro Rata Share of Building Operating Costs and Project Operating
Costs being paid in full by the end of the calendar year in which such
adjustment is made, and thereafter shall be in equal amounts sufficient to
result in Tenant's Pro Rata Share of Building Operating Costs and Project
Operating Costs being paid in full by the end of each succeeding calendar
year. In the event that the Project is not
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fully leased during any calendar year, Landlord may make appropriate
adjustments to the Building Operating Costs and Project Operating Costs to
adjust such expenses to a 95% leased basis, and such adjusted expenses
shall be used for purposes of this paragraph 3.4.
d. As soon as possible, each year Landlord shall compute the actual
Building Operating Costs and Project Operating Costs for the prior calendar
year, and shall give notice thereof to Tenant. Within 30 days after receipt
of such notice, Tenant shall pay any deficiency in Tenant's Pro Rata Share
of Building Operating Costs and Project Operating Costs for the prior
calendar year (prorated for any partial calendar year at the beginning or
end of the Lease Term. In the event of overpayment by Tenant, Landlord
shall apply the excess to the next payment of Rent when due, until such
excess is exhausted or until no further payments of Rent are due, in which
case, Landlord shall pay to Tenant the balance of such excess within 30
days thereafter.
3.5 TAXES: In addition to the Base Rent and other sums to be paid by
Tenant hereunder, tenant shall reimburse Landlord, as additional Rent, upon
demand, any and all taxes payable by Landlord, (a) upon, measured by or
reasonably attributable to the cost or value of Tenant's equipment, fixtures and
other personal property located in the Leased Premises or by the cost or value
of any leasehold improvements made in or to the Leased Premises by Tenant,
regardless of whether title to such improvements are in Tenant or Landlord; (b)
upon or measured by the monthly rental payable hereunder, including, without
limitation, any gross receipts tax or excise tax; (c) upon or with respect to
the possession, leasing, operation, management, maintenance, alteration, repair,
use or occupancy by Tenant of the Leased Premises or any portion thereof except
for income taxes; (d) upon this transaction or any document to which Tenant is a
party creating or transferring an interest or an estate in the Leased Premises.
ARTICLE FOUR
IMPROVEMENTS BY LANDLORD
4.1 CONSTRUCTION CONDITIONS: Landlord shall construct the improvements
described in the work letter attached hereto as SCHEDULE 6 (the "Improvements").
The expenses to be incurred as between Landlord and Tenant for construction of
the Improvements are specified in SCHEDULE 6. If any act, omission or change
requested or caused by Tenant increases the cost of work or materials or the
time required for completion of construction, Tenant shall reimburse Landlord or
such increase in cost at the time the increased cost is incurred and shall
reimburse Landlord for any loss in Rent at the time the Rent would have become
due.
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4.2 COMMENCEMENT OF POSSESSION: If the Leased Premises are not
substantially complete by the scheduled Lease Commencement Date, subject only to
items which do not materially affect the use thereof, then the Lease business
Commencement Date shall be extended to the date 5 business days after Landlord
shall notify Tenant that the Leased Premises are ready for occupancy. In such an
event the Lease Expiration Date shall remain the same. If Landlord fails to
cause the Leased Premises to be ready for occupancy at the time of the scheduled
Lease Commencement Date, (i)neither Landlord nor Landlord's agents, officers,
employees, or contractors shall be liable for any damage, loss, liability or
expense caused thereby, (ii) nor shall this Lease become void or voidable unless
such failure continues for more than 180 days, in which case Tenant may
terminate this Lease upon 20 days written notice to Landlord. Prior to occupying
the Leased Premises, Tenant shall execute and deliver to Landlord a letter in
the form attached as SCHEDULE 7, acknowledging the Lease Commencement Date and
certifying that the Improvements have been substantially completed and that
Tenant has examined and accepted the Leased Premises. Tenant hereby authorizes
any agent or employee who receives the keys to the Leased Premises on behalf of
Tenant to execute and deliver such letter in Tenant's name. If Tenant fails to
deliver such letter, Tenant shall conclusively be deemed to have made such
acknowledgment and certification by occupying the Leased Premises.
ARTICLE FIVE
PROJECT SERVICES
5.1 PROJECT SERVICES: Landlord shall furnish (unless other arrangements
are agreed to):
a. Utility Services: The utility services listed on SCHEDULE 3 ("Utility
Services"). Should Tenant, in Landlord's sole judgment, use additional,
unusual or excessive Utility Services, Landlord reserves the right to
charge for such services as determined either by a separate submeter,
installed at Tenant's expense, or by methods specified by an engineer
selected by Landlord.
b. Maintenance Services: Maintenance of all interior and exterior areas
including lighting, landscaping, cleaning, painting, maintenance and repair
of the exterior of the Building and its structural portions and roof,
including all of the services listed on SCHEDULE 4 ("Maintenance
Services").
c. Parking: Parking under the terms and conditions described in SCHEDULE 5
("Parking")
Utility Services, Maintenance Services and Parking described above
shall be collectively referred to as "Project Services". The cost of
Project Services shall be either billed to and paid for directly by Tenant
or shall be part of Building Operating Costs or Project Operating Costs.
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5.2 INTERRUPTION OF SERVICES: Landlord does not warrant that any of the
Project Services will be free from interruption. Any Project Service may be
suspended by reason of accident or of necessary repairs, alterations or
improvements, or by strikes or lockouts, or by reason of operation of law, or
causes beyond the reasonable control of Landlord. Subject to possible rent
abatement as may be provided pursuant to the conditions described in Article 8,
any such interruption or discontinuance of such Project Services shall never be
deemed a disturbance of Tenant's use and possession of the Leased Premises, or
render Landlord liable to Tenant for damages by abatement of rent or otherwise,
or relieve Tenant from performance of Tenant's obligations under this Lease.
However, Landlord shall use its best efforts to cause the Project Services
furnished by or through Landlord to be restored promptly.
ARTICLE SIX
TENANT'S COVENANTS
6.1 USE OF LEASED PREMISES: Tenant agrees to:
a. Permitted Usage: Continuously use the Leased Premises for the Permitted
Purpose only and for no other purpose.
b. Compliance with Laws: Comply with the provisions of all recorded
covenants, conditions and restrictions and all building, zoning, fire and
other governmental laws, ordinances, regulations or rules applicable to the
Leased Premises and all reasonable requirements of the carriers of
insurance covering the Project.
c. Nuisances or Waste: Not do or permit anything to be done in or about
the Leased Premises, or bring or keep anything in the Leased Premises that
may unreasonably increase Landlord's fire and extended coverage insurance
premium, damage the Building or the Project, constitute waste, constitute
an immoral purpose, or be a nuisance, public or private, or menace or other
disturbance to tenants of adjoining premises or anyone else, or use or
store any toxic chemicals, except for copier toners and developers, and
blueprint machine ammonia, wastes, elements or substances in the Leased
Premises.
d. Alterations and Improvements: Make no alterations or improvements to
the Leased Premises without the prior written approval of Landlord and
Landlord's mortgagee, if any. Any such alterations or improvements by
Tenant shall be done in a good and workmanlike manner, at Tenant's expense,
by a licensed contractor approved by Landlord in conformity with plans and
specifications approved by Landlord. If requested by Landlord, Tenant will
post a bond or other security reasonably satisfactory to Landlord to
protect Landlord against liens arising from work performed for Tenant. If
alterations or improvements are less than $5,000 Tenant, will not be
required to post a bond or other security.
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e. Liens: Keep the Leased Premises, the Building and the Project free from
liens arising but of any work performed, materials furnished or obligations
incurred by or for Tenant. If, at any time, a lien or encumbrance is filed
against the Leased Premises, the Building or the Project as a result of
Tenant's work, materials or obligations*, Tenant shall promptly discharge
such lien or encumbrance. If such lien or encumbrance has not been removed
within 30 days from the date it is filed, Tenant agrees to deposit with
Landlord at Landlord's request cash or a bond in an amount equal to 125% of
the amount of the lien, to be held by Landlord as security for the lien
being discharged.
* (except for those Improvements defined in Schedule 6 of the Lease for
initial Tenant Improvements).
f. Rules and Regulations: Observe, perform and abide by all the rules and
regulations reasonably promulgated by Landlord from time to time. SCHEDULE
2 sets forth Landlord's rules and regulations in effect on the date hereof.
g. Signage: **Obtain the prior approval of the Landlord and Landlord's
mortgagee, if any, before placing any sign or symbol in doors or windows or
elsewhere in or about the Leased Premises, or upon any other part of the
Building, or Project including building directories. Any signs or symbols
which have been placed without Landlord's approval may be removed by
Landlord. Upon expiration or termination of this Lease, all signs
installed by Tenant shall be removed and any damage resulting therefrom
shall be promptly repaired, or such removal and repair may be done by
Landlord and the cost charged to Tenant as Rent.
**Tenant shall have the right to display its name on the exterior of the
building in accordance with the sign ordinance for the Project an approved
by the City of Costa Mesa attached hereto as schedule 9.
6.2 INSURANCE: Tenant shall, at its own expense, procure and maintain
during the Lease Term comprehensive general liability insurance with respect to
the Leased Premises and Tenant's activities in the Leased Premises and in the
Building and the Project, providing bodily injury, broad form property damage
with a maximum $1,000 deductible, as follows:
a. $1,000,000, with respect to bodily injury or death to any one person;
b. $3,000,000, with respect to bodily injury or death arising out of any
one occurrence;
c. $1,000,000 with respect to property damage or other loss arising out of
any one occurrence;
d. fire and extended casualty insurance covering Tenant's trade fixtures,
merchandise and other personal property in a reasonable amount; and
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e. worker's compensation insurance in at least the statutory amounts.
Nothing in this paragraph 6.2 shall prevent Tenant from obtaining insurance
of the kind and in the amounts provided for under this paragraph under a blanket
insurance policy covering other properties as well as the Leased Premises,
provided, however, that any such policy of blanket insurance (i) shall specify
the amounts of the total insurance allocated to the Leased Premises, which
amounts shall not be less than the amounts required by sections a. through c.
hereof, and (ii) such amounts so specified shall be sufficient to prevent any
one of the assureds from becoming a co-insurer within the terms of the
applicable policy, and (iii) shall, as to the Leased Premises, otherwise comply
as to endorsements and coverage with the provisions of this paragraph.
Tenant's insurance shall be with a Best's Insurance Reports A+ rated
company (or A rated, if Class XIII or larger or with Design Professional
Insurance Company, or its successor). Landlord and Landlord's mortgagee, if
any, shall be named as "additional insureds" under Tenant's insurance, and such
Tenant's insurance shall be primary and non-contributing with Landlord's
insurance. Tenant's insurance policies shall contain endorsements requiring 30
days notice to Landlord and Landlord's mortgagee, if any, prior to any
cancellation, lapse or nonrenewal or any reduction in amount of coverage.
Tenant shall deliver to Landlord as a condition precedent to its taking
occupancy of the Leased Premises a certificate or certificates evidencing such
insurance.
6.3 REPAIRS: Tenant, at its sole expense, agrees to maintain the interior
of the Leased Premises in a neat, clean and sanitary condition. If Tenant fails
to maintain or keep the Leased Premises in good repair and such failure
continues for 10 days after written notice from Landlord or if such failure
results in a nuisance or health or safety risk, Landlord may perform any such
required maintenance and repairs and the cost thereof shall be payable by Tenant
as Rent within 10 days of receipt of an invoice from Landlord. Tenant shall
also pay to Landlord the costs of any repair ordinary wear and tear excepted to
the Building or Project necessitated by any act or neglect of Tenant. Tenant
waives the provisions of Sections 1941 of the Civil Code of the State of
California and any other statutes or laws permitting repairs by a tenant at the
expense of a landlord or to terminate a lease by reason of the condition of the
Leased Premises.
6.4 ASSIGNMENT AND SUBLETTING: Tenant shall not assign, mortgage, pledge
or encumber this Lease, or permit all or any part of the Leased Premises to be
subleased to another, without the prior written consent of Landlord and
Landlord's mortgagee, if any. Any transfer of this Lease by merger,
consolidation, reorganization or liquidation of Tenant, or by operation of law,
or change in ownership of or power to vote the majority of the outstanding
voting stock of a
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corporate Tenant, or by change in ownership of a controlling partnership
interest in a partnership Tenant, shall constitute an assignment for the
purposes of this paragraph. Tenant may sublet or assign, without Landlord's
approval, but with notice to Landlord to any entity in which it holds, or its
shareholders hold, at least a 33% interest.
Landlord agrees that it will not unreasonably withhold its consent to
Tenant's assigning this Lease or subletting the Leased Premises. In addition to
other reasonable bases, Tenant hereby agrees that Landlord shall be deemed to be
reasonable in withholding its consent, if (a) (Sic.) or (c) to any party who is
then a tenant of the Building or the Project if Landlord has comparable area; or
(d) Tenant is in default under any of the terms, covenants, conditions,
provisions and agreements of this Lease past any period of cure provided for
herein at the time of request for consent or on the effective date of such
subletting or assigning; or (e) (Sic.) or (f) the proposed subtenant or assignee
is, in Landlord's good faith judgment, incompatible with other tenants in the
Building, or seeks to use any portion of the Leased Premises for a use not
consistent with other uses in the Building, or is financially incapable of
assuming the obligations of this Lease. Tenant shall submit to Landlord the
name of a proposed assignee or subtenant, the terms of the proposed assignment
or subletting, the nature of the proposed subtenant's business and such
information as to the assignee's or subtenant's financial responsibility and
general reputation as Landlord may reasonably require.
No subletting or assignment, even with the consent of Landlord, shall
relieve Tenant of its primary obligation to pay the Rent and to perform all of
the other obligations to be performed by Tenant hereunder. The acceptance of
rent by Landlord from any other person shall not be deemed to be waiver by
Landlord of any provision of this Lease or to be a consent to any assignment,
subletting or other transfer. Consent to one assignment, subletting or other
transfer shall not be deemed to constitute consent to any subsequent assignment,
subletting or other transfer.
6.5 ESTOPPEL CERTIFICATE: From time to time and within 10 days after
request by Landlord, Tenant shall execute and deliver a certificate to any
proposed lender or purchaser, or to Landlord, together with a true and correct
copy of this Lease, certifying with any appropriate exceptions, (i) that this
Lease is in full force and effect without modification, (ii) the amount, if any,
of Prepaid Rent and Deposit paid by Tenant to Landlord, (iii) the nature and
kind of concessions, rental or otherwise, if any, which Tenant has received or
is entitled to receive, (iv) that Landlord has performed all of its obligations
due to be performed under this Lease and that there are no defenses,
counterclaims, deductions or offsets outstanding or other excuses for Tenant's
performance under this Lease, and (v) any other fact reasonably requested by
Landlord or such proposed lender or purchaser.
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6.6 BROKERAGE COMMISSIONS: Tenant represents to the Landlord that no
broker or agent was instrumental in procuring or negotiating or consummating
this Lease other than Broker of Record, and Tenant agrees to defend and
indemnify Landlord against any loss, expense or liability incurred by Landlord
as a result of a claim by any other broker or finder in connection with this
Lease or its negotiation.
ARTICLE SEVEN
LANDLORDS RESERVED RIGHTS
7.2 (Sic.) ADDITIONAL RIGHTS RESERVED TO LANDLORD: Without notice and
without liability to Tenant or without effecting an eviction or disturbance of
Tenant's use or possession, Landlord shall have the right to (i) grant utility
easements or other easements in, or replat, subdivide or make other changes in
the legal status of the land underlying the Building or the Project as Landlord
shall deem appropriate in its sole discretion, provided such changes do not
substantially interfere with Tenant's use of the Leased Premises for the
Permitted Purpose; (ii) enter the Leased Premises at reasonable times and at any
time in the event of an emergency to inspect, alter or repair the Leased
Premises or the Building and to perform any acts related to the safety,
protection, reletting, sale or improvement of the Leased Premises or the
Building; (iii) (Sic.) (iv) change the name or street address of the Building or
the Project; (v) install and maintain signs on and in the Building and the
Project; and (vi) make such reasonable rules and regulations as, in the sole
judgment of Landlord, may be needed from time to time for the safety of the
tenants, the care and cleanliness of the Leased Premises, the Building and the
Project and the preservation of good order therein.
