EXHIBIT 10.12
LEASE
MORENO CORPORATE CENTER, L.L.C.,
--------------------------------
a Delaware limited liability company
Landlord
and
THE KEITH COMPANIES, INC.,
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a California corporation,
formerly known as The Keith Companies - Inland Empire, Inc.,
a California corporation
Tenant
TABLE OF CONTENTS
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Page
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1. TERM.................................................................................
2. BASIC ANNUAL RENT AND SECURITY DEPOSIT...............................................
3. ADDITIONAL RENT......................................................................
4. IMPROVEMENTS AND ALTERATIONS.........................................................
5. REPAIRS..............................................................................
6. USE OF PREMISES......................................................................
7. UTILITIES AND SERVICES...............................................................
8. NONLIABILITY AND INDEMNIFICATION OF LANDLORD; INSURANCE..............................
9. FIRE OR CASUALTY.....................................................................
10. EMINENT DOMAIN.......................................................................
11. ASSIGNMENT AND SUBLETTING............................................................
12. DEFAULT..............................................................................
13. ACCESS; CONSTRUCTION.................................................................
14. BANKRUPTCY...........................................................................
15. SUBSTITUTION OF PREMISES.............................................................
16. SUBORDINATION; ATTORNMENT; ESTOPPEL CERTIFICATES.....................................
17. SALE BY LANDLORD; NONRECOURSE LIABILITY..............................................
18. PARKING; COMMON FACILITIES...........................................................
19. MISCELLANEOUS........................................................................
(a) Attorneys' Fees............................................................
(b) Waiver.....................................................................
(c) Notices....................................................................
(d) Labor......................................................................
(e) Security...................................................................
(f) Storage....................................................................
(g) Holding Over...............................................................
(h) Condition of Premises......................................................
(i) Quiet Possession...........................................................
(j) Matters of Record..........................................................
(k) Project Financing..........................................................
(1) Successors and Assigns.....................................................
(m) Brokers....................................................................
(n) Name.......................................................................
(o) Examination of Lease; Confidentiality......................................
(p) Time.......................................................................
(q) Defined Terms and Marginal Headings........................................
(r) Conflict of Laws; Prior Agreements; Separability...........................
(s) Authority..................................................................
(t) Common Areas...............................................................
(u) Joint and Several Liability................................................
(v) Rental Allocation..........................................................
(w) Rules and Regulations......................................................
(x) Financial Statements.......................................................
(y) Termination................................................................
LEASE
THIS LEASE ("LEASE") is made and entered into as of the 1st day of
January 1, 1996, by and between Moreno Corporate Center, L.L.C., a Delaware
limited liability company ("LANDLORD"), and The Keith Companies, Inc., a
California corporation ("TENANT"), formerly known as The Keith Companies -Inland
Empire, Inc., a California corporation, with regard to the premises located at
22690 Cactus Avenue, Floors 2 and 3, Moreno Valley, California.
NOW, THEREFORE, for and in consideration of the foregoing Recitals and the
mutual covenants and agreements set forth in this Lease, Landlord and Tenant
hereby agree as follows:
BASIC LEASE PROVISIONS
The following is a summary of lease provisions ("BASIC LEASE
PROVISIONS") intended for convenient use by Landlord and Tenant. If the letters
N/A appear in the Basic Lease Provisions, they mean that the particular item in
the Basic Lease Provision is not applicable to this Lease. Unless expressly
modified in this Lease, the following terms, words and figures set forth in the
Basic Lease Provisions are part of this Lease wherever reference is made to them
in this Lease, whether capitalized or lower case:
1. Tenant: The Keith Companies, Inc., a California corporation ("TENANT")
2. Building: Moreno Valley Corporate Center
Address: 22690 Cactus Street
Moreno Valley, California
3. Description of Premises: approximately 21,015 square feet located on the
third (3rd) floor, together with approximately 6,999 square feet located on
the second (2nd) Floor, together with 721 square feet comprising a field
office and computer room located on the first (1st) floor
Rentable Area: 28,735 square feet (See Exhibit "A")
4. Tenant's Proportionate Share of the Building: 46.18 %
5. Subject to the terms of Section 2 of the Lease, Basic Annual Rent:
$572,401.12. Basic Annual Rent shall include the following increases:
a. An eight percent (8%) increase in the month following Month Twenty-
four (24) of the Term;
b. An eight percent (8%) increase in the month following Month Forty-
eight (48) of the Term; and
c. An eight percent (8%) increase every twenty-four months thereafter for
the Term of the Lease and any extensions thereof;
PROVIDED, HOWEVER, subject to the terms and conditions herein Landlord
hereby covenants and agrees to abate a portion of the Basic Annual Rent
("Abated Rent"), so that the
amount of Basic Annual Rent payable under this Lease, after taking into
account such rent abatement, shall equal Four Hundred Thirty-one Thousand
Twenty-five Dollars ($431,025) so long as Tenant is not in default. Such
reduced Basic Annual Rent shall likewise be increased in accordance with
the increases set forth in Sections 5a., 5b., and 5c., of these Basic Lease
Provisions. If Tenant shall default under the terms of this Lease, Tenant
acknowledges and agrees that (i) the Basic Annual Rent shall be payable in
full without regard to any such rental abatement and (ii) Tenant shall
immediately pay to Landlord an amount equal to the Abated Rent not paid by
Tenant plus interest thereon calculated at the Default Rate from the date
each sum of Abated Rent would have been payable if not abated hereunder.
6. Initial Monthly Installment of Basic Annual Rent: $47,700 ($1.66 per square
foot of Rentable Area), unabated, and $35,918.75 ($1.25 per square foot of
Rentable Area) after deducting the Abated Rent. Concurrently upon Tenant's
execution of this Lease, Tenant shall cause the delivery to Landlord of a
promissory note in the original face amount of $273,892.96 in the form and
substance attached as Exhibit "B" to that certain Agreement Regarding Lease
entered into currently herewith by and between the parties to this Lease.
Said note is payment of rent for the first eight months of the Term. A
default under said note shall also constitute a default under this Lease.
7. Security Deposit: None, except as expressly provided in Section 2(c)
8. Base Year: 1995
9. Term: Five (5) years and nine (9) months
10. Commencement Date: January 1, 1996
11. Broker: None
12. Permitted Use: General Office
13. Number of Parking Spaces (See Paragraphs 18): Not more than 94 vehicle
parking spaces which includes Tenant's pro rata share of visitor parking
spaces for the Building.
14. Addresses for Notices:
To: Tenant To: Landlord
The Keith Companies, Inc. c/o Oaktree Capital Management, L.L.C.
2955 Red Hill Avenue 550 South Hope Street
Costa Mesa, California 92626 22nd Floor
Attention: Aram H. Keith Los Angeles, California 90071
Telephone: (714) 540-0800 Attention: W. Gregory Geiger
Telephone: (213) 614-0900
Telecopier: (213) 694-1592
With a copy to:
Paul, Hastings, Janofsky & Walker
555 South Flower Street
23rd Floor
Los Angeles, California 90071
Attention: Philip N. Feder, Esq.
Telephone: (213) 683-6298
Telecopier: (213) 627-0705
15. All payments payable under this Lease shall be sent to Landlord at the
address specified in Item 14 or to such other address as Landlord may
designate.
16. Guarantors: Keith Engineering, Inc., a California corporation dba The
Keith Companies The Keith Companies - North Counties, Inc.,
a California corporation Keith International, Inc., a
California corporation The Keith Companies - Hawaii, Inc., a
Hawaii corporation
[SIGNATURE PAGE TO FOLLOW]
IN WITNESS WHEREOF, the parties have executed this Lease, consistent
with foregoing Recitals, Basic Lease Provisions, the provisions of the Standard
Lease Provisions ("STANDARD PROVISIONS") (consisting of Paragraphs 1 through 19
which follow) and Exhibits "A" through "E", inclusive, all of which are
incorporated herein by this reference. In the event of any conflict between the
provisions of the Basic Lease Provisions and the provisions of the Standard
Lease Provisions, the Standard Lease Provisions shall control.
"Landlord" "Tenant"
Moreno Corporate Center, L.L.C. The Keith Companies, Inc.
a Delaware limited liability company a California corporation
By: TCW Asset Management Company, By: /s/ A.H. Keith
a California corporation, Its: President
its manager
By: /s/ Russel S. Bernard By: /s/ Floyd S. Reid
Its: Its: Secretary
By: /s/ Wm. Gregory Geiger
Its:
STANDARD LEASE PROVISIONS
Landlord hereby leases to Tenant and Tenant hereby hires from
Landlord, subject to all of the terms and conditions set forth herein, the
Premises, more particularly described in Item 3 of the Basic Lease Provisions.
The Premises are located in that certain office building ("BUILDING"), located
on that certain land ("LAND") described on Exhibit "A" attached hereto, which is
also improved with landscaping, parking facilities and other improvements and
appurtenances. The Land, together with all such improvements and appurtenances
and the Building, are, subject to Paragraph 18, collectively referred to herein
as the "PROJECT". However, Landlord reserves the right to make such changes,
additions and/or deletions to the Land, the Building and the Project as it shall
determine from time to time.
1. TERM
(a) Unless earlier terminated in accordance with the provisions
hereof, the initial term of this Lease shall be the period shown in Item 9 of
the Basic Lease Provisions. All references to the term of this Lease shall
include any extension agreed to in writing by Landlord.
(b) This Lease shall be a binding contractual obligation effective
upon execution hereof by Landlord and Tenant.
2. BASIC ANNUAL RENT AND SECURITY DEPOSIT
(a) Tenant agrees to pay each Lease Year (defined below) of the term
of this Lease as Basic Annual Rent ("BASIC ANNUAL RENT") for the Premises the
sums shown for such periods in Item 5 of the Basic Lease Provisions. For
purposes of this Lease, a "LEASE YEAR" shall be each 12 calendar month period
commencing on (i) the Commencement Date (or anniversary thereof) if the
Commencement Date occurs on the first day of a month, or otherwise (ii) on of
the first day of the calendar month following the Commencement Date (or
anniversary thereof). Subject to Tenant's fulfilling all its obligations under
this Lease, Landlord has agreed to reduce the rent payable hereunder from $1.66
per square foot to $1.25 per square under this Lease, such difference being
referred to herein as the "ABATED RENT".
(b) Except as expressly provided to the contrary herein, Basic Annual
Rent shall be payable in equal consecutive monthly installments, in advance,
without deduction or offset, commencing on the Commencement Date and continuing
on the first day of each calendar month thereafter. The Installment payable upon
execution, described in Item 6 of the Basic Lease Provisions, and all amounts to
be paid to Landlord by Tenant as set forth in Paragraph F of the Agreement
above, shall be payable upon Tenant's execution of this Lease. If the
Commencement Date is a day other than the first day of a calendar month, then
the Rent (defined below) for the Partial Lease Month ("PARTIAL LEASE MONTH
RENT") shall be calculated on the per them basis shown therefor in Item 5 of the
Basic Lease Provisions for the number of days of such month from and including
the Commencement Date. The Partial Lease Month Rent shall be payable by Tenant
prior to the date that Tenant takes possession or commences use of the Premises
for any business purpose (including moving in). Basic Annual Rent, all forms of
additional rent payable hereunder by Tenant and all other amounts, fees,
payments or charges payable hereunder by Tenant shall (i) each constitute rent
payable hereunder (and shall sometimes collectively be referred to herein as
"RENT"), (ii) be payable to Landlord when due without any prior demand therefor
in lawful money of the
United States and, except as may be expressly provided to the contrary herein,
without any offset or deduction whatsoever and (iii) be payable to Landlord at
the address of Landlord described in Item 2 of the Basic Lease Provisions or to
such other person or to such other place as Landlord may from time to time
designate in writing to Landlord. It is expressly understood and agreed that in
the event Tenant shall default hereunder the amount of the Abated Rent shall
become immediately due and payable.
(c) If Tenant shall be in default on three (3) or more occasions with
respect to any provision of this Lease, including, without limitation, the
provisions relating to the payment of Rent or the cleaning or restoration of the
Premises upon the termination of this Lease, Landlord may require that Tenant
pay to Landlord as part of Tenant's curing of such default a security deposit
("SECURITY DEPOSIT") in an amount equal to a the amount of Basic Annual Rent and
Additional Rent payable by Tenant for the three (3) month prior expiring
immediately prior to the date Landlord shall have given Tenant notice of such
default. Landlord may, but shall not be required to, use, apply or retain all or
any part of the Security Deposit (i) for the payment of any Rent or any other
sum in default, (ii) for the payment of any other amount which Landlord may
spend or become obligated to spend by reason of Tenant's default hereunder, or
(iii) to compensate Landlord for any other loss or damage which Landlord may
suffer by reason of Tenant's default hereunder, including, without limitation,
costs and attorneys' fees incurred by Landlord to recover possession of the
Premises following a default by Tenant hereunder. If any portion of the Security
Deposit is so used or applied, Tenant shall, upon demand therefor, deposit cash
with Landlord in an amount sufficient to restore the Security Deposit to the
appropriate amount, as required to be maintained by Tenant hereunder. If Tenant
shall fully perform every provision of this Lease to be performed by it, the
Security Deposit or any balance thereof shall be returned to Tenant (or, at
Landlord's option, to the last assignee of Tenant's interest hereunder) within
14 days following the expiration of the term of this Lease; provided, however,
that Landlord may retain the Security Deposit until such time as any amount due
from Tenant in accordance with Paragraph 3 below has been determined and paid to
Landlord in full.
(d) The parties agree that for all purposes hereunder the Premises
shall be stipulated to contain the number of square feet of Rentable Area
(defined in Exhibit "A") described in Item 3 of the Basic Lease Provisions. Upon
the request of Landlord, Landlord's Space Planner shall verify the exact number
of square feet of Rentable Area in the Premises. In the event there is a
variation of 3% or more from the number of square feet specified in Item 3 of
the Basic Lease Provisions, Landlord and Tenant shall execute an amendment to
this Lease for the purpose of making appropriate adjustments to the Basic Annual
Rent, the Security Deposit, Tenant's Proportionate Share (defined below) and
such other provisions hereof as shall be appropriate under the circumstances.
3. ADDITIONAL RENT
(a) Subject to the provisions of this Lease, if Operating Costs
(defined below) for the Project for any calendar year during the term of this
Lease exceed Base Operating Costs (defined below), Tenant shall pay to Landlord
as additional rent an amount equal to Tenant's Proportionate Share of such
excess.
(b) "TENANT'S PROPORTIONATE SHARE" is, subject to the provisions of
this Paragraph 3, the percentage number described in Item 4 of the Basic Lease
Provisions. Tenant's Proportionate Share represents a fraction, the numerator of
which is the number of square feet of
Rentable Area in the Premises and the denominator of which is the number of
square feet of Rentable Area in the Project, as determined by Landlord pursuant
to Paragraph 2(d) above.
(c) "BASE OPERATING COSTS", during the term of this Lease equals the
product of (i) Operating Costs for the Project during Base Year referred to as
Item 8 of the Basic Lease Provisions and (ii) the number of square feet of
Rentable Area contained in the Project. Operating Costs for the Base Year during
which actual occupancy of the Project is less than 95% of the Rentable Area of
the Project shall be appropriately adjusted to reflect 95% occupancy of the
existing Rentable Area of the Project during such period.
(d) "OPERATING COSTS" means all costs, expenses and obligations
incurred or payable by Landlord in connection with the operation, ownership,
repair, management or maintenance of the Project during or allocable to the term
of this Lease, including without limitation, the following:
(i) All real property taxes, assessments, license fees, excises,
levies, charges or impositions and other similar governmental ad valorem or
other charges levied on or attributable to the Project or its ownership,
operation or transfer, and all taxes, charges, assessments or similar
impositions imposed in lieu of the same (collectively, "REAL ESTATE TAXES").
