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▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇, ▇▇.
Office Lease Agreement
This lease made and entered into the 13th day of September , 1999 between
A.S.T. Properties (hereinafter referred to as LESSOR) and P.C. S. Education
Systems. Inc., (hereinafter referred to as LESSEE).
On the covenants and conditions of the lease, LESSOR leases to LESSEE, and
LESSEE leases from LESSOR a total of approximately (6,000) leasable square feet
of office space ("Leased Premises"), on the first floor of Main Street Plaza,
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇, ▇▇▇▇▇ "Building"), known as Suite Number(s) 100.
1. DELIVERY OF PREMISES. The estimated commencement date is December 1,
1999. If Landlord is unable to deliver possession of the Premises by the
estimated commencement date of the term by reason of the retention of possession
by parties other than Landlord or for any other cause beyond its reasonable
control, LESSOR shall not be liable for any damage caused for failing to deliver
possession nor shall such failure affect the validity of this lease or the
obligations of LESSEE under it or extend the term of this lease, but in such
event LESSEE shall not be liable for rent until LESSOR delivers possession of
the Premises to LESSEE. If LESSOR does not deliver possession of the Premises to
LESSEE within thirty (30) days after the estimated commencement date, LESSEE can
elect to terminate this lease by giving written notice to LESSOR at any time
before the date LESSOR delivers possession of the Premises to LESSEE, in which
event the parties shall be discharged form all obligations hereunder.
2. ACCEPTANCE OF PREMISES. On delivery of Premises LESSEE has inspected
the Premises and any appurtenances, is fully informed of their condition, and by
taking possession of the Premises on the commencement of the term acknowledges
that the Premises are in good condition; that no representation as to the
condition or repair of the Premises not herein expressed has been made by LESSOR
or its authorized representatives; and agrees to maintain the Premises and all
improvements, machinery, equipment, and appurtenances in good condition and
repair.
3. LEASE TERM. The lease term shall commence on the date five (5) days
after the LESSOR has given LESSEE written notice that the tenant improvements
and modifications to the Premises are substantially completed and shall continue
until the date that is three (3) years thereafter. The parties each agree to
execute a "Declaration of Lease Commencement" setting forth the date on which
the Lease Term shall have commenced. As used herein, the term "substantially
completed" shall mean completed except for incomplete items and defects which do
not materially and adversely affect LESSEE's use of the Premises for their
intended use.
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If the commencement date falls on the first day of a calendar month, the
term hereof shall begin to run from that date. If such date falls other than the
first day of a month, the term hereof shall commence upon occupancy, and an
additional rental of an amount calculated by prorating the monthly payment set
forth hereinafter shall be paid by LESSEE to LESSOR for the partial month in
which commencement date shall occur unless otherwise specified.
4. LEASE RENTAL. LESSEE agrees to pay rent to LESSOR at such place as
LESSOR may designate without deduction or offset. LESSOR agrees to accept as
rent for the-leased premises a total of Two hundred-seven thousand and 00/100
dollars ($207,000.00), payable in advance on or before the first day of each
month during the term of this lease, in the following monthly installments:
Months 1 to 12 $5,500.00 per month
Months 13 to 24 $5,750.00 per month
Months 25 to 36 $6,000.00 per month
The amount of Five thousand-five hundred and 00/100 dollars ($5,500.00 )
is paid LESSOR upon the execution of the lease which shall represent the first
month's rent of this lease. The deposit pursuant to Article 32 of this office
lease is Seven thousand and 00/100 dollars ($7,000.00) which is due at signing
of lease.
5 LATE PAYMENT. LESSOR shall not be obligated to accept any late payment
of rent unless the LESSEE also pays in addition a fee of two percent (2%) of the
amount of late rent or ($100.00 ) per month, whichever is greater, as
compensation for the increased overhead to LESSOR caused by the late payment
when payments are more than five(5) working days late.
