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Exhibit: 10.1FT
LEASE AGREEMENT
Lease Date - August 5, 1996
(For Reference Purposes Only)
CONCORD EQUITIES, L.L.C., AN ARIZONA LIMITED LIABILITY COMPANY, hereafter
"Landlord", agrees to lease to FUTECH EDUCATIONAL PRODUCTS, INC., AN ARIZONA
CORPORATION hereafter "Tenant", and Tenant agrees to lease from Landlord, that
certain office space located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, which is
described in Exhibit "A" to this agreement and known as Suite 225, hereafter
"the Premises", upon the following terms and conditions.
1. TERM: The term of this Lease shall be for a period of thirty six (36
months and shall commence on the 1st day of September, 1996, and
expiring on the 14th day of August 1999.
2. POSSESSION: Tenant agrees that in the event of the inability of
Landlord to deliver possession of the Premises to Tenant on the date
above specified for the commencement of the term of this Lease, this
Lease shall not be void or voidable, nor shall Landlord be liable to
Tenant for any loss or damage resulting therefrom, but in such event
Tenant shall not be liable for any rent until such time as Landlord
tenders delivery of possession of the Premises to Tenant with
Landlord's work therein, if any, substantially completed. Tenant shall
be bound by all provisions of this Lease, including the payment of
rent, at all times Tenant is in possession of the Premises. Should
Landlord tender possession of the Premises to Tenant prior to the date
specified for commencement of the term thereof, and Tenant elects to
accept such prior tender, such prior occupancy shall be subject to all
of the terms, covenants and conditions of this Lease, including the
payment of rent.
3. RENT: Tenant agrees to pay Landlord as Base Rent $ See Addendum per
month for each month of the Lease, subject to increases as hereinafter
provided, plus any excise, privilege or sales tax imposed upon the rent
paid by Tenant. Rent is due in advance on or before the first (1st)
day of each month and is payable at Landlord's offices or at such other
place as Landlord may designate in writing. Rent shall be prorated on
the basis of a thirty (30) day month for each partial month during the
term of this Lease or during which Tenant is in possession of the
Premises. All other monetary obligations of Tenant under this Lease
shall constitute additional rent and shall be due as specified in each
instance.
4. OPERATING EXPENSES: The operating expenses of the Project shall be paid
by Landlord when due, however, Landlord shall be entitled to partial
reimbursement from Tenant for such operating expenses as proved for
hereafter.
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(a) Landlord shall contribute $6.60 per square foot annually or
the actual operating expenses for the Base Year of 1996, which
ever is greater. Tenant shall pay to Landlord, as Additional
Rent, Tenants proportionate share of any excess operating
expenses in the manner provided for in Subparagraphs 4(d) and
4(e).
(b) The operating expenses of the project include without
limitation: property taxes, special assessments, utilities,
maintenance, supplies, management fees, janitorial services,
trash removal, insurance premiums, repairs and all other costs
(other than those required to be capitalized for federal
income tax purposes) which can properly be considered expenses
of operating and maintaining the Building and surrounding
property of which the Premises are a part.
(c) For the purposes of determining Tenant's proportionate share
of the operating expenses and Landlord's total contribution,
the project shall be deemed to be comprised of 133.289 square
feet, the Premises shall be deemed to be comprised of
approximately 5.327 rentable square feet and Tenant shall be
deemed to have occupied the Premises for the entire year.
(d) If the actual operating expenses of the Project for a calendar
year exceed the Landlord's contribution, Tenant shall pay to
Landlord within thirty (30) days of demand, Tenant's
proportionate share of such excess multiplied by the larger of
(i) the percentage of the year this Lease was in effect and
(ii) the percentage of the year Tenant was in possession of
the Premises, less any payments made by Tenant under
Subparagraph 4(e) for that year.
(e) If, upon creating an operating budget for the following
calendar year, it appears to the Landlord that the actual
operating expenses for the Project will exceed the Landlord's
contribution, Landlord, upon written demand, may require
Tenant to make monthly payments of Tenant's proportionate
share of such estimated excess which shall be payable at the
same time and in the same manner as Base Rent.
(f) If in a calendar year Tenant's proportionate share of the
actual operating expenses of the Project after Landlord's
contribution is less than the payments made by Tenant under
Subparagraph 4(e), such difference shall be credited to Tenant
and applied pro rata to reduce payments due from Tenant under
Subparagraph (4)e for the following year.
(g) Landlord shall compute the operating expenses of the project
for each calendar year within the first three (3) months of
the next calendar year and shall notify Tenant thereof within
a reasonable time thereafter.
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(h) Tenant shall have the right to have the Landlord's computation
of the operating expenses of the project audited by an
independent accounting agency so long as another tenant has
not previously had an audit conducted of the operating
expenses for that same year. The audit shall be at Tenant's
sole expense unless the audit reveals a discrepancy in
Landlord's favor of greater than ten percent (10%) in which
case Landlord shall pay the reasonable cost of such audit.
5. USE OF PREMISES: Tenant shall use the Premises for the sole purpose of
general office use and shall not use or allow the Premises to be used
for any illegal or objectionable purpose or in any manner inconsistent
with use in a first class office building or in manner which would
interfere with the rights of the other Tenants. Tenant shall not do or
permit anything to be done which would increase the cost of any fire,
extended coverage or any other insurance covering the Building. Tenant
shall promptly reimburse Landlord for any additional premium charged by
reason of Tenant's failure to comply with this paragraph.
6. REPAIRS:
(a) Tenant shall at its own expense keep the Premises in good
condition and repair.
(b) Landlord shall keep in good condition and repair the
structural and common areas of the Building, including the
basic plumbing, air conditioning and electrical systems
provided by Landlord.
7. ASSIGNMENT & SUBLETTING: Tenant shall not sublet any portion of the
Premises and shall not assign or hypothecate this Lease without
Landlord's prior written consent. Any assignee or subtenant shall agree
in writing to assume, perform and be bound by all of the terms of this
Lease and a duplicate executed original counterpart of such writing
shall be delivered to Landlord within ten (10) days of its execution.
Landlord's approval of any such assignment or sublease shall not
release Tenant from its obligations under this Lease or constitute
assent to any subsequent assignment or sublease; provided however, that
if, after approval by Landlord, Tenant assigns its entire interest in
this Lease to an entity that, at the sole determination of Landlord,
has a financial condition that is as strong or stronger than the
financial condition of Tenant at the time of this Lease, Tenant may
request that Landlord fully release Tenant from liability under the
Lease arising subsequent to the assignment. Landlord shall not
unreasonably withhold its consent to such request.