"Real Estate Taxes" shall also include all taxes, assessments, license fees,
excises, levies, charges or similar impositions imposed by any governmental
agency, district, authority or political subdivision (A) on any interest of
Landlord, any mortgagee of Landlord or any interest of Tenant in the Project,
the Premises or in this Lease, or on the occupancy or use of space in the
Project or the Premises; (B) on the gross or net rentals or income from the
Project, the Rent received hereunder, or on Landlord's "right" or "rights" to
any of the foregoing or on Landlord's business of leasing the Premises, the
Building or the Project, including, without limitation, any gross income tax or
excise tax levied by any federal, state or local governmental entity with
respect to the receipt of Rent or with respect to the possession, leasing,
operation, management, maintenance, alteration, repair, use or occupancy of the
Project or portions thereof; (C) measured by the gross square footage of the
Project, the Premises, or any portion thereof, or by the number of actual,
estimated or potential occupants of the Project, the number of vehicular trips
generated by or associated with the Project, or the number of parking spaces
contained within the Project, or for any transportation, arts, housing or
environmental plan, fund or system instituted within or for any geographic area
in which the Building is located, or any similar measure; (D) on the transfer of
or the transaction represented by this Lease or any lease of space in the
Project or on any document creating or transferring an interest in this Lease;
(E) on the construction, removal or alteration of improvements in the Project;
(F) for the provision of amenities, services or rights of use, whether or not
exclusive, public, quasi-public or otherwise made available on a shared use
basis, including amenities, services or rights of use such as fire protection,
police protection, street, sidewalk, lighting, sewer or road maintenance, refuse
removal or janitorial services or for any other service, without regard to
whether such services were formerly provided by governmental or quasi-
governmental agencies to property owners or occupants at no cost or at minimal
cost; and (G) related to any transportation plan, fund or system instituted
within the geographic area of the Project or otherwise applicable to the
Premises, the Project or any portion thereof. "Real Estate Taxes" shall not
include any income, capital stock, estate or inheritance tax imposed by the
State of California or the federal government; and
(ii) The cost of utilities (including taxes and other charges
incurred in connection therewith, but, subject to the provisions of Paragraph 7,
excluding the cost of Tenant's electrical current usage within its Premises,
which usage shall be separately metered pursuant to the provisions
of Paragraph 7 below), fuel, supplies, equipment, tools, materials, service
contracts, janitorial services, waste and refuse disposal, gardening and
landscaping, insurance (including, but not limited to, public liability, fire,
property damage, flood, rental loss, rent continuation, boiler machinery,
business interruption, contractual indemnification, earthquake and All Risk
coverage insurance for up to the full replacement cost of the Project and such
other insurance as is customarily carried by operators of other first class
buildings in the County in which the Project is located) to the extent carried
by Landlord in its discretion (and the deductible portion of any insured loss
otherwise covered by such insurance), the cost of compensation, including
employment, welfare and social security taxes, paid vacation days, disability,
pension, medical and other fringe benefits of all persons (including independent
contractors) who perform services connected with the operation, maintenance or
repair of the Project, personal property taxes on and maintenance and repair of
equipment and other personal property used in connection with the operation,
maintenance or repair of the Project, such auditors' fees and legal fees as are
incurred in connection with the operation, maintenance or repair of the Project,
costs incurred for administration and management of the Project, whether by
Landlord or by an independent contractor, administrative expenses, management
fees (which shall not exceed management fees customarily charged by first class
managers of comparable properties unaffiliated with Landlord), management office
operational expenses, rental expenses for or a reasonable allowance for
depreciation of, personal property used in the operation, maintenance or repair
of the Project, license, permit and inspection fees, all costs and expenses
required by any governmental or quasigovernmental authority or by applicable
law, for any reason, including capital improvements, whether capitalized or not,
the cost of any capital improvements made to the Project by Landlord that
improve lifesafety systems or reduce operating expenses (such costs to be
amortized over such reasonable periods as Landlord shall determine with a return
on capital at such rate as would have been paid by Landlord on funds borrowed
for the purpose of constructing such capital improvements), the cost of air
conditioning heating, ventilating, plumbing, elevator maintenance and repair,
sign maintenance, and Common Area (defined in Paragraph 18) repair, resurfacing,
operation and maintenance, the cost of providing security services, if any,
deemed appropriate by Landlord, and any other cost or expense incurred or
payable by Landlord in connection with the operation, repair, management or
maintenance of the Project. Notwithstanding anything to the contrary contained
herein, Operating Costs shall not include the following: (i) all items and
services for which Tenant or any other tenant in the Building reimburses
Landlord directly and not part of Operating Costs; (ii) penalties and charges
incurred by Landlord on account of Landlord's failure to comply with applicable
law; (iii) the costs of any decorative upgrades to the Common Areas which are
not intended to repair or replace a wornout or broken Common Area item, to make
the Project and related areas safer, to make the Project more efficient or to
comply with any applicable laws; (iv) depreciation except on materials, tools,
supplies and vendor-type equipment purchased by Landlord to enable Landlord to
supply services Landlord might otherwise contract for with a third party where
such depreciation would otherwise have been included in the charge for such
third party's services; (v) leasing commissions, attorneys' fees, marketing
costs, advertising expenses, payments, credits, free rent, lease takeover
obligations, other inducements and other costs and expenses incurred in
connection with the leasing of space, or negotiations or disputes with present
or prospective tenants or other occupants of the Building concerning their
particular leased premises; (vi) costs incurred by Landlord as a result of a
breach of lease by another tenant; and (vii) expenses for any services or other
benefits which are not offered to Tenant or for which Tenant or any other tenant
is charged directly; and (viii) any repairs or replacements Landlord makes to
the premises of any other tenant which, if made to the Premises, would be the
obligation of Tenant at it's sole cost and expense under the terms of this
Lease.
(e) Operating Costs for any calendar year during which actual
occupancy of the
Project is less than 95% of the Rentable Area of the Project shall be
appropriately adjusted to reflect 95% occupancy of the existing Rentable Area of
the Project during such period. In determining Operating Costs, if any services
or utilities are separately charged to tenants of the Project or others,
Operating Costs shall be adjusted by Landlord to reflect the amount of expense
which would have been incurred for such services or utilities on a full time
basis for normal Project operating hours. In the event (i) the Commencement Date
shall be a date other than January 1, (ii) the date fixed for the expiration of
the term shall be a date other than December 31, (iii) of any early termination
of this Lease, or (iv) of any increase or decrease in the size of the Premises,
then in each such event, an appropriate adjustment in the application of this
Paragraph 3 shall, subject to the provisions of this Lease, be made to reflect
such event on a basis determined by Landlord to be consistent with the
principles underlying the provisions of this Paragraph 3.
(f) Prior to the commencement of each calendar year of the term
following the Commencement Date, Landlord shall have the right to give to Tenant
a written estimate of Tenant's Proportionate Share of the projected excess, if
any, of the Operating Costs for the Project for the ensuing year over the Base
Operating Costs. Tenant shall pay such estimated amount to Landlord in equal
monthly installments, in advance on the first day of each month during such
year. Subject to the provisions of this Lease, Landlord shall endeavor to
furnish to Tenant within a reasonable period after the end of each calendar
year, a statement indicating in reasonable detail the excess of Operating Costs
over Base Operating Costs for such period and the parties shall, within 30 days
thereafter, make any payment or allowance necessary to adjust Tenant's estimated
payments to Tenant's actual share of such excess as indicated by such annual
statement. Any payment due Landlord shall be payable by Tenant on demand from
Landlord. Any amount due Tenant shall be credited against installments next
becoming due under this Paragraph 3 (f).
(g) Tenant shall pay 10 days before delinquency, all taxes and
assessments (i) levied against any personal property or trade fixtures of Tenant
in or about the Premises, (ii) based upon the gross or net Rent payable
hereunder and (iii) based upon this Lease or any document to which Tenant is a
party creating or transferring an interest in this Lease or an estate in all or
any portion of the Premises. If any such taxes or assessments are levied against
Landlord or Landlord's property or if the assessed value of the Project is
increased by the inclusion therein of a value placed upon such personal property
or trade fixtures, Tenant shall upon demand reimburse Landlord for the taxes and
assessments so levied against Landlord, or such taxes, levies and assessments
resulting from such increase in assessed value.
(h) Any delay or failure of Landlord in (i) delivering any estimate or
statement described in this Paragraph 3, or (ii) computing or billing Tenant' s
Proportionate Share of excess Operating Costs shall not constitute a waiver of
its right to require an increase in Rent, or in any way impair, the continuing
obligations of Tenant under this Paragraph 3. Without limiting the generality of
the foregoing, Landlord may at any time during the terms hereof recalculate and
correct the amount of Tenant's Proportionate Share of excess Operating Costs,
and Tenant shall pay any amount due on demand by Landlord. In the event of any
dispute as to any Rent due under this Paragraph 3, Tenant shall have the right
after reasonable notice and at reasonable times to inspect Landlord's accounting
records at the accounting office of Landlord's management company. If after such
inspection, Tenant still disputes such additional rental, upon Tenant's written
request therefor, a certification as to the proper amount of Operating Costs and
the amount due to or payable by Tenant shall be made by Landlord's independent
certified public accountant. Such certification shall be final and conclusive as
to all parties. Tenant agrees to pay the cost of such certification and the
investigation with respect thereto and no adjustments in Tenant's favor shall be
made unless it is
determined that Landlord's original statement was in error in Landlord's favor
by more than 5%. Tenant waives the right to dispute any matter relating to the
calculation of Operating Costs or other forms of Rent under this Paragraph 3 if
any claim or dispute is not asserted by Tenant in writing to Landlord within one
(1) year of delivery to Tenant of the original billing statement with respect
thereto.
(i) Subject to the provisions of this Paragraph 3, the rights
and obligations of Landlord and Tenant with respect to payments to be made
hereunder in regard to excess Operating Costs incurred or allocable to periods
prior to the expiration or sooner termination of this Lease shall survive such
expiration or termination.
4. IMROVEMENTS (Sic.) AND ALTERATIONS
(a) Tenant has accepted the Premises demised under the Lease, and
Landlord has completed all construction and improvements required under the
terms of the Lease to be completed by Landlord. Tenant understands, acknowledges
and agrees that Landlord has absolutely no obligations with respect to any
improvements for the Premises, except as may be specifically set forth in this
Lease. To the best of Tenant's knowledge, Tenant does not have any claim or
demand for additional sums from Landlord in connection with the installation of
Tenant's improvements.
(b) Tenant shall not make any alterations, additions or improvements
to the Premises (collectively, "ALTERATIONS") without (i) the prior written
consent of Landlord (unless such Alterations (a) do not affect the structural
portions of the Building or the electrical, mechanical, plumping (Sic.),
telecommunications or other utility systems of the Building (b) do not affect
any other occupant in the Building, (c) are not visible from the exterior of the
Premises and (d) do not exceed $5,000 in the aggregate, and Tenant nevertheless
provides Landlord with at least ten (10) days written notice prior to the
commencement of the making such Alterations) and (ii) compliance with such
nondiscriminatory requirements concerning such Alterations as may be imposed by
Landlord from time to time. Without limiting the foregoing, Landlord may
require, at a minimum, compliance with the requirements set forth in Exhibit "C"
attached hereto. All Alterations shall be made by Tenant at Tenants sole cost
and shall be diligently prosecuted to completion. The cost of any modifications
of Project improvements outside or inside of the Premises required by any
governmental agency as a condition or the result of Tenant's Alterations shall
be borne by Tenant. Any contractor or person making such Alterations shall first
be approved in writing by Landlord. Upon the expiration or earlier termination
of this Lease, Landlord may elect to have Tenant either (i) surrender with the
Premises any or all of such Alterations as Landlord shall determine (except
trade fixtures not attached to the Premises), in which case such Alterations
shall become the property of Landlord, or (ii) promptly remove any or all of
such Alterations designated by Landlord to be removed, in which case, Tenant
shall repair and restore the Premises to its original condition as of the date
of this Lease, reasonable wear and tear excepted. Notwithstanding the foregoing,
upon the expiration or earlier termination of this Lease, Tenant may remove all
Hermann Miller panels from the Premises, provided Tenant repairs all damage to
the Premises resulting therefrom.
(c) Tenant shall keep the Premises, the Building and the Project free
from any and all liens arising out of any work performed, materials furnished,
or obligations incurred by or for Tenant. In the event that Tenant shall not,
within 10 days following the imposition of any such lien, cause the same to be
released of record by payment or posting of a bond in a form and issued by a
surety acceptable to Landlord, Landlord shall have the right, but not the
obligation, to cause such lien to be released by such means as it shall deem
proper (including payment of or defense against
the claim giving rise to such
lien); in such case, Tenant shall reimburse Landlord for all amounts so paid by
Landlord in connection therewith, together with all of Landlord's costs and
expenses, with interest thereon at the Default Rate (defined below). Such rights
of Landlord shall be in addition to all other remedies provided herein or by
law.
5. REPAIRS
(a) Landlord shall use commercially reasonable efforts to keep the
Common Areas of the Building and the Project in a clean and neat condition.
Subject to subparagraph (b) below, Landlord shall make all necessary repairs,
within a reasonable period following receipt of notice of the need therefor from
Tenant, to the exterior walls, exterior doors and windows of the Building, and
to public corridors and other public areas of the Project not constituting a
portion of any tenant's premises, and shall use commercially reasonable efforts
to keep all Building standard equipment used by Tenant in common with other
tenants in good condition and repair, reasonable wear and tear excepted.
Landlord shall, however, provide janitorial services to the Premises. Except as
provided in Paragraph 9, there shall be no abatement of Rent and Landlord shall
not be liable for any injury to, or damage suffered by Tenant, including without
limitation, interference with Tenant's business arising from the making of any
repairs, alterations or improvements in or to any portion of the Premises, the
Building or the Project. Tenant waives the right to make repairs at Landlord's
expense under Sections 1941 and 1942 of the California Civil Code, and under all
other similar laws, statutes or ordinances now or hereafter in effect.
(b) Tenant, at its expense shall keep the Premises and all fixtures
contained therein in a safe, clean and neat condition, reasonable wear and tear
excepted. In that regard, Tenant shall be responsible for making at Tenant's
sole cost and expense all repairs and replacements to the Premises, except as
otherwise provided herein. In connection with any work required to be performed
at the expense of Tenant, Tenant shall use contractors selected by Landlord of
all facilities located in the Premises, including, without limitation, lavatory,
shower, toilet, wash basin and kitchen facilities, and heating and air
conditioning systems (including all plumbing connected to said facilities or
systems installed by or on behalf of tenant or existing in the Premises at the
time of Landlord's delivery of the Premises to Tenant). Tenant shall make all
repairs and replacements to the Premises using materials of equal or better
quality than that repaired or replaced. Tenant shall do all decorating,
remodeling, alteration and painting required by Tenant during the term of this
Lease.
(c) Upon the expiration or earlier termination of this Lease, Tenant
shall surrender the Premises in a safe, clean and neat condition reasonable wear
and tear excepted; in the event that Tenant defaults with respect to this
provision, in addition to any and all other remedies of Landlord, Landlord may
use, apply or retain all or any part of any Security Deposit with respect to
such default. Tenant shall remove from the Premises all trade fixtures (which
are not required to be surrendered with the Premises pursuant to the provisions
of Paragraph 4(b) hereof), furnishings and other personal property of Tenant,
shall repair all damage caused by such removal, and shall restore the Premises
to its original condition, reasonable wear and tear excepted. In addition to all
other rights Landlord may have, in the event Tenant does not so remove any such
fixtures, furnishings or personal property, Tenant shall be deemed to have
abandoned the same, in which case Landlord may store the same at Tenant's
expense, appropriate the same for itself, and/or sell the same in its
discretion.
