Exhibit
10.2
L E A S E A G R E E M E N
T
THIS LEASE AGREEMENT (the "Lease") is made and
entered into as of this __ 1st __ day of February
, 2008 between Development Specialties Inc. (the "Landlord"),
and Pacific WebWorks (the “tenant”).
For and in consideration of
the rental to be paid by Tenant and of the covenants and agreements
herein set forth to be kept and performed by Tenant, Landlord
hereby leases to Tenant and Tenant hereby leases from Landlord, the
Leased Premises (as hereinafter defined) and certain other areas,
rights and privileges for the term, at the rental and subject to
and upon all of the terms, covenants and agreements hereinafter set
forth.
I. PREMISES
1.1
Description of Premises. Landlord does
hereby demise, lease and let unto Tenant, and Tenant does hereby
take and receive from Landlord the following:
(a)
The entire first floor of the 230 West
Building, located at 230 West 400 South, Salt Lake City, UT
84111, consisting of approximately 8700 rentable sq. ft.
(b)
The non-exclusive right to Tenant's
Proportionate Share of the Common Areas (as defined in Section
19.1 below).
(c)
Such non-exclusive rights-of-way, easements and
similar rights with respect to the Building and Property as may
be reasonably necessary for access to and egress from the Leased
Premises and Tenant's pro rata portion of the Common Areas.
(d)
Parking for up to 22 vehicles will be provided,
including seven covered, reserved spaces.
1.2
Work Improvement. The obligations of Landlord and Tenant to
perform the work and supply the necessary materials and labor to
prepare the Leased Premises for occupancy are described in detail
on Exhibit "A." Landlord and Tenant shall expend all funds and do
all acts required of them as described on Exhibit "A" and shall
perform or have the work performed promptly and diligently in a
workmanlike manner.
1.3
Changes to Building. Landlord hereby
reserves the right at any time and from time to time to make
changes, alterations or additions to the Building or to the
Property. Tenant shall not, in such event, claim or be
allowed any damages for injury or for inconvenience occasioned
thereby and shall not be entitled to terminate this Lease.
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II. TERM
2.1
Length of Term. The term of this Lease
shall be for a period of Five Years plus the partial calendar
month, if any, occurring after the Commencement Date (as
hereinafter defined) if the Commencement Date occurs other than
on the first day of a calendar month.
2.2
Commencement Date; Obligation to Pay Rent.
The term of this Lease and Tenant's obligation to pay rent
hereunder shall commence on the last to occur of the following
dates (the "Commencement Date"):
(a) February 1, 2008
Except to the extent of any monies deposited
with Landlord by Tenant, Landlord shall not have any liability
to Tenant arising out of the failure of the Commencement Date to
occur.
2.3
Acknowledgement of Commencement Date. In
the event that the Commencement Date occurs other than on the
date set forth in Section 2.2(a) above, Landlord and Tenant
shall execute a written acknowledgement of the agreed upon
commencement date.
2.4
OPTION: Tenant shall have the option to
buy out the remaining term of the lease after three years for
the amount of $70,000.00. (Amount to be prorated depending on
actual buyout date).
III. BASIC RENTAL PAYMENT
3.1
Basic Monthly Rent. Tenant agrees to pay
to Landlord as basic monthly rent (the "Basic Monthly Rent") at
such place as Landlord may designate without prior demand
therefore and without any deduction or set off whatsoever, the
sum $10,500.00 per month for the first year of occupancy.
Rent shall increase each subsequent year of this lease as per
the following schedule: Year Two: $10,875.00 per
month
Year three:
$11,250.00 per month
Year four:
$11,600.00 per month
Year five:
$11,950.00 per month
Said Basic Monthly Rent shall be due and payable in
advance on the first day of each calendar month during the term of
the Lease. Simultaneously with the execution hereof, Tenant has
paid to Landlord the first month's rent, receipt whereof is hereby
acknowledged, subject to collection, however, if made by check.
In the event the Commencement Date occurs on a day other than
the first day of a calendar month, then rent shall be paid on the
Commencement Date for the initial fractional calendar month
prorated on a per-diem basis (based upon a thirty (30) day month)
and paid on the Commencement Date. Rent payments
received after the 5th day of the month in which it is due will be
subject to a 5% late fee.
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3.2
Additional Monetary Obligations. Tenant
shall also pay as base rental (in addition to the Basic Annual
Rent) all other sums of money as shall become due and payable by
Tenant to Landlord under this Lease. Landlord shall have
the same remedies in the case of a default in the payment of
said other sums of money as are available to Landlord in the
case of a default in the payment of Basic Monthly Rent.
