EXHIBIT 10.40
AGREEMENT OF
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NON-DISTURBANCE AND ATTORNMENT
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This Agreement (the "Agreement") is made is made as of July 28, 1999, by
and among ASP SCRIPPS, L.L.C., a Delaware limited liability company
("Landlord"), and The Keith Companies, Inc., a California corporation
("Subtenant").
RECITALS
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WHEREAS, under that certain Lease, dated May 21, 1993, between Scripps
Center Associates, a California general partnership, predecessor-in-interest to
Landlord, and Canon Computer Systems, Inc., a California corporation ("Tenant"),
as amended by that certain First Amendment to Lease, dated July 30, 1999
(collectively, the "Lease"), regarding space in the buildings located at 2995
and 2955 Red Hill Avenue, Costa Mesa, California (collectively, the "Premises"),
as more particularly described in the Lease, Landlord does lease, let, and
demise the Premises to Tenant for the period of time and upon the covenants,
terms, and conditions therein stated; and
WHEREAS, under that certain Sublease dated July 29, 1999, between Tenant
and Subtenant (hereinafter referred to as the "Sublease"), Tenant did sublease,
let, and demise a portion of the Premises (the "Sublease Premises") located in
the 2955 Red Hill Avenue building, to Subtenant for the period of time and upon
the covenants, terms, and conditions therein stated; and
WHEREAS, Landlord has consented to the Sublease; and
WHEREAS, Landlord is willing to agree that in the event Landlord elects to
terminate the Lease due to a default by Tenant, Landlord will succeed to
Tenant's interest in the Sublease, and Subtenant is willing to agree to attorn
to Landlord in that event upon the covenants, terms, and conditions set forth
hereinbelow.
AGREEMENT
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NOW, THEREFORE, in consideration of the covenants, terms, conditions and
agreements herein contained, and in consideration of other good and valuable
consideration, each to the other, the sufficiency and receipt of which are
hereby acknowledged, the parties hereto agree, covenant, and warrant as follows:
1. Subject to the observance and performance by Subtenant of all of the
covenants, terms and conditions of the Sublease and in any modification or
amendment specified herein or subsequently approved by Landlord on the part of
Subtenant to be observed and performed, in the event the Lease is terminated due
to a default by Tenant, Landlord hereby covenants that. provided that Subtenant
is not then in default of the Sublease beyond any applicable notice and cure
period provided in the Sublease, the Sublease and any modifications or
amendments specified herein or hereafter approved by Landlord will continue in
full force and effect, and
Landlord shall recognize the Sublease and any modifications or amendments
specified herein or subsequently approved by Landlord and Subtenant's rights
thereunder, and will thereby establish direct privity of estate and contract
between Landlord and Subtenant with the same force and effect and with the same
relative priority in time and right as though the Sublease and any modification
or amendment specified herein or subsequently approved by Landlord were directly
made from Landlord in favor of Subtenant; provided, however, that
notwithstanding anything in this Agreement to the contrary, in the event of a
termination of the Sublease and the recognition of the Sublease as set forth
herein, the terms of Section 14 of the Sublease have no applicability as between
Landlord and Subtenant.
2. Subtenant agrees that in the event of any act or omission by Tenant
under the Sublease which would give Subtenant the right, either immediately or
after a period of time, to terminate the Sublease, whether or not set forth in
the Sublease, Subtenant will not exercise any such right to terminate until (i)
it shall have given written notice of the act or omission to Landlord, and (ii)
if the default by Tenant is of a nature which can be cured by the Landlord, and
if the Landlord is proceeding with diligence to cure such default, Subtenant
shall have given the Landlord the time periods set forth in the Lease for
Landlord's cure of such default, in order to cure such default, provided that
any such cure period shall not commence to run until Landlord's receipt of
written notice from Subtenant of such default.