6. USE OF PREMISES
(a) Tenant shall use the Premises only for the purposes set forth in
Item 12 of the Basic Lease Provisions and shall not use the Premises or permit
the Premises to be used for any other purpose.
(b) Tenant shall not at any time use or occupy the Premises, or permit
any act or omission in or about the Premises in violation of any law, statute,
ordinance or any governmental rule, regulation or order (collectively, "LAW")
and Tenant shall, upon written notice from Landlord, discontinue any use of the
Premises which is a violation of Law. If any Law shall, by reason of the nature
of Tenant's use or occupancy of the Premises, impose any duty upon Tenant or
Landlord with respect to (i) modification, operation or other maintenance of the
Premises, the Building or the Project, or (ii) the use, alteration or occupancy
thereof, Tenant shall comply in full at its expense with such Law.
(c) Tenant shall not at any time use or occupy the Premises in
violation of the certificates of occupancy issued for the Building or the
Premises, and in the event that any department of the State of California or the
city or county in which the Project is located shall at any time contend or
declare that the Premises are used or occupied in violation of such certificate
or certificates of occupancy, any Law or any recorded covenants, conditions and
restrictions affecting the Project, Tenant shall, upon five days' notice from
Landlord or any such governmental agency, immediately discontinue such use of
the Premises (and otherwise immediately remedy such violation). The failure by
Tenant to discontinue such use shall be considered a default under this Lease
and Landlord shall have the right to exercise any and all rights and remedies
provided herein or by Law. The statement in this Lease of the nature of the
business to be conducted by Tenant in the Premises shall not be deemed or
construed to constitute a representation or guaranty by Landlord that such
business will continue to be lawful or permissible under any certificate of
occupancy issued for the Building or the Premises, or otherwise permitted by
Law.
(d) Tenant shall not do or permit to be done anything which may
invalidate or increase the cost of any All Risk, property damage, liability or
other insurance policy covering the Building, the Project and/or property
located therein and shall comply with all rules, orders, regulations and
requirements of the Pacific Fire Rating Bureau or any other organization
performing a similar function. In addition to all other remedies of Landlord,
Landlord may require Tenant, promptly upon demand, to reimburse Landlord for the
full amount of any additional premiums charged for such policy or policies by
reason of Tenant's failure to comply with the provisions of this Paragraph 6.
(e) Tenant shall not in any way interfere with the rights or quiet
enjoyment of other tenants or occupants of the Premises, the Building or the
Project. Tenant shall not use or allow the Premises to be used for any improper,
immoral, unlawful or objectionable purpose, nor shall Tenant cause, maintain, or
permit any nuisance in, on or about the Premises, the Building or the Project.
Tenant shall not place a load upon any portion of the Premises exceeding the
structural floor load (per square foot of area) which such area was designated
(and is permitted by Law) to carry or otherwise use any Building system in
excess of its capacity or in any other manner which may damage such system or
the Building. Business machines and mechanical equipment shall be placed and
maintained by Tenant, at Tenant's expense, in locations and in settings
sufficient in Landlord's reasonable judgment to absorb and prevent vibration,
noise and annoyance. Tenant shall not commit or suffer to be committed any waste
in, on, upon or about the Premises, the Building or the Project.
(f) As used herein, the term "HAZARDOUS MATERIAL" means any hazardous
or toxic substance, material or waste which is or becomes regulated by any local
governmental authority, the State of California or the United States Government,
including, without limitation, (i) any material or substance which is defined or
listed as a "hazardous waste," "extremely hazardous waste," "restricted
hazardous waste," "hazardous substance" or "hazardous material" under any
federal, state or local law, statute, ordinance or any governmental rule,
regulation or order governing or in any way relating to the release, use
generation, handling, leakage, dumping, discharge or disposal of any of the
above (collectively, "HAZARDOUS MATERIAL LAWS") (ii) petroleum or any petroleum
derivative, (iii) any flammable explosive or radioactive material, (iv) any
polychlorinated biphenal and (v) asbestos or any asbestos containing material or
derivative. Tenant hereby agrees that (i) Tenant and each of its Affiliates
(defined below), assignees, subtenants, and their respective agents, servants,
employees, representatives and contractors shall not bring onto the Premises or
the Project any Hazardous Material (other than customary amounts of Hazardous
Materials used for office supplies and cleaning materials brought into the
Premises by Tenant in the normal course of its tenancy and in full compliance
with all Hazardous Material Laws), (ii) Tenant shall immediately notify Landlord
in writing in the event Tenant becomes aware of or suspects that there has been
any release of any Hazardous Materials in, on or about the Premises or the
Project or that any person has stored or otherwise brought onto the Project or
any portion thereof any Hazardous Material (other than customary amounts of
office supplies and cleaning materials). Tenant agrees to indemnify, defend
(with counsel reasonably selected by Landlord), protect and hold Landlord and
each of its Affiliates harmless from and against any and all claims, actions,
administrative proceedings (including informal proceedings), judgments, damages,
punitive damages, penalties, fines, costs, liabilities, interest or losses,
including reasonable attorneys' fees and expenses, consultant fees, and expert
fees, together with all other costs and expenses of any kind or nature that
arise during or after the term of this Lease directly or indirectly from or in
connection with the presence, handling, storage, release or discharge of any
Hazardous Material in or into the air, soil, surface water or groundwater at,
on, about, under or within the Premises or the Project, or any portion thereof,
generated, released, discharged or otherwise brought onto, under, or about the
Project by Tenant or any Affiliate thereof. Each of the covenants and agreements
of Tenant set forth in this Paragraph 6(f) shall survive the expiration or
earlier termination of this Lease.
7. UTILITIES AND SERVICES
(a) Provided that Tenant is not in default hereunder, Landlord shall
furnish, or cause to be furnished to the Premises, the utility service and other
services described in Exhibit "D" attached hereto, subject to the conditions and
in accordance with the standards set forth therein and in this Lease.
(b) Tenant agrees to cooperate fully at all times with Landlord and to
comply with all regulations and requirements which Landlord may from time to
time prescribe for the use of the utilities and services described herein and in
Exhibit "D". Landlord shall not be liable to Tenant for the failure of any other
tenant, or its assignees, subtenants, employees, or their respective invitees,
licensees, agents or other representatives to comply with such regulations and
requirements; provided, however, Landlord shall non-discriminately pursue
violations of said regulations and requirements.
(c) If Tenant requires utility service or other services in quantities
greater than, at times other than or of a type or quality different than that
generally furnished by Landlord pursuant to Exhibit "D," Tenant shall pay to
Landlord, upon receipt of a written statement therefor, Landlord's
charge for such additional or different utility service or services; provided,
however, if, in Landlord's judgment, such excess or different service cannot be
furnished unless additional risers, conduits, feeders, switchboards and/or other
facilities are installed in the Building, or otherwise are not then being
provided to other tenants in the Project (at the rate or level requested by
Tenant), the provision of such additional or different services shall be subject
to Landlord's nondiscriminatory requirements and conditions, provided, further
however, that in no case shall Landlord have any obligation to provide such
additional or different utility or other services if (i) the same is not
generally available in first class office buildings in the area of the Project,
(ii) in the case where additional risers, conduits, feeders, switchboards and/or
other appurtenances would be required to be installed in the Building to provide
such service, (A) the installation, maintenance or use of such facilities is not
permitted under applicable Project financing documents, Law or insurance
regulations, could result in permanent damage or injury to the Building or
Building systems, could create a dangerous or hazardous condition or disturb or
interfere with the use, occupancy or quiet enjoyment of other tenants or
otherwise adversely affect the income stream, financeability, reputation or
value of the Project, (B) Tenant shall not commit in advance to bear the cost
(and to provide security satisfactory to Landlord for performance of such
obligation) of installation, use, maintenance, repair and removal of such
facilities, or (C) Landlord determines in good faith that installation,
operation, maintenance and/or removal of such facilities is otherwise infeasible
under the circumstances. Subject to the foregoing, Landlord shall, upon
reasonable prior notice by Tenant, furnish to the Premises additional elevator,
heating, air conditioning and/or cleaning services upon such terms and
conditions as shall be reasonably determined by Landlord, including payment of
Landlord's charge therefor. In the case of any additional utilities or services
to be provided hereunder, Landlord may require a switch and metering system to
be installed so as to measure the amount of such additional utilities or
services. The cost of installation, maintenance and repair of such system shall
be paid by Tenant upon demand.
(d) Landlord shall not be liable for, and Tenant shall not be entitled
to, any damages, abatement (except as expressly provided in subparagraph (f)
below) or reduction of Rent, or other liability by reason of any failure to
furnish any services or utilities described herein or in Exhibit "D" for any
reason, including, without limitation, when caused by accident, breakage,
repairs, Alterations or other improvements to the Project, strikes, lockouts or
other labor disturbances or labor disputes of any character, governmental
regulation, moratorium or other governmental action, inability to obtain
electricity, water or fuel, or any other cause beyond Landlord's reasonable
control. Landlord shall be entitled to cooperate with the energy conservation
efforts of governmental agencies or utility suppliers. No such failure, stoppage
or interruption of any such utility or service shall be construed as an eviction
of Tenant, nor shall the same relieve Tenant from any obligation to perform any
covenant or agreement under this Lease. In the event of any failure, stoppage or
interruption thereof, Landlord shall use reasonable efforts to attempt to
restore all services promptly. No representation is made by Landlord with
respect to the adequacy or fitness of the Building's ventilating, air
conditioning or other systems to maintain temperatures as may be required for
the operation of any computer, data processing or other special equipment of
Tenant or for any other purpose.
(e) Landlord reserves the right from time to time to make reasonable
and nondiscriminatory modifications to the above standards (including, without
limitation, those described in Exhibit "D") for utilities and services.
(f) In the event that Tenant is prevented from using the Premises or
any portion thereof, as a result of any failure of Landlord to provide services
or access to the Premises for fifteen
(15) consecutive days during the Lease term ("Eligibility Period"), then
Tenant's rent shall be abated or reduced, as the case may be, in the proportion
that the rentable area of the portion of the Premises that Tenant is prevented
from using bears to the total rentable area of the Premises during the period
Tenant is prevented from conducting its business from the Premises or a portion
of the Premises; provided, however, that if Tenant reoccupies and conducts its
business from any portion of the Premises during such period, or the Premises
are restored such that business may be conducted therein, the rent allocable to
such reoccupied portion, based upon the proportion which the rentable area of
such reoccupied portion of the Premises bears to the total rentable area of the
Premises, shall be payable by Tenant from the date such business operations
commence or could be commenced.
8. NONLIABILITY AND INDEMNIFICATION OF LANDLORD; INSURANCE
(a) Landlord shall not be liable to Tenant and Tenant hereby waives
all claims against Landlord, its partners, shareholders, officers, trustees,
affiliates, directors, employees, contractors, agents and representatives
(collectively, "AFFILIATES") for any injury or damage to any person or property
occurring or incurred in connection with or in any way relating to the Premises,
the Building or the Project from any cause, except damage to persons or personal
property in the Common Areas caused by the active or gross negligence of
Landlord or its agents, employees or contractors in the Common Areas unless such
damage is covered (or would be covered if Tenant obtained 100% casualty
insurance coverage) by insurance Tenant is required to have under this Lease or
otherwise has obtained. Without limiting the foregoing, except as provided in
subparagraph 7(f) above, neither Landlord nor any of its Affiliates shall be
liable for and there shall be no abatement of Rent for (i) any damage to
Tenant's property stored with or entrusted to Affiliates of Landlord, (ii) loss
of or damage to any property by theft or any other wrongful or illegal act, or
(iii) any injury or damage to persons or property resulting from fire,
explosion, falling plaster, steam, gas, electricity, water or rain which may
leak from any part of the Building or the Project or from the pipes, appliances,
appurtenances or plumbing works therein or from the roof, street or sub-surface
or from any other place or resulting from dampness or any other cause whatsoever
or from the acts or omissions of other tenants, occupants or other visitors to
the Building or the Project or from any other cause whatsoever, (iv) any
diminution or shutting off of light, air or view by any structure which may be
erected on lands adjacent to the Building, whether within or outside of the
Project, or (v) any latent or other defect in the Premises, the Building or the
Project. In addition and without limitation to the other provisions of
subparagraphs (a) and (b) of this Paragraph 8, Tenant agrees that in no case
shall Landlord ever be responsible or liable on any theory for any injury to
Tenant's business, loss of profits, loss of income or any other form of
consequential damage. Tenant shall give prompt notice to Landlord in the event
of (A) the occurrence of a fire or accident in the Premises or in the Building,
or (B) the discovery of any defect therein or in the fixtures or equipment
thereof.
(b) Tenant shall indemnify, defend (with legal counsel reasonably
selected by Landlord), protect and hold Landlord and its Affiliates (including
without limitation Oaktree Capital Management, L.L.C.) harmless from and against
any and all claims, suits, judgments, losses, costs, obligations, damages,
expenses, interest and liabilities, including, without limitation, reasonable
attorneys' fees, for any injury or damage to any person or property whatsoever
arising out of or in connection with this Lease, the Premises or Tenant' s
activities in the Project, including, without limitation, when such injury or
damage has been caused in whole or in part by the act, negligence, fault or
omission of Tenant, its agents, servants, contractors, employees,
representatives, licensees or invitees, except for injury or damage sustained to
Tenant or Tenant's agents, servants, employees, representatives, licensee or
invitees in the Common Areas by reason of the active or gross
negligence of Landlord or its agents, employees or contractors in the Common
Areas, unless such damage is covered (or would be covered if Tenant obtained
100% insurance coverage) by insurance Tenant is required to have under this
Lease or otherwise has obtained. Without limiting the foregoing, Tenant shall
reimburse Landlord and its Affiliates for all expenses, damages and fines
incurred or suffered by Landlord by reason of any breach, violation or non-
performance by Tenant, its agents, servants or employees, of any covenant as
provision of this Lease, or by reason of damage to persons or property caused by
moving property of or for Tenant in or out of the Building, or by the
installation or removal of furniture or other property, or by reason of
carelessness, negligence or improper conduct of Tenant or its agents, employees
or servants in the use or occupancy of the Premises. The provisions of this
subparagraph (b) shall survive the expiration or earlier termination of this
Lease.
(c) Tenant hereby agrees to maintain in full force and effect at all
times during the term of this Lease, at its own expense, for the protection of
Tenant and Landlord, as their interests may appear, policies of insurance issued
by a responsible carrier or carriers, qualified to do business in the State of
California, with a financial class rating of not less than X and a policy holder
rating of not less than A in the most recent Best's Key Rating Guide and
otherwise acceptable to Landlord, which afford the following coverages:
(i) Comprehensive general liability insurance (or commercial
general liability insurance) or such successor comparable form of coverage
including blanket contractual liability, broad form property damage, independent
contractor's coverage, personal injury, completed operations, products
liability, cross liability and severability of interest clauses, and fire
damage, written on an "occurrence" basis with coverage of not less than
$2,000,000 combined single limit per occurrence for both bodily injury
(including death) and property damage;
(ii) All Risk Insurance, including, without limitation,
insurance covering loss or damage resulting or arising from sprinkler leakage,
in an amount sufficient to cover 90% of replacement of all improvements to the
Premises (other than Building Standard Installations) and all of Tenant's
fixtures and other personal property, and subject to commercially reasonable
deductibles. The proceeds of such insurance shall be devoted exclusively to the
replacement of the same unless this Lease shall cease and terminate pursuant to
the provisions of Paragraph 9 hereof, and
(iii) Worker's Compensation and Employer's Liability insurance
(as required by Law).