6. PLACE OF PAYMENT. LESSEE shall pay said rent promptly without prior
notice or demand as above stipulated at MAIN STREET PLAZA, A.S.T. PROPERTIES,
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or at such other place as the
LESSOR may designate from time to time in writing. Checks shall be made out to
MAIN STREET PLAZA.
7. IMPROVEMENTS. LESSEE covenants not to make or permit to be made any
alterations, improvements in, on or to the leased promises or any of its
improvements without the written consent of the LESSOR. SEE ADDENDUM #1 FOR
TENANT IMPROVEMENTS.
8. USE OF PREMISES. The Leased premises may be used and occupied only for
office oriented purposes pertaining to development and delivery of educational
curriculum, including a children's leaning lab, and for no other purposes,
without LESSOR's prior written consent. LESSEE shall promptly comply with all
laws, ordinances, orders and regulations affecting the leased premises and their
cleanliness, safety, occupation and use.
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LESSEE shall not do or permit anything to be done in or about the leased
premised, or bring or keep anything in the leased premises that will in any way
increase the fire insurance upon the building.
LESSEE will not perform any act to or carry on any practices that may
injure the building or be a nuisance or menace to tenants of adjoining premises.
LESSEE shall not cause, maintain or permit any outside storage on or about
the leased premises, and not permit the use of premises for cooking and sleeping
purposes except for normal office purposes.
9. PARKING AREA. LESSOR reserves to itself the absolute right to make any
rules or regulations pertaining to use of the parking area adjacent to the
Leased Premises or any other common areas intended for public use, and shall be
the sole arbitrator in the event of any disputes that might arise between the
tenants of the Building in regard to such common areas including parking. Tenant
shall have 8 reserved parking spaces close to the entrance of the first floor.
10. UTILITIES. LESSOR agrees to assume and pay all utility charges for
water, sewer, trash, gas, and electrical.
LESSEE shall be responsible for all telephone charges including
installation to the Leased Premises.
11. COMPLIANCE WITH LAWS. LESSEE agrees to comply with all laws,
ordinances, rules and regulations, now or hereafter in force, affecting the
Leased Premises or its use and not so conduct the business permitted as to
increase the insurance rates on the Leased Premises or Building or contents.
LESSEE shall not commit any waste upon the Leased Premises or any
nuisance, or other act or thing which may disturb the quiet enjoyment of any
other tenants in the Building containing the leased premises of any building in
the project in which the Leased Premises are located.
12. INSURANCE. LESSEE agrees to hold LESSOR harmless from any claim,
damage, liability, or expense in connection with or arising from any injury to
any person or property on the Leased Premises caused by the acts of LESSEE, his
agents, employees, or clients. LESSEE agrees to procure at LESSEE'S expense, a
policy of public liability insurance in the minimum amount of $300,000 or more,
written by a responsible insurance company or companies, naming LESSOR as
additional insured, and furnish LESSOR with a certificate evidencing such
insurance.
LESSOR agrees to procure at LESSOR'S expense, adequate liability insurance
to protect the Building and common areas such as parking areas, common
corridors, sidewalks, etc. LESSOR shall procure and maintain fire and plate
glass insurance.
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No use shall be made or permitted to be made of the Leased Premises, nor
acts done, which will increase the existing rating for insurance purposes on the
Building or cause the cancellation of any insurance policy covering the
Building, or any part thereof, nor shall LESSEE sell, or permit to be kept, used
or sold in or about the Leased Premises, any article which may be prohibited by
the standard form of five insurance policies.
LESSEE shall, at its sole cost and expense, comply with any and all
requirements, pertaining to the Leased Premises, of any insurance organization
or company, necessary for the maintenance of reasonable fire and public
liability insurance, covering the Leased Premises, Building and appurtenances.
LESSEE agrees to pay LESSOR as additional rent, any increase in premiums
on policies which may be carried by LESSOR in the Leased Premises covering
damages to the Building and loss of rent caused by fire and the perils normally
included in extended coverage above the rates for the least hazardous type of
occupancy for office operations.