ARTICLE EIGHT
CASUALTY AND UNTENANTABILITY
8.1 CASUALTY AND UNTENANTABILITY: If the Building is made substantially
untenantable or if Tenant's use and occupancy of the Leased Premises are
substantially interfered with due to damage to the common areas of the Building
or the Leased Premises are made wholly or partially untenantable by fire or
other casualty, Landlord may, by notice to Tenant within 60 days after the
damage, terminate this Lease. Such termination shall become effective as of the
date of such casualty. If at any time during the last six months of the term of
this Lease, there is damage, which the Leased Premises are made partially
untenantable, Landlord may at Landlord's option cancel and terminate this Lease
as of the date of occurrence of such damage by giving written notice to Tenant
of Landlord's election to do so within 30 days after the date of occurrence of
such damage. In the event that Tenant has an option to renew this Lease, and the
time within which said option may be exercised has not yet expired, Tenant shall
exercise such option, if it is to be exercised at all, no later than 20 days
after the occurrence of said damage during the last six months of the term of
this Lease. If Tenant duly exercises such option during said 20 day period,
Landlord shall repair such damage as
14
soon as reasonably possible and this Lease shall continue in full force and
effect. If Tenant fails to exercise such option during said 20 day period, then
Landlord may, at Landlord's option, terminate and cancel this Lease as of the
expiration of said 20 day period by giving written notice to Tenant of
Landlord's election to do so.
If the Leased Premises are made partially or wholly untenantable by fire or
other casualty and this Lease is not terminated as provided above, Landlord
shall restore the Leased Premises to the condition specified in the work letter
described in SCHEDULE 6. Tenant waives the provisions of Section 1932 of the
Civil Code of the State of California and any other statute or law permitting
Tenant to terminate this lease in the event of casualty to the Leased Premises.
If the Landlord does not terminate this Lease as provided above, and
Landlord fails within 180 days from the date of such casualty to restore the
damaged common areas thereby eliminating substantial interference with Tenant's
use and occupancy of the Leased Premises, or fails to restore the Leased
Premises to the condition specified in the work letter described in SCHEDULE 6,
Tenant may terminate this Lease as of the end of such 180 day period.
In the event of termination of this Lease pursuant to this article 8, Rent
shall be prorated on a per diem basis and paid to the date of the casualty,
unless the Leased Premises shall be tenantable, in which case Rent shall be
payable to the date of the lease termination. If the Leased Premises are
untenantable and this Lease is not terminated, Rent shall abate on a per diem
basis from the date of the casualty until the Leased Premises are ready for
occupancy by Tenant. If part of the Leased Premises are untenantable, Rent
shall be prorated on a per diem basis and apportioned in accordance with the
part of the Leased Premises which is usable by Tenant until the damaged part is
ready for Tenant's occupancy. Notwithstanding the foregoing, if any damage was
proximately caused by an act or omission of Tenant, its employees, agents,
contractors, licensees or invitees, then, in such event, Tenant agrees that Rent
shall not abate or be diminished during the term of this Lease.
ARTICLE NINE
CONDEMNATION
9.1 CONDEMNATION: If all or any part of the Leased Premises shall be taken
under power of eminent domain or sold under imminent threat to any public
authority or private entity having such power, this Lease shall terminate as to
the part of the Leased Premises so taken or sold, effective as of the date
possession is required to be delivered to such authority. In such event, Base
Rent and Tenant's Pro Rata Share of Building Operating Costs or Project
Operating Costs shall abate in the ratio that the portion of Tenant's Square
Footage taken or sold bears to Tenant's Square Footage. If a partial taking or
sale of the Leased Premises, the Building or the Project (i) substantially
reduces Tenant's Square Footage resulting in a
15
substantial inability of Tenant to use the Leased Premises for the Permitted
Purpose, or (ii) renders the Building or the Project commercially unviable to
Landlord in Landlord's sole opinion, either Tenant in the case of (i), or
Landlord in the case of (ii), may terminate this Lease by notice to the other
party within 30 days after the terminating party receives written notice of the
portion to be taken or sold. Such termination shall be effective 180 days after
notice thereof, or when the portion is taken or sold, whichever is sooner. All
condemnation awards and similar payments shall be paid and belong to Landlord,
except any amounts awarded or paid specifically to Tenant for removal and
reinstallation of Tenant's trade fixtures, personal property or Tenant's moving
costs.
ARTICLE TEN
WAIVER OF CERTAIN CLAIMS
10.1 WAIVER OF CERTAIN CLAIMS: * Tenant, to the extent permitted by law,
waives all claims it may have against Landlord, and against Landlord's agents
and employees for any damages sustained by Tenant or by any occupant of the
Leased Premises, or by any other person, resulting from any cause arising at any
time.* Tenant agrees to hold Landlord harmless and indemnified against claims
and liability for injuries to all persons and for damage to or loss of property
occurring in or about the Leased Premises, due to any act of negligence or
default under this Lease by Tenant, its contractors, agents, employees,
licensees and invitees.
*Except for those claims arising from the areas negligence or willful misconduct
of Landlord.
10.2 WAIVER OF SUBROGATION: Tenant and Landlord release each other and
waive any right of recovery against each other for loss or damage to the waiving
party or its respective property, which occurs in or about the Leased Premises,
whether due to the negligence of either party, their agents, employees,
officers, contractors, licensees, invitees or otherwise, to the extent that such
loss or damage is insurable against under the terms of standard fire and
extended coverage insurance policies. Tenant and Landlord agree that all
policies of insurance obtained by either of them in connection with the Leased
Premises shall contain appropriate waiver of subrogation clauses.
10.3 LIMITATION OF LANDLORD'S LIABILITY: The obligations of Landlord under
this Lease do not constitute personal obligations of the individual partners,
shareholders, directors, officers, employees or agents of Landlord, and Tenant
shall look solely to Landlord's interest in the Leased Premises and to no other
assets of Landlord for satisfaction of any liability in respect of this Lease.
Tenant will not seek recourse against the individual partners, shareholders,
directors, officers, employees or agents of Landlord or any of their personal
assets for such satisfaction. Notwithstanding any other
16
provisions contained herein, Landlord shall not be liable to Tenant, its
contractors, agents or employees for any consequential damages or damages for
loss of profits.
ARTICLE ELEVEN
TENANTS DEFAULT AND LANDLORD'S REMEDIES
11.1 TENANT'S DEFAULT: It shall be an "Event of Default" if Tenant shall
(i) fail to pay any monthly installment of Base Rent or of Tenant's Pro Rata
Share of Building Operating Costs or Project Operating Costs, or any other sum
payable hereunder within 10 days after such payment is due and payable; (ii)
violate or fail to perform any of the other conditions, covenants or agreements
herein made by Tenant, and such violation or failure shall continue for 15 days
after written notice thereof to Tenant by Landlord; (iii) make a general
assignment for the benefit of its creditors or file a petition for bankruptcy or
other reorganization, liquidation, dissolution or similar relief; (iv) have a
proceeding filed against Tenant seeking any relief mentioned in (iii) above; (v)
have a trustee, receiver or liquidator appointed for Tenant or a substantial
part of its property; (vi) abandon or vacate the Leased Premises; (vii) default
under any other lease, if any, within the Building or the Project; or (viii) if
Tenant is a partnership, if any partner of the partnership is involved in any
of the acts or events described in subparagraphs (i) through (vii) above.
11.2 REMEDIES OF LANDLORD: If an Event of Default occurs, Landlord, at any
time thereafter and without waiving any other rights available to Landlord, at
law or in equity, may: (i) If Landlord does not terminate this Lease or Tenant's
right to possession of the Leased Premises, and whether or not Tenant has
vacated or abandoned the Leased Premises, and provided that Landlord promptly
notifies Tenant in writing that Tenant's right to possession has not been
terminated and that Tenant may assign its interest in this lease with the
consent of Landlord, which consent shall not unreasonably be withheld (it being
understood that Landlord's acts of maintenance or preservation of the Leased
Premises or efforts to relet the same, or the appointment of a receiver upon the
initiative of Landlord to protect Landlord's interest under this lease shall not
constitute a termination of Tenant's right to possession), enforce all of
Landlord's rights and remedies under this lease, including the right to recover
rent as it becomes due under this lease; or (ii) declare the term hereof ended,
peaceably reenter the Leased Premises, upon three days prior notice, and remove
all persons therefrom. In this event, Landlord may exercise any of the remedies
set forth in California Civil Code Section 1951.2, including, without limitation
thereto, the right of Landlord to recover from Tenant an amount equal to the
"worth at the time of the award," as such term is defined in such Section, of
the then unpaid rent for the balance of the term of this Lease to the extent
that it exceeds the amount of any rental loss that Tenant proves could be
reasonably avoided.
17
The remedies granted to Landlord herein in an Event of Default by Tenant
are nonexclusive of any other legal remedies or rights available in law or
equity to Landlord. No act of Landlord shall be deemed an act terminating this
lease or declaring the lease term ended unless a written notice is served upon
Tenant by Landlord expressly setting forth therein that Landlord elects to
terminate this lease or to declare the term ended.
ARTICLE TWELVE
TERMINATION
12.1 SURRENDER OF LEASED PREMISES: On expiration of this Lease, if no Event
of Default exists, Tenant shall surrender the Leased Premises in the same
condition as when the Lease Term commenced, ordinary wear and tear excepted.
Except for furnishings, trade fixtures and other personal property installed at
Tenant's expense, all alterations, additions or improvements, whether temporary
or permanent in character, made in or upon the Leased Premises, either by
Landlord or Tenant, shall be Landlord's property and at the expiration or
earlier termination of the term shall remain on the Leased Premises without
compensation to Tenant, except if requested by Landlord, Tenant, at its expense
and without delay, shall remove any alterations, additions or improvements made
to the Leased Premises by Tenant designated by Landlord to be removed, and
repair any damage to the Leased Premises or the Building caused by such removal.
If Tenant fails to repair the Leased Premises, Landlord may complete such
repairs and Tenant shall reimburse Landlord for such repair and restoration.
Landlord shall have the option to require Tenant to remove all its property. If
Tenant fails to remove such property as required under this Lease, Landlord may
dispose of such property in its sole discretion without any liability to Tenant,
and further may charge the cost of any such disposition to Tenant.
12.2 HOLD OVER TENANCY: If Tenant shall hold over after the Lease
Expiration Date, Tenant may be deemed, at Landlord's option, to occupy the
Leased Premises as a tenant from month to month, which tenancy may be terminated
by one month's written notice. During such tenancy, Tenant agrees to pay to
Landlord, monthly in advance, an amount equal to 125% of all Rent which would
become due (based on Base Rent and Tenant's Pro Rata Share of Building Operating
Costs and Project Operating Costs payable for the last month of the Lease Term,
together with all other amounts payable by Tenant to Landlord under this Lease),
and to be bound by all of the terms, covenants and conditions herein specified.
If Landlord relets the Leased Premises or any portion thereof to a new tenant
and the term of such new lease commences during the period for which Tenant
holds over, Landlord shall be entitled to recover from Tenant all costs and
expenses, attorneys fees, damages or loss of profits incurred by Landlord as a
result of Tenant's failure to deliver possession of the Leased Premises to
Landlord when required under this Lease.
ARTICLE THIRTEEN
MISCELLANEOUS
18
13.1 QUIET ENJOYMENT: If and so long as Tenant pays all Rent and keeps and
performs each and every term, covenant and condition herein contained on the
part of Tenant to be kept and performed, Tenant shall quietly enjoy the Leased
Premises without hindrance by Landlord.
13.2 ACCORD AND SATISFACTION: No receipt and retention by Landlord of any
payment tendered by Tenant in connection with this Lease shall constitute an
accord and satisfaction, or a compromise or other settlement, notwithstanding
any accompanying statement, instruction or other assertion to the contrary
unless Landlord expressly agrees to an accord and satisfaction, or a compromise
or other settlement, in a separate writing duly executed by Landlord. Landlord
will be entitled to treat any such payments as being received on account of any
item or items of Rent, interest, expense or damage due in connection herewith,
in such amounts and in such order as Landlord may determine at its sole option.
13.3 SEVERABILITY: The parties intend this Lease to be legally valid and
enforceable in accordance with all of its terms to the fullest extent permitted
by law. If any term hereof shall be invalid or unenforceable, the parties agree
that such term shall be stricken from this Lease to the extent unenforceable,
the same as if it never had been contained herein. Such invalidity or
unenforceability shall not extend to any other term of this Lease, and the
remaining terms hereof shall continue in effect to the fullest extent permitted
by law, the same as if such stricken term never had been contained herein.
13.4 SUBORDINATION AND ATTORNMENT: The rights of Tenant under this Lease
are and shall be subordinate to the lien of any first mortgage or first deed of
trust, now or hereafter in force against the Building or the Project, and to all
advances made or hereafter to be made thereunder ("Superior Instruments"). If
requested in writing by Landlord or any first mortgagee or ground lessor of
Landlord, Tenant agrees to execute a subordination agreement required to further
effect the provisions of this paragraph.
In the event of any transfer in lieu of foreclosure or termination of a
lease in which Landlord is lessee or the foreclosure of any Superior Instrument,
or sale of the Property pursuant to any Superior Instrument, Tenant shall attorn
to such purchaser, transferee or lessor and recognize such party as landlord
under this Lease, provided such party acquires and accepts the Leased Premises
subject to this Lease. The agreement of Tenant to attorn contained in the
immediately preceding sentence shall survive any such foreclosure sale or
transfer.
13.5 APPLICABLE LAW: This Lease shall be construed according to the laws of
the state in which the Leased Premises are located.
13.6 BINDING EFFECT; GENDER: This Lease shall be binding upon and inure to
the benefit of the parties and their successors and assigns.
19
It is understood and agreed that the terms "Landlord" and "Tenant" and verbs and
pronouns in the singular number are uniformly used throughout this Lease
regardless of gender, number or fact of incorporation of the parties hereto.
13.7 TIME: Time is of the essence of this Lease.
13.8 ENTIRE AGREEMENT: This Lease and the schedules and addenda attached
set forth all the covenants, promises, agreements, representations, conditions,
statements and understandings between Landlord and Tenant concerning the Leased
Premises and the Building and the Project, and there are no representations,
either oral or written between them other than those in this Lease. This Lease
shall not be amended or modified except in writing signed by both parties.
Failure to exercise any right in one or more instances shall not be construed as
a waiver of the right to strict performance or as an amendment to this Lease.
13.9 NOTICES: All notices pursuant to this Lease shall be in writing and
shall be effective when received having been mailed or delivered (i) to Landlord
or Tenant at the addresses designated in Article 1.1 with a copy to the Managing
Agent, or (ii) to such other addresses as may hereafter be designated by either
party by written notice.
SUBMISSION OF THIS INSTRUMENT FOR EXAMINATION OR SIGNATURE BY TENANT DOES
NOT CONSTITUTE A RESERVATION OF OR OPTION FOR LEASE, AND IT IS NOT
EFFECTIVE AS A LEASE OR OTHERWISE UNTIL EXECUTION AND DELIVERY BY BOTH
LANDLORD AND TENANT. PROVIDED THE LANDLORD DELIVERS A SIGNED COPY OF THE
LEASE WITHIN THIRTY DAYS OF THE RECEIPT BY LANDLORD OF A COPY OF THE LEASE
SIGNED BY TENANT.
This Lease is executed as of the date first written above.
WITNESS: LANDLORD: SCRIPPS CENTER ASSOCIATES
A California General Partnership
/s/ William Bowman
- ------------------
/s/ Steven M. Case BY: ALLSTATE INSURANCE COMPANY
- ------------------
an Illinois Corporation
-----------------------
General Partner,
BY: /s/ M.J.Resnick
-------------------
BY: Signed (illegible)
And BY: ALLSTATE LIFE INSURANCE COMPANY
BY: ALLSTATE INSURANCE COMPANY
an Illinois Corporation
-----------------------
General Partner,
BY: /s/ M.J.Resnick
-------------------
BY: Signed (illegible)
20
WITNESS: TENANT:
Keith Engineering, Inc.
/s/ William Bowman By: /s/ Aram Keith
- ------------------ -----------------------
Its President (signed)
----------------------
/s/ Steven M. Case
- -------------------
By: /s/ Floyd Reid
-----------------------
Its Secretary (signed)
-----------------------
GUARANTOR:
By _______________________
By _______________________
21
SCHEDULE 1
DESCRIPTION OF THE LEASED PREMISES AND FLOOR PLAN
-------------------------------------------------
22
SCHEDULE 2
RULES AND REGULATIONS
---------------------
1. The sidewalks, entrances, halls, corridors, elevators and stairways of the
Building and Project shall not be obstructed or used as a waiting or lounging
place by tenant, its agents, servants, employees, invitees, licensees and
visitors. All entrance doors leading from any Leased Premises to the hallways
are to be kept closed at all times.