(d) Tenant may, with the prior written consent of Landlord, elect to
have reasonable deductibles (not to exceed $10,000) under the policy required
pursuant to subparagraph (c)(ii).
(e) Tenant shall deliver to Landlord at least 30 days prior to the
time such insurance is first required to be carried by Tenant, and thereafter at
least 30 days prior to expiration of each such policy, certificates of insurance
evidencing the coverage required hereunder with limits not less than those
specified above. Such policies of insurance shall be written as primary
policies, not contributing with, and not in excess of coverage which Landlord
may carry. The certificate of insurance with respect to the coverage described
in subparagraph (c) (i) above shall specifically reflect insurance of Tenant's
obligations under subparagraph (b) above. Such certificates shall name Landlord
as an additional insured and shall expressly provide that the interest of the
same therein shall not be affected by any breach by Tenant of any policy
provision for which such certificates evidence coverage. Further, all
certificates shall expressly provide that not less than 30 days' prior
written notice shall be given Landlord in the event of material alteration to or
cancellation of the coverages evidenced by such certificates. If on account of
the failure of Tenant to comply with the provisions of this Paragraph 8,
Landlord is adjudged a co-insurer by its insurance carrier, then, in addition to
all other remedies available to Landlord, any loss or damage Landlord shall
sustain by reason thereof shall be borne by Tenant and shall be immediately paid
by Tenant upon receipt of a bill therefor and evidence of such loss.
(f) Upon demand, Tenant shall provide Landlord, at Tenant's expense,
with such increased amount of existing insurance and such other insurance with
such limits as Landlord may require and such other hazard insurance as the
nature and condition of the Premises may require, in the opinion of Landlord, to
afford Landlord adequate protection for such risks. However, in all cases such
adjustments shall be based upon the requirements of an institutional lender of
Landlord or otherwise reasonable and consistent with the requirements of other
first class office projects in the County in which the Project is located.
(g) Landlord makes no representation that the insurance coverage
specified to be carried by Tenant pursuant to this Paragraph 8 is adequate to
protect Tenant against Tenant's undertaking under the terms of this Lease or
otherwise, and in the event Tenant believes that any such insurance coverage
called for under this Lease is insufficient, Tenant shall provide, at its own
expense, such additional insurance as Tenant deems adequate. Tenant's
Proportionate Share of earthquake insurance (which shall, if purchased by
Landlord, be passed through to Tenant as part of Operating Costs only) shall not
exceed $5,000 annually as increased by Proportionate increases in the Consumer
Price Index, All Urban Consumers, All Items, Los Angeles - Anaheim - Riverside,
California (1982-84 equals 100), as published by the United States Department of
Labor's Bureau of Labor Statistics, or, if unavailable, such substitute index as
reasonably approximates said index.
(h) If Moreno Corporate Center, L.L.C., a Delaware limited liability
company, shall convey the Building to an unaffiliated third party landlord, such
successor Landlord (and its successors and assigns) shall agree to maintain in
full force and effect at all times during the Term, as an Operating Cost, unless
such Landlord has a tangible net worth of Five Million Dollars ($5,000,000), as
determined under generally accepted accounting principles (exclusive of
goodwill):
(i) All Risk Insurance (exclusive of damage resulting or
arising from sprinkler leakage, earthquake or floor (Sic.), unless Landlord in
its sole discretion shall elect to carry such coverage) in an amount sufficient
to cover the replacement the Building exclusive of Tenant's Alterations,
improvements and personal property; and
(ii) Comprehensive general liability insurance (or commercial
general liability insurance) or such successor comparable form of coverage with
coverage of not less than $1,000,000 combined single limit per occurrence for
both bodily injury and property damage. Notwithstanding any contribution by
Tenant to the cost of insurance premiums, Tenant acknowledges that it has no
right to receive any proceeds from any insurance policies carried by Landlord.
(i) Notwithstanding any provision of this Paragraph 8 to the contrary,
in the event that Landlord's insurance policies with respect to the Premises,
the Building or the Project permit a waiver of subrogation, Landlord hereby
waives any and all rights of recovery against Tenant for or arising out of
damage to, or destruction of, the Premises, the Building or the Project, from
causes then included under standard fire and All Risk insurance policies or
endorsements; provided,
however, that such waiver of subrogation shall be limited exclusively to
insurance proceeds actually received by Landlord for such damage or destruction.
In the event that Tenant's insurance policies with respect to the Premises
permit a waiver of subrogation, Tenant waives any and all rights of recovery
against Landlord for or arising out of damage to or destruction of, any property
of Tenant, from causes then included under standard fire and All Risk insurance
policies or endorsements. Tenant represents that its present insurance policies
now in force permit such waiver. If at any time during the term of this Lease
(i) either party shall give less than five days' prior written notice to the
other party certifying that any insurance carrier which has issued any such
policy shall refuse to consent to the aforesaid waiver of subrogation, or (ii)
such insurance carrier shall consent to such waiver only upon the payment of an
additional premium (and such additional premium is not paid by the other party
hereto), or (iii) such insurance carrier shall revoke a consent previously given
or shall cancel or threaten to cancel any policy previously issued and then in
force and effect, because of such waiver of subrogation, then, in any of such
events, the waiver of subrogation contained herein shall thereupon be of no
further force or effect as to the loss, damage or destruction covered by such
policy. If, however, at any time thereafter, a consent to such waiver of
subrogation shall be obtained without an additional premium from any existing or
substitute insurance carrier, the waiver hereinabove provided for shall again
become effective.
(j) Tenant shall not keep, use, sell or offer for sale in or upon the
Premises any article which may be prohibited by any insurance policy
periodically in force covering the Premises, the Building or the Project. If any
of Landlord's insurance policies shall be cancelled or cancellation shall be
threatened or the coverage thereunder reduced or threatened to be reduced in any
way because of the use of the Premises or any part thereof by Tenant or any
assignee, subtenant, licensee or invitee of Tenant and, if Tenant fails to
remedy the condition giving rise to such cancellation, threatened cancellation,
reduction of coverage, or threatened reduction of coverage, within two (2)
business days after notice thereof, Landlord may, at its option, either
terminate this Lease or enter upon the Premises and attempt to remedy such
condition, and Tenant shall promptly pay the cost thereof to Landlord as
additional Rent. Landlord shall not be liable for any damage or injury caused to
any property of Tenant or of others located on the Premises resulting from such
entry. If Landlord is unable, or elects not to remedy such condition, then
Landlord shall have all of the remedies provided for in this Lease in the event
of a default by Tenant.
(k) Tenant shall not do or permit to be done any act or things upon or
about the Premises or the Building, which will (i) result in the assertion of
any defense by the insurer to any claim under, (ii) invalidate or (iii) be in
conflict with, the insurance policies of Landlord or Tenant covering the
Building, the Premises or fixtures and property therein, or which would increase
the rate of fire insurance applicable to the Building to an amount higher than
it otherwise would be; and Tenant shall neither do nor permit to be done any act
or thing upon or about the Premises or the Building which shall or might subject
Landlord to any liability or responsibility for injury to any person or persons
or to property; provided that nothing in this Paragraph 8(j) shall prevent
Tenant's use of the Premises for the purposes stated in Paragraph 6 hereof.
(l) If, as a result of any act or omission by or on the part of Tenant
or violation of this Lease, whether or not Landlord has consented to the same,
the rate of "All Risk" or other type of insurance maintained by Landlord on the
Building and fixtures and property therein, shall be increased to an amount
higher than it otherwise would be, Tenant shall reimburse Landlord for all
increases of Landlord's fire insurance premiums so caused; such reimbursement to
be Additional Rent payable within 5 days after demand therefor by Landlord. If,
due to abandonment of, or failure to occupy the demised premises by Tenant, any
such insurance shall be canceled by the insurance
carrier, then Tenant hereby indemnifies Landlord against liability which would
have been covered by such insurance. In any action or proceeding wherein
Landlord and Tenant are parties, a schedule or "make-up" of rates for the
Building or the Premises issued by the body making fire insurance rates or
established by insurance carrier providing coverage for the Building or demised
premises shall be presumptive evidence of the facts stated therein including the
items and charges taken into consideration in fixing the "All Risk" insurance
rate then applicable to the Building or the Premises.
9. FIRE OR CASUALTY
(a) Subject to the provisions of this Paragraph 9, in the event the
Premises, or access thereto, is wholly or partially destroyed by fire or other
casualty, Landlord shall (to the extent permitted by Law and covenants,
conditions and restrictions then applicable to the Project) rebuild, repair or
restore the Premises and access thereto to substantially the same condition as
existing immediately prior to such destruction and this Lease shall continue in
full force and effect. Notwithstanding the foregoing, (i) Landlord's obligation
to rebuild, repair or restore the Premises shall not apply to any personal
property, tenant improvements or other items installed or contained in the
Premises which are not Building Standard Installations, and (ii) Landlord shall
have no obligation whatsoever to rebuild, repair or restore the Premises with
respect to any damage or destruction occurring during the last 12 months of the
term of this Lease.
(b) Landlord may elect to terminate this Lease in any of the following
cases of damage or destruction to the Premises, the Building or the Project: (i)
where the cost of rebuilding, repairing and restoring (collectively,
"RESTORATION") the Building or the Project, would, regardless of the lack of
damage to the Premises or access thereto, in the opinion of Landlord, exceed 20%
of the then replacement cost of the Building; (ii) where, in the case of any
damage or destruction to any portion of the Building or the Project by uninsured
casualty, the cost of Restoration of the Building or the Project, in the opinion
of Landlord, exceeds $500,000; or (iii) where, in the case of any damage or
destruction to the Premises or access thereto by uninsured casualty, the cost of
Restoration of the Premises or access thereto, in the opinion of Landlord,
exceeds 20% of the replacement cost of the Premises. Any such termination shall
be made by 30 days' prior written notice to Tenant given within 60 days of the
date of such damage or destruction. If this Lease is not terminated by Landlord
and as the result of any damage or destruction, the Premises, or a portion
thereof, are rendered untenantable, the Basic Annual Rent shall abate reasonably
during the period of Restoration (based upon the extent to which such damage and
Restoration materially interfere with Tenant's business in the Premises) unless
such damage or destruction shall have resulted from the wilful misconduct, fault
or neglect of Tenant, its agents, servants, contractors, representatives,
employees, licensees or invitees. This Lease shall be considered an express
agreement governing any case of damage to or destruction of the Premises, the
Building or the Project. Tenant hereby waives the provisions of California Civil
Code Sections 1932(2) and 1933(4) and the provisions of any successor or other
law of like import.
(c) Tenant may elect to terminate this Lease if (i) the Premises have
been damaged or destroyed by a casualty not caused by Tenant or Tenant's agents,
employees or contractors and (ii) the Premises have not been substantially
repaired or restored to a condition that is commercially usable for general
office use within a period of 270 days from and after the date of such casualty,
unless Landlord has provided Tenant with other space in the Project that is
comparable in size,
rent and area to the Premises for general office use. In the event of such a
casualty whereby Tenant is required to vacate the Premises, Landlord covenants
to use its good faith efforts to provide Tenant with any available vacant space
in the Building that is comparable in size and area as the Premises on terms
comparable to that then being agreed to by Landlord.
10. EMINENT DOMAIN
In the event the whole of the Premises, the Building or the Project
shall be taken under the power of eminent domain, or sold to prevent the
exercise thereof (collectively, a "TAKING"), this Lease shall automatically
terminate as of the date of such Taking. In the event of a Taking of such
portion of the Project, the Building or the Premises as shall, in the opinion of
Landlord, substantially interfere with Landlord's operation thereof, Landlord
may terminate this Lease upon 30 days' written notice to Tenant given at any
time within 60 days following the date of such Taking. For purposes of this
Lease, the date of Taking shall be the earlier of the date of transfer of title
resulting from such Taking or the date of transfer of possession resulting from
such Taking. In the event that a portion of the Premises is so taken and this
Lease is not terminated, Landlord shall, with reasonable diligence, proceed to
restore (to the extent permitted by Law and covenants, conditions and
restrictions then applicable to the Project) the Premises (other than Tenant' s
personal property and fixtures, and tenant improvements not constituting
Building Standard Installations) to a complete, functioning unit. In such case,
the Basic Annual Rent shall be reduced proportionately based on the portion of
the Premises so taken. If all or any portion of the Premises is the subject of a
temporary Taking, this Lease shall remain in full force and effect and Tenant
shall continue to perform each of its obligations under this Lease; in such
case, Tenant shall be entitled to receive the entire award allocable to the
temporary Taking of the Premises. Except as provided herein, Tenant shall not
assert any claim against Landlord or the condemning authority for, and hereby
assigns to Landlord, any compensation in connection with any such Taking, and
Landlord shall be entitled to receive the entire amount of any award therefor
without deduction for any estate or interest of Tenant. Nothing contained in
this Paragraph 10 shall be deemed to give Landlord any interest in, or prevent
Tenant from seeking any award against the condemning authority for the Taking of
personal property or fixtures of Tenant or for relocation or business
interruption expenses recoverable by Tenant from the condemning authority. This
Paragraph 10 shall be Tenant' s sole and exclusive remedy in the event of a
Taking. Each party hereby waives the provisions of Sections 1265.130 and
1265.150 of the California Code of Civil Procedure and the provisions of any
successor or other law of like import.
11. ASSIGNMENT AND SUBLETTING
(a) Tenant shall not directly or indirectly, voluntarily or
involuntarily, by operation of law or otherwise, assign, sublet, mortgage,
hypothecate or otherwise encumber all or any portion of its interest in this
Lease or in the Premises or grant any license in or suffer any person other than
Tenant or its employees to use or occupy the Premises or any part thereof
without obtaining the prior written consent of Landlord, which consent shall,
subject to subparagraphs (d), (e), (f), and (g) below, not be unreasonably
withheld. Any such attempted assignment, subletting, license, mortgage,
hypothecation, other encumbrance or other use or occupancy without the consent
of Landlord shall be null and void and of no effect. For purposes of application
of subparagraphs (b), (c), (d), (e), (f), and (g) below, any mortgage,
hypothecation or encumbrance of all or any portion of Tenant's interest in this
Lease or in the Premises and any grant of a license or sufferance of any person
other than Tenant or its employees to use or occupy the Premises or any part
thereof shall be deemed to be an "assignment" of this Lease. In addition, as
used in this Paragraph 11, the term "Tenant" shall also mean any entity that has
guaranteed Tenant's obligations under this Lease, and the restrictions
applicable to Tenant contained herein shall also be applicable to such
guarantor.
(b) No permitted assignment or subletting shall relieve Tenant of its
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 a waiver by Landlord of any provision of this Lease or to be
a consent to any subletting or assignment. Consent by Landlord to one subletting
or assignment shall not be deemed to constitute a consent to any other or
subsequent attempted subletting or assignment.
(c) If Tenant desires at any time to assign this Lease or to sublet
the Premises or any portion thereof, it shall first notify Landlord of its
desire to do so and shall submit in writing to Landlord (i) the name of the
proposed assignee or subtenant; (ii) the nature of the proposed assignee's or
subtenant's business to be carried on in the Premises; (iii) the terms and
provisions of the proposed assignment or sublease, which shall be expressly
subject to the provisions of this Lease; (iv) in the case of a sublease, the
portion of the Premises proposed to be sublet; and (v) such financial and other
information as Landlord may reasonably request concerning the proposed assignee
or subtenant.