LESSEE shall maintain in full force and effect on all of its fixtures and
equipment extended coverage insurance with standard coverage endorsement to the
extent of at least eighty percent (80%) of their insurable value. During the
term of this Lease the proceeds from any such policy or policies of insurance
shall be used for the repair or replacement of the fixtures and equipment so
insured.
LESSOR shall have no interest in the insurance upon LESSEE's equipment and
fixtures and will sign all documents necessary or proper in connection with the
settlement of any claim or loss by LESSEE. LESSOR will not carry insurance on
LESSEE's possessions. LESSEE shall furnish LESSOR with a certificate of such
policy and, whenever required, shall satisfy LESSOR that such policy is in full
force and effect within thirty (30) days of the commencement of this Lease.
13. INDEMNIFICATION BY TENANT. LESSEE shall indemnify and hold harmless
LESSOR against and from any and all claims arising from LESSEE's use of the
Leased Premises and the conduct of its business or from any activity, work, or
thing done, permitted or suffered by the LESSEE in or about the Leased Premises,
and shall further indemnify and hold harmless LESSOR against and from any and
all claims arising from any breach or default in the performance of any
obligation of LESSEE's part to be performed under the terms of this Lease, or
arising from any act, neglect, fault, or omission of the LESSEE, or of its
agents or employees, and from and against all costs, attorney's fees, expenses,
and liabilities incurred in or about such claim or any action or proceeding
brought thereof and in case any action or proceeding be brought against LESSOR
by reason of such claim, LESSEE upon notice from LESSOR, shall defend the same
at LESSEE's expense by counsel reasonably satisfactory to LESSOR.
LESSEE, as a material part of the consideration to LESSOR, hereby assumes
all risk of damage to property or injury to persons in, or about the Leased
Premises from any cause whatsoever except that which is caused by the failure of
LESSOR to observe any of the terms and conditions of this Lease and such failure
has persisted for an unreasonable period of time after written notice of
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failure and LESSEE hereby waives all claims in respect thereof against LESSOR.
The obligations of LESSEE under this section arising by reason of any occurrence
taking place during the term of this Lease shall survive any termination of this
Lease.
14 DESTRUCTION OF PREMISES. If at any time after the execution and
delivery of the Lease, the Building which is part of the Leased Premises or the
Leased Premises shall be destroyed or damaged by fire or explosion, this Lease
shall terminate at the option of the LESSOR by giving LESSEE written notice of
such termination within sixty (60) days after such damage, and any unearned rent
paid by LESSEE in advance of such damage shall be prorated and refunded to
LESSEE, if so terminated by LESSOR. If LESSOR elects to terminate the Lease,
then the LESSEE shall vacate and surrender the Leased Premises within thirty
(30) days thereafter.
If LESSOR shall not have so notified LESSEE of its intention to terminate
this Lease, then this Lease shall remain in full force and LESSOR shall, in such
case, proceed immediately after reasonable time for adjustment of insurance,
using all reasonable diligence to repair and restore said Leased Premises in as
good condition as they were prior to such damage, and during the time said
Leased Premises are so damaged and untenantable, rent shall be abated.
15 DEFAULT. If LESSEE fails to pay any rent or other money required
thereby after the same is due, and does not pay such rent or other money within
three (3) days after written notice to LESSEE, or if LESSEE, or any of those
claiming other LESSEE, violates or fails to perform any other provision, and
such violation or failure (with the exception of rent or other money as
hereinbefore provided) is not cured within twenty (20) days after written notice
to LESSEE thereof by LESSOR, the LESSOR may immediately or, at any time
thereafter, while any such condition continues, at LESSOR's option, recover
possession of the Leased Premises from all persons and expel and remove
forcibly, if necessary, without being liable for damages to LESSEE and those
claiming under LESSEE, all their effects; and LESSOR, at LESSOR's option,
without further notice, may either terminate this Lease, or, as agent of LESSEE,
relet or otherwise dispose of the Leased Premises, or any part thereof to others
in such manner and on such terms as LESSOR deems best; and LESSEE shall be
liable to LESSOR monthly for any deficiency LESSOR may suffer.