8. ALTERATIONS & IMPROVEMENTS: Tenant shall not make any alterations or
improvements to the Premises (including but not limited to, structural
alterations or improvements), other than movable furniture, without
Landlord's prior written consent of plans and contractor. Landlord may
require Tenant to provide a payment bond in an amount up to one and one
half (1.5) times the expected cost of the alterations or
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improvements. All such alterations and improvements shall at once
become part of the realty and belong to Landlord, this shall not,
however, preclude Landlord from requiring Tenant to remove such
alterations or improvements as provided for in Paragraph 9 of this
agreement. Furthermore, Tenant shall not file or allow the filing of
any liens on the Premises.
9. REMOVAL OF ALTERATIONS: Upon the termination of this Lease, Landlord
may require Tenant to remove all or some of the alterations or
improvements which Tenant made to the Premises. Tenant shall promptly
remove the designated alterations or improvements and shall repair all
damage caused by such removal at its own expense.
10. RETURN OF PREMISES: Upon the termination of this Lease, Tenant shall
return the Premises to Landlord in their original condition, ordinary
wear and tear and alterations or improvements not designated to be
removed excepted.
11. SUBORDINATION: Tenant agrees that this Lease shall be subject and
subordinate to First Mortgage Liens only, or to any renewals,
extensions or replacements of any existing encumbrances upon the
Premises. Tenant agrees to immediately execute and deliver upon demand
any instrument that a lender may require in connection with this
subordination agreement. Tenant irrevocably appoints Landlord to act as
Tenant's agent and attorney-in-fact for the limited purpose of
executing all such instruments.
12. SALE BY LANDLORD: Landlord reserves the right to sell or transfer the
premises and to assign its rights in this Lease. Upon any such
assignment, Landlord shall be released from any further liability under
this Lease. In conjunction with any such sale or assignment, Landlord
may transfer any security deposit made by Tenant under this Lease to
such assignee and upon such transfer shall be relieved of all liability
to Tenant for such deposit. Tenant agrees to immediately execute and
deliver upon demand of Landlord or any such assignee and instrument in
proper form by which Tenant attorns to said assignee.
13. INSURANCE: Tenant shall maintain at its own expense comprehensive
general liability insurance from an insurer licensed to do business in
the State of Arizona insuring the indemnity set forth in this agreement
for claims for personal injury or death property damage in and about
the premises with limits not less than $1,000,000 in the event of
bodily injury or death of any number of persons in any one accident and
limits of not less than $1,000,000 for damage to property, and shall
provide Landlord with a copy of the policy prior to commencement of
this Lease. Tenant shall name Landlord as an additional named insured
under the policy. The insurance shall be primary insurance and shall
provide that any right of subrogation against Landlord is waived. The
policy shall further provide that no act or omission by Tenant shall
impair the rights of the insured to receive
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the proceeds of the policy and that the policy shall not be cancelled
except upon ten (10) days prior written notice to each named insured.
14. INDEMNIFICATION: Tenant shall indemnify, defend and hold Landlord
harmless from all actions, claims, demands, penalties or liabilities
arising out of events occurring in or about the premises or caused in
whole or in part by Tenant or Tenant's agents, servants, employees or
invites. This indemnification shall include all costs and expenses and
reasonable attorney's fees which Landlord may expend in connection with
any of the foregoing. Any and all monies due Landlord from Tenant shall
survive this Lease.
15. UTILITIES & SERVICES: Landlord agrees to furnish water and electricity
suitable for the intended use of the premises, janitorial service five
(5) nights a week, elevator service and maintenance of the common areas
of the building. Landlord further agrees to furnish heat and air
conditioning required in Landlord's judgement for the comfortable use
of the premises on generally recognized business days. These services
and utilities constitute operating expenses under Paragraph 4 and will
be paid for in accordance with said Paragraph.
After hours use, which is monitored by Landlord, of heating,
ventilation, air conditioning, and electric shall be charged to Tenant
at Six Dollars and 00/100 ($6.00) per hour per zone activated. The
above rate is subject to increase relative to additional costs of
electricity service and wages of personnel directly associated with the
operation of such after hours usage. Landlord shall require Tenant to
pay for such after hours usage (if any) on the next preceding month of
such usage. All amounts due shall be considered as Additional Rent
which shall be payable at the same time and in the same manner as base
rent.
Business Office Hours shall be:
7:00 a.m. to 7:00 p.m., Monday through Friday and from 8:00 a.m. to
2:00 p.m. on Saturday, except for the generally recognized six (6)
major holidays of New Year's Day, Memorial Day, Fourth of July, Labor
Day, Thanksgiving Day and Christmas Day.
16. LIMITATION OF LIABILITY: Landlord shall not be liable to Tenant for
damages nor shall Tenant be entitled to a reduction in rent by reason
of any of the following: (i) Landlord's failure to provide utilities
or services when such failure is caused by accident, repairs, strikes,
disturbances or any other cause beyond the reasonable control of
Landlord (ii) disruption to Tenant's business caused by Landlord's
repairs or improvements to the project (iii) damage to the Premises or
Tenant's property unless caused by Landlord's negligence or misconduct.
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17. NOTICE: All notices or demands under this Lease or required to be given
by law are to be made in writing by registered or certified mail and
are deemed given three (3) days after being deposited in the United
states mail postage prepaid and addressed to Landlord or Tenant at the
addresses set forth on the signature page of this Agreement. Each party
shall have the right, from time to time, to designate a different
address to which notices and demands are to be sent by giving notice in
the manner provided for above except that Landlord may in any event use
the premises as Tenant's address for notice purposes.
18. ENTRY BY LANDLORD: Landlord shall have the right, upon twenty-four (24)
hour notice (except in case of emergency), to enter the Premises at all
reasonable times for the purposes of inspecting, repairing or
maintaining the Premises, determining whether the terms of the Lease
are being complied with, posting such notices as Landlord deems
advisable for its protection, and, showing the Premises to prospective
tenants, purchasers or lenders. For these purposes Landlord shall
retain keys to all doors upon the Premises other than Tenant's vaults
and safes.
19. DEFAULT & REMEDIES:
(a) The occurrence of one or more of the following events shall
constitute a default of this Agreement by Tenant:
(1) The abandonment of the Premises by Tenant or absence
of Tenant from Premises for five (5) days or longer.
(2) The failure by Tenant to make any payment of rent or
other payments required to be made by Tenant under
this Agreement when due where such failure continues
for a period of five (5) days.