(d) At any time within 30 days after Landlord's receipt of the
information specified in subparagraph (c) above, Landlord may by written notice
to Tenant elect (i) to sublease from Tenant the Premises or the portion thereof
so proposed to be subleased by Tenant, or to take an assignment of Tenants
leasehold estate hereunder, or such part thereof as shall be specified in said
notice, upon the same terms as those offered to the proposed subtenant or
assignee, as the case may be, except that the Rent payable by Landlord in the
case of a sublease to Landlord shall be the same Rent per square foot as is
payable by Tenant hereunder for the same period; or (ii) to terminate this Lease
as to the portion of the Premises so proposed to be subleased or assigned (which
may include all of the Premises), with a proportionate abatement in the Rent
payable hereunder. In the case where Landlord elects to sublease space, receive
an assignment from Tenant or terminate all or any portion of this Lease pursuant
to this subparagraph (d), Landlord may thereafter lease the space affected to
Tenant's proposed assignee or subtenant, without liability to Tenant. If
Landlord does not exercise any option set forth in this subparagraph (d) within
said 30 day period, Tenant may within 90 days thereafter enter into a valid
assignment or sublease of the Premises or portion thereof, upon the terms and
conditions set forth in the information furnished by Tenant to Landlord pursuant
to subparagraph (c) above, subject, however, in each instance, to (i) Landlord's
consent under subparagraph (a) above, and (ii) Landlord's receipt of a fully
executed counterpart of such assignment or sublease. If Landlord elects to
exercise its option to sublet or receive an assignment from Tenant (or terminate
this Lease) as to any portion of the Premises, (i) Landlord and its subtenants
shall have the right to use in common with Tenant all lavatories, corridors and
lobbies within the Premises the use of which is reasonably required for the use
of such sublet, assigned or terminated space, and (ii) Tenant shall have no
right of setoff or right to assert a default hereunder by reason of a default by
Landlord under such sublease.
(e) Tenant acknowledges that it shall be reasonable for Landlord to
withhold its consent to a proposed assignment or sublease if (i) the use to be
made of the Premises by the proposed assignee or subtenant is (A) not generally
consistent with the character and nature of other tenants in the Building or the
Project or would result in a heavier burden (in comparison to that resulting
from Tenant's use of such portion of the Premises) on the Building, the Project,
the systems, the structures or the Common Areas thereof, (B) in conflict with
any "exclusive" or similar use or signage rights of another Project tenant, or
(C) prohibited by any provision of this Lease, including, without limitation,
the rules and regulations then in effect; (ii) the character, moral stability,
reputation or financial responsibility of the proposed assignee or subtenant are
not reasonably satisfactory to Landlord; (iii) in the case of a proposed
mortgage hypothecation or other
encumbrance of Tenant s leasehold estate, (A) the proposed assignee or subtenant
requests relief from any provision of this Paragraph 11 or this Lease,
including, without limitation, those provisions requiring assumption of this
Lease by each assignee or subtenant and continuous occupancy of the Premises,
(B) the proposed mortgage, hypothecation or encumbrance is of less than the
entire leasehold estate, or (C) the proposed assignee or subtenant cannot
reasonably demonstrate to Landlord that such mortgage, hypothecation or
encumbrance will not impair or adversely affect any of Landlord's rights
hereunder; (iv) in the case of a sublease, (A) the portion of the Premises
proposed to be sublet is not a single, self-contained unit of space with access
to restrooms and exits in conformance with applicable Law or otherwise cannot be
the subject of a valid certificate of occupancy or (B) the proposed transaction
is a sublease of a subleasehold interest; or (v) the proposed assignee or
subtenant is an existing tenant or subtenant in the Project.
(f) The voluntary or other surrender of this Lease by Tenant or a
mutual cancellation hereof shall not work a merger, and shall at the option of
Landlord, either terminate all or any existing subleases or subtenancies or
shall operate as an assignment to Landlord of such subleases or subtenancies. If
Tenant is a corporation which is not the issuer of any security registered under
Section 12(b) or Section 12(g) of the Securities Exchange Act of 1934, or is an
unincorporated association, trust or partnership, the transfer, assignment or
hypothecation of any stock or interest in such corporation, association, trust
or partnership in excess of 25% in the aggregate during the term hereof of the
total stock or interest in such corporation, association, trust or partnership
shall be deemed an assignment within the meaning of this Paragraph 11; provided,
however, that Landlord shall not withhold its consent and the provisions of
subparagraphs (d) and (g) of this Paragraph 11 shall not apply to transactions
described in the foregoing sentence with a corporation (i) into or with which
Tenant is merged or consolidated, (ii) to which substantially all of Tenant's
assets are transferred, (iii) that controls, is controlled by or is under common
control with Tenant or (iv) of which Aram Keith owns and controls at least 51%,
so long as in each such case, (A) the successor of Tenant has a tangible net
worth, calculated in accordance with generally accepted accounting principles
(and evidenced by financial statements in form reasonably satisfactory to
Landlord) equal to the greater of the net worth of Tenant immediately prior to
such transaction or the net worth of the original Tenant hereunder as of the
date of this Lease, (B) all provisions of this Paragraph 11, other than
subparagraphs (d), (g) and the consent requirements of subparagraph (a), shall
apply to such transactions, and (C) Tenant shall present proof reasonably
satisfactory to Landlord that the parties to the transaction were not attempting
to avoid the application of subparagraphs (d) and (g) of this Paragraph 11. If
Tenant consists of more than one person, a purported transfer, assignment,
mortgage, hypothecation or other encumbrance, voluntary, involuntary or by
operation of law, by any one of the persons executing this Lease of all or part
of such person's interest to this Lease shall be deemed an assignment within the
meaning of this Paragraph 11. Each assignee, sublessee, licensee, mortgagee or
other transferee, other than Landlord, shall assume in a writing satisfactory to
Landlord, all obligations of Tenant under this Lease and shall be jointly and
severally liable for the performance of all of the provisions hereof.
Notwithstanding the foregoing and without prejudice to Landlord's right to
require a written assumption from each assignee, any person or entity to whom
this Lease is assigned, including, without limitation, assignees pursuant to the
provisions of the Bankruptcy Code, 11 U.S.C.(SS) 101 et seq. (THE "BANKRUPTCY
Code"), shall automatically be deemed to have assumed all obligations of Tenant
arising under this Lease. Tenant agrees to reimburse Landlord for Landlord's
reasonable costs and attorneys' fees incurred in connection with the processing,
investigation and documentation of any requested assignment or sublease subject
to this Paragraph 11.
(g) If Landlord shall give its consent to any assignment of this Lease
or to any
sublease of all or any portion of the Premises, Tenant shall pay to Landlord as
Additional Rent hereunder:
(i) In the case of an assignment, fifty percent (50%) of an
amount equal to all sums and other consideration paid to the assignor Tenant by
the assignee for, or by reason of, such assignment, in excess of Rent accruing
hereunder, but deducting from such sums and consideration all brokerage
commissions actually paid to independent brokers in connection with such
transaction and any tenant improvement allowance granted to the assignee to the
extent actually devoted exclusively to the installation of leasehold
improvements in the Premises (such commissions and allowance being referred to
herein as "TRANSACTION INDUCEMENTS"); and
(ii) In the case of a sublease, fifty percent (50%) of all sums,
rents, additional charges, key money and other consideration payable under the
sublease by the subtenant to Tenant in excess of Rent accruing during the term
of the sublease with respect to the subleased portion of the Premises (at the
rate per square foot of Rentable Area payable by Tenant). Tenant shall be
entitled to deduct all Transaction Inducements related to such sublease,
provided the same are amortized over the entire term of the sublease.
The obligation to make the payments described in this subparagraph (g)
shall be a joint and several obligation of the Tenant and the assignee or
sublessee, as the case may be. The amounts payable under subparagraph (g) (i)
shall be paid to Landlord on the effective date of the assignment, as a
condition of the effectiveness of Landlord's consent. The amounts payable under
subparagraph (g) (ii) shall be paid to Landlord as and when payable by the
sublessee to Tenant. Within 15 days after written request therefor by Landlord,
Tenant shall furnish evidence to Landlord of the amount of consideration
received or expected to be received from such assignment or sublease.
(h) Notwithstanding any provision of this Lease to the contrary, in
the event this Lease is assigned to any person or entity pursuant to the
provisions of the Bankruptcy Code, any and all monies or other consideration
payable or otherwise to be delivered in connection with such assignment shall be
paid or delivered to Landlord, shall be and remain the exclusive property of
Landlord and shall not constitute the property of Tenant or Tenant' s estate
within the meaning of the Bankruptcy Code. All such money and other
consideration not paid or delivered to Landlord shall be held in trust for the
benefit of Landlord and shall be promptly paid or delivered to Landlord.
(i) Notwithstanding any provision of this Lease to the contrary,
Tenant shall have the right, without obtaining Landlord's consent, to permit a
portion of the Premises, not to exceed a total of 7,000 square feet of Rentable
Area in the aggregate, to be used for so-called "Executive Suites", provided
that Tenant shall first obtain from each occupant of such Executive Suites an
agreement that states that such occupant shall not take any action that will
violate the terms of this Lease and that such occupant shall pay all of
Landlord's costs and expenses (including reasonable attorneys' fees and costs)
that Landlord may incur as a result of any such default or such occupant's
failure to vacate its portion of the Premises when its rights of occupancy have
expired. Tenant shall be entitled to all so-called amounts paid by the occupant
of the Executive Suites to Tenant, provided Tenant is not in default under this
Lease.
12. DEFAULT
(a) The occurrence of any of the following shall constitute a default
by Tenant:
(i) Any failure by Tenant to pay any installment of Basic
Annual Rent or to make any other payment required to be made by Tenant hereunder
when due, where such failures continues for 3 business days after delivery of
written notice of such failure by Landlord to Tenant; provided, however, that
any such notice shall be in lieu of, and not in addition to, any notice required
under Section 1161 et seq., of the California Code of Civil Procedure;
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(ii) The abandonment or vacation of the Premises by Tenant;
(iii) Any failure by Tenant to execute and deliver any statement
described in Paragraph 16 requested by Landlord, where such failure continues
for 3 business days after delivery of written notice of such failure by Landlord
to Tenant; provided, however, that any such notice shall be in lieu of, and not
in addition to, any notice required under Section 1161 et seq., of the
California Code of Civil Procedure;
(iv) Any failure by Tenant to observe and perform any other
provision of this Lease, including, without limitation, any provision of the
Exhibits attached hereto, as they may exist from time to time, to be observed or
performed by Tenant, where such failure continues for 30 days (except where a
different period of time is specified in this Lease, in which case such
different time period shall apply) after delivery of written notice of such
failure by Landlord to Tenant; provided, however, that any such notice shall be
in lieu of, and not in addition to, any notice required under Section 1161 et
seq., of the California Code of Civil Procedure. If the nature of such default
is such that the same cannot reasonably be cured within such 30 day period,
Tenant shall not be deemed to be in default if Tenant shall, within 10 days of
receipt of such notice, both deliver to Landlord its written agreement to cure
such default and commence such cure, and thereafter diligently prosecute such
cure to completion;
(v) The making or furnishing by Tenant of any warranty,
representation or statement to Landlord in connection with this Lease, or any
other agreement to which Tenant and Landlord are parties, which is false or
misleading in any material respect when made or furnished;
(vi) Any transfer of a substantial portion of the assets of
Tenant (except transfers among Tenant and any guarantor of this Lease), or the
incurrance of any material obligation of Tenant, unless such transfer or
obligation is undertaken or incurred in the ordinary course of Tenant's business
or in good faith for fair equivalent consideration, or with Landlord's consent;
(vii) Any instance whereby Tenant or any general partner of
Tenant shall cease doing business as a going concern, make an assignment for the
benefit of creditors, generally not pay its debts as they become due or admit in
writing its inability to pay its debts as they become due, file a petition
commencing a voluntary case under any chapter of the Bankruptcy Code, be
adjudicated an insolvent, file a petition seeking for itself any reorganization,
composition, readjustment, liquidation, dissolution or similar arrangement under
the Bankruptcy Code or any other present or future similar statute, law, rule or
regulation, or file an answer admitting the material allegations of a petition
filed against it in any such proceeding, consent to the filing of such a
petition or acquiesce in the appointment of a trustee, receiver, custodian or
other similar official for it or of all or any substantial part of its assets or
properties, or take any action looking to its dissolution or liquidation;
(viii) Any instance whereby a case, proceeding or other action
shall be instituted against Tenant or any general partner of Tenant seeking the
entry of an order for relief against
Tenant or any general partner thereof as debtor, to adjudicate Tenant or any
general partner thereof as a bankrupt or insolvent, or seeking reorganization,
arrangement, readjustment, liquidation, dissolution or similar relief against
Tenant or any general partner thereof under the Bankruptcy Code or any other
present or future similar statute, law, rule or regulation, which case,
proceeding or other action either results in such entry, adjudication or
issuance or entry of any other order or judgment having a similar effect, or
remains undismissed for 60 days, or within 60 days after the appointment
(without Tenant's or such general partner's consent) of any trustee, receiver,
custodian or other similar official for it or such general partner, or of all or
any substantial part of its or such general partner's assets and properties,
such appointment shall not be vacated;
(ix) The appointment of a receiver, trustee or custodian to take
possession of all or any substantial portion of the assets of Tenant, or the
formation of any committee of Tenant's creditors, or any class thereof, for the
purpose of monitoring or investigating the financial affairs of Tenant or
enforcing such creditors' rights; or
(x) The default of any guarantor of Tenant's obligations
hereunder under any guaranty of this Lease, the attempted repudiation or
revocation of any such guaranty or the participation by any such guarantor in
any other event described in this subparagraph (a) (as if this subparagraph (a)
referred to such guarantor in place of Tenant).
(b) In the event of any such default by Tenant, then in
addition to any other remedies available to Landlord at law or in equity,
Landlord shall have the immediate option to terminate this Lease and all rights
of Tenant hereunder by giving written notice of such termination. In the event
that Landlord shall elect to so terminate this Lease, then Landlord may recover
from Tenant:
(i) The worth at the time of award of any unpaid Rent which had
been earned at the time of such termination; plus
(ii) The worth at the time of award of the amount by which the
unpaid Rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss Tenant proves reasonably could have
been avoided; plus
(iii) The worth at the time of award of the amount by which the
unpaid Rent for the balance of the term after the time of award exceeds the
amount of such rental loss that Tenant proves reasonably could be avoided;
(iv) Any other amount necessary to compensate Landlord for all
detriment proximately caused by Tenant' s failure to perform its obligations
under this Lease or which in the ordinary course would be likely to result
therefrom, and
(v) At Landlord's election, such other amounts in addition to
or in lieu of the foregoing as may be permitted from time to time by applicable
California Law.
(c) As used in subparagraphs (b) (i) and (b) (ii) above, the "worth at
the time of award" is computed by allowing interest at the rate specified in
subparagraph (i) below. As used in subparagraph (b) (iii) above, the "worth at
the time of award" is computed by discounting such amount at the discount rate
of the Federal Reserve Bank of San Francisco at the time of award plus 1%.
(d) In the event of any such default by Tenant, Landlord shall also
have the right, with or without terminating this Lease, to re-enter the Premises
and remove all persons and property from the Premises; such property may be
removed and stored in a public warehouse or elsewhere at the cost and risk of
and for the account of Tenant.
(e) In the event of the vacation or abandonment of the Premises by
Tenant or in the event that Landlord shall elect to re-enter as provided in
subparagraph (d) or shall take possession of the Premises pursuant to legal
proceedings, or pursuant to any notice provided by Law, then if Landlord does
not elect to terminate this Lease as provided in this Paragraph 12, Landlord may
from time to time, without terminating this Lease, either recover all rentals as
they become due or relet the Premises or any part thereof for such term or terms
and at such rental or rentals and upon such other terms and conditions as
Landlord in its sole and absolute discretion may deem advisable, with the right
to make alterations and repairs to the Premises.