16. ABANDONMENT. LESSEE shall not vacate nor abandon Leased Premises at
any time during the term of this Lease nor permit the Leased Premises to remain
unoccupied for a period longer than fifteen (15) Consecutive days during the
term of this Lease.
If LESSEE shall abandon, vacate, or surrender the Leased Premises, or be
dispossessed by process of law, or otherwise, this Lease shall be considered in
default and any personal property belonging to LESSEE and left on the Leased
Premises shall, at the option of the LESSOR, be deemed abandoned. All security
deposits shall be kept by LESSOR if Leased Premises is abandoned.
17. LEASE SECURITY. All improvements and fixtures located on the Leased
Premises at the time of such default shall remain on the Leased Premises and are
impressed with a lien in favor
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of the LESSOR to satisfy any damage or loss of rents which LESSOR may suffer;
provided, however, in such event LESSEE shall be credited with the fair market
value of said fixtures and improvements.
18. SIGNS. No signs shall be placed on the interior or exterior of the
Building other than at the Building directory or as approved by LESSOR. All
standard signage or approved signage shall be at LESSEE's expense unless
otherwise indicated. A PCS sign may be placed on the exterior of the building
under the current 4 x 8 foot sign. This sign installation will be paid for by
LESSOR with the tenant improvements.
19. WAIVER. No waiver of any condition or breach of covenant expressed in
this agreement shall be implied by any neglect of the LESSOR to declare a
forfeiture on account of the violation of such condition or by reason of such
breach of the same continuing or being repeated subsequently.
20. CONDEMNATION. In the event the demised Leased Premises or any part
shall be taken by condemnation, eminent domain, or other similar proceedings, or
acts of Federal, State, County, Municipal, or any governmental, public or
quasi-public authority for any public or quasi-public purpose, then the Lease
shall terminate from the time possession shall be taken for such purpose and the
payment of rent shall cease at the time, and no part of any award by reason of
such condemnation shall be attributable to the former leasehold estate. The
current rent, however, in such case shall be prorated as of the date of
possession.
21. ASSIGNMENT. LESSEE shall not sublet the Leased Premises, or any part,
and LESSEE shall not assign, transfer pledge, mortgage or encumber this Lease or
any portion, without the previous written consent of LESSOR. LESSOR shall not
unreasonably withhold consent of assignment of this Lease. A consent to one
assignment, subletting, occupation or use by any other person, firm or
corporation shall not be deemed to be a consent to any subsequent subletting,
assignment, occupation or use by any other person, firm or corporation. on any
such assignment or subletting, any key money or surplus rent above provided in
this Lease or any similar payment which shall be due from the sub-tenant to
LESSEE, shall be paid over to LESSOR.
LESSOR shall not be bound to approve any assignment or subletting which is
a part of a larger transaction between LESSEE and another party, where other
consideration is also being transferred to LESSEE, unless LESSOR shall receive
as rent from the assignee or sub-tenant a rent then commensurate with current
market conditions but not less than the amount of rent provided in the Lease.
SEE ADDENDUM #2 FOR MORE INFORMATION.
22. INSPECTION. The LESSEE agrees to permit LESSOR to enter upon the
Leased Premises, inspect the same, make repairs and attend to any other business
which LESSOR may have at reasonable times. LESSOR shall at all times have and
retain a key with which to unlock all of the doors in, upon and about the Leased
Premises, excluding LESSEE's vaults and safes.
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LESSEE shall not alter any lock or install a new lock or any bolt on any
door of the Leased Premises without prior written consent of LESSOR. If LESSOR
shall give its consent, the LESSEE shall in each case furnish the LESSOR with a
key for any such lock.