3. That in the event the Lease is terminated due to a default by Tenant,
Subtenant hereby covenants and agrees to make full and complete attornment to
Landlord as substitute sublessor upon the same terms, covenants and conditions
as provided in the Sublease and all extensions or renewals thereof, so as to
establish direct privity of estate and contract between the Landlord and
Subtenant with the same force and effect as though the Sublease and all
modifications and amendments thereof specified herein or hereafter consented to
by Landlord, together with all guarantees of Subtenant's obligations under the
Sublease, were originally made directly between Landlord and Subtenant (except
as specifically set forth in this Agreement). Subtenant will thereafter make all
payments directly to Landlord. Subtenant waives all joinder and/or service of
any and all actions at law by Landlord to gain possession of the Premises. It
shall not be necessary, except as required by law, for Landlord to name
Subtenant as a party prosecute any action at law to gain possession of the
Premises, and unless required by law Landlord agrees not to name Subtenant in
any such proceeding.
4. Notwithstanding anything contained herein to the contrary, or anything
to the contrary in the Sublease or in any modifications or amendments thereto
(except as set forth below), in the event the Lease is terminated due to a
default by Tenant, then Landlord and Subtenant hereby covenant and agree that
Landlord and its respective assignees shall not be:
(a) Liable for any act or omission of Tenant, or its successors or
assigns, except in the event that Landlord recognizes the Sublease pursuant to
the non-disturbance provisions of Paragraph I of this Agreement, then Landlord
shall be liable for the performance of the obligations of the Sublandlord under
the Sublease from and after the effective date of such recognition.
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(b) Subject to any offsets or defenses which Subtenant might have as
to Tenant, or its successors or assigns, or to any claim for damages against
Tenant, or its successors or assigns.
(c) Required or obligated to credit Subtenant with any rent or
additional rent paid by Subtenant to Tenant more than thirty (30) days in
advance.
(d) Bound by any amendments or modifications of the Sublease made at
any time (whether before or after the Lease is terminated) without Landlord's
consent.
(e) Bound to or liable for refund of all or any part of any security
deposit deposited by Subtenant with Tenant for any purpose unless and until such
security deposit shall have been delivered by Tenant to and actually received by
Landlord. In the event of receipt of any such security deposit, Landlord's
obligations with respect thereto shall be limited to the amount of such security
deposit actually received by Landlord, and Landlord shall be entitled to all
rights, privileges and benefits of Tenant set forth in the Sublease with respect
thereto.
(f) Liable to Subtenant under the Sublease or otherwise from and after
such time as the Landlord ceases to be the owner of the Building.
Nothing in this Paragraph 4 shall be intended to waive or impair any
liability Landlord may have to Subtenant pursuant to the non-disturbance
provisions of Paragraph 1 above. In addition, Subtenant reserves its rights to
any and all claims or causes of action against Canon Computer Systems, Inc., a
California corporation, for prior losses or damages.
5. Subtenant covenants and agrees as follows for the benefit and reliance
of Landlord:
that it will not, without the express written consent of Landlord:
(i) Cancel, terminate, modify, alter, amend or surrender the
Sublease, except as may be consented to by Landlord; or
(ii) Enter into any agreement with Tenant, its successors or
assigns, which grants any concession with respect to the Sublease or which
reduces the rent called for thereunder; or
(iii) Make any offset or claim against rents, or prepay rent more
than one (1) month in advance.
6. Landlord and Subtenant hereby agree as follows:
(a) That neither this Agreement, nor anything to the contrary in the
aforesaid Sublease or in any modifications or amendments thereto shall, prior to
Landlord succeeding to the interest of Tenant, its successors or assigns, under
the Sublease, operate to give rise to or create any responsibility or liability
for the control, care, management or repair of the Sublease
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Premises upon Landlord, or impose responsibility for the carrying out by
Landlord of any of the covenants, terms and conditions of the Sublease or of any
modification or amendment specified herein or hereafter consented to by
Landlord. Notwithstanding anything to the contrary in the Sublease, Landlord,
its successors and assigns, shall be responsible for performance of only those
covenants and obligations of the Sublease accruing after the Lease is terminated
due to a default by Tenant, and Landlord's obligations to Subtenant shall be
further limited as provided in this Agreement. Notwithstanding anything in this
Agreement to the contrary, Landlord acknowledges and agrees that prior to
termination of the Lease by Landlord and the recognition and attornment provided
for herein, Subtenant shall have no right pursuant to the Sublease or this
Agreement to take direct action under any circumstances against Landlord in the
name of Tenant.
