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EXHIBIT 10.13
SUBLEASE
THIS SUBLEASE (the "Sublease") is made as of September 26, 2000, by CANON
COMPUTER SYSTEMS, INC., a California corporation (the "Sublandlord") and THE
KEITH COMPANIES, INC., a California corporation (the "Subtenant").
BACKGROUND:
A. SCRIPPS REDHILL ASSOCIATES, LLC, a Delaware limited liability company, as
successor in interest to ASP SCRIPPS, LLC, a California limited liability
company as Landlord ("Landlord"), and Sublandlord, as Tenant, have entered into
that certain Lease dated as of May 21, 1993, as amended, (the "Prime Lease"),
regarding certain premises ("Prime Lease Premises") in the building known as
2955 Red Hill Avenue, Costa Mesa, California 92626 (the Building"), all as
described in the Prime Lease.
B. Sublandlord and Subtenant have agreed to enter into a sublease for 27,171
rentable square feet of the Prime Lease Premises on the First Floor of the
Building as described on attached Exhibit A ("Sublease Premises"), upon the
terms and conditions set forth below.
1. SUBLEASE. Subtenant agrees to sublease from Sublandlord, and Sublandlord
agrees to sublease to Subtenant, the Sublease Premises upon the terms and
conditions set forth below. Notwithstanding any provision contained in the
Lease, the Second Amendment to Lease dated September 26, 2000, or this Sublease,
upon delivery to Subtenant of any portion of the Sublease Premises, Subtenant
shall immediately accept and begin paying rent for those portions of the
Sublease Premises delivered to Subtenant even if the entire Sublease Premises
has not yet been delivered to Subtenant.
2. SUBLEASE TERM. The term of this Sublease ("Sublease Term") will commence on
October 1, 2000 (the "Commencement Date"), and will continue until October 30,
2003.
3. USE. Subtenant shall use the Sublease Premises for general office and other
permitted purposes under the Prime Lease, and for no other purpose.
4. "AS IS" SUBLEASE; ALTERATIONS; CONSTRUCTION ALLOWANCE. Subtenant agrees to
accept the Sublease Premises in "as is" condition, "with all faults".
Sublandlord and Subtenant acknowledge that Subtenant is currently occupying the
Sublease Premises pursuant to a lease between Subtenant and Landlord set to
expire September 30, 2000. Subtenant shall be responsible for the installation
and cost of any and all improvements, alterations or other work (the " Subtenant
Improvements") required in order to accommodate Subtenant's use of the
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Subleased Premises or required on or to the Sublease Premises by the Americans
With Disabilities Act of 1990 or any other applicable law, rule or regulation as
a result of Subtenant's use of the Sublease Premises. Subtenant shall directly
employ the general contractor and shall oversee the construction of the
Subtenant Improvements.
Prior to the commencement of construction of the Subtenant Improvements,
Subtenant shall secure the written approval of the plans for the Subtenant
Improvements from both Landlord and Sublandlord, which consent shall not be
unreasonably withheld or delayed by either Landlord or Sublandlord. All
construction work, including the selection of the space planner, general
contractor and subcontractors, shall be subject to Landlord's prior approval,
which approval shall not be unreasonably withheld or delayed. Subtenant shall
make or install no other improvements, alterations or work on or to the Sublease
Premises or on or to the property and/or Building of which the Sublease Premises
are a part without the prior written consent of Sublandlord and Landlord, which
consent may be withheld by either Landlord or Sublandlord in the reasonable
discretion of Landlord or Sublandlord; provided, however, that Subtenant may
make any nonstructural improvement costing less than Fifty Thousand Dollars
($50,000.00) and no consent shall be required, but Subtenant shall give
Sublandlord and Landlord at least twenty (20) days prior written notice of
Subtenant's intention to make any such improvement, which notice shall include a
reasonable description of the improvement, including marked floor plans where
appropriate.