(3) The failure by Tenant to observe or perform any
provision of this Agreement other than the payment of
money where such failure continues for a period of
ten (10) days after written notice thereof from
Landlord to Tenant. This notice shall be in lieu of,
and not addition to, any notice required under
Arizona law. (4)(i) The making by Tenant of any
general assignment for the benefit of creditors; (ii)
the filing by or against Tenant of a petition under
the United States Bankruptcy Code unless dismissed
within thirty (30) days; (iii) the appointment of a
receiver or trustee to take possession of
substantially all of Tenant's assets located at the
Premises or of this Lease where possession is not
restored to Tenant within thirty (30) days; (iv) the
attachment, execution or other judicial seizure of
substantially all of Tenant's assets located on the
Premises where such seizure is not discharged within
thirty (30) days.
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(b) In the event of any default by Tenant as defined above, Landlord may
exercise one or more of the following remedies in addition to any
remedy provided for at law or equity:
(1) With or without notice or process of law and using such force
as Landlord may deem reasonably necessary under the
circumstances, and without terminating this Lease or relieving
Tenant of any obligation hereunder, Landlord may re-enter and
take possession of the Premises. Under no circumstances shall
Landlord be liable in damages or otherwise by reason of the
exercise by Landlord of any such re-entry or eviction, or by
reason of the exercise by Landlord of any other remedy
provided in this subparagraph (b).
(2) Without terminating this Lease or relieving Tenant of any
obligation hereunder, Landlord may relet the Premises for such
rental and upon such terms as Landlord in its sole discretion
deems proper and apply the proceeds actually collected against
the amounts due from Tenant.
(3) Landlord may terminate this Lease by notifying Tenant in
writing that it intends to do so. Such termination will not
relieve Tenant of any obligation which accrued prior to the
date of termination. In addition to all other sums recoverable
under this Lease or at law, in the event of such termination,
Landlord shall be entitled to recover from Tenant the
difference between the present value of the rent which would
have fallen due under this Lease over the remaining term of
this Lease if this Lease had not been terminated and the
present value of the amount that Tenant proves Landlord will
receive over that same period by reletting the Premises.
(4) In the event that Landlord recovers possession of the Premises
without termination of this Lease, Tenant shall pay to
Landlord all sums due under this Lease on the dates due as if
Tenant remained in possession of the Premises.
(5) Landlord may recover from Tenant, and Tenant shall pay upon
demand, all expenses incurred in recovering possession of the
Premises, repairing and altering the Premises for reletting,
and attempting to relet the Premises, including commissions
and attorney fees.
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(c) The remedies described in subparagraph (b) are cumulative and
in addition to any remedy at law or in equity. The filing of
an action by Landlord against Tenant requesting under one or
more remedies shall not be deemed an election of that remedy
or remedies to the exclusion of all others.
(d) Landlord shall be under no obligation to observe or perform
any duty imposed by this Lease which accrues after the date of
any default by Tenant.
(e) The failure or delay of Landlord in exercising any right or
remedy shall not be construed as a waiver of any such right or
remedy or of any default by Tenant.
20. ATTORNEY FEES: Should any action be brought to enforce any of the terms
of this agreement, the prevailing party shall be entitled to the award
of its reasonable attorneys' fees.
21. WAIVER: The waiver by Landlord of Tenant's breach by any provision of
this agreement shall not constitute a continuing waiver of any
subsequent breach by Tenant of the same or other provision.
22. PARKING: Landlord shall provide, operate and maintain a parking area or
areas, together with necessary access, having a capacity adequate, in
the opinion of the Landlord, to accommodate the requirements of Tenant
and others entitled to use said parking areas and adequate to comply
with the requirements of appropriate government authorities. Landlord
shall provide Tenant with ten (10) covered, reserved parking spaces so
identified for the sole use of Tenant for the term of the Lease thereof
at no cost to Tenant. Tenant has the option to lease additional covered
reserved parking spaces from Landlord at the prevailing rate which will
be payable as Additional Rent. The balance of the parking is considered
non reserved and shall be on a first-come first-served basis, with the
understanding that Tenant, Tenant's agents, servants, employees or
invites will not over burden the parking lot. Landlord shall not be
obligated to provide any additional parking.
23. SECURITY DEPOSIT: Tenant, upon execution of this Lease, will deposit
with Landlord the sum of $ . See Addendum as security for Tenant's
performance of all of the terms of this Lease. If Tenant defaults on
any of the terms of this Lease, Landlord may use such sum to cure such
default and compensate Landlord for any loss or damage which it has
suffered thereby. If any portion of the deposit is so used, Tenant
shall immediately deposit with Landlord an amount sufficient to restore
the security deposit to its original amount. Landlord shall not be
required to keep this security deposit separate from its general funds
and Tenant shall not be entitled to interest on such deposit.
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24. DEFAULT BY LANDLORD: Landlord shall not be in default unless Landlord
fails to perform its obligations under this Lease within thirty (30)
days after written notice by Tenant to Landlord specifying the
obligations which the Landlord has failed to perform. If an obligation
is such that it cannot reasonably be completed within such thirty (30)
day period, Landlord shall not be in default if Landlord commences
performance within thirty (30) days and thereafter diligently
prosecutes the same to completion.
25. SURRENDER OF PREMISES: The surrender of this Lease by Tenant to
Landlord shall not work a merger and shall, at the option of Landlord,
operate as an assignment to it of any subleases affecting the Premises.
26. ESTOPPEL CERTIFICATE:
(a) Tenant shall upon not less than ten (10) days prior written
notice from Landlord execute, acknowledge and deliver to
Landlord a statement in writing (i) certifying that this Lease
is unmodified and in full force and effect and if modified,
stating the nature of such modification and certifying that
this Lease as modified is in full force and effect (ii)
specifying the dates to which rental and other charges are
paid in advance, and (iii) acknowledging that there are no
uncured defaults on the part of Landlord or specifying such
defaults if any are claimed. Any such statement may be relied
upon by any prospective purchaser or encumbrancer of the real
property of which the Premises are a part.
(b) Tenant's failure to deliver such a statement within the time
specified above shall be conclusive upon Tenant (i) that this
Lease is in full force and effect and without modification
except as may be represented by Landlord (ii) that there are
not uncured defaults by Landlord, and (iii) that no more than
one (1) month's rental has been paid in advance.
27. RULES AND REGULATIONS: Tenant shall comply with the rules and
regulations which are attached hereto as Exhibit "B" and all
non-discriminatory modifications thereof and additions thereto put into
effect by Landlord. Landlord shall not be responsible to Tenant for the
violation of any such rules and regulations by any other occupant or
Tenant of the Building.