V. SECURITY DEPOSIT
5.1
Deposit. Tenant shall deposit with
Landlord the sum of $10,500.00 as security for the
performance by Tenant of all of the terms, covenants, and
conditions required to be performed by it hereunder. Such
sum shall be returned to Tenant after the expiration of the term
of this Lease and delivery of possession of the Leased Premises
to Landlord if, at such time, Tenant has performed all such
terms, covenants and conditions of this Lease. Deductions may be
made by landlord for repair of damage caused by tenant, or for
any unpaid obligations. Prior to the time when Tenant is
entitled to any return of the security deposit, Landlord may
intermingle such deposit with its own funds and use such sum for
such purposes as Landlord may determine. Tenant shall not
be entitled to any interest on the security deposit
5.2
Default. In the event of default by Tenant
in respect to any of its obligations under this Lease,
including, but not limited to, the payment of rent or additional
rent, Landlord may use, apply, or retain all or any part of the
security deposit for the payment of any unpaid Basic Monthly
Rent or Additional Rent, or for any other amount which Landlord
may be required to expend by reason of the default of Tenant,
including any damages or deficiency in the reletting of the
Leased Premises, regardless of whether the accrual of such
damages or deficiency occurs before or after an eviction or a
portion of the security deposit is so used or applied. Tenant
shall, upon five (5) days written demand, deposit cash with
Landlord in an amount sufficient to restore the security deposit
to its original amount.
VI. USE
6.1
Use of Leased Premises. The Leased
Premises shall be used and occupied by Tenant for general office
purposes only and for no other purpose whatsoever without the
prior written consent of Landlord.
Tenant agrees not to keep, use or permit to be
kept or used on the Leased Premises any flammable fluids,
explosives or any "hazardous substance," "solid waste," or
"hazardous waste" as said terms are defined in 42 U.S.C. 9601
(14), and 40 C.F.R. 261.1 et seq. without the prior written
permission of Landlord.
6.2
Prohibition of Certain Activities or Uses.
The Tenant shall not do or permit anything to be done in
or about, or bring or keep anything in the Leased Premises,
which is prohibited by this Lease or will, in any way:
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(a)
Adversely affect any fire, liability or other
insurance policy carried with respect to the Building, the
improvements or any of the contents of the Building (except with
Landlord's express written permission, which will not be
unreasonably withheld, but which may be contingent upon Tenant's
agreement to bear any additional costs, expenses or liability
for risks that may be involved).
(b)
Obstruct or interfere with any right of any
other tenant or occupant of the Building or injure or annoy such
persons.
(c)
Conflict with or violate any law, statute,
ordinance, rule, regulation or requirement of any governmental
unit, agency or authority (whether existing or enacted as
promulgated in the future, known or unknown, foreseen or
unforeseen).
(d)
Adversely overload the floors or otherwise
damage the structural soundness of the Leased Premises, or
Building, or any part thereof, (except with Landlord's express
written permission, which will not be unreasonably withheld, but
which may be contingent upon Tenant's agreement to bear any
additional costs, expenses or liability for risk that may be
involved).
6.3
Affirmation Obligations With Respect to Use.
Tenant will, at its sole cost and expense, comply with all
governmental laws, ordinances, regulations, and requirements,
now in force or which hereafter may be in force, of any lawful
governmental body or authority having jurisdiction over the
Leased Premises, will keep the Premises and every part thereof
in a clean, neat and orderly condition, free of objectionable
noise, odors, or nuisance, and which in all respects and at all
times fully comply with all health and policy regulations, and
shall not suffer, permit, or commit any waste.
6.4
Suitability. Tenant acknowledges that
except as expressly set forth in this Lease, neither Landlord
nor any other person has made any representation or warranty
with respect to the Leased Premises or any other portion of the
Building or improvements. Specifically, but not in limitation of
the foregoing, no representation has been made or relied on with
respect to the suitability of the Leased Premises or any other
portion of the Building or improvements for the conduct of
Tenant's business. The Leased Premises, Building and
improvements shall be deemed to be in satisfactory condition
unless, within Thirty (30) days after the Commencement Date,
Tenant shall give Landlord written notice specifying in
reasonable detail, the respects in which the Leased Premises,
Building or improvements are not in satisfactory condition.
6.5
Taxes. Tenant shall pay all taxes,
assessments, charges, and fees which during the term hereof may
be imposed, assessed or levied by any governmental or public
authority against or upon Tenant's use of the Leased Premises or
any personal property or fixture kept or installed therein by
Tenant and on the value of leasehold improvements to the extent
that the same exceed Building allowances.
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VII. UTILITIES AND SERVICE
7.1
Obligation of Landlord. During the term of
this Lease, Landlord agrees to cause to be furnished to the
Leased Premises during customary business hours and during
generally recognized business days the following utilities and
services:
(a)
Telephone connection, but not including
telephone stations and equipment (it being expressly understood
and agreed that Tenant shall be responsible for the ordering and
installation of telephone lines and equipment which pertain to
the Leased Premises).
(b)
Snow removal service.
(c)
Landscaping and groundskeeping service.
(d)
Janitorial service: Common areas shall be
cleaned by Landlord; Landlord also agrees to clean the
tenant area as follows: Restrooms cleaned and wastebaskets
emptied nightly. Floors shall be vacuumed and light
dusting shall be performed once weekly. Light dusting does
not include moving of any tenant devices or property.