Sublandlord shall provide Subtenant with a tenant improvement allowance (the
Tenant Improvement Allowance") to a maximum of $83,508.00 as a contribution
towards the costs incurred by Subtenant in the completion of the build out of
the Sublease Premises. Subtenant shall be entitled to apply the Tenant
Improvement Allowance toward reimbursement of its architectural fees,
engineering and design fees, demolition costs, city permits and construction
costs. The Tenant Improvement Allowance shall be disbursed by Sublandlord to
Subtenant in accordance with the terms and schedule set forth on the Work Letter
attached as Exhibit B to the First Amendment to Lease between Landlord and
Sublandlord dated July 30, 1999. Sublandlord shall not be allowed to charge
Subtenant for profit, overhead expenses, supervisory expenses, plan review fees
or any similar charge in connection with the construction of the Subtenant
Improvements, nor shall Subtenant be charged by Landlord for parking, elevator
use, or staging areas required by Subtenant's contractor or subcontractors for
completion of the Subtenant Improvements.
5. RENT. Subtenant will pay monthly base rent ("Subrent") for the Sublease
Premises in advance, without abatement, deduction or setoff, on the Commencement
Date and on the first day of each calendar month thereafter during the Sublease
Term, in accordance with the terms set forth on Exhibit B attached hereto (the
"Subrent Schedule"). Subtenant will also pay, as additional rent, Subtenant's
Proportionate Share of the Building and Subtenant's Proportionate Share of the
Project (as defined below) of all other payments due the Landlord under the
Prime Lease, including, without limitation, insurance, real estate taxes, and
all other Project Operating Costs and Building Operating Costs (the "Triple Net
Expenses"), as and when they shall become due in accordance with Section 3.2 of
the Prime Lease. For purposes of this Sublease,
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"Subtenant's Proportionate Share of the Building" means the ratio of the
rentable area (determined by Sublandlord's architect in accordance with BOMA
standards) of the Sublease Premises to the rentable area of the Building,
expressed as a percentage rounded to the second decimal point. "Subtenant's
Proportionate Share of the Project" means the ratio of the rentable area (27,171
square feet) of the Sublease Premises to the rentable area of the Project,
expressed as a percentage rounded to the second decimal point.
6. BUILDING REAL ESTATE TAXES. In addition to Subtenant's obligation to pay
Subtenant's share of Subtenant's Proportionate Share of real estate taxes, and
in accordance with Section 3.2(a) of the Prime Lease, Subtenant agrees that it
will pay to Sublandlord fifty percent (50%) of the increase in any real estate
taxes which result from the sale or transfer of the Building or the Project (as
defined in the Prime Lease) during the term of this Sublease.
7. PARKING. Subtenant shall be entitled to four (4) parking spaces for every
1000 rentable square feet of space subleased by Subtenant. All parking shall
remain free of charge during the Sublease Tenn.
8. PERFORMANCE OF PRIME LEASE BY SUBTENANT. Except as otherwise set forth in
this Sublease, Subtenant assumes and agrees to keep, obey and perform all of the
terms, covenants and conditions of Sublandlord as Tenant under the Prime Lease
with respect to the Sublease Premises, and except for Sections 13.17, 13.18,
13.19, and 13.21 of the Prime Lease, and as otherwise provided herein, shall
enjoy all of the rights and privileges of Sublandlord under the Prime Lease.
9. SUBTENANT'S RIGHTS AS TO PRIME LANDLORD. Sublandlord shall not be liable for
any nonperformance of or noncompliance with or breach or failure to observe any
term, covenant or condition of the Prime Lease upon Landlord's part to be kept,
observed, performed or complied with, or for any delay or interruption in
Landlord's performing its obligations thereunder, provided that Sublandlord
shall cooperate with Subtenant in assisting Subtenant in enforcing the terms of
the Prime Lease, to the extent provided below. Sublandlord agrees to exercise
commercially reasonable diligence in attempting to cause Landlord to perform its
obligations under the Prime Lease for the benefit of Subtenant.
10. INSURANCE; WAIVERS. Subtenant will, during the Sublease Term, continuously
maintain commercial general liability insurance as required under the Prime
Lease, which insurance policy shall name Sublandlord as an additional insured
party, and a certificate thereof acceptable to Sublandlord shall be delivered to
Sublandlord prior to the delivery of the Sublease Premises to Subtenant.