28. CONDITION OF PREMISES: Tenant acknowledges that neither the Landlord
nor any of the Landlord's agents has made any representation or
warranty with respect to the Premises or Building or with respect to
the suitability of either for the conduct of Tenant's business. Taking
possession of the Premises by Tenant shall conclusively establish that
the Premises and Building were in good, sanitary order, condition and
repair at such time.
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29. DESTRUCTION OF PREMISES: In the event that the Premises or the Building
of which the Premises are a part are destroyed in whole or in part by
fire or other casualty, Landlord may terminate this Lease at its
option. If Landlord does not terminate this Lease and elects to repair
the damage, this Lease shall remain in full force and effect except
that Tenant shall be entitled to a proportionate reduction in the rent
specified in Paragraph 3 from the date of damage until the repairs have
been completed. Such proportionate reduction shall be based upon the
extent to which the damage and making of such repairs reasonably
interferes with the business carried on by the Tenant in the Premises:
If the damage is caused in whole or in part by the Tenant or Tenant's
agents, servants, employees or invites, there shall be no abatement of
rent.
30. CONDEMNATION: If all or a portion of the Leased Premises are
appropriated by a public or quasi-public authority under the power of
eminent domain or are transferred by Landlord in lieu thereof, Landlord
may terminate this Lease without liability to Tenant for any unexpired
term of this Lease. If this Lease is not terminated as a result of such
appropriation or transfer, Base Rent shall be equitably reduced. In
either event, Landlord shall be entitled to the entire condemnation
award or settlement except that Tenant shall be entitled to any award
made by such authority specifically to Tenant for moving expenses or
damages for disruption to Tenant's business.
31. LATE CHARGES: All sums due under this Lease not paid by Tenant within
Ten (10) calendar days from the date such payment(s) were due shall be
subject to a late charge of Twenty Dollars ($20.00), or Five Percent
(5.00%) of the amount, whichever is greater. Additionally, for each
month that it remains unpaid such payment(s) shall bear interest at a
rate of Eighteen Percent (18.00%) per annum from the date the
payment(s) were due until paid in full.
32. LANDLORD'S CONSENT: Where Landlord's consent is required under this
agreement, such consent shall not be unreasonably withheld.
33. APPLICABLE LAW: This agreement shall be governed by the laws of the
State of Arizona.
34. TIME OF ESSENCE: Time is of the essence with respect to the
performance of every provision of this Lease in which time of
performance is a factor.
35. PRIOR AGREEMENTS; AMENDMENTS: This Lease incorporates and supersedes
all previous understandings and agreements concerning any matter
covered or mentioned in this Lease and may not be amended except in
writing signed by both parties.
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36. PRIOR FIRST RIGHTS: Landlord may have granted an existing Tenant the
right of the first refusal of the Premises and, therefore, may be
obligated to offer to Lease the Premises to such Tenant upon the same
terms contained in this Lease. If so, this Lease is contingent upon
such Tenant's failure to exercise its right of first refusal with
respect to the Premises. If any such Tenant exercises its right of
first refusal with respect to the Premises, this Lease shall be null
and void.
37. QUIET ENJOYMENT: Upon payment by Tenant of the rents herein provided,
and upon the observance and performance of all the covenants, terms and
conditions on Tenant's part to be observed and performed, Tenant shall
peaceably and quietly hold and enjoy the Premises for the term hereby
demised without hindrance or interruption by Landlord or any other
person or persons lawfully or equitably claiming by, through or under
Landlord, subject, nevertheless, to the terms and conditions of this
Lease, and any mortgage and/or deed of trust to which this Lease is
subordinate.
38. HOLDOVER TENANCY: Upon expiration of this Lease, should Tenant continue
to occupy the Premises on an unpermitted holdover, the lease term be
extended on a month-to-month basis and the most current base rental
amount shall be increased by a minimum of Fifty Percent (50%).
Furthermore, (i) Tenant shall indemnify Landlord for any and all costs
incurred as a result of this holdover, (ii) either Party may cancel
this holdover by giving thirty (30) days written notice, and (iii) all
provisions of this Lease shall remain in full force and effect during
the entire holdover period.
39. LIMITATION OF LANDLORD'S LIABILITY:
a) Tenant recourse shall be limited to Landlord's interest in the
building. In the event of a transfer of ownership, assignor
must remain responsible for any accrued liability or
obligation.
b) Landlord's failure to perform any term, provision, or
covenants under this Lease relating to services or maintenance
to be provided by Landlord shall be subject to force majeure.
(i) Tenant's Remedies: If Landlord does not commence to
cure within thirty (30) days after receiving notice,
Tenant must inform Mortgagee of Landlord's default
and give Mortgagee the right, but not the obligation,
to cure the default with an additional thirty (30)
days after notice, subject to force majeure (provided
that default is of a nature that cannot be cured
within thirty (30) days, the Mortgagee's cure period
shall be extended so long as Mortgagee is diligently
proceeding to cure).
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40. INVALIDITY CLAUSE: If a portion of this Lease is declared invalid, the
remainder must remain in full force and effect.
41. HAZARDOUS MATERIALS: Tenant shall not (either with or without
negligence) cause or permit the escape, disposal or release of a
biologically or chemically active or other hazardous substances or
materials. Tenant shall not allow the storage or use of such substances
or materials in any manner not sanctioned by law or by the highest
standards prevailing in the industry for the storage and use of such
substances or materials, nor allow to be brought into the Premises any
such materials or substances except to use in the ordinary course of
Tenant's business, and then only after written notice is given to
Landlord of the identity of such substances or materials. Without
limitation, hazardous substances and materials shall include those
described in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended 42 U.S.C. Section 9601 et seq., any
applicable state or local laws and the regulations adopted under these
acts. If any lender or governmental agency shall ever require testing
to ascertain whether or not there has been any release of hazardous
materials, then the reasonable costs thereof shall be reimbursed by
Tenant to Landlord upon demand as additional charges, if such
requirement applies to the Premises. In addition, Tenant shall execute
affidavits, representations and the like from time to time at
Landlord's request concerning Tenant's best knowledge and belief
regarding the presence of hazardous substances or material on the
Premises. In all events, Tenant shall indemnify Landlord in the manner
elsewhere provided in this Lease from any release of hazardous
materials on the Premises occurring while Tenant is in possession, or
elsewhere if caused by Tenant or persons acting under Tenant. The
within covenants shall survive the expiration or earlier termination of
the Lease term.