(f) In the event that Landlord shall elect to relet, then rentals
received by Landlord from such reletting shall be applied: first, to the payment
of any indebtedness (other than Rent) due hereunder from Tenant to Landlord;
second, to the payment of any cost of such reletting (including brokerage
commissions); third, to the payment of the cost of any alterations and repairs
to the Premises; fourth, to the payment of Rent due and unpaid hereunder; and
the residue, if any, shall be held by Landlord and applied in payment of future
Rent as the same may become due and payable hereunder. Should reletting, during
any month to which such Rent is applied, result in the actual payment of rentals
at less than the Rent payable during that month by Tenant hereunder, then Tenant
shall pay such deficiency to Landlord immediately upon demand therefor by
Landlord. Such deficiency shall be calculated and paid monthly. Tenant shall
also pay to Landlord as soon as ascertained, any costs and expenses incurred by
Landlord in such reletting or in making such alterations and repairs not covered
by the rentals received from such reletting.
(g) No re-entry or taking of possession of the Premises by Landlord
pursuant to this Paragraph 12 shall be construed as an election to terminate
this Lease unless a written notice of such election shall be given to Tenant or
unless the termination thereof be decreed by a court of competent jurisdiction.
Notwithstanding any reletting without termination by Landlord, Landlord may, at
any time after such reletting, elect to terminate this Lease for any such
default. Upon the occurrence of a default by Tenant under subparagraph (a), if
the Premises or any portion thereof are sublet, Landlord in addition and without
prejudice to any other remedies herein provided or provided by Law, may, at its
option, collect directly from the sublessee all rentals becoming due to the
Tenant and apply such rentals against other sums due hereunder to Landlord.
(h) Except as otherwise specifically provided in this Lease, in
addition and without prejudice to any other right or remedy of Landlord, if
Tenant shall be in default under this Lease, Landlord may cure the same at the
expense of Tenant (i) immediately and without notice in the case (A) of
emergency, (B) where such default unreasonably interferes with any other tenant
in the Project, or (C) where such default will result in the violation of Law or
the cancellation of any insurance policy maintained by Landlord and (ii) in any
other case if such default continues for 10 days from the receipt by Tenant of
notice of such default from Landlord and Tenant is not diligently prosecuting
the cure of such default. All costs incurred by Landlord in curing such
default(s), including, without limitation, attorneys' fees, shall be
reimbursable by Tenant as additional Rent hereunder upon demand, together with
interest thereon, from the date such costs were incurred by Landlord, at the
rate specified in subparagraph (i) below.
(i) The performance by Landlord of any agreement, concession or grant
for "free rent," Rent abatement, a "credit fund" to be applied against Rent
otherwise payable hereunder or any grant or payment by Landlord to or for the
benefit of Tenant of any cash or other bonus, allowance or other payment or
inducement or any assumption of obligations by Landlord to or for the benefit of
Tenant given or granted to or for the benefit of Tenant as consideration for
execution and delivery of this Lease by Tenant (all such agreements,
concessions, grants, payments and assumptions are collectively referred to
herein as "TENANT INDUCEMENTS") shall be continuously conditional upon Tenant's
full and complete performance of its obligations under this Lease, as this Lease
may be amended or extended. Effective immediately upon the occurrence of a
default (A) any provision of this Lease providing for performance of a Tenant
Inducement shall be automatically deemed terminated and of no further force or
effect and (B) any Tenant Inducement previously granted, issued, paid or given
to or for the benefit of Tenant shall be immediately due and payable by Tenant
to Landlord as Rent hereunder.
(j) Tenant acknowledges and agrees that any late payment by Tenant of
Rent or any other amount payable by Tenant hereunder will result in damage to
Landlord, the exact amount of which will be extremely difficult to ascertain.
Such damage includes, without limitation, administrative expenses, accounting
and processing costs and late charges which may be payable by Landlord on
mortgage financing or other obligations of Landlord relating to the Property. As
a result, Landlord and Tenant agree that in the event Tenant is more than 10
days late in paying any amount of Rent or any other payment due under this
Lease, then provided Tenant does not pay the outstanding Rent or other payment
within 3 business days of written notice by Landlord of the late payment, Tenant
shall pay Landlord a late charge equal to 5% of the delinquent amount. Landlord
and Tenant agree that such late charge is a fair and reasonable estimate of the
damage Landlord will incur by reason of such delinquent payment. Following the
occurrence of three instances of payment of Rent more than 10 days late in any
twelve month period, Landlord may, without prejudice to any other rights or
remedies available to it, upon written notice to Tenant, (i) require that all
remaining monthly installments of Rent shall be payable three months in advance;
and in addition or in the alternative at Landlord's election, (ii) require that
Tenant increase the amount of the Security Deposit (if any) by an amount equal
to one month's Rent. In addition, any amount due from Tenant to Landlord
hereunder which is not paid within 30 days of the date due shall bear interest
at an annual rate (the "DEFAULT RATE") equal to 4% in excess of the discount
rate being charged by the Federal Reserve Bank of San Francisco on advances to
member banks pursuant to Sections 13 and 13(a) of the Federal Reserve Act, as
amended, as of the 25th day of the month preceding the date hereof (or such
lesser amount as shall be the maximum rate then permitted by applicable Law).
The payment of such interest by Tenant shall not constitute a waiver of any
default by Tenant hereunder.
(k) Tenant hereby waives for Tenant and for all those claiming under
Tenant all right now or hereafter existing to redeem by order or judgment of any
court or by any legal process or writ, Tenant's right of occupancy of the
Premises after any termination of this Lease. Notwithstanding any provision of
this Lease to the contrary, the expiration or termination of this Lease and/or
the termination of Tenant' s rights to possession of the Premises shall not
discharge, relieve or release Tenant from any obligation or liability whatsoever
under any indemnity provision of this Lease, including without limitation the
provisions of Paragraphs 6 and 8 hereof.
13. ACCESS; CONSTRUCTION
Landlord reserves the right to use the roof and exterior walls of the Premises
and the area beneath,
adjacent to and above the Premises, together with the right to install, use,
maintain, repair, replace and relocate equipment, machinery, meters, pipes,
ducts, plumbing, conduits and wiring through the Premises, which serve other
portions of the Building or the Project in a manner and in locations which do
not unreasonably interfere with Tenant's use of the Premises. In addition,
Landlord shall have free access to any and all mechanical installations of
Landlord or Tenant, including, without limitation, machine rooms, telephone
rooms and electrical closets. Tenant agrees that there shall be no construction
of partitions or other obstructions which interfere with or which threaten to
interfere with Landlord's free access thereto, or interfere with the moving of
Landlord's equipment to or from the enclosures containing said installations.
Landlord reserves and shall at any time and all times have the right to enter
the Premises to inspect the same, to supply janitorial service and any other
service to be provided by Landlord to Tenant hereunder, to exhibit the Premises
to prospective purchasers, lenders or tenants, to post notices of non-
responsibility, to alter, improve, restore, rebuild or repair the Premises or
any other portion of the Building, or to do any other act permitted or
contemplated to be done by Landlord hereunder, all without being deemed guilty
of an eviction of Tenant and without liability for abatement of Rent or
otherwise. For such purposes, Landlord may also erect scaffolding and other
necessary structures where reasonably required by the character of the work to
be performed. Landlord shall conduct all such inspections and/or improvements,
alterations and repairs so as to minimize, to the extent reasonably practical
and without additional expense to Landlord, any interruption of or interference
with the business of Tenant. Tenant hereby waives any claim for damages for any
injury or inconvenience to or interference with Tenant's business, any loss of
occupancy or quiet enjoyment of the Premises, and any other loss occasioned
thereby. For each of such purposes, Landlord shall at all times have and retain
a key with which to unlock all of the doors in, upon and about the Premises
(excluding Tenant's vaults and safes, access to which shall be provided by
Tenant upon Landlord's reasonable request). Landlord shall have the right to use
any and all means which Landlord may deem proper in an emergency in order to
obtain entry to the Premises or any portion thereof. Any entry into the Premises
obtained by Landlord by any of such means shall not under any circumstances be
construed to be a forcible or unlawful entry into, or a detainer of, the
Premises, or any eviction of Tenant from the Premises or any portion thereof. No
provision of this Lease shall be construed as obligating Landlord to perform any
repairs, Alterations or decorations to the Premises or the Project except as
otherwise expressly agreed to be performed by Landlord pursuant to the
provisions of this Lease.
14. BANKRUPTCY
(a) If at any time on or before the Commencement Date there shall be
filed by or against Tenant in any court, tribunal, administrative agency or any
other forum having jurisdiction, pursuant to any applicable law, either of the
United States or of any state, a petition in bankruptcy or insolvency or for
reorganization or for the appointment of a receiver, trustee or conservator of
all or a portion of Tenant's property, or if Tenant makes an assignment for the
benefit of creditors, this Lease shall ipso facto be cancelled and terminated
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and in such event neither Tenant nor any person claiming through or under Tenant
or by virtue of any applicable law or by an order of any court, tribunal,
administrative agency or any other forum having jurisdiction, shall be entitled
to possession of the Premises and Landlord, in addition to the other rights and
remedies given by Paragraph 12 hereof or by virtue of any other provision
contained in this Lease or by virtue of any applicable law, may retain as
damages any Rent, Security Deposit or moneys received by it from Tenant or
others on behalf of Tenant.
(b) If, after the Commencement Date, or if at any time during the term
of this Lease, there shall be filed against Tenant in any court, tribunal,
administrative agency or any other
forum having jurisdiction, pursuant to any applicable law, either of the United
States or of any state, a petition in bankruptcy or insolvency or for
reorganization or for the appointment of a receiver, trustee or conservator of
all or a portion of Tenant' s property, and the same is not dismissed after
sixty (60) calendar days, or if Tenant makes an assignment for the benefit of
creditors, this Lease, at the option of Landlord exercised within a reasonable
time after notice of the happening of any one or more of such events, may be
cancelled and terminated and in such event neither Tenant nor any person
claiming through or under Tenant or by virtue of any statute or of an order of
any court shall be entitled to possession or to remain in possession of the
Premises, but shall forthwith quit and surrender the Premises, and Landlord, in
addition to the other rights and remedies granted by Paragraph 12 hereof or by
virtue of any other provision contained in this Lease or by virtue of any
applicable law, may retain as damages any Rent, Security Deposit or moneys
received by it from Tenant or others on behalf of Tenant.
(c) In the event of the occurrence of any of those events specified in
this Paragraph 14, if Landlord shall not choose to exercise, or by applicable
law shall not be able to exercise, its rights hereunder to terminate this Lease
upon the occurrence of such events, then, in addition to any other rights of
Landlord hereunder or by virtue of applicable law, (i) Landlord shall not be
obligated to provide Tenant with any of the utilities or services specified in
Paragraph 7, unless Landlord has received compensation in advance for such
utilities or services, and the parties agree that Landlord's reasonable estimate
of the compensation required with respect to such services shall control, and
(ii) neither Tenant, as debtor-in-possession, nor any trustee or other person
(hereinafter collectively referred to as the "ASSUMING TENANT") shall be
entitled to assume this Lease unless on or before the date of such assumption,
the Assuming Tenant (x) cures, or provides adequate assurance that the latter
will promptly cure, any existing default under this Lease, (y) compensates, or
provides adequate assurance that the Assuming Tenant will promptly compensate
Landlord for any pecuniary loss (including, without limitation, attorneys' fees
and disbursements) resulting from such default, and (z) provides adequate
assurance of future performance under this Lease, it being covenanted and agreed
by the parties that, for such purposes, any cure or compensation shall be
effected by the immediate payment of any monetary default or any required
compensation, or the immediate correction or bonding of any nonmonetary default.
For purposes of this Lease, (i) any "adequate assurance" of such cure or
compensation shall be effected by the establishment of an escrow fund for the
amount at issue or by bonding, and (ii) "adequate assurance" of future
performance shall be effected by the establishment of an escrow fund for the
amount at issue or by bonding.
15. SUBSTITUTION OF PREMISES - INTENTIONALLY LEFT BLANK.
16. SUBORDINATION; ATTORNMENT; ESTOPPEL CERTIFICATES
(a) Tenant agrees that this Lease and the rights of Tenant hereunder
shall be subject and subordinate to any and all deeds of trust, security
interests, mortgages, master leases, ground leases or other security documents
and any and all modifications, renewals, extensions, consolidations and
replacements thereof (collectively, "SECURITY DOCUMENTS") which now or hereafter
constitute a lien upon or affect the Project, the Building or the Premises. Such
subordination shall be effective without the necessity of the execution by
Tenant of any additional document for the purpose of evidencing or effecting
such subordination. In addition, Landlord shall have the right to subordinate or
cause to be subordinated any such Security Documents to this Lease and in such
case, in the event of the termination or transfer of Landlord's estate or
interest in the Project by reason of any termination or foreclosure of any such
Security Documents, Tenant shall,
notwithstanding such subordination, attorn to and become the Tenant of the
successor in interest to Landlord at the option of such successor in interest.
Furthermore, Tenant shall within five days of demand therefor execute any
instruments or other documents which may be required by Landlord or the holder
of any Security Document and specifically shall execute, acknowledge and deliver
within five days of demand therefor a subordination of lease or subordination of
deed of trust, in the form required by the holder of the Security Document
requesting the document; the failure to do so by Tenant within such time period
shall be a material default hereunder. Landlord is hereby irrevocably appointed
and authorized as agent and attorney-in-fact of Tenant to execute and deliver
all such subordination instruments in the event that Tenant fails to execute and
deliver said instruments within five days after notice from Landlord requesting
execution and delivery thereof. Notwithstanding any provision of this Lease to
the contrary, the subordination of this Lease and the rights of Tenant to any
Security Documents which are executed or entered into after the date of this
Lease (and Tenant's duty hereunder to execute any documents evidencing such
subordination) shall be subject to the holder of such Security Document agreeing
pursuant to such holder's standard form for such purpose or otherwise pursuant
to any other form in common use by institutional lenders) that Tenant's
possession and this Lease shall not be disturbed by such holder so long as no
default hereunder shall occur and Tenant shall attorn to the record owner of the
Project.
(b) If any proceeding is brought for default under any ground or
master lease to which this Lease is subject or in the event of foreclosure or
the exercise of the power of sale under any mortgage, deed of trust or other
Security Document made by Landlord covering the Premises, at the election of
such ground lessor, master lessor or purchaser at foreclosure, Tenant shall
attorn to and recognize the same as Landlord under this Lease, provided such
successor expressly agrees in writing to be bound to all future obligations by
the terms of this Lease, and if so requested, Tenant shall enter into a new
lease with that successor on the same terms and conditions as are contained in
this Lease (for the unexpired term of this Lease then remaining); provided,
however, in no case shall such ground lessor, master lessor or purchaser (i) be
liable or responsible for any acts or omissions of any predecessor owner or with
respect to events prior to its ownership, (ii) be subject to any offsets or
defenses Tenant may have against any predecessor or (iii) be bound by prepayment
of more than one month's rent.