(b) That in the event Landlord succeeds to the interest of Tenant, its
successors or assigns, under the Sublease and becomes the substitute sublessor,
it is agreed that Landlord may assign its interest as substitute sublessor
without the consent of Subtenant.
(c) Subtenant hereby acknowledges and agrees that in the event
Landlord succeeds to the interest of Tenant, its successors or assigns, under
the Sublease, that any liability or obligation of the Landlord as sublessor
under the Sublease shall be limited to Landlord's equity interest in the
building in which the Subleased Premises are located and no recourse shall be
had to any other assets of Landlord.
(d) It is specifically agreed that Subtenant shall not, as to
Landlord, require cure of any such default which is personal to Tenant, its
successors or assigns, and therefore not susceptible of cure by Landlord.
(e) Upon Landlord's written request of Subtenant given at any time
after the termination of the Lease by Landlord, Subtenant (as tenant) agrees to
execute a lease of the Sublease Premises with Landlord or its successor (as
landlord) upon the same terms and conditions as the Sublease between Tenant and
Subtenant (except with respect to any provisions eliminated therefrom pursuant
to the terms of this Agreement, which lease shall cover any unexpired term of
the Sublease existing at the time of such termination.
7. Any notices to Subtenant or Landlord hereunder shall be sent by United
States certified or registered mail, postage prepaid, return. receipt requested,
or delivered personally, addressed as follows:
Subtenant: The Keith Companies, Inc.
2955 Redhill Avenue
Costa Mesa, California 92626
With a copy to: Rutan & Tucker, LLP
611 Anton Boulevard, Suite 1400
Costa Mesa, California 92626
Attention: Adam N. Volkert, Esq.
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Landlord: Amresco, Inc.
700 North Pearl Street, Suite 1700
Dallas, Texas 75201
Attention: Mr. Andy Doughtie
With a copy to: Allen, Matkins, Leck, Gamble & Mallory
1999 Avenue of the Stars, Suite 1800
Los Angeles, California 90067
Attn: Cheryl S. Prell, Esq.
or as to each party, to such other address as the party may designate by a
notice given in accordance with the requirements contained in this Section 7.
8. This Agreement contains the entire agreement between the parties
hereto. No variations, modifications or changes herein or hereof shall be
binding upon any party hereto unless set forth in a document duly executed by or
on behalf of such party.
9. This instrument may be executed in multiple counterparts, all of which
shall be deemed originals and with the same effect as if all parties hereto had
signed the same document All of such counterparts shall be construed together
and shall constitute one instrument, but in making proof, it shall only be
necessary to produce one such counterpart executed by the party against whom it
is being enforced.
10. Whenever used herein, the singular number shall include the plural, the
plural the singular, and the use of any gender shall include all genders. The
words, "Landlord" and "Subtenant" shall include their heirs, executors,
administrators, beneficiaries, successors and assigns.
11. Counterparts. This Agreement may be executed in counterparts, each of
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which shall be deemed an original, and all such counterparts, when taken
together, shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed, sealed and delivered in their respective names and in their behalf; and
if a corporation, by its officers duly authorized, as of the 28th day of July,
1999.
"Landlord":
ASP SCRIPPS, L.L.C.,
a Delaware limited liability company
By: /s/ SCOTT R. FITZGERALD
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Its: Vice President
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"Subtenant":
The Keith Companies, Inc.,
A California corporation
By: /s/ ERIC C. NIELSEN
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Its: President
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By: /s/ GARY CAMPANARO
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Its: Secretary
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