42. OPTION TO RENEW: Tenant, upon paying the rent herein reserved and
performing all the terms, covenants and conditions herein contained on
its part to be kept and performed, shall have the option to renew this
Lease for one (1) additional term of two (2) years. Any such extension
of this lease for the additional terms shall be upon the same covenants
and conditions as are set forth herein, except that the Base rental
rate for the additional term of two (2) years shall be $23.00 per
square foot for the first (1st) year of the option period and $24.00
per square That for the second (2nd) year of the option period. Tenant
must notify Landlord in writing not less that three (3) months prior to
the expiration of this Lease of its election to exercise the above
option and the agreement to be bound by the terms, covenants and
conditions of the Lease for the additional term stated above. In the
event Tenant fails to so notify Landlord or declines to exercise said
Option to Renew, such right shall terminate and not longer be in
effect.
BUILDING PLANNING: Intentionally deleted.
Concord Equities Lease Agreement
Page 12 of 13
13
An Addendum is attached hereto and made a part of this Lease.
IN WITNESS WHEREOF the parties hereto have executed this Lease by proper
persons thereunto duly authorized so to do on the day and year first hereinabove
written.
LANDLORD: TENANT:
CONCORD EQUITIES, L.L.C. FUTECH EDUCATIONAL PRODUCTS, INC.,
an Arizona Limited Liability Company an Arizona Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
BY: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ BY: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------ -----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
ITS: Manager ITS: Chief Executive Officer
Concord Equities Lease Agreement
Page 13 of 13
14
HORIZON REAL ESTATE GROUP, INC.
NOTICE AND WAIVER OF LIABILITY RIDER
Notice to Landlords/Tenants Regarding Hazardous
Materials and Americans with Disabilities Act
Comprehensive federal, state and local regulations have recently been enacted
to control the use, storage, handling, clean-up, removal and disposal of
hazardous and toxic wastes and substances. Extensive legislation has also been
adopted with regard to underground storage tanks. As real estate licensees, we
are not experts in the area of hazardous substances and we encourage you to
consult with your legal counsel with respect to your rights and liabilities with
regard to hazardous substances laws and regulations and to obtain technical
advice with regard to the use, storage, handling, clean-up, removal or disposal
of hazardous substances from professions, such as a civil engineer, geologist,
or other persons with experience in these matters to advise you concerning the
property. We also encourage you to review the past uses of the property (as to
which we make no representation) which may provide information as to the
likelihood of the existence of hazardous substances or underground storage tanks
on the property.
Legislation known as the "Americans with Disabilities Act ("ADA") was recently
adopted and may affect the property and/or its intended use. As real estate
licensee, we are not experts in the legal or technical aspects of ADA as it may
pertain to you. We encourage you to consult you legal counsel, architect and/or
other professionals with appropriate experience with regard to your rights or
obligations for compliance with ADA. HORIZON REAL ESTATE GROUP, INC. makes no
representation or warranty regarding the compliance or noncompliance of the
property under ADA.
INDEMNIFICATION
Owner/Landlord and Buyer/Tenant shall defend, indemnify, and hold harmless
HORIZON REAL ESTATE GROUP, INC. from and against all claims, costs, expenses,
actions, losses, damages and liabilities of any kind whatsoever (including
reasonable attorneys' fees) directly or indirectly arising out of the existence
of Hazardous Substances and/or Environmental Conditions or ADA noncompliance
conditions on the Property. This indemnification shall survive the termination
of any contract, listing or lease and continue thereafter.
Owner hereby authorizes Broker to represent and serve as agent for any
prospective tenant or purchaser of the Property and Owner hereby waives any
conflict of interest which may arise as a result thereof.
NOTE TO TENANT FROM BROKER
It has been a pleasure working with you towards consummation of a mutually
beneficial commercial lease. It is my hope that this negotiation process has
brought to light any interests, questions or concerns which you may have had.
Throughout our discussions, I have endeavored to provide you with the full and
complete information which you have requested. Following our discussions, this
lease agreement has been prepared which should include all relevant issues. If
you are relying upon any discussion, statement, inference or representation
which is not memorialized by the present lease agreement, please immediately
notify Broker both verbally and in writing. We have no wish to have you proceed
with the lease based upon inaccurate information or assumptions.
If the lease document accurately reflects our agreement, please indicate your
approval by signing in the space provided below. You should sign this document
if, and only if, you are relying entirely upon the lease agreement and no
further oral promises, discussions, statements or representations.
Rules and Regulations
Page 1 of 4
15
LANDLORD AND TENANT HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM
AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND TENANT WITH RESPECT TO THE
PREMISES.
THIS LEASE HAS BEEN PREPARED FOR SUBMISSION TO YOU AND YOUR ATTORNEY FOR REVIEW,
COMMENT AND APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS MADE BY HORIZON
REAL ESTATE GROUP, INC. (BROKER), ITS AGENTS, EMPLOYEES, OWNER OR ANY OTHER
PERSON AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS
LEASE OR THE TRANSACTION RELATING THERETO. THE PARTIES SHALL RELY SOLELY UPON
THE ADVICE OF THEIR OWN LEGAL COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF
THIS LEASE.
PREMISES: Concord Place. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
LEASE DATED: August 5,1996
LANDLORD: TENANT:
CONCORD EQUITIES, L.L.C., an FUTECH EDUCATIONAL PRODUCTS, INC.
Arizona Liability Company an Arizona Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------- ------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Manager its: Chief Executive Officer
Date: 8-16-96 Date:
Rules And Regulations
Page 2 of 4
16
ADDENDUM TO LEASE
THE ATTACHED LEASE made and entered into the 5th day of August, 1996, by and
between CONCORD EQUITIES, L.L.C., an Arizona Limited Liability Company, as
"Landlord", and FUTECH EDUCATIONAL PRODUCTS, INC., An Arizona Corporation
as "Tenant", of which this Addendum to Lease is made a part is hereby amended
and supplemented as follows:
- WITNESSETH -
1. CONSTRUCTION OF PREMISES: Tenant to accept Suite 225 in "as is"
condition. Landlord's sole construction obligations with respect to
Suite 225, shall be to install (at it's sole cost) one set of double
"solid core" doors between the large executive office and the adjoining
board room (see exhibit "C"). All work and materials shall conform to
existing building standards with quality of work to be at Landlord's
sole and absolute discretion.
The following is added to paragraph 3.