2. In case of invasion, riot, public excitement or other commotion, Landlord
also reserves the right to prevent access to the Building during the continuance
of same. Landlord shall in no case be liable for damages for the admission or
exclusion of any person to or from the Building.
3. Landlord will furnish tenant with two keys to each door lock on the Leased
Premises, and Landlord may make a reasonable charge for any additional keys and
access cards requested by tenant. Tenant shall not alter any lock, or install
new or additional locks or bolts, on any door without the prior written approval
of Landlord. In the event of such alteration for installation approval by
Landlord, tenant shall supply Landlord with a key for any such additional or
altered lock or bolt. Tenant, upon the expiration or termination of its
tenancy, shall deliver to Landlord all keys and access cards in tenant's
possession for all locks and bolts in the Building.
4. Tenant shall not cause any unnecessary labor by reason of tenant's
carelessness or indifference in the preservation of good order and cleanliness
of the Leased Premises. Tenant will see that (i) the windows are closed, (ii)
the doors securely locked, and (iii) all water faucets and other utilities are
shut off (so as to prevent waste or damage) each day before leaving the Leased
Premises. In the event tenant must dispose of crates, boxes, etc. which will
not fit into office waste paper baskets, it will be the responsibility of tenant
to dispose of same. In no event shall tenant set such items in the public
hallways or other areas of the Building or garage facility, excepting tenant's
owned Leased Premises, for disposal.
5. Landlord and Tenant shall mutually agree to prescribe the date, time, method
and conditions that any personal property, equipment, trade fixtures,
merchandise and other similar items shall be delivered to or removed from the
Building for Tenant's initial move in only. No iron safe or other heavy or bulky
object shall be delivered to or removed from the Building, except by experienced
safe men, movers or riggers approved in writing by Landlord. All damage done to
the Building by the delivery or removal of such items, or by reason of their
presence in the Building, shall be paid to Landlord, immediately upon demand, by
the tenant by, through, or under whom such damage was done. There shall not be
used in any space, or in the public halls of the Building, either by tenant or
by jobbers or others, in the
23
delivery or receipt of merchandise, any hand trucks, except those equipped with
rubber tires.
6. The walls, partitions, skylights, windows, doors and transoms that reflect
or admit light into passageways or into any other part of the Building shall not
be covered or obstructed by tenant.
7. The toilet rooms, toilets, urinals, wash bowls and water apparatus shall not
be used for any purpose other than for those for which they were constructed or
installed, and no sweepings, rubbish, chemicals, or other unsuitable substances
shall be thrown or placed therein. The expense of any breakage, stoppage or
damage resulting from violation(s) of this rule shall be borne by tenant, or by
its agents, employees, invitees, licensees or visitors, such breakage, stoppage
or damage shall have been caused.
8. No sign, name, placard, advertisement or notice visible from the exterior of
any Leased Premises, shall be inscribed, painted or affixed by tenant on any
part of the Building or Project without the prior written approval of Landlord.
All signs or letterings on doors, or otherwise, approved by Landlord shall be
inscribed, painted or affixed at the sole cost and expense of the tenant, by a
person approved by Landlord. A directory containing the names of all tenants in
the Building shall be provided by Landlord at an appropriate place. Tenant
shall have the right to display its name on the exterior of the building in
accordance with the sign ordinance for the Project as provided by the City of
Costa Mesa pursuant to paragraph 6.1G.
9. No signalling, telegraphic or telephonic instruments or devices, or other
wires, instruments or devices, shall be installed In connection with any Leased
Premises without the prior written approval of Landlord. Such installations,
and the boring or cutting for wires, shall be made at the sole cost and expense
of the tenant and under control and direction of Landlord. Landlord retains, in
all cases, the right to require (i) the installation and use of such electrical
protecting devices that prevent the transmission of excessive currents of
electricity into or through the Building, (ii) the changing of wires and of
their installation and arrangement underground or otherwise as Landlord may
direct, and (iii) compliance on the part of all using or seeking access to such
wires with such rules as Landlord may establish relating thereto. All such
wires used by tenant must be clearly tagged at the distribution boards and
junction boxes and elsewhere in the Building, with (i) the number of the Leased
Premises to which said wires lead, (ii) the purpose for which said wires are
used, and (iii) the name of the company operating same.
10. Tenant, their agents, servants or employees, shall not (a) go on the roof
of the Building, (b) use any additional method of heating or air conditioning
the Leased Premises, (c) sweep or throw any dirt or other substance from the
Leased Premises into any of the halls, corridors, elevators, or stairways of the
Building, (d) bring in or keep in or about the Leased Premises any vehicles
except for company vehicles of Tenant brought into the warehouse area for minor
repairs
24
or maintenance, or animals of any kind, (e) install any radio or television
antennae or any other device or item on the roof, exterior walls, windows or
windowsills of the Building, (f) place objects against glass partitions, doors
or windows which would be unsightly from the interior or exterior of the
Building, (g) use any Leased Premises (i) for lodging or sleeping, (ii) for
cooking (except that the use by tenant of Underwriter's Laboratory equipment for
brewing coffee, tea and similar beverages or a cafeteria for Tenant's own
employees shall be permitted, provided that such use is in compliance with law),
(h) cause or permit unusual or objectionable odor to be produced or permeate
from the Leased Premises, (including, without limitation, duplicating or
printing equipment fumes except for copier and blueprint machines, and (i)
(Sic.) Tenant, its agents, servants and employees, invitees, licensees, or
visitors shall not permit the operation of any musical or sound producing
instruments or device which may be heard outside Leased Premises, Building or
garage facility, or which may emit electrical waves which will impair radio or
television broadcast or reception from or into the Building and Project.
11. Tenant shall not store or use in any Leased Premises any (a) ether, naptha,
phosphorous, benzol, gasoline, benzine, petroleum, crude or refined earth or
coal oils, flashlight powder, kerosene or camphene, (b) any other flammable,
combustible, explosive or illuminating fluid, gas or material of any kind, and
(c) any other fluid, gas or material of any kind having an offensive odor,
without the prior written consent of Landlord.
12. No canvassing, soliciting, distribution of hand bills or other written
material, or peddling shall be permitted in the Building or the Project, and
tenant shall cooperate with Landlord in prevention and elimination of same.
13. Tenant shall give Landlord prompt notice of all accidents to or defects in
air conditioning equipment, plumbing, electrical facilities or any part or
appurtenances of Leased Premises.
14. If any Leased Premises becomes infested with vermin, tenant, at its sole
cost and expense, shall cause its premises to be exterminated from time to time
to the satisfaction of the Landlord and shall employ such exterminators as shall
be approved by Landlord.
15. No curtains, blinds, shades, screens, awnings or other coverings or
projections of any nature shall be attached to or hung in, or used in connection
with any door, window or wall of the premises of the building without the prior
written consent of Landlord. Landlord will not unreasonably withhold consent.
16. Landlord shall have the right to prohibit any advertising by tenant which,
in Landlord's opinion, tends to impair the reputation of Landlord or of the
Building, or its desirability as an office building for existing or prospective
tenant who require the highest standards
25
of integrity and respectability, and upon written notice from Landlord, tenant
shall refrain from or discontinue such advertising.
17. Wherever the word "tenant" occurs, it is understood and agreed that it
shall also mean tenant's associates, employees, agents and any other person
entering the Building or the Leased Premises under the express or implied
invitation of tenant. Tenant shall cooperate with Landlord to assure compliance
by all such parties with rules and regulations.
18. Landlord reserves the right to make reasonable amendments, modifications
and additions to the rules and regulations heretofore set forth, and to make
additional reasonable rules and regulations, as in Landlord's sole judgment may
from time to time be needed for the safety, care, cleanliness and preservation
of good order of the Building and Project.
26
SCHEDULE 3
UTILITY SERVICES
----------------
The Landlord shall provide, the following services as part of Operating Costs,
except as otherwise provided:
(1) Air Conditioning and heat for normal purposes at all times. Tenant agrees
not to use any apparatus or device, in or upon or about the Leased Premises, and
Tenant further agrees not to connect any apparatus or device with the conduits
or pipes, or other means by which such services are supplied, for the purpose of
using additional or unusual amounts of such services, without written consent of
Landlord. Should Tenant use such services under this provision to excess,
Landlord reserves the right to charge for such services. The charge shall be
payable as additional Rent. Should Tenant refuse to make payment upon demand of
Landlord, such excess charge constitutes a breach of the obligation to pay Rent
under this Lease and shall entitle Landlord to the rights hereinafter granted
for such breach.
(2) Electric power for lighting and operating of office machines, air
conditioning and heating as may be required for comfortable occupancy of the
premises. Electric power furnished by Landlord is intended to be that consumed
in normal office use for the lighting, heating, ventilating, air conditioning
and small office machines. Landlord reserves the right if consumption of
electricity exceeds that required for normal office use as specified, to include
a charge to be based upon the average cost per unit of electricity for this
Building applied to the excess use as determined by a submeter to be furnished
and installed at the option of the Tenant and at its expense. If the Tenant
refuses to pay upon demand of Landlord such excess charge, such refusal shall
constitute a breach of the obligation to pay rent under this Lease and shall
entitle Landlord to the rights hereinafter granted for such breach.
(3) Water for drinking, lavatory and toilet purposes from the regular Building
supply (at the prevailing temperature) through fixtures installed by Landlord,
(or by Tenant with Landlord's written consent).
27
SCHEDULE 4
MAINTENANCE SERVICES
--------------------
(1) Subject to the terms of this Lease, Landlord shall supply exterior lamp
replacement, exterior window washing with reasonable frequency, and janitorial
services to the common areas and Leased Premises during the time and in the
manner that such janitorial services are customarily furnished in general office
buildings in the area.
(2) Landlord agrees to reasonably maintain the exterior and interior of the
Leased Premises to include lawn and shrub care, snow removal, maintenance of the
structure, roof, mechanical and electrical equipment, architectural finish, and
so on, excluding only those items specifically excepted elsewhere in this Lease.
28
SCHEDULE 5
PARKING
-------
Landlord hereby grants to Tenant a license to the use during the term of this
Lease the spaces described in Article 1.1j. Said parking spaces shall be made
available to Tenant on an allocated basis and Tenant agrees to comply with such
reasonable rules and regulations as may be made by Landlord from time to time in
order to insure the proper operation of the parking facilities. Tenant agrees
not to overburden the parking facilities and agrees to cooperate with Landlord
and other tenants in the use of parking facilities. Landlord reserves the right
in its sole discretion to determine whether parking facilities are becoming
crowded, and in such event, to allocate specific parking spaces among Tenant and
other tenants or to take such other steps necessary to correct such condition,
including but not limited to policing and towing, and if Tenant, its agents,
officers, employees, contractors, licensees or invitees are deemed by Landlord
to be contributing to such condition, to charge to Tenant as Rent that portion
of the cost thereof which Landlord reasonably determines to be caused thereby.
Landlord may, in its sole discretion, change the location and nature of the
parking spaces available to Tenant, provided that after such change, there shall
be available to Tenant approximately the same number of spaces as available
before such change. Tenant shall have nine (9) reserved parking spaces. The
location of the reserved parking spaces are shown in Parking Exhibit 1.
29
SCHEDULE 6
Scripps Center Office Building
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Costa Mesa, California City, State
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Date__________________
WORK LETTER AGREEMENT
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Keith Engineering, Inc.
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200 Baker Street
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Costa Mesa, California 92626
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Re: Suite Building C,
Scripps Center Office Building
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Gentlemen:
You (referred to as "Tenant"), and we (referred to as "Landlord,) are executing,
simultaneously with this work letter agreement, a written lease (the "Lease")
pertaining to the space referred to above (the "Leased Premises"). This work
letter agreement is attached to the Lease as Schedule 6 and made a part thereof.
To induce Tenant and Landlord, each, to enter into the Lease (which is hereby
incorporated by reference to the extent that the provisions of this work letter
agreement may apply thereto) and in consideration of the mutual covenants
hereinafter contained, Landlord and Tenant mutually agree as follows:
1. Definitions The terms defined in this paragraph, for purposes of this work
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letter agreement, shall have the meanings specified herein, and, in addition to
the terms defined herein, terms defined in the Lease shall, for purposes of this
work letter agreement, have the meanings specified therein.
1.01 "Base Tenant Improvements" means the Building Standard items which
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are supplied, installed and finished by Landlord, according to Building
Standard specifications and which shall be paid for by Landlord (subject to
the Allowance) as provided for in paragraph 2.03 below.
1.02 "Building Standard" means the quantity and quality of materials,
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finishing and workmanship specified by Landlord for the Building, as set
forth on Exhibit I attached hereto and made a part hereof.
1.03 "Construction Documents" means the construction drawings, plans and
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specifications referred to in paragraphs 2.02 and 2.03 below to be attached
hereto and made a part hereof.
1.04 "Extraordinary Tenant Improvements" means any work Tenant requests
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Landlord to do in connection with the Leased Premises,
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other than Base Tenant Improvements and which exceed the $25.00 per square
foot allowance.
1.05 "Leasehold Improvements" means the aggregate of Base Tenant
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Improvements and Extraordinary Tenant Improvements, as contemplated by the
Construction Documents.
1.06 "Substantial Completion" means that the Leasehold Improvements have
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been substantially completed according to the Construction Documents,
except for items which will not materially affect the use of the Leased
Premises or which customarily are deemed to be "punchlist work".
2. Construction Documents; Payments
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2.01 The parties have approved a preliminary floor plan for the Leased
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Premises, a copy of which is attached to the Lease as Schedule 1 (the
"Preliminary Plan"). The estimated cost of completing the Leasehold
Improvements according to the Preliminary Plan (the "Estimate") is
$________. The Estimate represents Landlord's good faith estimate of the
cost of completing the Leasehold Improvements. Landlord shall have no
liability if the Final Cost (defined in paragraph 2.03 below) is greater
than the Estimate.
2.02 Tenant, within 60 days hereof, shall as a part of the allowance for
---- ----
improvement cause the Consultants (defined below) to prepare and submit to
Landlord for approval or disapproval all drawings, plans and specifications
necessary to construct the Leasehold Improvements. The following companies
shall prepare the drawings, plans and specifications which are to comprise
the Construction Documents:
Architectural ____________________:
Mechanical _______________________:
Electrical _______________________:
Plumbing _________________________:
(collectively, the "Consultants"). The fees and expenses of the
Consultants for preparing the initial drawings, plans and specifications
which are to comprise the Construction Documents shall be included in the
Final Cost (defined in paragraph 2.03 below) and allocated accordingly
between Base Tenant Improvements and Extraordinary Tenant Improvements.
Tenant shall receive an appropriate credit for any advance payments made to
the Consultants.
2.03 Upon Landlord's approval of the final form of the drawings, plans and
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specifications, which when submitted by Tenant and approved by Landlord
shall constitute the Construction Documents,
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Landlord shall prepare a good faith analysis in its sole judgement of the
cost of constructing the Leasehold Improvements according to the
Construction Documents (the "Final Cost") and submit such analysis to
Tenant for its approval. The Final Cost shall be allocated between the
costs attributable to the construction of the Base Tenant Improvements and
to be paid for by Landlord (subject to the Allowance, the "Landlord's
Share") and the costs or to be otherwise paid for by Tenant (the "Tenant's
Share") within 7 days of receipt, Tenant shall approve the Final Cost
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(including the allocation thereof). If Tenant does not approve the Final
Cost, it shall promptly notify Landlord thereof; in which case Tenant and
Landlord shall use their best efforts to amend the Construction Documents
in a manner reasonably satisfactory to each. If they are unable to do so
within 10 days after Tenant notifies Landlord as provided in the preceding
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sentence, either party may thereafter terminate the Lease by delivering
written notice to the other. Tenant acknowledges that Landlord's sole
obligation is to pay the costs attributable to the construction of the Base
Tenant Improvements, up to an aggregate maximum limit of $ 25.00 per square
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foot of Tenant's Square Footage (the "Allowance"), and Tenant shall pay all
other costs of the construction of the Leasehold Improvements as the
Tenant's Share. If the construction Documents require the construction or
installation of additional improvements beyond those regularly provided by
Landlord in the $ 25.00 per square foot allowance for the core of the
Building in which the Leased Premises are located (including, without
limitation, extra sprinklers, fire hose cabinets and other safety
devices.), Tenant agrees to pay all costs and expenses arising from the
construction and installation of such additional improvements. All costs
attributable to changes and variations from the Construction Documents
resulting from acts or omissions of Tenant (including, without limitation,
any fees and expenses of the Consultants and any increased costs of
construction) shall be paid by Tenant, if they exceed the $25.00 per square
foot allowance.