(c) Tenant shall, upon not less than five days' prior notice by
Landlord, execute, acknowledge and deliver to Landlord a statement in writing
certifying to those facts for which certification has been requested by Landlord
or any current or prospective purchaser, holder of any Security Document, ground
lessor or master lessor, including, but without limitation, that (i) this Lease
is unmodified and in full force and effect (or if there have been modifications,
that the same is in full force and effect as modified and stating the
modifications), (ii) the dates to which the Basic Annual Rent, Rent and other
charges hereunder have been paid, if any, and (iii) whether or not to the best
knowledge of Tenant, Landlord is in default in the performance of any covenant,
agreement or condition contained in this Lease and, if so, specifying each such
default of which Tenant may have knowledge. The form of the statement attached
hereto as Exhibit "F" is hereby approved by Tenant for use pursuant to this
subparagraph (c); however, at Landlord's option, Landlord shall have the right
to use other forms for such purpose. Tenants failure to execute and deliver such
statement within 10 days shall, at the option of Landlord, constitute a material
default under this Lease and, in any event, shall be conclusive upon Tenant that
this Lease is in full force and effect without modification except as may be
represented by Landlord in any such certificate prepared by Landlord and
delivered to Tenant for execution. In addition, Landlord is hereby irrevocably
appointed and authorized as agent and attorney-in-fact of Tenant to execute and
deliver such statement in the event that Tenant fails to execute and deliver
such statement within five days after notice from Landlord
requesting execution and delivery thereof Any statement delivered pursuant to
this Paragraph 16 may be relied upon by any prospective purchaser of the fee of
the Building or the Project or any mortgagee, ground lessor or other like
encumbrancer thereof or any assignee of any such encumbrance upon the Building
or the Project.
(d) In addition, and not in lieu of the foregoing, as a condition of
Landlord's obligation to deliver the Premises to Tenant hereunder, on or before
the date that Tenant takes possession or commences use of the Premises for any
business purpose (including moving in), Tenant shall execute and deliver to
Landlord a certificate substantially in the form of Exhibit "G" attached hereto,
indicating thereon any exceptions thereto which Tenant claims to exist at that
time.
17. SALE BY LANDLORD; NONRECOURSE LIABILITY
(a) In the event of a sale or conveyance by Landlord of the Building
or the Project, Landlord shall be released (i) from any and all liability
accruing thereafter, and (ii), if Tenant has been presented with an estoppel
certificate for Tenant's execution in connection with such sale or conveyance,
Landlord shall also be released from any and all liability accruing prior to
such sale or conveyance, except for any default of Landlord set forth in such
estoppel certificate signed by Tenant. If the Security Deposit has been made by
Tenant prior to such sale or conveyance, Landlord shall transfer the Security
Deposit to the purchaser, and upon delivery to Tenant of notice thereof pursuant
to the provisions of Section 1950.7 of the California Civil Code, Landlord shall
be discharged from any further liability in reference thereto.
(b) Landlord and each of its officers, directors, Affiliates,
shareholders and constituent shareholders shall in no event or at any time be
personally liable for the payment or performance of any obligation required or
permitted of the Landlord under this Lease or under any document executed in
connection herewith. In the event of any actual or alleged failure, breach or
default by Landlord under this Lease or any such document, the sole recourse of
Tenant shall be against the interest of Landlord in the Project. No attachment,
execution, writ or other process shall be sought or obtained, and no judicial
proceeding shall be initiated by or on behalf of Tenant, against Landlord (or
any of Landlord's officers, directors, Affiliates or constituent partners or
shareholders) personally or Landlord's assets (other than Landlord's interest in
the Project) as a result of any such failure, breach or default.
(c) Landlord shall not be in default of any obligation of Landlord
hereunder unless and until it has failed to perform such obligation within 30
days after receipt of written notice of such failure from Tenant, provided,
however, that if the nature of Landlord's obligation is such that more than 30
days are required for its performance, Landlord shall not be in default if
Landlord commences to cure such default within the 30 day period and thereafter
diligently prosecutes the same to completion. Tenants sole remedy for breach of
this Lease by Landlord shall be an action for damages, injunction or specific
performance; Tenant shall have no right to terminate this Lease on account of
any breach or default by Landlord. Notwithstanding any provision of this Lease,
all liability of Landlord under this Lease or otherwise with respect to any acts
or omissions of Landlord or events which occur during the term of this Lease and
which in any way relate to Tenant's tenancy hereunder or occupancy of the
Premises shall terminate two years following the expiration or sooner
termination of this Lease other than as to those claims, if any, asserted in
reasonable detail in a writing delivered by Tenant to Landlord prior to the
expiration of such two-year period.
(d) As a condition to the effectiveness of any notice of default given
by Tenant to
Landlord, Tenant shall also concurrently give such notice under the provisions
of Paragraph 17(c) to each beneficiary under a deed of trust encumbering the
Project of whom Tenant has received written notice (such notice to specify the
address of the beneficiary). In the event Landlord shall fail to cure any breach
or default within the time period specified in subparagraph (c), then prior to
the pursuit of any remedy therefor by Tenant, each such beneficiary shall have
an additional 30 days within which to cure such default, or if such default
cannot reasonably be cured within such period, then each such beneficiary shall
have such additional time as shall be necessary to cure such default, provided
that within such 30 day period, such beneficiary has commenced and is diligently
pursuing the remedies available to it which are necessary to cure such default
(including, without limitation, as appropriate, commencement of foreclosure
proceedings).
18. PARKING; COMMON FACILITIES
(a) Tenant shall have the right to the nonexclusive use of the number
of parking spaces located in the parking facilities of the Project specified in
Item 13 of the Basic Lease Provisions for the parking of motor vehicles used by
Tenant, its officers, employees and invitees only. Landlord reserves the right,
at any time upon written notice to Tenant, to change the location of Tenant's
parking spaces within the parking facility originally designated for such use,
if any, as determined by Landlord in its reasonable discretion. The use of such
spaces shall be subject to the rules and regulations adopted by Landlord from
time to time for the use of such facilities. Landlord further reserves the right
to make such changes to the parking system as Landlord may deem necessary or
reasonable from time to time (i.e., Landlord may provide for one or a
combination of parking systems, including, without limitation, self-parking,
single or double stall parking spaces, and valet assist parking). Tenant agrees
that Tenant, its officers and employees shall not be entitled to park in any
reserved or specially assigned areas designated by Landlord from time to time in
the Project's parking facilities. Landlord may require execution of an agreement
with respect to the use of such parking facilities by Tenant and/or its officers
and employees in form satisfactory to Landlord as a condition of any such use by
Tenant, its officers and employees. A default by Tenant, its officers or
employees in the payment of such charges, the compliance with such rules and
regulations, or the performance of such agreement(s) shall constitute a material
default by Tenant hereunder. Tenant shall not permit or allow any vehicles that
belong to or are controlled by Tenant or Tenant's officers, employees,
suppliers, shippers, customers or invitees to be loaded, unloaded or parked in
areas other than those designated by Landlord for such activities. If Tenant
permits or allows any of the prohibited activities described in this Paragraph,
then Landlord shall have the right, without notice, in addition to such other
rights and remedies that it may have, to remove or tow away the vehicle involved
and charge the cost to Tenant, which cost shall be immediately payable upon
demand by Landlord.
(b) Subject to subparagraphs (c) and (d) below and the remaining
provisions of this Lease, Tenant shall have the nonexclusive right, in common
with others, to the use of such entrances, lobbies, restrooms, elevators, ramps,
drives, stairs, and similar access ways and service ways and other common areas
and facilities in and adjacent to the Building and the Project as are designated
from time to time by Landlord for the general nonexclusive use of Landlord,
Tenant and the other tenants of the Project and their respective employees,
agents, representatives, licensees and invitees ("COMMON AREAS"). The use of
such Common Areas shall be subject to the rules and regulations contained herein
and the provisions of any covenants, conditions and restrictions affecting the
Project. Landlord reserves the right to make such changes, alterations,
additions, deletions, improvements, repairs or replacements in or to the
Building, the Project (including the Premises) and the Common Areas as Landlord
may deem necessary or desirable, including, without
limitation, constructing new buildings and making changes in the location, size,
shape and number of driveways, entrances, parking spaces, parking areas, loading
areas, landscaped areas and walkways; provided, however, that there shall be no
unreasonable permanent obstruction of access to or use of the Premises resulting
therefrom. In the event that the Building or the Project is not completed on the
date of execution of this Lease, Landlord shall have the sole judgment and
discretion to determine the architecture, design, appearance, construction,
workmanship, materials and equipment with respect to construction of the
Building and the Project. Notwithstanding any provision of this Lease to the
contrary, the Common Areas shall not in any event be deemed to be a portion of
or included within the Premises leased to Tenant and the Premises shall not be
deemed to be a portion of the Common Areas.
(c) Landlord reserves the right (i) to change the configuration, size
and dimensions of the Project and its Common Areas, (ii) to add or sever from
its ownership any portion of the Project at any time, and (iii) to exclude from
the rights of use granted to Tenant any rights of passage over or use of any
portion of the Project; provided, however, Landlord shall not unreasonably
interfere with access to or use of the Premises.
19. MISCELLANEOUS
(a) Attorneys' Fees. In the event of any legal action or proceeding
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brought by either party against the other arising out of this Lease, the
prevailing party shall be entitled to recover reasonable attorneys' fees and
costs incurred in such action. Such amounts shall be included in any judgment
rendered in any such action or proceeding.
(b) Waiver. No waiver by Landlord of any provision of this Lease or of
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any breach by Tenant hereunder shall be deemed to be a waiver of any other
provision hereof, or of any subseqsequent breach by Tenant. Landlord's consent
to or approval of any act by Tenant requiring Landlord's consent or approval
under this Lease shall not be deemed to render unnecessary the obtaining of
Landlord's consent to or approval of any subsequent act of Tenant. No act or
thing done by Landlord or Landlord's agents during the term of this Lease shall
be deemed an acceptance of a surrender of the Premises, unless in writing signed
by Landlord. The delivery of the keys to any employee or agent of Landlord shall
not operate as a termination of the Lease or a surrender of the Premises. The
acceptance of any Rent by Landlord following a breach of this Lease by Tenant
shall not constitute a waiver by Landlord of such breach or any other breach
unless such waiver is expressly stated in a writing signed by Landlord.
(c) Notices. All notices which Landlord or Tenant may be required, or
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may desire, to serve on the other must be in writing and may be served by
personal service, or as an alternative to personal service, by mailing the same
by registered or certified mail, postage prepaid, addressed as set forth in Item
14 of the Basic Lease Provisions, or addressed to such other address or
addresses as either Landlord or Tenant may from time to time designate to the
other in writing. However, any notice (including a summons and complaint) which
Landlord may be required or may desire to serve on Tenant shall be deemed
sufficiently served and given if personally served or sent by registered or
certified mail, postage prepaid, to Tenant at the Premises address set forth in
Item 14 of the Basic Lease Provisions. In addition, any bill, statement, consent
or other communication which Landlord may desire or is required to give to
Tenant shall be deemed sufficiently given or rendered if in writing, hand
delivered to the Premises or sent to Tenant at the Premises by registered or
certified mail, postage prepaid.
(d) Labor. Tenant shall not at any time prior to or during the term
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hereof, either directly or indirectly, use any contractors, labor or materials
whose use would create any difficulty with other contractors or labor engaged by
Tenant, Landlord or by others in the construction, maintenance or operation of
the Premises, the Building or the Project.
(e) Security. Landlord shall be the sole determinant of the type and
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amount of security services to be provided to the Project, if any. In all
events, Landlord shall not be liable to Tenant, and Tenant hereby waives any
claim against Landlord, for, and expressly assumes the risk of (i) any
unauthorized or criminal entry of third parties into the Premises, the Building
or the Project, (ii) any damage to persons, or (iii) any loss of property in and
about the Premises, the Building or the Project, by or from any unauthorized or
criminal acts of third parties, regardless of any action, inaction, failure,
breakdown, malfunction and/or insufficiency of the security services provided by
Landlord or any actual or alleged passive or active negligence of Landlord.
(f) Storage. Any storage space at any time demised to Tenant hereunder
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shall be used exclusively for storage. Notwithstanding any other provision of
this Lease to the contrary, (i) Landlord shall have no obligation to provide
heating, cleaning, water or air conditioning therefor, and (ii) Landlord shall
be obligated to provide to such storage space only such electricity as will, in
Landlord's judgment, be adequate to light said space as storage space.
(g) Holding Over. Tenant shall have no right to holdover or retain
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possession of any portion of the Premises after the expiration or sooner
termination of this Lease. If Tenant holds over after the expiration or earlier
termination of the term hereof, with or without the express or implied consent
of Landlord, Tenant shall become and be only a month to month tenant at a Rent
equal to the greater of (i) the then prevailing market rate as determined by
Landlord in its sole and absolute discretion (subject to adjustments as provided
in Paragraphs 2 and 3 hereof and prorated on a daily basis) or (ii) 125% of the
Basic Annual Rent payable by Tenant immediately prior to such expiration or
termination, and otherwise upon the terms, covenants and conditions herein
specified, so far as applicable. Neither any provision hereof nor acceptance by
Landlord of Rent after such expiration or earlier termination shall be deemed a
consent to a holdover hereunder or result in a renewal of this Lease or an
extension of the term. Notwithstanding any provision to the contrary contained
herein, (i) Landlord expressly reserves the right to require Tenant to surrender
possession of the Premises upon the expiration of the term of this Lease or upon
the earlier termination hereof, the right to reenter the Premises, and the right
to assert any remedy at law or in equity to evict Tenant and/or collect damages
in connection with any such holding over, and (ii) Tenant shall indemnify,
defend and hold Landlord harmless from and against any and all claims, demands,
actions, losses, damages, obligations, costs and expenses, including, without
limitation, attorneys' fees incurred or suffered by Landlord by reason of
Tenant's failure to surrender the Premises on the expiration or earlier
termination of this Lease in accordance with the provisions of this Lease.
(h) Condition of Premises. Tenant acknowledges that neither Landlord
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nor any agent of Landlord has made any representation or warranty with respect
to the Premises, the Building or the Project, or with respect to the suitability
of any part of the Project for the conduct of Tenant's business. Tenant agrees
that the Premises, the Building and the Project are in good and sanitary order,
condition and repair without defect.
(i) Quiet Possession. Upon Tenant's paying the Rent reserved hereunder
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and observing and performing all of the covenants, conditions and provisions on
Tenant's part to be observed and performed hereunder, Tenant shall have quiet
possession of the Premises for the term
hereof without hindrance or ejection by any person lawfully claiming under
Landlord, subject to the provisions of this Lease and to the provisions of any
(i) covenants, conditions and restrictions, (ii) master lease, or (iii) deed of
trust to which this Lease is subordinate or may be subordinated.
(j) Matters of Record. Except as otherwise provided herein, this Lease
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and Tenant's rights hereunder are subject and subordinate to all matters
affecting Landlord's title to the Project recorded in the official records of
the County in which the Project is located prior to and subsequent to the date
hereof, including, without limitation, all covenants, conditions and
restrictions and the provisions of all loan documents relating to each loan
secured by a mortgage or deed of trust encumbering the Project. Tenant agrees
for itself and all persons in possession or holding under it that it will comply
with and not violate any such covenants, conditions and restrictions, loan
documents, or other matters of record. Landlord reserves the right, from time to
time, to grant such easements, rights and dedications as Landlord deems
necessary or desirable, and to cause the recordation of parcel maps and
covenants, conditions and restrictions affecting the Premises, the Building or
the Project, as long as such easements, rights, dedications, maps, and
covenants, conditions and restrictions do not materially interfere with the use
of the Premises by Tenant. At Landlord's request, Tenant shall join in the
execution of any of the aforementioned documents.