7.2
Landlord shall pay all charges, including water,
gas, electricity and other public utilities used on the leased
premises. Tenant shall arrange for and shall pay the
entire cost and expense of all telephone stations, equipment and
use charges, and all other materials and services not expressly
required to be provided and paid for pursuant to the provisions
of Section 7.1 above.
7.3
Tenant to Insure Leased Premises.
Tenant shall insure and keep insured the tenants
leased portion of the premises against the perils of fire,
lightning, the "Extended Coverages," vandalism and malicious
mischief, and Tenant shall carry insurance against the risk of
business interruption and loss of rents and income resulting
from fire or other hazards. Tenant shall be responsible
for any damage to premises as a result of forced entry into his
space or burglary thereof. Such insurance provided for
hereunder shall be in a company or companies acceptable to
Landlord and shall be procured and paid for by Tenant, and said
policy or policies will be delivered to Landlord. Such
insurance may, at Tenant's election, be carried under any
General Blanket Insurance Policy of Tenant; provided, however,
that a satisfactory Certificate of Insurance, together with
proof of payment of the premium, shall be deposited with
Landlord. Landlord shall be named as co-insured.
7.4
Limitation of Landlord's Liability.
Landlord shall not be liable for and Tenant
shall not be entitled to terminate this Lease or to effectuate
any abatement or reduction of rent by reason of Landlord’s
failure to provide or furnish any of the foregoing utilities or
services if such failure was reasonably beyond the control of
Landlord. In no event shall Landlord be liable for loss or
injury to persons or property, however, arising or occurring in
connection with or attributable to any failure to furnish such
utilities or services even if
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within the control of Landlord.
VIII. MAINTENANCE AND REPAIRS;
ALTERATIONS, ACCESS
8.1
Maintenance and Repairs by Landlord.
Landlord shall maintain in good order, condition and
repair the Building and improvements. Landlord shall
supply and pay for weekly janitorial and cleaning services
reasonably required to keep the Building common area and
improvements in a clean, sanitary and orderly condition.
Landlord agrees for the term of this Lease, to maintain in
good condition and repair any latent defects in the exterior
wall, floor joists, and foundations, and to repair any latent
defects in the plumbing, electrical, heating and air
conditioning systems as well as any damage that might result
from acts of Landlord or Landlords representatives. Landlord
shall not, however, be obligated to repair any such damage until
written notice of the need of repair shall have been given to
Landlord by Tenant and, after such notice is so given, Landlord
shall have a reasonable time in which to make such repairs.
8.2
Maintenance and Repairs by Tenant. Tenant,
at Tenant's sole cost and expense and without prior demand being
made, shall maintain the Leased Premises in good order,
condition and repair, reasonable wear and tear excepted. Tenant
expressly and irrevocably waives the benefit or applicability of
any statute now or hereafter in effect which would otherwise
afford Tenant the right to make repairs at Landlord's expense or
to terminate this Lease because of Landlord's failure to keep
the Leased Premises in good order, condition and repair.
8.3
Alterations. Except as set forth on
Exhibit "A” attached hereto, Tenant shall not make or
cause to be made any alterations, additions or improvements or
install or cause to be installed any fixtures, signs, floor
coverings, interior or exterior lighting, plumbing fixtures, or
shades or awnings, or make any other changes to the Leased
Premises without first obtaining Landlord's written approval.
Tenant shall present to the Landlord plans and
specifications for such work at the time approval is sought.
In the event Landlord consents to the making of any
alterations, additions, or improvements to the Leased Premises
by Tenant, the same shall be made by Tenant at Tenant's sole
cost and expense. All such work with respect to any
alterations, additions, and changes shall be done in a good and
workmanlike manner and diligently prosecuted to completion such
that, except as absolutely necessary during the course of such
work, the Leased Premises shall at all times be a complete
operating unit. Any such alterations, additions, or
changes shall be performed and done strictly in accordance with
all laws and ordinances relating thereto. In performing
the work or any such alterations, additions, or changes, Tenant
shall have the same performed in such a manner as not to
obstruct access to any portion of the Building. Any
alterations, additions, or improvements to or of the Leased
Premises, including, but not limited to, wall covering,
paneling, and built-in cabinet work, but excepting movable
furniture and equipment, shall at once become a part of the
realty and shall be surrendered with the Premises unless
Landlord otherwise elects at the end of the term hereof.
8.4
Landlord's Access to Leased Premises.
Landlord shall have the right to place, maintain, and
repair all utility equipment of any kind in, upon, and under the
Leased Premises as may be necessary for the servicing of the
Leased Premises and other portion of the Building.
Landlord shall
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also have the right to enter the Leased Premises
at all times to inspect or to exhibit the same to prospective
purchasers, mortgagees, tenants, and lessees, and to make such
repairs, additions, alterations, or improvements as Landlord may
deem desirable. Landlord shall