Subtenant hereby agrees to indemnify and hold harmless Sublandlord from, and
shall reimburse Sublandlord for, all costs and expenses, including reasonable
attorneys' fees, incurred by Sublandlord in connection with the defense of all
claims and demands of third persons, including but not limited to those for
death, personal injuries, or property damage, arising out of any default of
Subtenant in performing or observing any term, covenant, condition or provision
of this Sublease, or out of the use or occupancy of the Sublease Premises by
Subtenant, or out of any of the acts or omissions of the Subtenant, its agents,
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representatives, employees, customers, guests, invitees or other persons who are
doing business with Subtenant or who are at the Sublease Premises with
Subtenant's consent. Subtenant, for itself and its insurers, hereby further
expressly waives all claims against Sublandlord for any and all damages to
persons or property caused by or resulting from any thing or circumstance,
excepting any claims arising due to the willful misconduct of Sublandlord, its
agents, representatives, employees, contractors or invitees.
11. ASSIGNMENT AND SUBLETTING. Subtenant shall be allowed to assign or sublease
all or a part of the Sublease Premises subject to and in accordance with the
terms set forth in Section 6.4 of the Prime Lease. In the event Subtenant
assigns or sublets the Sublease Premises for a rental rate which exceeds the
Subrent Schedule set forth on Schedule B, in accordance with the terms and
conditions set forth in Section 6.4 of the Prime Lease Landlord and Sublandlord
shall share equally any rental profit resulting from such further sublease.
Subtenant may not, without the prior written consent of Sublandlord (which may
be withheld in Sublandlord's sole discretion), allow any liens to be placed on
this Sublease or the Sublease Premises, or suffer this Sublease or the Sublease
Premises or any portion thereof to be attached or taken upon execution without
posting a bond in the statutory amount required to remove the lien or otherwise
providing adequate security to Sublandlord and Landlord if Subtenant disputes or
contests the amount or validity of such lien. Sublandlord may assign its
interest under this Sublease at any time, and in such case Sublandlord shall be
released from any liability arising under this Sublease after the effective date
of such assignment.
12. TERMINATION. This Sublease shall terminate at the end of the Sublease Term
hereof. Subtenant will peacefully and quietly vacate and surrender the Sublease
Premises to Sublandlord at the expiration of the Sublease Term, in the condition
called for under the Prime Lease. The existence of this Sublease is dependent
and conditioned upon the continued existence of the Prime Lease, and in the
event of the cancellation or termination of the Prime Lease, this Sublease
automatically shall be terminated, except to the extent provided in the
Agreement of Non-Disturbance and Attornment attached hereto, if any; provided,
however, that this provision shall not be deemed to release Sublandlord of
liability if the Prime Lease is canceled or terminated due to a default by
Sublandlord as Tenant under the Prime Lease, which default did not result, in
whole or in part, from a default by Subtenant under this Sublease. Sublandlord
agrees not to amend, alter or modify any of the provisions of the Prime Lease
affecting Subtenant, or to surrender the Prime Lease, without Subtenant's
consent, which consent will not be unreasonably withheld or delayed. Sublandlord
shall have no liability to Subtenant due to the termination of the Prime Lease
by reason of any default by Subtenant under this Lease, or by reason of any
condemnation or destruction of the Prime Lease Premises, unless such destruction
is due to the gross negligence or willful misconduct of Sublandlord, its agents,
representatives, employees, contractors or invitees. In accordance with the
terms set forth in the Prime Lease, in the event Subtenant fails to surrender
possession of the Sublease Premises at the end of the Sublease Term, Subtenant
shall at Sublandlord's option, be deemed to occupy the Sublease Premises as a
tenant from month to month, which tenancy may be terminated by one month's
written notice. During such tenancy, Subtenant agrees to pay to Sublandlord,
monthly in
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advance, an amount equal to 200% of all Subrent (based on the Subrent and
Subtenant's pro rata share of Operating Costs payable for the last month of the
Sublease Term, together with all other amounts payable by Subtenant to
Sublandlord under this Sublease), and to be bound by all of the terms, covenants
and conditions herein specified.