3. Leasehold Improvements
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3.01 The following provisions shall apply to the construction of the
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Leasehold Improvements:
(a) All work involved in the completion of the Leasehold Improvements
shall be carried out by Landlord and its agents and contractors under
the sole direction of Landlord. Tenant shall cooperate with Landlord
and its agents and contractors to promote the efficient and
expeditious completion of the Leasehold Improvements; and Landlord
shall be permitted a reasonable reimbursement for supervision and
overhead, but no profit.
(b) Landlord agrees to construct the Leasehold Improvements in
accordance with the Construction Documents,
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provided Tenant has complied with all the applicable provisions of
this work letter agreement and the Lease.
3.02 If there are any changes in the Leasehold Improvements requested by,
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or on behalf of, Tenant from the work as reflected in the Construction
Documents, each such change must receive the prior written approval of
Landlord, and Tenant shall bear the cost of all such changes, if these
costs cause the Leasehold Improvements to exceed the Allowance.
3.03 Landlord shall have no obligation to commence construction of any in
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the Leased Premises until (a) Tenant has submitted and Landlord has
approved the Construction Documents and Tenant shall have approved the
Final Cost for the construction of the Leasehold Improvements as required
by the provisions hereof, and (b) Landlord shall have received Tenant's
advance payment in an amount equal to the Tenant's Share.
4. Lease Commencement Date
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4.01 Landlord shall notify Tenant when Substantial Completion has been
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achieved, and thereafter the Lease Commencement Date shall be established
as set forth in the Lease. Not withstanding anything to the contrary
contained in the Lease or this work letter agreement, the Lease
Commencement Date shall not be extended for any delay in Substantial
Completion to the extent that such delay is caused by any act or omission
attributable to Tenant, including without limitation:
(a) Tenant's request for any Extraordinary Tenant Improvements;
(b) Tenant's failure to furnish promptly information concerning
Tenant's requirements pertaining to construction of the Leasehold
improvements or any other information requested by the Consultants as
necessary or useful to prepare the initial drawings, plans and
specifications which are to comprise the Construction Documents;
(c) Tenant's failure to submit promptly the initial drawings, plans
and specifications which are to comprise the Construction Documents;
(d) Tenant's failure to approve promptly the Final Cost; and
(e) Tenant's request for any changes in the Leasehold Improvements
from the work as reflected in the Construction Documents 1
4.02 In any event, Rent payable under the Lease shall not abate by reason
----
of any unreasonable delay, expense or other burden arising out of or
incurred in connection with the design or
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construction of the Leasehold Improvements to the extent that such delay,
expense or other burden is caused by any act or omission attributable to
Tenant (including, without limitation, the acts and omissions referred to
in subparagraphs (a) through (e) of paragraph 4.01 above).
5. Tenant's Access To Leased Premises
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5.01 Landlord, in its sole discretion, may permit Tenant and Tenant's
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agents or independent contractors to enter the Leased Premises prior to the
scheduled Lease Commencement Date in order that Tenant may do Other work as
may be required by Tenant to make the Leased Premises ready for Tenant's
use and occupancy. Such permission must be in writing prior to entry. If
Landlord permits such prior entry, then such license shall be subject to
the condition that Tenant and Tenant's agents, contractors, workmen,
mechanics, suppliers, and invitees shall work in harmony and not interfere
with Landlord and its agents and contractors in doing its work in the
Leased Premises or the Building or with other tenants and occupants of the
Building or the Project. If at any time such entry shall cause or threaten
to cause disharmony or interference, Landlord, in its sole, discretion,
shall have the right to withdraw and cancel such license upon notice to
Tenant. Tenant agrees that any such entry into the Leased Premises shall
be deemed to be under all of the terms, covenants, conditions and
provisions of the Lease, except as to the covenant to pay periodic Rent.
Tenant further agrees that, to the extent permitted by law, Landlord and
its principals shall not be liable in any way for any injury or death to
any person or persons, loss or damage to any of the Leasehold Improvements
or installations made in the Leased Premises or loss or damage to property
placed therein or there about, the same being at Tenant's sole risk.
5.02 In addition to any other conditions or limitations on such license to
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enter the Leased Premises prior to the Lease Commencement Date, Tenant
expressly agrees that none of its agents, contractors, workmen, mechanics,
suppliers or invitees shall enter the Leased Premises prior to the Lease
Commencement Date unless and until each of them shall furnish Landlord with
satisfactory evidence of insurance coverage, financial responsibility and
appropriate written releases of mechanics' or materialmen's lien claims.
6. Miscellaneous Provisions Landlord and Tenant further agree as follows:
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6.01 Except as herein expressly set forth with respect to the Leasehold
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improvements in paragraph 3.01 of schedule 6, Landlord has no agreement
with Tenant and has no obligation to do any work with respect to the Leased
Premises. Any other work in the Leased Premises which may be permitted by
Landlord pursuant to the terms and conditions of the Lease, including any
alterations
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or improvements as contemplated by paragraph 6.1d of the Lease, shall be
done at Tenant's sole cost and expense and in accordance with the terms and
conditions of the Lease.
6.02 This work letter agreement shall not be deemed applicable to: any
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additional space added to the original Leased Premises at any time, whether
by the exercise of any options under the Lease or otherwise, or (b) any
portion of the original Leased Premises or any additions thereto in the
event of a renewal or extension of the original Lease Term, whether by the
exercise of any options under the Lease or any amendment or supplement
thereto. The construction of any additions or improvements to the Leased
Premises not contemplated by this work letter agreement shall be effected
pursuant to a separate work letter agreement, in the form then being used
by Landlord and specifically addressed to the allocation of costs relating
to such construction.
6.03 Any person signing this work letter agreement on behalf of Tenant
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warrants and represents he has authority to do so.
6.04 This work letter agreement shall be binding upon and inure to the
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benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns.
6.05 Anything in the Lease to the contrary notwithstanding, notices and
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other items to be delivered pursuant to this work letter agreement shall be
effective upon receipt of same by the party to whom such notice or item is
directed.
6.06 Tenant shall have the right to install modular furniture partitions
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in said Leased Premises. Landlord shall pay for the modular furniture
partitions provided that Tenant does not exceed the allowance in paragraph
2.03 herein. The modular furniture partitions purchased by Landlord shall
remain in the Building and become property of the Landlord upon termination
of the Lease. If Tenant does not use the $25.00 per square foot Allowance,
the unused Allowance shall be credited against rent in the first month or
months that rent is due.
If the foregoing correctly sets forth our understanding, kindly acknowledge your
approval in the space provided below for that purpose and return to us two
signed counterparts of this work letter agreement.
Very truly yours,
LANDLORD: SCRIPPS CENTER ASSOCIATES
A California General Partnership
By: ALLSTATE INSURANCE COMPANY
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an Illinois Corporation
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General Partner
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By: /s/ M.J. Resnick
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By: signature illegible
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Authorized Signatory
And by: ALLSTATE LIFE INSURANCE COMPANY
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an Illinois Corporation
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General Partner
By: /s/ M.J. Resnick
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By: signature illegible
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Authorized Signatory
AGREED TO AND ACCEPTED this 16th day of August, 1989
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Keith Engineering, Inc.
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A California Corporation
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By: /s/ Aram H. Keith (signed)
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Its President
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EXHIBIT 1 TO WORK LETTER AGREEMENT
BUILDING STANDARD WORK
HEATING, VENTILATING AND
AIR CONDITIONING: Supply and install building standard condenser
water piping distribution system, heat pump supply
unit, ductwork & supply diffusers.
ELECTRICAL LIGHT FIXTURES: Supply and install building 2 ft. x 4 ft.
fluorescent lay in fixtures containing three tubes
and acrylic lenses, based on an allocation of one
per 85 square feet of usable area on each floor.
CEILING, TO INCLUDE GRID
AND LAY-IN TILE: Supply and install building standard 2 ft. x 2 ft.
exposed white grid and acoustical tile lay-in
ceiling throughout the Leased Premises. Ceiling
height shall be approximately 8 ft. 6 in. Cost to
drop tile in place will be charged to the
allowance.
WINDOW COVERINGS: Supply and install building standard Levelor
blinds.
FIRE PROTECTION: Supply and install the building standard sprinkler
protection system based on the sprinkler design
depicted on the original or most recent fire
protection document. Relocation or additional
heads required for approval by insurance and
jurisdictional bodies due to Tenant's partition
layout will be charged as an extra to Tenant.
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TENANT ESTOPPEL CERTIFICATE
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BY LEASE DATED August 16, 1989, as amended by the documents listed in paragraph
7 below ("Lease") between Keith Engineering, Inc., dba: The Keith Companies
("Tenant"), or its predecessor, and Scripps Center Associates ("Landlord"), or
its predecessor, Landlord has leased to Tenant 49,413 rentable square feet, as
more particularly described in the Lease "Leased Premises"), in the building
located at 2955 Redhill Avenue, Suite 200, Costa Mesa, California ("Property").
Landlord, as owner, intends to sell the said Property to ASP Acquisitions,
L.L.C. and/or its affiliates or assigns ("Buyer") who, as a condition to the
purchase of the Property, has required this Tenant Estoppel Certificate. In
consideration of Buyer" (Sic.) agreement to purchase the Property, Tenant
agrees and certifies to Landlord and to Buyer as follows:
1. The Lease Premises and possessions thereof are accepted. The Lease is in
full force and effect.
2. The Lease term begins on June 1, 1993 and ends on April 20, 2000.
3. All work to be performed for Tenant under the Lease has been performed as
required under the Lease and has been accepted by Tenant, except n/a ,
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and all allowances to be paid to Tenant, including allowances for tenant
improvements, moving expenses or other items, have been paid.
4. Tenant claims no present charge, lien or claim of offset against rent.
5. Rent is paid for the current month, but is not paid, and will not be paid,
more than one month in advance. Base Rent is $53,067.86 per month and is due on
the first of each month. Additional rent and any other amounts due under the
lease are $18,095.00 per month. A security deposit has been paid to Landlord in
the amount of $78,023.20. Tenant's share of Operating Costs, including real
estate taxes, are based on one of the following:
---
_____Base Year of 19 ; OR
_____Operating Cost Stop of $ ____ per square foot; OR
_____No pass-through of Operating Costs; OR
X Other NNN pro rata share
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6. There are no existing defaults by reason of any act or omission of the
Landlord except as follows: to the knowledge of tenant as of the date of
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this certificate there are none.
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7. The Lease has not been modified, except in accordance with the documents
dated as follows:
Amendment dated November 30, 1989
Amendment dated August 31, 1990
Amendment dated April 15, 1993
Special Limited Guarantee dated June 1, 1993
Amendment dated October 1, 1993
Amendment dated May 28, 1998
8. The Tenant has no rights or options to purchase the property.
This certificate may be relied upon by Buyer, its lender from time to time, and
their respective successors, assigns, and affiliates.
Tenant: KEITH ENGINEERING, INC.
dba The Keith Companies
By: /s/ Aram H. Keith
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Title: CEO
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Date: 7/7/98
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ADDENDUM TO LEASE
DATED _______ , 1989
BETWEEN
SCRIPPS CENTER ASSOCIATES (LANDLORD) AND
KEITH ENGINEERING, INC. (TENANT)
14.1 Base Rent: The Base Rent shall be as follows:
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Monthly Base Rent Per
Months Payment Square Foot Per Year
------ ------- ---------------------
01-12 $49,000.00 $ 8.40
13-24 $54,600.00 $ 9.36
25-36 $60,200.00 $10.32
37-48 $66,500.00 $11.40
49-60 $73,500.00 $12.60
61-72 $77,000.00 $13.20
73-84 $80,500.00 $13.80
85-96 $84,700.00 $14.52
97-108 $88,900.00 $15.24
109-120 $93,100.00 $15.96
14.2 Right of Refusal: Provided Tenant is not in default under the Lease, at any
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time during the Lease Term and the terms of any renewal option periods,
Tenant shall have the following rights:
- A right of first refusal to lease additional space in Building C ("First
Right - C").
- A right of first refusal for space in Building A only in the event that
no rights of first refusal are granted to any current or future tenant
leasing space in Building A ("First Right - A").
- A right of second refusal for space in Building A which shall be subject
to any rights of first refusal granted to any current or future tenant in
Building A ("Second Right - A").
The Above First Right - C, First Right - A and Second Right - A shall sometimes
be individually or collectively referred to as "Right" or "Rights".
Landlord shall give Tenant written notice that a third party is interested in
leasing all or any portion of the space in either Building A or C governed by
the Rights. Tenant shall have five (5) working days after receiving notice from
Landlord to respond in writing of its intention to exercise any Right. If any
Right is exercised during years 1 through 7 of the Lease Term, it shall be at
the same terms and conditions as this Lease with base rent being the same amount
per rentable square foot as that being paid by Tenant for the Leased Premises
under this Lease as of the date any of the Rights are exercised. If any Right
is exercised during years 8 through 10 of the Lease Term, it shall be at the
same terms and conditions as this Lease except for base rent and lease term
which shall be the same as those offered by Landlord to the third party.
14.3 Rental Abatement: The Base Rent for months one (1) through five (5) of the
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Lease Term shall be free. Tenant shall pay its Pro Rata Share of the
Project Operating Costs and Building Operating Costs, as defined in
paragraph 1.lG., during the free rent period.
14.4 Cancellation Provision: Tenant shall have the right to cancel the Lease for
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up to 50% of Tenant's square footage anytime after the first year of the
Lease Term. The maximum space that Tenant may cancel, however, is 35,000
rentable square feet. Tenant shall have the option to cancel space in
amounts not less than 10,000 rentable square feet or larger. The location
of the space that Tenant can cancel is outlined in Exhibit ___ attached
hereto. Tenant shall provide Landlord six (6) months written notice of its
intent to cancel the Lease for a portion of the Leased Premises. Tenant
shall reimburse Landlord within 30 days of notice from Landlord for the
space cancelled based upon the following schedule:
If Cancelled Cancellation Cost
In Year Per Rentable Square Foot Returned
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1 Not cancellable
2 $5.00
3 $4.00
4 $3.00
5 $2.00
6 $1.50
7 $1.50
8 $1.15
9 $ .77
10 $ .38
14.5 Option to Renew: Provided Tenant is not in default, Landlord hereby grants
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Tenant two (2) five (5) year options to renew the term of this Lease. The
base rent for the first renewal term shall be 105% of the Base Rent Tenant
is paying during the last year of the initial Lease Term. This base rent
shall be increased by 5% per year through the first five (5) year option to
renew. The second five (5) year option shall be at the fair market rate.
Tenant shall give Landlord six (6) months written notice of Tenant's intent
to exercise said option to renew.
14.6 Option to Purchase: Provided Tenant is not In default under the Lease, and
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further provided Tenant has not elected to reduce its Leased Premises by
more than 10% pursuant to Article 14.4 of this Lease, Tenant shall have the
option to purchase the Project on the last business day of the second year
of the initial Lease Term. Tenant shall give Landlord six months prior
written notice of its Intent to exercise this option. The purchase price
for the Project shall be $25,500,000 plus the cost of all tenant
improvements installed between the Lease Commencement Date and the end of
the second year of the initial Lease Term in the 149,018 square feet of
unleased space in the Project (which includes Tenant's Square Footage),
less the cost (not including interest) of any amounts paid to Landlord by
tenants for such tenant improvements.
LEASE AMENDMENT NO. 1
This Amendment is made this 30 day of November 1989 by and between Scripps
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Center Associates, a California general partnership ("Landlord") and Keith
Engineering, Inc., d/b/a The Keith Companies ("Tenant").
Whereas, by written Lease dated August 16, 1989 ("Lease"), Landlord did lease
70,000 rentable square feet at Scripps Center (more specifically described in
Article l.lb and c of said Lease) to Tenant for a term commencing May 1, 1990
and terminating April 30, 2000.
Now, therefore in consideration of the premises and the respective covenants and
agreements, herein set forth, the parties hereto agree as follows:
1. Article l.ld shall be changed to read as follows:
Tenant's Square Footage shall mean 88,006 rentable square feet; Total
square footage of the Building shall mean 88,006 rentable square feet, and
total Square Footage of the Project shall mean 229,226 rentable square
feet, which may be adjusted pursuant paragraph 7.2 (iii) below, subject to
adherence to BOMA standards as attached hereto in Schedule B.
