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EXHIBIT 10.26
LEASE MODIFICATION AGREEMENT
THIS LEASE MODIFICATION AGREEMENT NO. 2 (this "Agreement") dated as of
April 26, 2000, by and between OTR, an Ohio general partnership ("Landlord") and
Beacon Education Management LLC, a Tennessee limited liability company
("Tenant").
WITNESSETH:
WHEREAS, Landlord and Tenant entered into a Lease dated July 29, 1998
(the "Lease"), covering approximately 2,570 square feet of space (the "Existing
Premises") in the building (the "Building") known as 000 Xxxxxxxx Xxxx,
Xxxxxxxxxxx Executive Park, Westborough, Massachusetts; and
WHEREAS, the Commencement Date of the Lease occurred on October 1,
1998, and the Initial Term of the Lease expires by its terms on September 30,
2003; and
WHEREAS, Landlord and Tenant mutually desire to amend the Lease by,
among other things, enlarging the size of the Premises by approximately 4,024
square feet of space (the "Additional Premises") on the first floor of the
Building, and by extending the Initial Term through March 31, 2005; and
WHEREAS, Landlord and Tenant mutually intend and desire to modify the
Lease on and subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, each to the other paid, the receipt and sufficiency
of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:
1. Tenant currently occupies the Existing Premises, and
agrees that Landlord is not responsible or liable to perform any work therein,
or to pay any allowance or contribution toward the cost of any work to be
performed by Tenant therein. In addition, Tenant agrees (except as expressly set
forth hereafter) to accept the Additional Premises in their AS IS condition, and
without any representation or warranty by Landlord.
2. (a) Effective from and after the Effective Date (as
hereinafter defined), the definition of "Premises" set forth in Section 1.2 of
the Lease is amended to read: "A portion of the Building as shown on Exhibit A-1
annexed hereto." The Lease is further amended, effective from and after the
Effective Date, by deleting Exhibit A to the Lease and substituting therefor
Exhibit A-1, annexed hereto.
(b) Effective from and after the Effective Date, the
definitions of "Premises Rentable Area," "Escalation Factor," "Initial Term" and
"Security Deposit," set forth in Section 1.2 of the Lease are amended to read as
follows:
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Premises Rentable Area: Agreed to be 6,594 square feet located on the
first floor of the Building.
Escalation Factor: 9.76%, as computed in accordance with the Escalation
Factor Computation.
Initial Term: The period commencing on the Commencement Date and
expiring at the close of the day on March 31, 2005.
Security Deposit: $12,089.00,
(c) Effective from and after the thirtieth (30th) day
following the Effective Date, the definition of "Basic Rent," set forth in
Section 1.2 of the Lease is amended to read as follows:
Basic Rent: The sum of (i) $145,068.00 ($22.00 per square foot of
Premises Rentable Area) per annum, plus (ii) $6,264.30 ($0.95 per
square foot of Premises Rentable Area) per annum as an allowance (the
"Estimated Electricity Payment") toward the actual cost to Landlord of
providing electricity to the Premises, as all of the same may be
adjusted and/or abated pursuant to Sections 7.5 and 12.1.
3 The Effective Date shall be the later to occur of:
(i) April 1, 2000, or (ii) the sooner to occur of (A) the date on which Landlord
substantially completes Tenant's Work and a certificate of occupancy has been
issued therefor, or (B) the date upon which Tenant first occupies all or any
portion of the Additional Premises for the conduct of its business. Tenant's
Work shall be deemed substantially completed on the first day on which such Work
has been completed except for items of work (and, if applicable, adjustment of
equipment and fixtures) which can be completed after occupancy has been taken
without causing undue interference with Tenant's use of the Additional Premises
(i.e. so-called "punch list" items) and Tenant has been given notice thereof.
Landlord shall complete as soon as conditions permit all "punch list" items and
Tenant shall afford Landlord access to the Additional Premises for such
purposes. Free month rent begins upon receipt of certificate of occupancy. JM
4/11/00
4 (a) Tenant acknowledges that work will have to be
done in Additional Premises to prepare the same for Tenant's occupancy. Tenant
has prepared various plans and specifications (the "Plans") showing the proposed
improvements to the Additional Premises, which Plan has been approved by
Landlord. From the Plans, Tenant's architect shall prepare and deliver to
Landlord such additional plans and specifications (the "Final Plan") as may be
required to obtain necessary governmental permits or approvals and thereafter to
undertake the work shown thereon ("Tenant's Work"). Landlord shall submit the
Final Plan to Tenant for its approval, which shall not be unreasonably withheld,
delayed or conditioned (and any failure to disapprove the Final Plan in writing
(together with a reasonably detailed statement of the reasons therefor) within
three days after submission shall be deemed approval thereof). Promptly upon
execution of this Amendment and approval of the Final Plan, and execution by
Tenant of a work letter setting forth Tenant's responsibility for the costs of
such Work, Landlord shall thereafter
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undertake and substantially complete such work in the Additional Premises as is
shown on the Plan.