23. MODIFICATION. All modifications of this Lease shall not be deemed
effective unless they are in writing signed by both of the parties; but rules
and regulations governing the use of the Building and its parking lot shall not
be considered lease provisions for this purpose.
24. NOTICE. All notices are to be given by either party in writing, and if
notice is on LESSOR, it shall be sufficiently served by being mailed, United
sates certified mail (return receipt requested) to LESSOR at the address where
the rent is payable, or if notice is on LESSEE, it shall be sufficiently served
by being mailed, United States certified mail (return receipt requested) to
LESSEE at the Leased Premises. Either party may, from time to time, by written
notice to the other, designate a different post office address in the United
States to which such notice shall be sent.
25. PARTIES. The words "LESSOR" and "LESSEE" shall refer to one or more
parties, and the obligations and benefits shall be binding upon the inure to the
benefit of the heirs, legal representatives, successors and assigns,
respectively, of the LESSOR and LESSEE.
26. EFFECT OF HOLDING OVER. If LESSEE should remain in possession of the
Leased Premises after the expiration of the Lease term and without executing a
new lease, then such holding over shall be construed as a tenancy from month to
month, subject to all the conditions, provisions, and obligations of this Lease
insofar as the same are applicable to a month to-month tenancy. In addition,
Tenant shall pay to Landlord as rent during any such holding over period, an
amount equal to one and one-half times that due in the last month of the Lease
occupancy.
27. FIXTURE AND EOUIPMENT. LESSOR shall supply and maintain heating and
air conditioning and standard lighting fixtures. No alterations, additions, or
fixtures shall be installed upon the Leased Premises without the written consent
of LESSOR and if approved shall be installed at the sole cost and expense of
LESSEE. Any such installation or improvement must comply with building standards
and all current govenunental building codes.
28. JANITORIAL SERVICES. LESSOR agrees to provide Janitorial service to
the Building on a minimum three times per week basis.
29. PERSONAL PROPERTY TAX. In addition to the monthly rental, LESSEE shall
pay during the term of this Lease, all expenses of every kind payable in
connection with LESSEE's occupancy of the Leased Premises; all personal property
taxes levied upon personal property, furniture, and fixtures, including, but not
without prejudice to the generality of the foregoing shelves. counters, safes,
partitions, trade fixtures, equipment and stock in trade located at the demised
Leased Premises, except LESSOR shall be responsible for such bills in
conjunction with the operation of the Leased Premises as set forth in Section
(5).
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30. SUBORDINATION AND ESTOPPEL CERTRFICATES. LESSEE agrees that
this Lease is and shall be subordinate to any mortgage, deed of trust, or other
instruments of security which have been or shall be placed on land and Building,
or land or Building of which the demised Leased Premises form a part, and such
subordination is made effective without further action by LESSEE. At any time
and from time to time, LESSEE agrees, upon request in writing certifying that
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
starting the modifications) and dates to which the rent and other charges have
been paid.
LESSEE agrees to execute any documents required to effectuate such
subordination or to make this Lease prior to the lien of any ground lease,
mortgage, deed of trust or Estoppel Certificates, as the case may be, and
failing to do so within 10 days after written demand, does hereby make,
constitute and irrevocably appoint LESSOR as LESSEE's attomey-in-fact and in
LESSEE's name, place, and stead, to do so.
31. ENFORCEMENT. In the event of any action by either party in any way
connected with the enforcement of this Lease, or for the recovery of possession
of the Leased Premises, the prevailing party shall be entitled to a reasonable
sum for attomey's fees in the action, and such fees shall be deemed to have
accrued on the commencement of such action. It is agreed that such reasonable
attomey's fees shall be not less than fifteen percent (I 5%) of the amount due.
32. CAPTION TITLE. The caption titles set opposite the sections of this
Lease are for the purpose of identification only and do not modify or limit the
terms of this agreement.