2. The second phrase of Article 1.1f shall be changed to read as follows:
The total Base Rent payable over the entire Lease Term is $10,613,523.60.
3. Article 1.1g shall be changed to read as follows:
Tenant's Pro Rata Share of Building Operating Costs shall mean 100%, which
may be adjusted pursuant to paragraph 7.2 (iii) below. Tenant's Pro Rata
Share of Project Operating Costs shall mean 38.39%, which may be adjusted
pursuant to paragraph 7.2 (iii) below. Tenant's Pro Rata Share of Project
Operating Costs for the first year of the Lease Term is estimated to be
$148,730.14 ($1.69 per square foot of Tenant's Square Footage) payable in
monthly installments of $12,394.17 subject to adjustment pursuant to
Article 3.4b and c below.
4. Article 1.lh shall be changed to read as follows:
Deposit shall mean $61,604.20; Prepaid Rent shall mean $61,604.20, of which
$61,604.20 represents the first monthly installment of Base Rent.
1
5. Article 1.1j shall be changed to read as follows:
Authorized Number of Parking Spaces shall mean 352 spaces at the rate of
$0, which is a ratio of four spaces per 1,000 rentable square feet.
6. Article 14.1 shall be changed to read as follows:
Base Rent: The Base Rent shall be as follows:
Monthly Base Rent Per
Month Payment Square Foot Per Year
----- ------- --------------------
1-6 $ -0- $ -0-
7-12 61,604.20 8.40
13-24 68,644.68 9.36
25-36 75,685.16 10.32
37-48 83,605.70 11.40
49-60 92,406.30 12.60
61-72 96,806.60 13.20
73-84 101,206.90 13.80
85-96 106,487.26 14.52
97-108 111,767.62 15.24
109-120 117,047.98 15.96
7. Article 14.3 shall be deleted in its entirety.
8. The first two sentences of Article 14.4 shall be changed as follows:
Cancellation Provision: Tenant shall have the right to cancel the Lease for
up to 35,000 rentable square feet anytime after the first year of the Lease
Term.
9. Schedule 4 Paragraph 1 of the lease dated August 16, 1989 shall be deleted
and replaced by "subject to the terms of this lease, Landlord shall supply
exterior lamp replacement, exterior window washing with reasonable
frequency, and janitorial services to the common area".
10. The following paragraph shall be added to Schedule 4:
Tenant shall be obligated to maintain all HVAC mechanical equipment
servicing the Leased Premises in a manner consistent with comparable office
buildings in Orange County. If Tenant fails to maintain or keep in good
repair and such failure continues for 15 days after written notice from
Landlord, or if such failure results in a nuisance or health or safety
risk, Landlord may perform any such required maintenance and repairs
2
and the cost thereof shall be payable by Tenant as Rent within 30 days of
receipt of an invoice from Landlord.
Except as amended herein, all of the terms and conditions in the above defined
Lease shall remain in full force and effect.
In witness hereof, Landlord and Tenant have cause their respective names to be
affixed by their respective officers or duly authorized signatories.
WITNESS: LANDLORD:
SCRIPPS CENTER ASSOCIATES,
/s/ Marie Viceie a California general partnership
- ----------------------------
/s/ June Garby
- ----------------------------
By: ALLSTATE INSURANCE COMPANY
an Illinois corporation
General Partner
By: /s/ M.J. Resnick
------------------------------------
By: /s/ H.H. J
------------------------------------
Its Authorized Signatories
By: ALLSTATE INSURANCE COMPANY
an Illinois corporation
General Partner
By: /s/ M.J. Resnick
------------------------------------
By: /s/ H.H.J.
------------------------------------
Its Authorized Signatories
WITNESS:
/s/ William Bowman TENANT:
- ----------------------------
KEITH ENGINEERING, INC. d/b/a THE KEITH
/s/ Steve M. Case COMPANIES
- ----------------------------
By: /s/ Aram H. Keith
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Its President
By: /s/ Floyd S. Reid
------------------------------------
Its Secretary
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LEASE AMENDMENT NO. 2
THIS LEASE AMENDMENT NO. 2 is made and entered into as of August 31 1990,
--
by and between SCRIPPS CENTER ASSOCIATES, a California general partnership
("Landlord") and KEITH ENGINEERING, INC., d/b/a THE KEITH COMPANIES ("Tenant.")
WHEREAS, Landlord and Tenant entered into a lease dated August 16, 1989,
whereby Tenant leased approximately 70,000 square feet of space in an office
building known as Building C of Scripps Center located at 2995 Red Hill Avenue,
Costa Mesa, California.
WHEREAS, the lease was amended by a Lease Amendment No. 1 dated November
30, 1989, whereby among other things, Tenant's Square Footage was increased to
88,006 rentable square feet. The lease, together with Lease Amendment No. 1 are
herein collectively referred to as the "Lease."
NOW, THEREFORE, in consideration or the foregoing premises and the
respective covenants and agreements herein set forth, the parties hereto agree
as follows:
1. The final calculation of Tenant's Share (as defined in Schedule 6 of
the Lease) of the cost of completing the Leasehold Improvements is $577,878.34.
The amount of $544,811.53 is hereby defined as "Amortizable Costs". The amount
of $33,066.81 is hereby defined as "Unamortizable Costs" and shall be paid by
Tenant to Landlord within 30 days after receipt of invoices from Landlord.
The Amortizable Costs shall be paid to Landlord as follows: Tenant shall
pay Landlord the Amortizable Costs, plus interest at the rate of ten per cent
(10%) per year, in 60 amortized equal monthly installments of $11,575.63.
Commencing on the first day of the month following the month in which the actual
Lease Commencement Date falls, each monthly installment shall be paid in advance
on the first day of each month, together with each monthly installment of Base
Rent and Tenant's Pro Rata Share of Excess Operating Costs. The Unamortizable
Costs and the Amortizable Costs are hereby deemed to be included within the
definition of Rent.
By way of clarification and for purposes of calculating the purchase price
under paragraph 14.6 of the Lease, (i) the Unamortizable Costs and monthly
installments of the Amortized Costs may be deducted from the purchase price only
to the extent such payments are actually made by Tenant and received by Landlord
with good funds, and (ii) the amortization schedule attached hereto as Exhibit A
---------
shall be used to determine the principal and interest portions of monthly
installments of the Amortized Costs paid to Landlord. Pursuant to paragraph 14.6
of the Lease, only the principal portions of monthly payments made by Tenant may
be deducted from the purchase price.
2. The following are hereby added to the List of Schedules on page 3 of
the Lease:
10. Landscape Improvements at Landlord's Cost
11. Landscape Improvements at Tenant's Cost
1
12. Signage Proposal
13. Reserved and Visitor Parking
3. Article 1.1e of the Lease is hereby deleted in its entirety and
replaced with the following:
e. Lease Commencement Date shall mean May 7, 1990, which may be
adjusted pursuant to the provisions of this Lease; Lease Expiration
Date shall mean April 20, 2000; Lease Term shall mean the period
between Lease Commencement Date and Lease Expiration Date.
4. Article 1.1j of the Lease is hereby deleted in its entirety and
replaced with the following:
j. Authorized Number of Parking Spaces shall mean 350 spaces at the
rate of $ -O-. 350 spaces constitutes a ratio of four spaces per 1,000
rentable square feet less 2 spaces to be used to install a new
entrance to the executive entrance on the north side of the Building.
5. The following Schedules attached hereto are hereby made a part of the
Lease and added to the list of Schedules in Article 1.2 of the Lease:
h. Schedule 10: Landscape Improvements at Landlord's Cost
i. Schedule 11: Landscape Improvements at Tenant's Cost
j. Schedule 12: Signage Proposal
k. Schedule 13: Reserved and Visitor Parking
6. Article 5.lb of the Lease is hereby deleted in its entirety and
replaced with the following:
b. Maintenance Services: Maintenance of all exterior areas of the
Building including lighting, landscaping, cleaning, painting,
maintenance and repair of the exterior of the Building and its
structural portions and roof, including all of the services listed on
Schedule 4 ("Maintenance Services").
7. The insertion to Article 6.lg marked with an asterisk at the bottom of
page 11 of the Lease shall be deleted in its entirety and replaced with the
following:
**Tenant shall have the right to display its name on the exterior of
the Building in accordance with the sign ordinance for the Project, as
approved by the City of Costa Mesa, attached to the Lease as Schedule
9, as modified by the letter dated April 13, 1990 which modification
is attached hereto as Schedule 12, and as may be further modified by
the City of Costa Mesa. The Tenant and Landlord have agreed that the
Tenant may
2
submit its signage request to the City of Costa Mesa in accordance
with the signage proposal detailed in Schedule 12 to this Lease
Amendment No. 2.
8. Schedule 4 of the Lease is hereby deleted in its entirety and replaced
with the following:
SCHEDULE 4
MAINTENANCE SERVICES
--------------------
(1) Subject to the terms of this Lease, Landlord shall supply exterior
lamp replacement, exterior window washing with reasonable frequency, and
janitorial services to the exterior common areas of the Building only during the
time and in the manner that such janitorial services are customarily furnished
in similar buildings in the area. Tenant shall be responsible for the
janitorial, maintenance and repairs in the interior of the Building.
(2) Landlord agrees to reasonably maintain the exterior of the Building to
include lawn and shrub care, snow removal, maintenance of the structure, roof,
architectural finish, and so on, excluding only those items specifically
excepted elsewhere in this Lease. Tenant shall be responsible for the
maintenance of the mechanical and electrical equipment within the Building.
Tenant shall be obligated to maintain all HVAC mechanical equipment
servicing the Leased Premises in a manner consistent with comparable office
buildings in Orange County. If Tenant fails to maintain or keep in good repair
and such failure continues for 15 days after written notice from Landlord, or if
such failure results in a nuisance or health or safety risk, Landlord may
perform any such required maintenance and repairs and the cost thereof shall be
payable by Tenant as Rent within 30 days or receipt of an invoice from Landlord.
9. The last 2 sentences of Schedule 5 (Parking) are hereby deleted in
their entirety and are replaced with the following:
Tenant shall have sixteen (16) reserved parking spaces and 15 visitor
parking spaces. The location of the reserved and visitor parking
spaces are shown on Schedule 13.
10. The following Article is hereby added to the Addendum to Lease as
Article 14.7:
14.7 Tenant shall cause landscaping improvements to be installed
around the Building as detailed on Schedule 10 attached hereto
("Schedule 10 Landscaping"). Within 30 days after receipt of paid
invoices, Landlord shall reimburse to Tenant the cost of all
Schedule 10 Improvements up to a total amount of $42,662.00
("Landscape Allowance"). All costs for Schedule 10 Landscaping in
excess of the Landscape Allowance shall be paid by Tenant. Tenant
may, at its option, make additional landscape and site
improvements as detailed in Schedule 11 attached hereto and
solely at Tenant's cost. All landscaping detailed in Schedules 10
and 11 shall be installed by professional landscapes acceptable
to Landlord.
3
11. Except as provided in this Lease Amendment No. 2, all other terms,
covenants and conditions contained in the Lease shall remain in full force and
effect. Initially capitalized terms not otherwise defined herein shall have the
same meaning as contained in the Lease.
IN WITNESS WHEREOF, the parties have caused their respective names to be
subscribed to this LEASE AMENDMENT NO. 2 as of the date first above written, the
execution and delivery thereof having been duly authorized.
WITNESS: LANDLORD:
SCRIPPS CENTER ASSOCIATES,
/s/ JUNE GARBY a California general partnership
- ------------------------
________________________
By: ALLSTATE INSURANCE COMPANY
an Illinois corporation
General Partner
By: /s/ M.J. RESNICK
------------------------------------
By: /s/ H.H.J
------------------------------------
Its Authorized Signatories
By: ALLSTATE INSURANCE COMPANY
an Illinois corporation
General Partner
By: /s/ M.J. RESNICK
------------------------------------
By: /s/ H.H.J.
------------------------------------
Its Authorized Signatories
WITNESS:
/s/ WILLIAM BOWMAN TENANT:
- ------------------------
________________________
KEITH ENGINEERING, INC. d/b/a THE KEITH
COMPANIES
By: /s/ ARAM H. KEITH
------------------------------------
Its President
By: /s/ FLOYD S. REID
------------------------------------
Its Secretary
4
LEASE AMENDMENT No. 3
This Lease Amendment No. 3 is made and entered into as of October 24, 1991 by
and between Scripps Center Associates, A California General Partnership
("Landlord") and Keith Engineering Inc., DBA THE KEITH COMPANIES ("Tenant.")
WHEREAS, Landlord and tenant entered into a lease dated August 16, 1989,
whereby tenant leased approximately 70,000 square feet of space in an office
building known as Building C of Scripps Center located at 2995 Red Hill Avenue,
Costa Mesa, California.
WHEREAS, the lease was amended by a Lease Amendment No. 1 dated November 30,
1989, whereby among other things, Tenant's Square Footage was increased to
88,006 rentable square feet.
WHEREAS, the lease was amended by Lease Amendment No. 2 dated August 31,
1990, whereby by among other things, the final calculation of tenant's share of
Leasehold Improvements was stated as well as additional schedules included in
the Lease for landscape improvements, signage and parking. The lease, together
with Lease Amendment No. 1 and Lease Amendment No. 2 are hear (Sic.) and
collectively referred to as the "Lease".
Now, therefore, in consideration of the forgoing premises and the respective
covenants and agreements herein set forth, the parties hereto agree as follows:
1. The last two sentences of Schedule 5 "Parking" of the original lease dated
August 16, 1989 which was amended by Paragraph 9 of Lease Amendment No. 2,
will be deleted and replaced with the following:
Tenant shall have 16 reserved parking spaces, 11 visitor spaces, 8 carpool
spaces and 2 delivery spaces as specified on Schedule 13 dated October 24,
1991 attached hereto.
Except as provided in this Lease Amendment No. 3, all other terms, covenants
and conditions contained in the Lease shall remain in full force and effect.
Initially capitalized terms not otherwise defined herein shall have the same
meaning as contained in the Lease.
IN WITNESS WHEREOF, the parties have caused their respective names to be
subscribed to this LEASE AMENDMENT NO. 3 as of the date first written above, the
execution and delivery thereof having been duly authorized.
1
WITNESS: LANDLORD:
SCRIPPS CENTER ASSOCIATES,
________________________ a California general partnership
________________________
By: ALLSTATE INSURANCE COMPANY
an Illinois corporation
General Partner
By: /s/
---------------------------------
By:
---------------------------------
Its Authorized Signatories
By: ALLSTATE INSURANCE COMPANY
an Illinois corporation
General Partner
By: /s/
---------------------------------
By:
---------------------------------
Its Authorized Signatories
WITNESS:
________________________ TENANT:
KEITH ENGINEERING, INC. d/b/a THE KEITH
________________________ COMPANIES
By: /s/ ARAM H. KEITH
---------------------------------
Its President
By: /s/ FLOYD S. REID
---------------------------------
Its Secretary
2
LEASE AMENDMENT NO. 3
THIS LEASE AMENDMENT NO. 3 ("Amendment") is made and entered into as of
April 15, 1993, by and between SCRIPPS CENTER ASSOCIATES, a California general
--
partnership ("Landlord") and KEITH ENGINEERING, INC., d/b/a THE KEITH COMPANIES
("Tenant") and shall become effective on the Lease Commencement Date as set
forth in Paragraph 3 hereof.
WHEREAS Landlord and Tenant entered into a lease dated August 16, 1989,
whereby Tenant leased approximately 70,000 square feet of space in an office
building known as Building C of Scripps Center located at 2995 Red Hill Avenue,
Costa Mesa, California (the "Old Leased Premises").
WHEREAS, the lease was amended by Lease Amendment No. 1 dated November 30,
1989 and Lease Amendment No. 2 dated August 31, 1990. The lease, together with
Lease Amendments No. 1 and 2 are herein collectively referred to as the "Lease".
WHEREAS, Landlord and Tenant now desire to amend the Lease to reflect the
relocation of Tenant.
NOW, THEREFORE, in consideration of the foregoing premises and the
respective covenants and agreements herein set forth, the parties hereto agree
as follows:
1. Paragraph 1.1(a) of the Lease shall be deleted in its entirety and
replaced with the following:
Leased Premises shall mean the second floor and a portion of the first
floor in "Building A", which has a common address of at 2955 Red Hill Avenue,
and as further described on Exhibit A attached hereto and made a part hereof.