(b) Following Landlord's approval of the Final
Plan, Tenant shall make no changes or modifications thereto, except with
Landlord's consent (which may be conditioned on, inter alia, Tenant's agreement
as to any additional cost or time delays incurred). To the extent that the cost
of completing Tenant's Work (including without limitation Tenant's cost of space
planning and architectural services, as well as the cost of construction, as
reasonably estimated by Landlord's contractor as of the time of approval of the
Final Plan) exceeds an amount (the "Additional Contribution") equal to Twenty
Dollars ($20.00) per square foot of Premises Rentable Area contained in the
Additional Premises, Tenant shall pay such excess to Landlord, 80% thereof to be
paid on the date Tenant's Plans are approved and 20% on the Effective Date (or,
in either case, at such later time as Landlord advises Tenant of the amount of
such excess). Tenant shall, if requested by Landlord, execute a work letter
confirming such excess costs prior to the time Landlord shall be required to
commence work. In the event that the actual cost to Landlord of completing
Tenant's Work is greater or less than the estimate of Landlord's contractor,
then Tenant shall pay, or Landlord shall credit, such difference (as the case
may be) within fifteen (15) days after Landlord shall advise Tenant of such
actual cost. In addition, if and to the extent that the cost of completing
Tenant's Work (as so estimated by Landlord's contractor) exceeds the Additional
Contribution, Tenant shall have the right to have Landlord finance such excess,
up to an additional Five Dollars ($5.00) per square foot of Premises Rentable
Area contained in the Additional Premises (the "Excess Contribution"), in which
case each monthly payment of Basic Rent shall be increased (commencing on the
first day of the month following determination of the actual cost of Tenant's
Work) by an amount sufficient to frilly amortize the Excess Contribution over
the then-remainder of the Initial Term, with interest at ten percent (10%) per
annum. Payments on account of the Excess Contribution shall be additional rent
under the Lease.
5. As a material inducement to Landlord entering into
this Agreement, Tenant certifies to Landlord that as of the date hereof: (i) the
Lease, as modified hereby, contains the entire agreement between the parties
hereto relating to the Premises and that there are no other agreements between
the parties relating to the Premises, the Lease or the Building which are not
contained or referred to herein or in the Lease, (ii) Landlord is not in default
in any respect in any of the terms, covenants and conditions of the Lease; (iii)
Tenant has no existing setoffs, counterclaims or defenses against Landlord under
the Lease; and (iv) Tenant is not, and the performance by Tenant of its
obligations hereunder shall not render Tenant, insolvent within the meaning of
the United States Bankruptcy Code, the Internal Revenue Code or any other
applicable law, code or regulation.
6. Tenant covenants, represents and warrants to Landlord
that Tenant has had no dealings or communications with any broker or agent
(other than Xxxxxxxxx & Xxxx, whose fees shall be paid by Landlord) in
connection with this Agreement and Tenant covenants and agrees to pay, hold
harmless and indemnify Landlord from and against any and all cost, expense
(including reasonable attorneys' fees) or liability for any compensation,
commission or charges to any broker or agent claiming through Tenant with
respect hereto.
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7. Tenant represents and warrants that it has taken all
necessary corporate, partnership or other action necessary to execute and
deliver this Agreement, and that this Agreement constitutes the legally binding
obligation of Tenant, enforceable in accordance with its terms. Tenant further
represents and warrants that it has full and complete authority to enter into
and execute this Agreement and acknowledges that Landlord is relying upon
Tenant's representation of its authority to execute this Agreement and Tenant
shall save and hold Landlord harmless from any claims or damages, including
reasonable attorneys' fees, arising from Tenant's misrepresentation of its
authority to enter into and execute this Agreement.
8. This Agreement is executed by certain employees of
the State Teachers Retirement System of Ohio, not individually, but solely on
behalf of Landlord, the authorized nominee and agent for The State Teachers
Retirement Board of Ohio ("XXXXX"). In consideration for entering into this
Agreement, Tenant hereby waives any rights to bring a cause of action against
the individuals executing this Agreement on behalf of Landlord (except for any
cause of action based upon lack of authority or fraud), and all persons dealing
with Landlord must look solely to Landlord's assets for the enforcement of any
claim against Landlord, and the obligations hereunder are not binding upon, not
shall resort be had to the private property of any of the trustees, officers,
directors, employees or agents of XXXXX.
9. Capitalized terms used but not defined herein shall
have the meanings ascribed to them in the Lease.
10. As amended hereby, the Lease is ratified and
confirmed and declared to be in full force and effect.
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IN WITNESS WHEREOF, parties have set their respective hands as of the
date first above written.
LANDLORD:
OTR, an Ohio general partnership, as nominee
for the State Teachers Retirement System of
Ohio
By: /s/ Xxxxxxx X. Valanich
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Hereunto Duly Authorized
Xxxxxxx X. Valanich
Director, Eastern Region -
Real Estate
TENANT:
BEACON EDUCATION MANAGEMENT, LLC
By: /s/ Xxxxx X. XxXxxxxxx
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Name: Xxxxx X. XxXxxxxxx
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Title: CFO
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