2. RENT: The rent schedule during the term of this Lease shall be modified
as follows:
Year Monthly Amount
---- --------------
1 through 3 $8,878.33
4 (option period) see paragraph 42 $10,210.08
5 (option period) see paragraph 42 $10,654.00
3. SECURITY DEPOSIT: Notwithstanding anything to the contrary regarding
Paragraph 23 of this Lease, Landlord and Tenant do hereby agree that
Tenant shall establish a "trading account" at Peacock, Hislop, ▇▇▇▇▇▇
and ▇▇▇▇▇▇, located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ #▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, wherein Tenant will maintain a minimum balance of Fifty
Five Thousand Dollars ($55,000) for the entire term of this Lease. A
copy of the documentation establishing this account shall be attached
to this Lease as Exhibit "D". Upon written notice from Landlord of
default by Tenant (pursuant to Paragraph #19), Landlord shall have the
right to instruct Peacock, Hislop, ▇▇▇▇▇▇ and ▇▇▇▇▇▇ to immediately
convert to cash that amount Landlord deems necessary to cure the
default. Furthermore, should the balance of the "trading account" fall
below the Fifty Five Thousand Dollars ($55,000) minimum required
balance, this shall constitute a default of this Agreement by Tenant
(pursuant to Paragraph #19).
LANDLORD: TENANT:
CONCORD EQUITIES, L.L.C. an FUTECH EDUCATIONAL PRODUCTS, INC.
Arizona Limited Liability Company an Arizona Corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------ ------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Manager Its: Chief Executive Officer
17
EXHIBIT A
RENTABLE SQUARE FOOTAGE
SECOND FLOOR
[FLOOR PLAN]
18
EXHIBIT "B"
RULES AND REGULATIONS
1. Except with the prior written consent of the Landlord, no Tenant shall
sell or cause to be sold any items or services at retail on or from the
leased premises, nor shall any Tenant carry on or permit or allow any
employee or person to carry on the business of machine copying,
stenography, typewriting or similar business in or from the leased
premises for the service or accommodation of occupants of any portion
of the building without written consent of the Landlord.
2. The Sidewalks, halls and passageways will not be obstructed by any of
the Tenants or used by them for any purpose other than for the ingress
and egress to and from their respective premises.
3. All Tenants shall adhere to and obey all such parking control measures
as may be placed into effect by the Landlord through the use of signs,
identifying decals or other instructions.
4. No moving companies shall be used for the purpose of moving furnishings
in or out of the lease premises unless they are licensed, commercial
movers.
5. Any electric wiring that the Tenant desires to introduce into the
Premises must be connected as directed by the Landlord. No boring or
cutting for wires will be allowed except with a specific consent of the
Landlord. The location of telephones, electrical appliances, call
boxes, intercoms, etc., shall be prescribed by Landlord.
6. The Tenant shall not conduct any auction or permit any fire or
bankruptcy sale to be held on the Premises, nor store goods, wares or
merchandise on the Premises.
7. All freight must be moved into, within and our of the Building under
the supervision of the Landlord and according to such regulations as
may be posted in the Building Office. All moving of furniture or
equipment into or out of the Building by the Tenant shall be done at
such time and in such manner as directed by the Landlord or its agent.
In no cases shall items of freight, furniture, fixtures or equipment be
moved into or out of the Building during such
Rules And Regulations
Page 1 of 4
19
hours as are normally considered rush hours to an office building (i.e.
morning rush hours, noon rush hours and evening rush hours).
8. Requirements of the Tenant for Building services, maintenance or repair
shall be attended to only upon application to the office of the
Building. Employees of the Building are not permitted to perform any
work nor to do anything outside of their regular duties unless under
special instructions from the office of the Building. No employees of
the Building shall admit any person, Tenant or otherwise without
specific instructions from the Office Manager of the Building.
9. The Tenant shall not change locks nor install other locks on doors
without the prior written consent of the Landlord.
10. The Tenant shall give prompt notice to the Building of any accidents to
or defects in plumbing, electrical fixtures or heating apparatus so
that the same may be attended to properly.
11. No safes or other objects larger that the doors shall be brought into
or installed on the Leased Premises without the prior written consent
of the Landlord. Also, the Landlord shall have the power to prescribe
the weight and positions of or other objects which shall, if considered
necessary by the Landlord, be required to be supported by additional
materials placed on the floor. In such event, the additional materials
shall be at the expense of the Tenant. In no event can these items
exceed a weight of fifty (50) pounds per square foot of floor space
utilized.
12. No person or persons other that those approved by the Landlord will be
permitted to enter the Building for purposes of cleaning, maintenance,
construction or painting.
13. Tenant shall not permit or offer the Leased Premises to be occupied or
used in a manner offensive or objectionable to the Landlord or other
occupants of the Building by reason of noise, odors or vibrations or
interfere in any way with other Tenants or those having business
therein, nor shall any animals or birds be kept in or about the
Building.
14. No cooking shall be done or permitted by any Tenant on the Leased
Premises except for that cooking utilizing existing kitchen facilities
or microwave ovens in Premises nor shall offices of The Building be
used, nor any part thereof, permitted to be used for lodging.
Rules And Regulations
Page 2 of 4
20
15. Each Tenant, upon the termination of the tenancy, shall deliver to the
Landlord all the keys of the offices, rooms and toilet rooms which
shall have been furnished to the Tenant.
16. No Tenant shall lay floor covering so that the same shall be affixed to
the Leased Premises in any manner by paste or other material, except
that which may easily be removed with water. The use of cement or other
similar adhesive materials is expressly prohibited. Landlord shall have
no obligation to repair, restretch, clean or replace carpeting but will
spot clean and sweep carpeting as part of any janitorial services
required to be furnished by Landlord under the Lease.
17. On Sundays, holidays (legal), and on other days during certain hours of
which the Building may be closed after normal business hours, access to
the Building or to the halls or corridors will be subject to complete
control and approval of the Landlord.
18. Janitorial service shall be provided five (5) days per week in and
about the Premises, and in no case shall such services be provided on
Saturdays, Sundays and holidays (legal). Tenants shall not cause
unnecessary labor by reason of carelessness or indifference in the
preservation of good order and cleanliness.
19. Tenants shall see that doors of the Premises are closed and securely
locked before leaving the Building and must observe strict care not to
leave such doors, etc. open and exposed to the weather or other
elements, and each Tenant shall exercise extraordinary care and caution
that all water faucets or water apparatus are entirely shut off before
the Tenant or the Tenant's employees leave the Building, and that all
electricity, gas and air conditioning shall likewise be carefully shut
off, so as to prevent waste or damage, where controlled by Tenant.