2. Paragraph 1.1(d) of the Lease shall be deleted in its entirety and
replaced with the following:
Tenant's Square Footage shall mean approximately 30,000 rentable square
feet which shall be subject to remeasurement by Landlord in accordance with BOMA
standards (and shall specifically exclude in the calculation the center
stairwell). Tenant's Square Footage shall be calculated on a rentable basis
which includes a pro rata share of common area. Total Square Footage of the
Building shall mean 60,042 rentable square feet, and Total Square Footage of the
Project shall mean 230,196 rentable square feet, which may be adjusted pursuant
to paragraph 7.2(iii) of the Lease.
3. Paragraph 1.1(e) of the Lease shall be deleted in its entirety and
replaced with the following:
Lease Commencement Date shall mean the date that is 5 business day (Sic.)
after the date Landlord notifies Tenant that the Leasehold Improvements as set
forth in Exhibit B attached to this Lease Amendment No. 3 have been completed,
but in no event later than June 1, 1993. Lease Expiration Date shall mean April
20, 2000. Lease Term shall mean the period between Lease Commencement Date and
Lease Expiration Date. Base Rent Adjustment Date shall mean the first day of May
in each year of the Lease Term commencing 1995.
1
4. Paragraph 1.1(f) of the Lease shall be deleted in its entirety and
replaced with the following:
a. Base Rent shall be payable in monthly installments plus applicable
sales tax, if any in accordance with the following schedule and adjustments:
(i) From the Lease Commencement Date through April 30, 1994, Base Rent
shall mean $342,000 ($11.40 per square foot of Tenant's Square Footage) per
year, which shall be adjusted pursuant to the remeasurement in Paragraph 2.
(ii) From May 1, 1994 through April 30, 1995, Base Rent shall mean
$378,000 ($12.60 per square foot of Tenant's Square Footage) per year, which
shall be adjusted pursuant to the remeasurement in Paragraph 2.
(iii) From May 1, 1995 through April 20, 2000, Base Rent shall be subject
to adjustment on each Base Rent Adjustment Date as follows:
b. The monthly installment of Base Rent for the month ending immediately
prior to the Base Rent Adjustment Date shall be multiplied by a fraction, the
numerator of which is the CPI (as defined below) for the month beginning on the
date four months prior to the Base Rent Adjustment Date, and the denominator of
which is the CPI for the same month one year prior thereto; however, in no
event, shall Base Rent be decreased as a result of this calculation nor shall
Base Rent be increased by more than 8% on any Base Rent Adjustment Date.
c. "CPI" shall mean the Consumer Price Index in the column for "All
Items" in the table entitled "Consumer Price Index for All Urban Consumers: Los
Angeles-Anaheim-Riverside, California, (1982-84 = 100)," published by the Bureau
of Labor Statistics of the United States Department of Labor. If the Bureau of
Labor Statistics changes the base period (now 1982-84 = 100), or the composition
of the CPI, the new index numbers shall be substituted for the old index numbers
in making the above computations. If the CPI is discontinued, the parties shall
accept comparable statistics on the purchasing power of the consumer dollar, as
published at the time of said discontinuation, by a responsible financial
periodical of recognized authority to be chosen by Landlord and reasonably
acceptable to Tenant.
d. From the Lease Commencement Date through April 30, 1995, Tenant shall
pay, as additional rent ("Adjustment Payment") $11,000 per month. Subject to
Tenant making all of the Adjustment Payments, from May 1, 1995 through May 30,
1998, Tenant shall be entitled to a credit to or reduction of rent of $6,838 per
month ("Adjustment Credit").
5. Paragraph 1.1(g) of the Lease shall be deleted in its entirety and
replaced with the following:
Tenant's Pro Rata Share of building Operating Costs shall mean 50%, which
--
shall be adjusted pursuant to the remeasurement in Paragraph 2 above and which
may be adjusted pursuant to paragraph 7.2(iii) of the Lease. Tenant's Pro Rata
Share of Project operating Costs shall mean 13%, which shall be adjusted
--
pursuant to the remeasurement in Paragraph 2 above and which may be adjusted
pursuant to paragraph 7.2(iii) of the Lease. Tenant's Pro Rata Share of Project
Operating Costs for the first calendar year of the Lease Term is estimated to be
$68,400.00 ($2.28 per square foot of Tenant's Square Footage
2
payable in Monthly installments of $5,700.00, which shall be adjusted pursuant
to the remeasurement in Paragraph 2 above and which is subject to adjustment
pursuant to Article 3.4c and d of the Lease.
6. Paragraph 1.1(j) of the Lease shall be deleted in its entirety and
replaced with the following:
Authorized Number of Parking Spaces shall mean four spaces per 1,000
rentable square feet leased.
7. Paragraph 1.1(m) of the Lease shall be deleted in its entirety and
replaced with the following:
Landlord's Mailing Address: Scripps Center Associates c/o Allstate
Insurance Company, Allstate Plaza G5B, Northbrook, Illinois 60062 Attn: Real
Estate Equity Investment Division.
8. Paragraph 1.1(n) of the Lease shall be deleted in its entirety and
replaced with the following:
Tenant's Mailing Address prior to the Lease Commencement Date shall be 2995
Red Hill Avenue, Costa Mesa, California 92626. After the Lease Commencement
Date, it shall be 2955 Red Hill Avenue, Costa Mesa, California 92626.
9. Landlord shall provide up to $250,000.00 ("Relocation Fund") which
shall be used by Tenant to pay the actual cost of tenant improvements, interior
and exterior signage (as set forth in Paragraph 16 hereof), moving costs,
telephone relocation expenses and other costs (but specifically excluding costs
of disruption of Tenant's business and space planning) associated with Tenant's
relocation to the Leased Premises. In the event Tenant contracts for any goods
or services in connection with the relocation (specifically excluding costs of
disruption of Tenant's business and space planning), Tenant shall provide
Landlord with invoices and lien waivers (if appropriate) and Landlord shall
reimburse Tenant within 15 business days of receipt and approval of said
invoices and lien waivers. Should Tenant default under the Lease, the Relocation
Fund shall immediately become due and payable, less Adjustment Payments paid to
the date of default. Tenant shall have no right to collect or receive a set off
for any unpaid Adjustment Credits.
10. All tenant improvement construction for the Leased Premises shall be
directed by Landlord and paid from the Relocation Fund in accordance with
Exhibit B attached hereto and made a part hereof.
11. Landlord and Tenant acknowledge that Tenant owes Landlord an amount of
$250,854.15 for unamortized over standard tenant improvement costs ("Unamortized
TI") in the Old Leased Premises. Subject to Paragraph 13 hereof, the Unamortized
TI shall be a contingent liability of Tenant and thus can only be asserted by
Landlord in the event that either Tenant files for protection under the Federal
Bankruptcy Act during the Lease Term or if there has been an Event of Default
under the Lease and Landlord terminates the Lease by judicial process. In such
event, the Unamortized TI shall become immediately due and payable as set forth
below and said amount shall bear interest from the date of filing for protection
or Event of Default until paid at a rate of 2% per month:
3
Month of Default Unamortized IT
---------------- --------------
6/1/93 -4/31/94 $ 250,854.15
5/l/94 -4/31/95 215,017.84
5/l/95 -4/31/96 179,181.54
5/l/96 -4/31/97 143,345.23
5/1/97 -4/31/98 107,508.92
5/l/98 -4/31/99 71,672.61
5/l/99 -4/20/00 35,836.31
If there is an Event of Default under the Lease and Landlord does not
terminate the Lease by judicial process, the Unamortized TI, as determined
above, shall bear interest at the rate of 2% per month from the date of the
Event of Default until the default has been cured. Said interest shall be paid
monthly with the Base Rent and failure to so pay will be deemed another Event of
Default under Paragraph 11.1 of the Lease. The interest paid under this
Paragraph shall be in addition to any Interest payable by Tenant to Landlord
under any other provision of the Lease or this Lease Amendment No. 3.
12. Landlord and Tenant acknowledge that as of May 31, 1993, Tenant owes
Landlord for delinquent rent for the Old Leased Promises in the amount of
$661,200.49 plus interest of $152,792.03 for a total of $813,992.52 (such
delinquent rent and interest collectively referred to as "Delinquent Rent").
Subject to Paragraph 13 hereof, the Delinquent Rent shall be a contingent
liability of Tenant and thus can only be asserted by Landlord in the event that
either Tenant files for protection under the Federal Bankruptcy Act during the
Lease Term or if there has been an Event of Default under the Lease and Landlord
terminates the Lease by judicial process. In such event, the Delinquent Rent
shall become immediately due and payable as set forth below and said amount
shall bear interest from the date of filing for protection or Event of Default
until paid at a rate of 2% per month:
Month of Default Delinquent Rent
---------------- ---------------
6/1/93 -4/31/94 $ 853,842.86
5/l/94 -4/31/95 731,865.31
5/l/95 -4/31/96 609,887.76
5/l/96 -4/31/97 487,910.21
5/1/97 -4/31/98 365,932.66
5/l/98 -4/31/99 243,955.11
5/l/99 -4/20/00 121,977.56
If there is an Event of Default under the Lease and Landlord does not
terminate the Lease by judicial process, the Delinquent Rent, as determined
above, shall bear interest at a rate of 2% per month from the date of the Event
of Default until the default has been cured. Said interest shall be paid monthly
with the Base Rent and failure to so pay will be deemed another Event of Default
under Paragraph 11.1 of the Lease. The interest paid under this Paragraph shall
be in addition to any interest payable by Tenant to Landlord under any other
provisions of the Lease or Lease Amendment No. 3.
13. There shall be no liability, contingent or otherwise, of Tenant to
Landlord related to the Unamortized TI and the Delinquent Rent for the Old
Leased Premises, as set forth in Paragraphs 11 and 12
hereof, at any time after the effective date of a registration statement
for a public offering of shares of stock in Tenant (or any related entity which
is a signatory to the Lease or which becomes a
4
successor to Tenant) provided that at least $5,000,000 of new capital is raised
for Tenant by such registration of its securities. This waiver of liability
shall not apply to the Relocation fund. In the event less than $5,000,000 of new
capital is raised, the Unamortized TI and the Delinquent Rent for the Old Leased
Premises shall remain due and payable in accordance with the terms of this
Amendment.
14. It is the intent of Landlord to enter into a 10 year lease with Canon
Computer Systems, Inc. ("Canon Lease") for all of the Old Leased Premises which
shall include an expansion option for space in Building A. Landlord shall have
the right to terminate this Lease between the 60th and the 72nd months of the
Canon Lease term. Landlord shall provide Tenant with the commencement date of
the term of the Canon Lease when available. Landlord shall give six months prior
written notice to Tenant of its intent to terminate the Lease pursuant to this
Paragraph. In the event Landlord terminates the Lease and Tenant is not in
default of the Lease on the date the Lease terminates, the Unamortized TI and
Delinquent Rent for the old Leased Premises shall be forgiven.
15. Paragraph 6.1(g) of the Lease shall be deleted in its entirety and
replaced with the following:
Tenant shall have the non exclusive right to install, at its sole cost and
expense, or from the Relocation Fund, its name on the exterior of the Building
subject to Landlord's reasonable approval of the size, specifications and
location of such sign and in accordance with the sign ordinance for the Project,
as approved by the City of Costa Mesa, and any other applicable governmental
authorities. Tenant must obtain the prior approval of the Landlord before
placing any other sign or symbol in doors or windows or elsewhere in or about
the Leased Premises, or upon any other part of the Building, or Project
including building directories. Any Signs or symbols which have been placed
without Landlord's approval may be removed by Landlord. During the Lease Term,
the cost of maintenance and repair of all signage shall be Tenant's cost. Upon
expiration or termination of the Lease, all signs installed by Tenant shall be
removed and any damage resulting therefrom shall be promptly repaired or such
removal and repair may be done by Landlord and the cost charged to Tenant as
Rent.
16. The Addendum to Lease, which was incorporated into the original Lease
at the time of its execution, and which includes Paragraphs 14.1 Base Rent, 14.2
Right of Refusal, 14.3 Rental Abatement, 14.4 Cancellation Provision, 14.5
Option to Renew and 14.6 Option to Purchase, shall be deleted in its entirety.
17. The last sentence of paragraph (2) and the third paragraph of Schedule
4 "Maintenance Services" (as amended in Lease Amendment No. 2) shall be deleted
in their entirety.
18. The last two sentences of Schedule 5 (Parking) (as amended in Lease
Amendment No. 2) shall be deleted in their entirety and replaced with the
following:
Of the Authorized Number of Parking Spaces set forth in Paragraph 7 hereof,
Tenant shall have 9 reserved parking spaces the location of which are shown on
revised Schedule 13 attached hereto and made a part hereof.
19. Tenant agrees to vacate the Old Leased Premises on or before the Lease
Commencement Date as set forth in Paragraph 3 hereof and said vacation shall
comply with Paragraph 12.1 of the Lease. Provided Landlord has not inhibited
Tenant from occupying the Leased Premises, Tenant's failure to
5
comply with said vacation shall be deemed an Event of Default under Paragraph
11.1 of the Lease; and, in addition to the obligations set forth in Paragraph 21
hereof, Tenant shall be obligated to comply with all the terms and conditions of
the Old Lease, as hereinafter defined, except that Tenant shall be deemed to be
holding over pursuant to Paragraph 12.2 of the Old Lease and shall be subject to
the accelerated Rent, until Tenant vacates and surrenders the Old Leased
Premises pursuant to the Old Lease terms. The term "Old Lease" shall mean lease
reference in the recitals of this Amendment No. 3.
20. Landlord shall have the right to declare this Lease Amendment No. 3
null and void if Landlord does not enter into the Canon Lease; provided that
Landlord reimburses Tenant for all actual reasonable costs paid by Tenant in
conjunction with moving to the Leased Premises.
21. The rights and obligations of Landlord and Tenant relating to
insurance, indemnification, removal of property, holding-over and brokers shall
continue to apply to all claims arising from the period in which Tenant occupied
the Old Leased Premises.
Except as provided in this Lease Amendment No. 3, all other terms,
covenants and conditions contained in the Lease shall remain in full force and
effect. Initially capitalized terms not otherwise defined herein shall have the
same meaning as contained in the Lease.
IN WITNESS WHEREOF, the parties have caused their respective names to be
subscribed to this Lease Amendment No. 3 as of the date first above written the
execution and delivery thereof having been duly authorized.
TENANT: LANDLORD:
KEITH ENGINEERING, INC. SCRIPPS CENTER ASSOCIATES
d/b/a THE KEITH COMPANIES a California general partnership
By: /s/ ARAM H. KEITH By: ALLSTATE INSURANCE COMPANY
-------------------
Its President an Illinois corporation
general partner
By: /s/ FLOYD S. REID
------------------- By: /s/ KS (last name unreadable)
Its Secretary -------------------------------
By: /s/ JOHN (last name unreadable)
-------------------------------
By: ALLSTATE LIFE INSURANCE COMPANY
an Illinois corporation
general partner
By: /s/ KS (last name unreadable)
-------------------------------
By: /s/ JOHN (last name unreadable)
-------------------------------
6
EXHIBIT B
---------
1. Definitions The terms defined In this paragraph, for purposes of this
-----------
schedule, shall have the meanings specified below, and, in addition to the terms
defined below, terms defined in the Lease and
---
Lease Amendment No. 3 shall, for purposes of this Schedule have the
---------------------
meanings specified in the Lease and Lease Amendment No. 3.
--------------------------
1.01 "Leasehold Improvements" means those items which are supplied,
installed and finished by Landlord, according to and described in the
Construction documents (as hereinafter defined) and which shall be paid for by
Landlord (subject to the Allowance) as provided for in paragraph 2.03 below.
1.02 "Construction Documents" means the approved construction drawings,
plans and specifications referred to in paragraph 2.03.
1.03 "Substantial Completion" means that the Leasehold Improvements have
been substantially completed according to the Construction Documents, except for
items which will not materially affect the use of the Leased Premises or which
customarily are deemed to be "punchlist work".
2. Construction Documents: Payments
--------------------------------
2.01 The Parties have approved a preliminary floor plan for the Leased
----
Premises, a copy of which is attached hereto as Schedule I (the "Preliminary
Plan")
2.02 Tenant shall cause to be prepared and submitted to Landlord for
----
approval all drawings, plans and specifications necessary to construct the
Leasehold Improvements. The fees and expenses for preparing the drawings, plans
and specifications shall the sole responsibility of Tenant.