13. DEFAULT. If Subtenant defaults in its obligations under this Sublease,
Sublandlord shall have all of the same rights and remedies against Subtenant as
would be available to the Landlord against Sublandlord if Sublandlord were in
default under the Prime Lease, as fully as if such rights and remedies were set
forth in this Sublease.
14. INTENTIONALLY DELETED
15. NOTICES. Any notice or demand permitted or required hereunder shall be
deemed given or made if, and shall not be deemed to have been given or made
unless, it is in writing and deposited in the United States mails certified,
return receipt requested, postage prepaid, addressed as follows:
If to Sublandlord: Canon Computer Systems, Inc.
2995 Redhill Avenue
Costa Mesa, California 92626
Attn: General Counsel
With a copy to: Dorsey & Whitney LLP
370 17' Street, Suite 4400
Denver, Colorado 80202
Attn: Kevin P. Hein, Esq.
If to Subtenant: 2955 Redhill Avenue
Costa Mesa, California 92626
With a copy to: Rutan & Tucker, LLP
611 Anton Boulevard
Suite 1400
Costa Mesa, California 92626
Attn: Adam N. Volkert, Esq.
The foregoing addresses may be changed from time to time by notice as above
provided, which change shall be effective 10 days after notice is given.
16. SECURITY DEPOSIT; SUBMISSION OF SUBTENANT'S FINANCIALS. Upon execution of
this Sublease, Subtenant shall pay to Sublandlord a security deposit equal to
$41,212.50. Within five business days of the execution of this Sublease,
Subtenant shall submit current audited financials for review by Landlord and
Sublandlord.
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17. DIRECTORY BOARD LISTING. Subject to Landlord's prior approval, as provided
in the Prime Lease, Subtenant shall be allowed to place an appropriate listing
in the Building directory board.
18. ENTIRE AGREEMENT. This Sublease contains the entire agreement between
Sublandlord and Subtenant regarding the Sublease Premises. Subtenant agrees that
it has not relied on any statement, representation or warranty of any person
except as set out in this Sublease. This Sublease may be modified only by an
agreement in writing signed by Sublandlord and Subtenant. No surrender of the
Sublease Premises, or of the remainder of the Sublease Term, will be valid
unless accepted by Sublandlord in writing.
19. SUCCESSORS AND ASSIGNS. All provisions of this Sublease will be binding on
and for the benefit of the successors and assigns of Sublandlord and Subtenant,
except that no person or entity holding under or through Subtenant in violation
of any provision of this Sublease will have any right or interest in this
Sublease or the Sublease Premises.
20. COMMISSIONS. Sublandlord shall pay any commissions due CB Richard Ellis,
Inc. regarding this Sublease. Sublandlord and Subtenant shall each indemnify and
hold the other harmless from and against any claims, losses, costs or liability
arising from any other parties who may claim a brokerage commission as a result
of the indemnifying party's actions or agreements in connection with this
Sublease.
21. INTENTIONALLY DELETED
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EXECUTION:
Sublandlord and Subtenant have executed this Sublease as of the date first
stated above.
SUBLANDLORD:
CANON COMPUTER SYSTEMS, INC., a
California corporation
/s/ MICHEAL RUSERT
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Its: VP
SUBTENANT:
THE KEITH COMPANIES, INC., a California
corporation
/s/ ERIC. C. NIELSEN
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By: ERIC. C. NIELSEN
Its: President
/s/ GARY C. CAMPANARO
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By: GARY C. CAMPANARO
Its: Chief Financial Officer
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EXHIBIT B
Subrent Schedule
Months Monthly Subrent
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10/1/00 - 7/31/01 $36,680.85
8/1/01 - 7/31/02 $38,039.40
8/1/02 - 7/31/03 $39,397.95
8/1/03 - 10/30/03 $40,756.50
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