20. Canvassing, soliciting and peddling in the Building are prohibited.
Tenants shall cooperate to prevent the same.
21. Intentionally Deleted.
Rules And Regulations
Page 3 of 4
21
22. No signs of any kind shall be placed on the walls or windows of the
Leased Premises or outside the Leased Premises without the prior
written consent of the Landlord first had and obtained. It is intended
that the only identification to be provided for Tenant will be a
directory of design and location as approved by Landlord.
23. The non-enforcement of any one or more of these Rules and Regulations
with respect to any one or more Tenants in the Leased Premises, or the
development of which the Leased Premises are a part, shall not be
deemed a waiver of any of these Rules and Regulations, nor prohibit
the right of the Landlord to enforce these Rules and Regulations at any
time.
24. The Landlord reserves the right, at any time, to rescind any one or
more of these Rules and Regulations, or to make such other and further
reasonable rules and regulations as in the Landlord's judgement may,
from time to time, be necessary for the safety, care and cleanliness of
the Premises, and for the preservation of order therein.
25. Tenant will not, without the prior written consent of the Landlord, use
any apparatus or device in the Leased Premises, including but without
limitation thereto, electronic data processing machines, punch card
machines, and machines using current in excess of 110 volts, which
will, in any way, increase the amount of electricity or water usually
furnished or supplied for use of the Leased Premises as general office
space; nor connect with electric current, except through existing
electrical outlets in the Leased Premises, or water pipes, any
apparatus or device for the purposes of using electric current or
water.
AGREED AND ACCEPTED:
LANDLORD: TENANT:
CONCORD EQUITIES, L.L.C. FUTECH EDUCATIONAL PRODUCTS, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
BY: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ BY: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- -----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
ITS: Manager ITS: Chief Executive Officer
DATE: 8-16-96 DATE: 8-15-96
Rules And Regulations
Page 4 of 4
22
EXHIBIT "C"
(FLOOR PLAN OF LEASED PREMISES)
23
[FUTECH LOGO]
EXHIBIT "D"
PAGE ONE OF TWO
Date: September 19, 1996
TO: Concord Equities, L.L.C. (Concord)
cc: ▇. ▇▇▇▇▇▇▇, Peacock, Hislop, ▇▇▇▇▇▇ and ▇▇▇▇▇▇ (PHSG)
From: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chairman and CEO (Futech)
Subject: Addendum to lease re: Security deposit through Peacock, Hislop,
▇▇▇▇▇▇ and ▇▇▇▇▇▇ investment account
Dear Concord Equities, L.L.C.,
This is to serve as Futech's instructions to Concord and PHSG regarding
Concord's limited access to Futech's investment account with PHSG.
Per the terms of the lease, Paragraph 23, Futech opened an account with PHSG
(#705-05115 per the attached) and have invested the minimum amount of funds per
the lease's terms. The lease specifies the grace period and notification
requirements by Concord if Futech does not meet its monthly obligation. If
Futech does not meet its outstanding obligation to Concord per the stated terms
of the lease agreement, then Concord may, with prior written notice to Futech
and PHSG, independently access Futech investment account in order to cure the
outstanding default. Prior to any actual transaction occurring, however, Futech
must be advised by PHSG as to the specifics of the transaction. Concord must
specify in writing to Futech and PHSG who within their organization is
authorized to perform such transaction.
Concord does not have the right to make inquiries (except for minimum balance
verification pursuant to the terms of the lease) or any other action
regarding Futech's account at PHSG.
Sincerely,
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
COO/CFO
24
STATEMENT OF
ACCOUNT
[PEACOCK, HISLOP, ▇▇▇▇▇▇ & GIVEN, INC. LETTERHEAD]
G-05115 TAX ID ▇▇-▇▇▇▇▇▇▇ AUGUST 01 - AUGUST 31, 1996
EDUCATIONAL PRODUCT INC YOUR INVESTMENT REPRESENTATIVE IS:
▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
44TH STREET STE ▇▇▇▇ ▇. ▇▇▇▇.▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
IR# 705-424 PHONE 602-952-6800
TOLL FREE (▇▇▇) ▇▇▇-▇▇▇▇
MONEY MARKET FUND 7 DAY AVERAGE YIELDS
FOR CURRENT YIELD INFORMATION PLEASE
CONTACT YOUR INVESTMENT REPRESENTATIVE
ASSETS LIABILITIES
PERCENT OF YOUR
AMOUNT PORTFOLIO AMOUNT
CASH
15,734.97 21 % MARGIN LOAN
SHORT OPTIONS
OTHER SHORT SECURITIES
58,500.00 79 %
$ 74,234.97 TOTAL LIABILITIES $ 00
YOUR ACCOUNT $ 74,234.97 CURRENT ESTIMATED YIELD .83%
SECURITIES ESTIMATED ANNUAL INCOME $682.00
FUNDS DEPOSITED AND WITHDRAWN
YOUR ACCOUNT $75,000.00 FUNDS REMITTED FROM YOUR ACCOUNT $.00
INCOME/EXPENSE SUMMARY
THIS THIS THIS THIS
PERIOD YEAR EXPENSE PERIOD YEAR
INTEREST CHARGES
U.S. TAX
NON-RES TAX
FOREIGN TAX
.00 .00 TOTAL .00 .00
EXHIBIT "D"
PAGE TWO OF TWO
25
[CONCORD EQUITIES LOGO]
June 30, 1997
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, CEO
FUTECH EDUCATIONAL PRODUCTS, INC.
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ #▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Amendment to Lease
Release of Trading Account
Dear ▇▇▇▇▇:
Pursuant to paragraph #9 of the aforementioned Amendment to Lease, Landlord
hereby authorizes you to close the "trading account", which was established by
Tenant as a Security Deposit, for the benefit of Landlord.
Immediately upon closing of said account, Tenant shall deliver to Landlord a
cashiers check in the amount of $25,490.50, which shall be held by Landlord as
Security Deposit for the entire term of the Amended Lease.
Sincerely,
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Managing Member
cc: file
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
PHONE ▇▇▇.▇▇▇.▇▇▇▇ FAX ▇▇▇.▇▇▇.▇▇▇▇
26
AMENDMENT TO LEASE
THIS AMENDMENT TO LEASE, made and entered into this 27th day of June, 1997, by
and between CONCORD EQUITIES, L.L.C., an Arizona limited liability company
hereinafter referred to as "Landlord" and FUTECH EDUCATIONAL PRODUCTS, INC., an
Arizona corporation hereinafter referred to as "Tenant".