----------------------------------
2.03 Tenant acknowledges that Landlord's sole monetary obligation is to
----
pay the costs attributable to the construction of the Leasehold Improvements, up
to an aggregate maximum limit of $ 250,000 (the "Allowance"), and Tenant shall
-------
pay all other costs of the construction of the Leasehold Improvements ("Tenant's
Share"). In addition, all costs attributable to changes and variations from the
Construction Documents (including, without limitation, any fees and expenses of
the Consultants and any increased costs of construction) shall be paid by
Tenant.
3. Leasehold Improvements
----------------------
3.01 The following provisions shall apply to the construction of the
----
Leasehold Improvements;
(a) All work involved in the completion of the Leasehold Improvements
shall be carried out by Landlord and its agents and contractors under the sole
direction of Landlord. Tenant shall cooperate with Landlord and its agents and
contractors to promote the efficient and expeditious completion of the Leasehold
Improvements; and
7
(b) Landlord agrees to construct the Leasehold Improvements in accordance
with the Construction Documents, provided Tenant has complied with all the
applicable provisions of this Schedule, the Lease and Lease Amendment No. 3.
3.02 If there are any changes in the Leasehold improvements requested by,
----
or on behalf of, Tenant from the work as reflected in the Construction
Documents, each such change must receive the prior written approval of Landlord,
and Tenant shall bear the cost of all such changes.
3.03 Landlord shall have no obligation to commence construction of any
----
work in the Leased Premises until (a) Tenant has submitted the Construction
----------
Documents for the construction of the Leasehold improvements as required by the
provisions hereof, and (b) Landlord shall have received Tenant's advance payment
in an amount equal to the Tenant's Share, if any.
4. Lease Commencement Date
-----------------------
4.01 Landlord shall notify Tenant when Substantial Completion has been
----
achieved and the Lease Commencement Date shall Completion has established as set
forth in the Lease Amendment No. 3. Notwithstanding anything to the contrary
contained in the Lease, the Lease Amendment No. 3 or this Schedule, the Lease
Commencement Date shall not be extended for any delay in Substantial Completion
to the extent that such delay is caused in whole or in part by any act or
omission attributable to Tenant, including without limitation:
(a) Tenant's request for any Leasehold Improvements which require
materials which need to be ordered and are not immediately available;
(b) Tenant's failure to furnish promptly information concerning Tenant's
requirements pertaining to construction of the Leasehold improvements or any
other information requested by the Landlord as necessary or useful to prepare
the Construction Documents;
(c) Tenant's failure to submit promptly the Construction Documents; and
------
(d) Tenant's request for any changes in the Leasehold Improvements from
the work as reflected in the Construction Documents.
4.02 In any event, Rent payable under the Lease and Lease Amendment No. 3
----
shall not abate by reason of any delay, expense or other burden arising out of
or incurred in connection with the design or construction of the Leasehold
Improvements to the extent that such delay, expense or other burden is caused in
whole or in part by any act or omission attributable to Tenant including,
without limitation, the acts and omissions referred to in subparagraphs (a)
through (d) of paragraph 4.01 above).
5. Tenant's Access to Leased Premises
----------------------------------
5.01 Landlord, in its sole discretion, may permit Tenant and Tenant's
----
agents or independent contractors to enter the Leased Premises prior to the
scheduled Lease Commencement Date in order that Tenant may do other work as may
be required by Tenant to make the Leased Premises ready for Tenant's use and
occupancy. Such permission must be in writing prior to entry. If Landlord
permits such prior entry, then such license shall be subject to the condition
that Tenant and Tenant's agents, contractors, workman, mechanics, suppliers, and
invitees shall work in harmony with and not interfere with Landlord
8
and its agents and contractors in doing its work in the Leased Premises or the
Building or with other tenants and occupants of the Building or the Project. If
at any time such entry shall cause or threaten to cause disharmony or
interference, Landlord, in its sole discretion, shall have the right to withdraw
and cancel such license upon notice to Tenant. Tenant agrees that any such entry
into the Leased Promises shall be deemed to be under all of the terms,
covenants, conditions and provisions of the Lease and Lease Amendment No. 3,
except as to the covenant to pay periodic Rent. Tenant further agrees that, to
the extent permitted by law, Landlord and its principals shall not be liable in
any way for any injury or death to any person or persons, loss or damage to any
of the Leasehold Improvements or installations made in Leased Premises or loss
or damage to property placed therein or there about, the same being at Tenant's
risk.
5.02 In addition to any other conditions or limitations on such license to
----
enter the Leased Premises prior to the Lease Commencement Date, Tenant expressly
agrees that none of its agents, contractors, workmen, mechanics, suppliers or
invitees shall enter the Leased Premises prior to the Lease Commencement Date
unless and until each of them shall furnish Landlord with satisfactory evidence
of Insurance coverage, financial responsibility and appropriate written releases
of mechanics' or materialmen's lien claims.
6. Miscellaneous Provisions Landlord and Tenant further agree as
------------------------
follows:
6.01 Except as herein expressly set forth with respect to the Leasehold
----
Improvements, Landlord has no agreement with Tenant and has no obligation to do
any work with respect to the Leased Premises. Any other work in the Leased
Premises which may be permitted by Landlord pursuant to the terms and conditions
of the Lease and Lease Amendment No. 3 shall be done at Tenant's sole cost and
expense and in accordance with the terms and conditions of the Lease and Lease
Amendment No. 3.
6.02 This Schedule shall not be deemed applicable to: (a) any additional
----
space added to the original Leased Premises at any time, whether by the exercise
of any options under the Lease, Lease Amendment No. 3 or otherwise, or (b) any
portion of the original Leased Premises or any additions thereto in the event of
a renewal or extension of the original Lease Term, whether by the exercise of
any options under the Lease or any amendment or supplement thereto. The
construction of any additions or improvements to the Leased Premises not
contemplated by this Schedule shall be effected pursuant to a separate work
letter agreement or other document, in the form then being used by Landlord and
specifically addressed to the allocation of costs relating to such construction.
9
LEASE AMENDMENT NO. 4
THIS LEASE AMENDMENT NO. 4 ("Amendment") is made and entered into as of
October 1, 1993, by and between SCRIPPS CENTER ASSOCIATES, a California general
- ----------
partnership ("Landlord") and KEITH ENGINEERING, INC., d/b/a THE KEITH COMPANIES
("Tenant").
WHEREAS, Landlord and Tenant entered into a lease dated August 16, 1989,
whereby Tenant leased approximately 70,000 square feet of space in an office
building known as Building C of Scripps Center located at 2995 Red Hill Avenue,
Costa Mesa, California (the "Old Leased Premises").
WHEREAS, the lease was amended by Lease Amendment No. 1 dated November 30,
1989, Lease Amendment No. 2 dated August 31, 1990 and Lease Amendment No. 3
dated April 15, 1993. The lease, together with Lease Amendments No. 1, 2 and 3
are herein collectively referred to as the "Lease".
WHEREAS, Landlord and Tenant now desire to amend the Lease to reflect
certain economic and other changes to the Lease.
NOW, THEREFORE, in consideration of the foregoing premises and the
respective covenants and agreements herein set forth, the parties hereto agree
as follows:
1. Paragraph 1.1 (d) of the Lease shall be deleted in its entirety and
replaced with the following:
Tenant's Square Footage shall mean 32,994 rentable square feet which has
been measured by Landlord in accordance with BOMA standards (and
specifically excludes in the calculation the center stairwell). Tenant's
Square Footage is calculated on a rentable basis which includes a pro rata
share of common area. Total Square Footage of the Building shall mean
60,165 rentable square feet and Total Square Footage of the Project shall
mean 229,349 rentable square feet, which may be adjusted pursuant to
paragraph 7.2(iii) of the Lease.
2. Paragraph 1.1 (e) of the Lease shall be deleted in its entirety and
replaced with the following:
Lease Commencement Date shall mean June 1, 1993; Lease Expiration Date
shall mean April 20, 2000; Lease Term shall mean the period between the
Lease Commencement Date and the Lease Expiration Date.
1
3. Paragraph 1.1(f)a. of the Lease shall be deleted in its entirety and
replaced with the following:
a. Base Rent shall be payable in monthly installments Plus applicable
sales tax, if any in accordance with the following schedule and
adjustments:
(i) From the Lease Commencement Date through April 30, 1994, Base
Rent shall mean $376,131.60 ($11.40 per square foot of Tenant's Square
Footage) per year, payable in monthly installments of $31,344.30.
(ii) From May 1, 1994 through April 30, 1995, Base Rent shall mean
$415,724.40 ($12.60 per square foot of Tenant's Square Footage) per
year, payable in monthly installments of $34,643.70.
(iii) From May 1, 1995 through April 20, 2000, Base Rent shall be
subject to adjustment on each Base Rent Adjustment Date as follows:
4. The following language shall be added to the end of Paragraph 1.1(f)d
of Lease Amendment No. 3:
In lieu of Tenant paying the Adjustment Payments to Landlord, Tenant
shall guaranty the Adjustment Payments under a separate guaranty
document executed by Tenant and Landlord. In the event of default
under the Lease, the guaranty shall control.
5. Paragraph 1.1(g) of the Lease shall be deleted in its entirety and
replaced with the following:
Tenant's Pro Rata Share of Building Operating Costs shall mean 54.8%.,
which may be adjusted pursuant to paragraph 7.2 (iii) of the Lease.
Tenant's Pro Rata Share of Project Operating Costs shall mean 14.4%, which
may be adjusted pursuant to paragraph 7.2 (iii) of the Lease. Tenant's Pro
Rata Share of Project Operating Costs for the first calendar year of the
Lease Term is estimated to be $75,226.32 ($2.28 per square foot of
Tenant's Square Footage) payable in monthly installments of $6,268.86,
which is subject to adjustment pursuant to Article 3.4c and d of the
Lease. Tenant's Pro Rata Share of Building Operating Costs for the first
calendar year of the Lease Term is estimated to be $65,328.12 ($1.98 per
square foot of Tenant's Square Footage) payable in monthly installments of
$5,444.01, which is subject to adjustment pursuant to Article 3.4c and d
of the Lease.
2
6. The first paragraph and the Delinquent Rent schedule in Paragraph 12
of Lease Amendment No. 3 shall be deleted in their entirety and replaced with
the following:
Landlord and Tenant acknowledge that as of May 31, 1993, Tenant owes
Landlord for delinquent rent for the Old Leased Premises in the amount of
$671,152.16 plus interest of $153,330.66 for a total of $824,482.82 (such
delinquent rent and interest collectively referred to as "Delinquent
Rent"). Subject to Paragraph 13 hereof, the Delinquent Rent shall be a
contingent liability of Tenant and thus can only be asserted by Landlord in
the event that either Tenant files for protection under the Federal
Bankruptcy Act during the Lease Term or if there has been an Event of
Default under the Lease and Landlord terminates the Lease by judicial
process. In such event, the Delinquent Rent shall become immediately due
and payable as set forth below and said amount shall bear interest from the
date of filing for protection or Event of Default until paid at a rate of
2% per month:
Month of Default Delinquent Rent
---------------- ----------------
6/l/93 - 4/31/94 $824,482.82
5/l/94 - 4/31/95 706,699.56
5/l/95 - 4/31/96 588,916.30
5/l/96 - 4/31/97 471,133.04
5/l/97 - 4/31/98 353,349.78
5/l/98 - 4/31/99 235,566.52
5/l/99 - 4/20/00 117,783.26
7. The last two sentences of Schedule 5 (Parking) (as amended in Lease
Amendment Nos. 2 and 3) shall be deleted in their entirety and replaced with the
following:
Of the Authorized Number of Parking Spaces set forth in Paragraph 6 hereof,
Tenant shall have 12 reserved parking spaces and 8 car/van pool reserved
parking spaces, the location of which are shown on revised Schedule 13
attached hereto and made a part hereof.
8. Schedule 13 of Lease Amendment No. 3 is hereby deleted in its entirety
and replaced with Schedule 13 attached hereto and made a part hereof.
Except as provided in this Lease Amendment No. 4, all other terms,
covenants and conditions contained in the Lease shall remain in full force and
effect. Initially capitalized terms not otherwise defined herein shall have the
same meaning as contained in the Lease.
3
IN WITNESS WHEREOF, the parties have caused their respective names to be
subscribed to this Lease Amendment No. 4 as of the date first above written the
execution and delivery thereof having been duly authorized.
TENANT: LANDLORD:
KEITH ENGINEERING, INC. SCRIPPS CENTER ASSOCIATES
d/b/a THE KEITH COMPANIES a California general partnership
By: /s/ Aram H. Keith By: ALLSTATE INSURANCE COMPANY AND
------------------
Its President ALLSTATE LIFE INSURANCE COMPANY
both Illinois corporations
By: /s/ Floyd S. Reid general partners
------------------
Its Secretary by: Its (2) authorized signers
(signatures illegible)
4
FIFTH AMENDMENT TO LEASE
This Fifth Amendment to Lease ("Fifth Amendment") is made and entered into as of
the ____ day of May, 1998 by and between Scripps Center Associates ("Landlord")
and The Keith Companies ("Tenant").
RECITALS
A. Landlord and Tenant entered into that certain Lease dated August 16, 1989
("Lease") for premises in Scripps Center in the facility known as 2995
Redhill Avenue, Costa Mesa, California. Said Lease was modified with
Amendments # 1, 2, 3 and 4, which provided for Tenant's relocation to 2955
Redhill Avenue, Costa Mesa (the "Building"').
B. The parties wish to modify the Lease whereby Tenant shall lease an
additional 16,419 rentable square feet, on a portion of the ground floor
further identified as Suite 100, in the property known as 2955 Redhill
Avenue, Costa Mesa, California ("Additional Premises"), in addition to the
initial amended Leased Premises.
Now, therefore, in consideration of the foregoing recitals and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. LEASED PREMISES: Shall additionally include Suite 100 on a portion of the
ground floor of the Building, as of the Lease Commencement Date for the
Additional Premises, further described and shown in the attached Exhibit 1.
2. TENANT'S SQUARE FOOTAGE: Shall mean 49,41') rentable square feet for the
combined 4th Amendment defined Leased Premises and Additional Premises as
of the Lease Commencement Date for the Additional Premises.
3. LEASE COMMENCEMENT DATE: For the Additional Premises shall mean July 1,
1998.
4. LEASE TERM: Shall expire on April 20, 2000 or earlier, if cancelled by
Landlord as provided for in the current Lease.
5. BASE RENT: Shall mean for the Additional Premises only, as of the Lease
Commencement Date for the Additional Premises on a triple net basis, Sixteen
Thousand Four Hundred Nineteen and No/100 Dollars ($16,419.00) monthly for
months I - 12 of said Lease Term and Sixteen Thousand Seven Hundred Forty-
seven and 38/100 Dollars ($16,747.38) monthly for months 13 -22 of the Lease
Term. Tenant shall continue to pay the Base Rent for the Initial Premises as
prescribed in the Lease as amended unabated over the remainder of the Lease
Term.
6. EARLY OCCUPANCY: Tenant shall have the right, provided it does not interfere
with the tenant improvement process, of one (1) month early occupancy prior
to the Lease Commencement Date rent free for the purpose of installing
furniture, fixtures and equipment.
7. OPERATING EXPENSES: Tenant's Pro Rata Share of Building Operating Costs
shall mean 81.7% as of the Lease Commencement Date for the combined 4th
Amendment defined Premises and the Additional Premises. Tenant's Pro Rata
Share of Project Operating Costs shall mean 21.5% as of the Lease
Commencement Date for the combined 4th Amendment defined Premises and the
Additional Premises.