33. CORPORATE AUTHORITY. If LESSEE is a corporation, each individual
executing this Lease on behalf of said corporation represents and warrants that
he is duly authorized to execute and deliver this Lease on behalf of said
corporation in accordance with a duly adopted resolution of the Board of
Directors of said corporation or in accordance with the By-laws of said
corporation, and that this lease is binding upon said corporation in accordance
with its terms.
If LESSEE is a corporation, LESSEE shall, within thirty (30) days after
execution of this lease, deliver to LESSOR a certified copy of resolution of the
Board of Directors of said corporation authorizing or ratifying the execution of
this lease and a financial statement not more than ninety (90) days old.
34. SECURITY DEPOSIT. Concurrently with the execution hereof by LESSEE,
LESSEE shall deposit with LESSOR ($7,000.00) to be held by LESSOR as a security
deposit for the performance by LESSEE of all of the terms of this Lease. LESSOR
may at its option, apply or retain all or any part of such deposit for the
payment of any amount which LESSOR may become obligated to spend by reason of
LESSEE's default or to compensate LESSOR for any other loss or damage arising
from LESSEE's default. If any portion of such deposit is so applied, LESSEE
shall within 10 days of written notice deposit with LESSOR cash sufficient to
restore such deposit to its original amount. LESSOR shall not be required to
keep such deposit separate from its general funds,
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nor shall LESSEE be entitled to any interest thereon. If LESSEE fulfills all of
its Lease obligations, LESSOR shall return such deposit or any balance thereof
to LESSEE within 30 days of the expiration of the Lease term and after LESSEE
has vacated the premises. In the event of termination of LESSOR's interest in
the Lease, LESSOR shall transfer said deposit to LESSOR's successor in interest,
hereupon LESSEE agrees to release LESSOR from all liability for the return of
such deposit.
35. RENEWAL RIGHTS. Should LESSEE wish to renew this lease upon the
expiration date hereof, he shall provide LESSOR with ninety (90) days advanced
written notice as provided for herein of his intent to renew for a minimum
additional term of two (2) years at the rate of ($12.50/sq. ft./yr.). Should
notice not be given to LESSOR, LESSOR shall acknowledge the lease expiring as of
the date provided for and commence marketing the space for lease to the open
market.
ADDENDUM #1:
LESSOR shall pay for all tenant improvements. These tenant improvements
are not to exceed the total amount of $81,000.00. Definition of tenant
improvements: any addition to or modification of the Premises made by Tenant
before, at, or near the commencement of the term, including, without limitation,
fixtures (not including tenant's trade fixtures, as defined here).
Definition of trade fixtures: any property installed in or on the Premises
by Tenant for proposes of trade, manufacture, ornament, or related use. The
payment of tenant improvements by LESSEE has already been figured into the
rental prices listed in paragraph #4. Included in the Tenant Improvements shall
be 4 walls in the "Technical Support" area of the leased premises. These walls
will not be placed with the initial construction, but the LESSEE reserves the
right to have these 4 walls, with openings and doors, placed in this area at any
time during the lease.
ADDENDUM #2:
LESSEE may at any time during the term of the lease give written notice to
LESSOR with LESSEE's intent to have Leased space re-leased to another party. At
this time the LESSOR will put Leased space back on the market for lease at the
same rental rates as listed in the current lease, plus the cost of any leasing
commissions, and for a term no less than the amount of time that is left on the
current lease. When a new party has signed a lease for the Leased space the
LESSEE will be given a 30 day notice and will at the end of the 30 days vacate
premises and not be responsible for the Leased space.
LESSOR: LESSEE:
A.S.T. PROPERTIES P.C.S. EDUCATION SYSTEM
By: /s/ ▇▇▇▇▇ ▇▇▇ Fall By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------- -----------------------------------
Date: October 5, 1999 Date: October 5, 1999
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