WITNESSETH
WHEREAS, Landlord wishes to lease additional premises ("Expanded Area") to
Tenant and Tenant wishes to lease additional premises ("Expanded Area") from
Landlord; and
WHEREAS, Landlord wishes to modify the rent payments of the Original Lease
(Dated August 5, 1996) and Tenant wishes to modify the rent payments of the
Original Lease; and
WHEREAS, Landlord wishes to modify the term of the Original Lease and Tenant
wishes to modify the term of the Original Lease;
NOW, THEREFORE, in consideration of these present and the agreement of each
other, Landlord and Tenant agree that the said Lease shall be and the same is
hereby amended as of the 27th day of June, 1997 as to the following items, but
shall remain as stated with regard to all other matters.
1. Line 5 of the prologue paragraph of the Lease is amended by the
replacement of Exhibit "A" with the new Exhibit "D", attached hereto
and made a part hereof, showing the "Expanded Area" and "Existing
Space".
2. Paragraph 1 of the Lease: The term of the Modified Lease shall be for a
period of thirty-six (36) months and shall commence on the 1st day of
September, 1997 and expire on the 31st day of August, 2000.
3. Paragraph 3 of the Lease: Tenant agrees to pay Landlord a base rent of
Twelve Thousand Seven Hundred Forty-Five Dollars and 25/100 $12,745.25)
per month, subject to increases as hereinafter provided, plus any
excise, privilege or sales tax imposed upon the rent paid by Tenant.
Said rent shall commence on the latter to occur of September 1, 1997 or
the date the tenant improvements in the "Expanded Area" are completed
and said space is ready for occupancy by Tenant.
4. Paragraph 4 of the Lease: For the purpose of calculating the operating
expenses of the project as outlined and defined in Paragraph 4.
"OPERATING EXPENSES" of the Lease the following terms will prevail:
(a). The terms of the Original Lease shall remain in full force and
effect relating to of "operating expenses" for the primary
space (existing space) as defined in the Lease.
27
(b). Tenant shall have a 1997 Base Year Expense Stop (Landlord to
pay said expense stop amount) calculated for the "Expanded
Area", which area is comprised of 1,956 net rentable square
feet, with all other terms and conditions of Paragraph 4. of
the Lease remaining in full force and effect.
(c). It is the intent of this Paragraph that the operating expenses
for the existing premises and the expanded area be calculated
separately from each other using the respected rentable square
footage of each area and the respective Base Year for each
area as outlined above.
5. ▇▇▇▇▇▇▇▇▇ ▇▇ of the Lease: It is hereby amended and the following new
paragraph is added:
4(c). For the purpose of determining Tenant's proportionate share of
the operating expenses and Landlord's total contribution, the
project shall be deemed to be comprised of 133,289 net
rentable square feet; the existing primary space shall be
deemed to be comprised of 5,327 net rentable square feet and
the "Expanded Area" to be comprised of 1,956 net rentable
square feet.
6. Paragraph 1 of the Addendum to Lease is hereby amended and the
following new paragraph is added:
Landlord shall build out the Expanded Area with tenant
improvements acceptable to Tenant. Landlord will pay for said
improvements up to $48,900.00. If the costs exceed $48,900.00,
said excess, plus simple interest thereon calculated at 9% per
annum, shall be amortized in equal monthly installments and
paid by Tenant to Landlord as additional rent between
September 1, 1997 and August 1, 2000. Tenant shall have the
right to approve all bids and contracts relating to
the construction work. The contracts will call for the work to
be completed, and the work will be completed, by September 15,
1997. Either party may terminate this Amendment if the details
of the tenant improvements are not finalized to the
satisfaction of the parties by August 1, 1997.
Landlord shall retain the bills, invoices, or their written
documentation evidencing the final total construction costs
and make same available to Tenant for audit.
7. Line 8 of Paragraph 22. "PARKING" of the Original Lease Agreement - the
figure "ten (10)" is deleted and "fifteen (15)" is substituted. The 5
new parking spaces will be adjacent to Tenant's current 10 spaces.
8. Line(s) 6 and 7 of Paragraph 42: "OPTION TO RENEW" of the Original
Lease - the figure "$23.00 shall be replaced with "$24.00" and the
figure "$24.00" shall be replaced with "$25.00".
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9. Paragraph 3 of the Addendum to Lease is hereby modified as follows:
Notwithstanding anything to the contrary regarding Paragraph 23 of the
Original Lease, Landlord and Tenant do hereby agree that Tenant shall
deposit with Landlord an amount equal to $25,490.50, which amount shall
be held by Landlord as Security Deposit for the entire term of the
Amended Lease. Furthermore, upon receipt by Landlord of the
aforementioned Security Deposit, Tenant shall be permitted to close the
"$55,000 trading account" previously established by Tenant as a
Security Deposit for the benefit of Landlord.
10. Section 36 of the Original Lease is hereby deleted from this lease.
11. All other terms and conditions in this Lease, as amended, remain in
full force and effect as heretofore.
IN WITNESS WHEREOF, Landlord and Tenant have executed this instrument by
proper persons thereunto authorized so to do on the day and year first
hereinabove written.
LANDLORD: TENANT:
CONCORD EQUITIES, L.L.C., an FUTECH EDUCATIONAL PRODUCTS, INC.,
Arizona limited liability company an Arizona corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- ------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Managing Member Its: Chief Executive Officer
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9. Paragraph 3 of the Addendum to Lease is hereby modified as follows:
Notwithstanding anything to the contrary regarding Paragraph 23 of the
Original Lease, Landlord and Tenant do hereby agree that Tenant shall
deposit with Landlord an amount equal to $25,490.50, which amount shall
be held by Landlord as Security Deposit for the entire term of the
Amended Lease. Furthermore, upon receipt by Landlord of the
aforementioned Security Deposit, Tenant shall be permitted to close the
"$55,000 trading account" previously established by Tenant as a
Security Deposit for the benefit of Landlord.
10. Section 36 of the Original Lease is hereby deleted from this lease.
11. All other terms and conditions in this Lease, as amended, remain in
full force and effect as heretofore.
IN WITNESS WHEREOF, Landlord and Tenant have executed this instrument by proper
persons thereunto authorized so to do on the day and year first hereinabove
written.
LANDLORD: TENANT:
CONCORD EQUITIES, L.L.C., an FUTECH EDUCATIONAL PRODUCTS, INC.,
Arizona limited liability company an Arizona corporation
By: By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------- -----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Managing Member Its: Chief Executive Officer
3