8. OPTION TO RENEW: Subject to any existing rights, Tenant shall have one (1)
------------------------------
option to renew ("Option to Renew") this Lease for five (5) years (the
"Renewal Period"). If Tenant desires to exercise its Option to Renew, Tenant
shall give Landlord written notice ("Renewal Notice") thereof on or before
January 20, 2000. During the thirty-(30) day period following Landlord's
receipt of the Renewal Notice, Landlord and Tenant shall
2
use reasonable efforts to negotiate a mutually agreeable base rent ("Market
Base Rent") for the Renewal Period. The Market Base Rent shall be negotiated
in light of then current terms for reviewing tenants for comparable space,
including market rents, term of renewal and operating expense pass throughs
and the tenant improvement allowance of $5.00 per rentable square foot which
Landlord will provide Tenant as part of its renewal. Within fifteen (15)
business days of agreement by the parties on the Market Base Rent and other
terms of the renewal, Landlord shall deliver to Tenant an amendment to this
Lease extending this Lease on such terms. Such amendment shall not contain
any further option to renew. Tenant shall execute and deliver the amendment
to Landlord within ten (10) business days following receipt of such
amendment. The foregoing option and rights are subject to there having been
no Event of Default which has not been cured under this Lease, are personal
to the original Tenant executing the Lease, may not be assigned, and shall
be available to and exercisable by the Tenant only when the original Tenant
is in actual possession and physical occupancy of the entire Leased
Premises. Time is of the essence in the exercise of Tenant's Option to
Renew. Should Tenant fail to exercise such option, execute and deliver any
required documents, or perform any of its required obligations under this
section, or should the parties be unable to agree on Market Base Rent for
the Renewal Period, within the time periods set forth above, then this
Option to Renew and any other rights of Tenant under the Lease in the nature
of options, shall be null and void, and the Lease shall terminate at the end
of the Lease Term. The option to renew shall include annual rent increases
based upon the CPI, not to exceed 3% per annum compounded.
9. PARKING: As of the Lease Commencement Date for the Additional premises
only, Tenant shall have fifty-nine (59) unreserved and in common parking
spaces and five (5) reserved parking spaces in a mutually agreed upon
location.
10. SECURITY DEPOSIT: Upon execution of this 5th Amendment to Lease, Tenant
shall deposit with Landlord a security deposit equal to the first month's
rent for the Additional Premises.
11. PREPAID RENT: Upon execution of this 5th Amendment to Lease, Tenant shall
deposit with Landlord' Tenant's first full month's rent for the Additional
Premises.
12. RIGHT TO ASSIGN OR SUBLEASE: No consent shall be required for
transactions with affiliates or for corporate restructuring (mergers,
-----------------------
consolidations, etc.) provided Tenant notifies Landlord within thirty (30)
days. All profits on any sublease or assignment transaction shall be
shared 50% to Landlord and 50% to Tenant.
13. CONSTRUCTION: The terms defined in this paragraph 14, for the purposes of
constructing the improvements within the Additional Premises, shall have
the meanings specified below, and in addition to the terms below, other
terms identified in the Lease shall, for the purposes of this paragraph 14,
have the meaning specified in the Lease.
1. DEFINITIONS:
1.01 "Leasehold Improvements" means those items which are supplied,
------------------------
installed and finished by Tenant, according to and described in the
Construction Documents (as hereinafter defined) and which shall be
paid for by Tenant (subject to the Allowance) as provided for in
paragraph 2.03 below.
1.02 "Construction Documents" means the approved construction drawings,
------------------------
plans and specifications referred to in paragraph 2.03.
1.03 "Substantial Completion" means that the Leasehold Improvements have
------------------------
been substantially completed according to the Construction Documents,
except for items which will not materially affect the use of the
Leased Premises or which customarily are deemed to be "punchlist work"
3
2. CONSTRUCTION DOCUMENTS; PAYMENTS
2.01 The parties have approved a preliminary- floor plan for the Leased
Premises, a copy of which is attached to the Lease as Schedule I (the
"Preliminary Plan").
2.02 Tenant shall cause to be prepared and submitted to Landlord for
approval all drawings, plans and specifications necessary to construct
the Leasehold improvements. Within five (5) business days from the
date the documents are Submitted ("Document Approval Period"),
Landlord shall approve or disapprove the documents. Said approval
shall not be unreasonably withheld or delayed. If the Landlord
disapproves the documents within the Approval Period, then the
Landlord and Tenant shall attempt to resolve the objections of
Landlord; and if a reasonable resolution cannot he reached within ten
(10) days of Landlord's notice of disapproval, then either Tenant or
Landlord shall have the right to terminate the Lease by written notice
to the other. Tenant shall have sole responsibility for ensuring that
the Leasehold Improvements comply with all applicable laws, statues,
ordinances and regulations, including without limitation the Americans
with Disabilities Act.
2.03 Upon Landlord's approval of the final form of the drawings, plans
and specifications, which shall constitute the Construction Documents,
Tenant shall prepare an analysis of the cost of constructing the
Leasehold Improvements according to the Construction Documents (the
"Final Cost") and submit such analysis to Landlord for its approval.
Within five (5) business days from the date the Final Cost has been
submitted ("Cost Approval Period") Landlord shall approve or
disapprove the Final Cost, which shall not be unreasonably withheld or
delayed. If Landlord does not approve the Final Cost, it shall
promptly notify Tenant; in which case Tenant and Landlord shall use
their best efforts to amend the Construction Documents in a manner
satisfactory to each. If they are unable to do so within five (5)
days after Landlord notifies Tenant as provided in the preceding
sentence, either party may terminate the Lease by delivering written
notice to the other. Tenant acknowledges that Landlord's sole
monetary obligation is to pay the costs attributable to the
construction of the Leasehold Improvements, up to an aggregate maximum
limit of $2.68 per rentable square foot of Tenant's Additional
Premises (the "Allowance"), and Tenant shall pay all other costs of
the construction of the Leasehold' Improvements ("Tenant's Share").
In addition, all costs attributable to changes and variations from the
Construction Documents in excess of the Final Cost (including, without
limitation, any fees and expenses of the Consultants and any increased
costs of construction) shall be paid by Tenant.
2.04 After approval of the construction Documents, Tenant shall bid the
Leasehold Improvements to at least two (2) general contractors or
product vendors applicable approved in advance by Landlord. Tenant
shall have the right to select the general contractor who will
construct the Leasehold Improvements (the "General Contractor") from
the responses to such bids and approve the Cost Estimate. The General
Contractor shall execute an industry standard American Institute of
Architect's ("AIA") Contract with the Tenant, satisfactory to Landlord
in form and substance, which shall include an indemnification of
Tenant and Landlord and their successors and assigns from and against
any and all claims, damages, losses or expenses suffered or incurred
by reason of misfeasance or malfeasance of the General Contractor or
any of its employees, agents, contractors, invitees or guests. The
contract shall provide for a retainage of not less than ten percent
(10%).
2.05 Prior to the commencement of construction, the General Contractor
shall deliver to Tenant and to Landlord:
4
(a) evidence that all permits necessary for the construction of the
Leasehold Improvements have been obtained:
(b) certificates of insurance from companies acceptable to Tenant and
Landlord, naming Tenant and Landlord as additional Insureds, and
evidencing builder's risk coverage in an amount satisfactory to
Tenant and Landlord, along with such other insurance coverages as
Tenant and Landlord may reasonably require:
(c) at Landlord's request, obtain and deliver to Landlord a bond for
payment and performance, in form and amount reasonably
satisfactory to Landlord, naming Landlord and Tenant as
beneficiaries.
2.06 Payments of portions of the Allowance shall be made from time to time
during the course of the construction of the Leasehold Improvements,
but not more often than once a month. Disbursements of the requested
amounts, subject to Landlord's withholding of the retainage, shall be
made upon the Submission to Landlord of the following documents:
(a) a draw request from Tenant in form acceptable to Landlord,
together with copies of the invoices for which payment is being
requested;
(b) lien waivers (to the extent available under local law), and sworn
statements from the General Contractor, subcontractors, sub-
subcontractors, laborers and material suppliers pertaining to the
work. If lien waivers are not available for the currently
requested disbursement, Tenant shall submit lien waivers for all
sums previously advanced;
(c) a certificate from Tenant's architect that all work (labor and
materials) for which the draw request has been made has been
completed and performed in a good and workmanlike manner
substantially in accordance with the Construction Drawings and
Specifications;
(d) such evidence as Landlord may reasonably require certifying that
any work requiring inspection by Governmental authorities has
been duly inspected and approved;
(e) at Landlord's request, title insurance endorsements satisfactory
to Landlord at Tenant's expense; and
(f) satisfy such other conditions as Landlord may reasonably require
in order to establish that the work has been satisfactorily
completed and paid for.
2.07 At Landlord's option, payments may be made directly to the invoicing
party, to the General Contractor or to Tenant. Landlord shall have no
obligation to disburse any sums hereunder if Landlord has received
notice that the property is subject to a charge, liability, claim,
lien, mechanic's lien, or other encumbrance of whatsoever kind or
nature created by Tenant or by reason of the construction of the
Leasehold Improvements by the Tenant, unless any such claim or lien is
bonded over to the satisfaction of Landlord in Landlord's sole and
absolute discretion.
2.08 Landlord shall not be obligated to make the final advance of the
Allowance until the Tenant has also delivered to Landlord the
following additional items, all satisfactory to Landlord in Landlord's
sole discretion.
(a) such as-built plans and specifications as Landlord may deem
necessary to describe the work;
5
(b) certificates of occupancy and such other evidence as Landlord may
reasonably require certifying that any work requiring inspection
by governmental authorities has been duly inspected and approved;
c) a certificate from Tenant's architect stating that Improvements
have been completed substantially in accordance with the
Construction Drawings (as they may have been modified from time
to time as provided by this agreement);
(d) final lien waivers from the General Contractor, subcontractors,
laborers and materials suppliers, or evidence satisfactory to
Landlord in Landlord's sole discretion that such lien shall be
delivered to Landlord immediately upon payment of the final
advance by Landlord; and
(e) at Landlord's request, title insurance endorsements satisfactory
to Landlord at Tenant's expense.
3. LEASEHOLD IMPROVEMENTS
3.01 The following provisions shall apply to the construction of the
Leasehold Improvements:
(a) All work involved in the completion of the Leasehold Improvements
shall be carried out by Tenant and its agents and contractors
under the sole direction of Tenant, except that in the event that
installation of any of the Leasehold Improvements affects,
connects to or impacts the mechanical, electrical or plumbing
systems of the Building or any space in the Building outside of
the Leased Premises, Landlord's Representative (as described
below) shall have full and absolute authority to stop or redirect
the work as s/he deems necessary. Landlord shall cooperate with
Tenant and its agents and contractors to promote the efficient
and expeditious completion of the Leasehold Improvements.
(b) Landlord shall be represented during the construction of the
Leasehold Improvements by Property Manager ("Landlord's
Representative"), who shall be given full and complete access to
the Leased Premises and the Construction Documents while the
Leasehold Improvements are being constructed. Tenant's agents
and contractors shall cooperate fully with all requests of
Landlord's representative.
(c) Tenant agrees to construct the Leasehold Improvements in
accordance with the construction Documents, and in compliance
with all applicable building and safety codes. Tenant shall
complete the construction of the Leasehold Improvements with as
little disruption or interference as possible with the other
tenants of the Building. Specifically, without limiting the
foregoing, Tenant shall not block access to the Building,
obstruct walkways or parking spaces, or tie up passenger
elevators, without first receiving Landlord's prior written
consent, nor shall Tenant cause any fire or safety hazards during
the construction.
(d) Tenant hereby indemnifies and holds Landlord and its agents
harmless from any and all damages or injury to person and
property arising out of or related to the Improvements being
performed to the Leased Premises, excluding damage or injury
caused by the acts, omissions or gross negligence on the part of
the Landlord or its agents. Tenant shall reimburse Landlord for
any expenses incurred by Landlord in making repairs to the Leased
Premises or other areas of the Project or Building
6
outside the Leased Premises, arising out of or related to the
Improvements being performed hereunder.
3.02 If there are any changes in the Leasehold Improvements requested by,
or on behalf of, Tenant from the work as reflected in the Construction
Documents, each Such change must receive the prior written approval of
Landlord, and Tenant shall bear the cost of all such changes.
3.03 Tenant shall not commence construction of any work in the Leased
Premises until (a) Landlord has approved the Construction Documents
and the Final cost for the construction of the Leasehold Improvements
as required by the provisions hereof, and (b) Landlord shall have
received Tenant's advance payment in an amount equal to the Tenant's
Share, if any.
4. LEASE COMMENCEMENT DATE
4.01 Tenant shall notify Landlord when Substantial Completion has been
achieved and the Lease Commencement Date shall be established as set
forth in the Lease. Notwithstanding anything to the contrary
contained in the Lease or this Schedule, the Lease Commencement Date
shall not be extended for any delay in Substantial Completion to the
extent that such delay is caused in whole or in party by any act or
omission attributable to Tenant, including without limitation:
(a) Tenant's request for any Leasehold Improvements which require
materials which need to be ordered and are not immediately
available;
(b) Tenant's failure to furnish promptly information concerning
Tenant's requirements pertaining to construction of the Leasehold
Improvements or any other information requested by the Landlord
as necessary or useful to approve the Construction Documents,
(c) Tenant's failure to promptly prepare and submit the Construction
Documents and Final Cost; and
(d) Tenant's request for any changes in the Leasehold Improvements
from the work as reflected in the Construction Documents.
4.02 In any event, Rent payable under the Lease shall not abate by reason
of any delay, expense or other burden arising out of or incurred in
connection with the design or construction of the Leasehold
Improvements to the extent that such delay, expense or other burden is
caused in whole or in party by any act or omission attributable to
Tenant (including, without limitation, the acts and omissions referred
to in subparagraphs (a) through (d) of paragraph 4.01 above).
5. TENANT'S ACCESS TO LEASED PREMISES
5.01 Tenant and Tenant's agents or independent contractors may enter the
Leased Premises prior to the scheduled Lease Commencement Date to
perform the construction of the Leasehold Improvements and to do such
other work as may be required by Tenant to make the Leased Premises
ready for Tenant's use and occupancy. Such entry shall be subject to
the condition that Tenant and Tenant's agents, contractors, workmen,
mechanics, suppliers and invitees shall work in harmony with and not
interfere with Landlord and its agents and contractors in doing its
work in the Leased Premises or the Building or with other tenants and
occupants of the Building or the Project. If at any time such entry
shall cause or threaten to cause disharmony or interference, Landlord,
in its sole discretion, shall have the right to limit, withdraw or
cancel such license upon notice to Tenant and, if necessary, to
complete the construction of the Leasehold Improvements on Tenant's
behalf. Tenant agrees that any
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such entry into the Leased Premises shall be deemed to be under all of
the terms, covenants, conditions and provisions o (Sic.) the Lease,
except as to the covenant to pay periodic Rent. Tenant further agrees
that, to the extent permitted by law, Landlord and its principals
shall not be liable in any way for any injury or death to any person
or person, loss or damage to any of the Leasehold Improvements or
installations made in the Leased Premises or loss or damage to
property placed therein or thereabout, the same being at Tenant's sole
risk.
5.02 In addition to any other conditions or limitations on such license to
enter the Leased Premises prior to the Lease Commencement Date, Tenant
expressly agrees that none of its agents, contractors, workmen,
mechanics suppliers or invitees shall enter the Leased Premises prior
to the Lease Commencement Date unless and until each of them shall
furnish Landlord with satisfactory evidence of insurance coverage,
financial responsibility and appropriate written releases of
mechanics' or materialmens' lien claims.
6. MISCELLANEOUS PROVISIONS
6.01 Except as herein expressly set forth with respect to the Leasehold
Improvements, Landlord has no agreement with Tenant and has no
obligation to do any work with respect to the Leased Premises. Any
other work in the Leased Premises which may be permitted by Landlord
pursuant to the terms and conditions of the Lease shall be done
Tenant's sole cost and expense and in accordance with the terms and
conditions of the Lease.
6.02 This paragraph 13 shall not be deemed applicable to: (a) any
additional space added to the original Leased Premises at any time,
whether by the exercise of any options under the Lease or otherwise,
or (b) any portion of the original Leased Premises as amended or any
additions thereto in the event of a renewal or extension of the
original Lease Term, whether by the exercise of any options under the
Lease or any amendment or supplement thereto. The construction of any
additions or Improvements to the Leased Premises not contemplated by
this paragraph 13 shall be effected pursuant to a separate work letter
agreement or other document, in the form then being used by Landlord
and specifically addressed to the allocation of costs relating to such
construction.
Except as modified herein, the Lease as amended shall remain in full force and
effect. In witness whereof, the Fifth Amendment has been executed as of the day
and year first written above.
LANDLORD: TENANT:
SCRIPPS CENTER ASSOCIATES THE KEITH COMPANIES
By: Allstate Life Insurance Company By:
Its: General Partner Its:
By: /s/ B.S.B. (signature illegible) By: /s/ Jerry Brickman
-------------------------------- ----------------------
Its: Authorized Signatory Its: Authorized Signatory
By: Allstate Insurance Company
Its: General Partner
By: /s/ B.S.B. (signature illegible)
--------------------------------
Its: Authorized Signatory
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