(k) Project Financing. Tenant acknowledges that as a material
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inducement to Landlord to execute this Lease, (i) Tenant shall timely
acknowledge and deliver to Landlord all such documents and instruments as may be
customarily required by any lender providing financing to Landlord from time to
time during the term hereof, including, without limitation, those documents and
instruments which may be required under Paragraph 16 and (ii) if any prospective
lender to Landlord shall request or require in connection with the placement of
any financing to Landlord or pursuant to the provisions of any Security Document
any modification of this Lease Tenant shall not delay or withhold its agreement
to such proposed modification provided the same shall not modify the Basic
Annual Rent payable hereunder nor materially and adversely affect the
obligations of Tenant hereunder. Tenant shall be responsible for any and all
liability, loss, cost, damage and expense, including, without limitation,
attorneys' fees, which Landlord shall incur in connection with Tenant's
failure or delay in executing, acknowledging and delivering such documents and
instruments or Tenant's breach of any other covenant or agreement embodied in
this Lease that results in the delay, impairment or cancellation of such
financing.
(l) Successors and Assigns. Except as otherwise provided in this
----------------------
Lease, all of the covenants, conditions and provisions of this Lease shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and assigns. Tenant shall
attorn to each purchaser, successor or assignee of Landlord.
(m) Brokers. Tenant warrants that it has had no dealings with any real
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estate broker or agent in connection with the negotiation of this Lease,
excepting only the broker named in Item 11 of the Basic Lease Provisions and
that it knows of no other real estate broker or agent who is or might be
entitled to a commission in connection with this Lease. Landlord covenants and
agrees to pay all real estate commissions due in connection with this Lease to
the broker described in Item 11 of the Basic Lease Provisions.
(n) Name. Tenant shall not, without the prior written consent of
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Landlord (which consent shall not be unreasonably withheld) use the name,
insignia or logotype of the Building or the Project for any purpose, and in no
event shall Tenant acquire any rights in or to such names. Tenant shall not use
any picture of the Building or of the Project in its advertising, stationery or
in any other
manner. Landlord expressly reserves the right at any time to change
the name, number, designation or logotype of the Building or the Project or the
exterior or interior signage thereon and therein without the consent of Tenant
without in any manner being liable to Tenant therefor.
(o) Examination of Lease; Confidentiality. Submission of this
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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 by and delivery to both Landlord and Tenant. Tenant
agrees that (i) the terms and provisions of this Lease are confidential and
constitute proprietary information of Landlord and (ii) it shall not disclose,
and it shall cause its partners, officers, directors, shareholders, employees,
brokers and attorneys to not disclose any term or provision of this Lease to any
other person without first obtaining the prior written consent of Landlord.
(p) Time. Time is of the essence of this Lease and each and all of
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its provisions.
(q) Defined Terms and Marginal Headings. The words "Landlord" and
-----------------------------------
"Tenant" as used herein shall include the plural as well as the singular. If
more than one person is named as Tenant the obligations of such persons are
joint and several. The marginal headings and titles to the articles of this
Lease are not a part of this Lease and shall have no effect upon the
construction or interpretation of any part hereof.
(r) Conflict of Laws; Prior Agreements; Separability. This Lease shall
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be governed by and construed pursuant to the laws of the State of California.
This Lease contains all of the agreements of the parties hereto with respect to
any matter covered or mentioned in this Lease. No prior agreement, understanding
or representation pertaining to any such matter shall be effective for any
purpose. No provision of this Lease may be amended or added to except by an
agreement in writing signed by the parties hereto or their respective successors
in interest. The illegality, invalidity or unenforceability of any provision of
this Lease shall in no way impair or invalidate any other provision of this
Lease, and such remaining provisions shall remain in full force and effect.
(s) Authority. If Tenant is a corporation, each individual executing
---------
this Lease on behalf of Tenant hereby covenants and warrants that Tenant is a
duly authorized and existing corporation, that Tenant has and is qualified to do
business in California, that the corporation has full right and authority to
enter into this Lease, and that each person signing on behalf of the corporation
is authorized to do so. If Tenant is a partnership or trust, each individual
executing this Lease on behalf of Tenant hereby covenants and warrants that he
is duly authorized to execute and deliver this Lease on behalf of Tenant in
accordance with the terms of such entity's partnership or trust agreement.
Tenant shall provide Landlord on demand with such evidence of such authority as
Landlord shall reasonably request, including, without limitation, resolutions,
certificates and opinions of counsel.
(t) Common Areas. The rights of Tenant hereunder in and to the Common
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Areas shall at all times be nonexclusive with the rights of Landlord and other
tenants of Landlord who use the same in common with Tenant, and it shall be the
duty of Tenant to keep all of the Common Areas free and clear of any
obstructions created or permitted by Tenant or resulting from Tenant's
operations, and to use the Common Areas only for normal activities, parking and
ingress and egress by Tenant and its employees, agents, representatives,
licensees and invitees to and from the Premises, the Building or the Project.
If, in the opinion of Landlord, unauthorized persons are using the Common Areas
by reason of the presence of Tenant in the Premises, Tenant, upon demand of
Landlord, shall correct such situation by appropriate action or proceedings
against all such unauthorized persons. Nothing herein shall affect the rights of
Landlord at any time to remove any such unauthorized persons from said areas or
to prevent the use of any of said areas by unauthorized persons.
(u) Joint and Several Liability. If two or more individuals,
---------------------------
corporations, partnerships or other business associations (or any combination of
two or more thereof) shall sign this Lease as Tenant, the liability of each such
individual, corporation, partnership or other business association to pay Rent
and perform all other obligations hereunder shall be deemed to be joint and
several, and all notices, payments and agreements given or made by, with or to
any one of such individuals, corporations, partnerships or other business
associations shall be deemed to have been given or made by, with or to all of
them. In like manner, if Tenant shall be a partnership or other business
association, the members of which are, by virtue of statute or federal law,
subject to personal liability, then the liability of each such member shall be
joint and several.
(v) Rental Allocation. For purposes of Section 467 of the Internal
-----------------
Revenue Code of 1986, as amended from time to time, Landlord and Tenant hereby
agree to allocate all Rent to the period in which payment is due, or if later,
the period in which Rent is paid.
(w) Rules and Regulations. Tenant agrees to comply with all rules and
---------------------
regulations of the Building and the Project imposed by Landlord as set forth on
Exhibit "D" attached hereto, as the same may be changed from time to time upon
reasonable notice to Tenant. Landlord shall not be liable to Tenant for the
failure of any other tenant or any of its assignees, subtenants, or their
respective agents, employees, representatives, invitees or licensees to conform
to such rules and regulations.
(x) Financial Statements. Upon Landlord's written request, Tenant
shall promptly furnish, and cause each guarantor of this Lease to furnish,
Landlord from time to time, with financial statements compiled by a certified
public accountant in accordance with generally accepted accounting principles
(without footnotes) certified by an officer of Tenant stating that such
financial statements present fairly Tenant's then current financial condition
and contain no material misstatements or omissions.
(y) Termination. If Landlord decides to alter, demolish or close the
-----------
Project, or any portion thereof, in connection with Landlord's expansion,
reduction, removal, renovation or construction of new or existing improvements
in any portion of the Project, then Landlord may, in its sole discretion,
terminate this Lease, provided Landlord gives Tenant at least one hundred eighty
(180) days' written notice prior to the date that Tenant is required to remove
itself and all personal property from the Premises ("VACATION DATE"). The Lease
shall remain in full force and effect until the Vacation Date. Tenant shall (a)
remove itself and all personal property from the Premises prior to the Vacation
Date, (b) surrender the Premises to Landlord as required in Section 5 (c) of
this Lease, and (c) execute a quitclaim deed prepared by Landlord. If Tenant
performs such terms (a), (b) and (c) by the Vacation Date, Landlord shall pay
Tenant an amount not to exceed the sum of Five Hundred Dollars ($500) toward the
costs of Tenants expenses in connection with or resulting from the termination
of this Lease, such as change of stationary, business cards and advertising.
Landlord shall have no further obligation or responsibility to Tenant.
FIRST AMENDMENT TO LEASE
------------------------
This FIRST AMENDMENT TO LEASE ("AMENDMENT") is effective as of
December 1, 1997, and is entered into by and between MORENO CORPORATE CENTER,
L.L.C., a Delaware limited liability company ("LANDLORD"), and THE KEITH
COMPANIES, INC., a California corporation ("TENANT").
R E C I T A L S
- - - - - - - -
A. Landlord and Tenant previously entered into that certain Lease
dated January 1, 1996 ("LEASE"), with regard to certain premises referred to as
"Floors 2 and 3" ("EXISTING PREMISES") located on certain property at 22690
Cactus Avenue, Moreno Valley, California and more commonly known as "Moreno
Corporate Center" ("PROPERTY"). All initially capitalized terms used herein and
not otherwise defined herein shall have the meanings ascribed to such terms in
the Lease. All references to "Lease" shall mean the Lease as amended by this
Amendment.
B. Upon the terms and conditions set forth below, Landlord and
Tenant desire to amend the Lease to add to the Premises under the Lease that
certain additional space commonly known as "Suites 117-119" ("ADDITIONAL
PREMISES") located at 14300 Elsworth Street, Moreno Valley, California. The
Additional Premises contain approximately 3,279 square feet. The Additional
Premises and the Existing Premises are sometimes collectively hereinafter
referred to as the "TOTAL PREMISES".
In consideration of the facts recited above, the mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree
as follows:
1. Additional Premises. In addition to the Existing Premises,
-------------------
Landlord hereby leases to Tenant the Additional Premises as more particularly
described on Exhibit "A" attached hereto, and in accordance with the terms of
------------
this Amendment and the Lease.
2. Additional Premises Term. The Term of the Lease with respect to
------------------------
the Additional Premises shall commence on December 1, 1997 ("ADDITIONAL PREMISES
COMMENCEMENT DATE"), and shall be a periodic month-to-month tenancy ("ADDITIONAL
PREMISES TERM"). The Additional Premises Term may be terminated by Landlord or
Tenant upon thirty (30) days prior written notice to the other. Any termination
of the Additional Premises Term shall not in any way affect the term of the
Lease with respect to the Existing Premises.
3. Rent. The Base Monthly Rent for the Additional Premises shall be
----
$819.75 per month, payable pursuant to the terms and conditions set forth in the
Lease; provided, however, that any provisions in the Lease regarding Abated Rent
shall not affect the amount payable by Tenant hereunder as Base Monthly Rent for
the Additional Premises. Tenant's obligation to pay Base Monthly Rent and any
and all other amounts due under this Amendment and the Lease with respect to the
Additional Premises shall commence on the Additional Premises Commencement Date.
Such Base Monthly Rent for the initial month of the Additional Premises Term
shall be prorated as of the Additional Premises Commencement Date. In addition
to Base Monthly Rent, Tenant shall be required to pay, with respect to the
Additional Premises, any and all other sums, money or charges of whatsoever
nature required to be paid under the Lease. Notwithstanding the foregoing,
Tenant shall have no obligation to pay additional rent with respect to the
Additional Premises which is attributable to Landlord's operating expenses or
common area maintenance charges for the Property.
4. Additional Security Deposit. Concurrently with the execution of
---------------------------
this Amendment by Tenant, Tenant shall deliver to Landlord the sum of $819.75 as
an additional security deposit which shall be held by Landlord in accordance
with and subject to any and all terms of the Lease relating to security
deposits.
5. Condition of Additional Premises. Tenant hereby accepts the
--------------------------------
Additional Premises in its current " AS-IS " condition. Tenant acknowledges and
agrees that Landlord shall not be obligated to make any improvements to the
Additional Premises, that Landlord has not made any representations or
warranties as to the Additional Premises and that after the Additional Premises
Commencement Date, Tenant shall make all improvements to the Additional Premises
thereafter required by applicable law.
6. Use. Item No. 12 of the Basic Lease Provisions is hereby amended
---
to provide that Tenant shall use the Additional Premises for storage and
warehouse purposes only. The use by Tenant of the Total Premises, including the
Additional Premises, shall be in accordance with Item No. 12 of the Basic Lease
Provisions, as amended above, and any and all additional use provisions
contained in the Lease.
7. Waiver and Release. Tenant hereby expressly waives, and releases
------------------
Landlord from, any and all claims, obligations, liabilities, acts, omissions,
causes of action, damages, costs, losses and expenses, whether now existing or
hereafter arising, known or unknown, which arise out of, are connected with or
relate to any acts, omissions, events, or circumstances arising prior to the
date of execution of this Amendment.
Tenant hereby agrees, represents and warrants that the matters
released herein are not limited to matters that are known or disclosed, and
Tenant hereby waives any and all rights and benefits that it now has, or in the
future may have, conferred upon it by virtue of the provisions of Section 1542
of the Civil Code of the State of California, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
Tenant hereby agrees, represents and warrants that it realizes and
acknowledges that factual matters now unknown to it may have given or may
hereafter give rise to causes of action, claims, demands, debts, controversies,
damages, costs, losses and expenses that are presently unknown, unanticipated
and unsuspected, and it further agrees, represents and warrants that the release
set forth above has been negotiated and agreed upon in light of that realization
and that it nevertheless hereby intends to release, discharge and acquit the
parties set forth hereinabove from any such unknown causes of action, claims,
damages, costs, losses and expenses that are in any way related to the matters
referred to hereinabove.
8. Effect of Amendment of Lease. Except to the extent the Lease is
----------------------------
modified by this Amendment, the terms and provisions of the Lease shall remain
unmodified and in full force and effect.
9. Construction. In the event of a conflict between the terms of
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the Lease and the terms of this Amendment, the terms of this Amendment shall
govern and prevail. The language of this
Amendment shall not be construed against any party since all parties have
participated in the negotiation and drafting of this Amendment.
10. Governing Law. This Amendment shall be construed in accordance
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with and governed by the laws of the State of California.
11. Successors and Assigns. Subject to the provisions of the Lease
----------------------
relating to assignment, mortgaging, pledging and subletting, the Lease, as
amended by this Amendment, shall bind the heirs, executors, administrators,
successors and assigns of any and all of the parties hereto.
12. Attorneys' Fees. If either party commences an action or
---------------
proceeding to enforce or interpret this Amendment, the prevailing party (as
determined by the trier of fact and confirmed on appeal, if any) shall be
entitled to collect its attorneys' fees and costs incurred in connection with
such action or proceeding (including any appeals) from the other party, and the
prevailing party's rights and the other party's obligations hereunder shall be
severable from, and shall survive and not merge into, any judgment.
13. Brokerage Commission. Tenant has incurred no liability for any
--------------------
brokerage commission or finder's fee arising from or relating to the
transactions contemplated by this Amendment or the Lease. Tenant hereby
indemnifies and agrees to protect, defend and hold harmless Landlord from and
against all liability, cost, damage or expense (including, without limitation,
attorneys' fees and costs incurred in connection therewith) on account of any
brokerage commission or finder's fee in connection with this transaction. This
indemnification is intended to be solely for the benefit of Landlord and its
successors and assigns and is not intended to benefit, nor may it be relied upon
by, any other person or entity.
14. Counterparts. This Amendment may be executed in one or more
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counterparts, each of which shall be an original, but all of which shall
constitute one and the same instrument.
15. Entire Agreement. This Amendment constitutes the entire
----------------
agreement of Landlord and Tenant with respect to the specific subject matter
hereof.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of
the date and year first written above.
"LANDLORD":
MORENO CORPORATE CENTER, L.L.C.,
a Delaware limited liability company
By: TCW Asset Management Company,
a California corporation
Its Manager
By: /s/ RUSSEL S. BERNARD
Name: RUSSEL S. BERNARD
Its: AUTHORIZED SIGNATORY
By: /s/ KENNETH LIANG
Its: Authorized Signatory
"TENANT":
THE KEITH COMPANIES, INC.
a California corporation
By: /s/ Jerry Brickman
Jerry Brickman
Its: Chief Operating Officer
4