<PAGE>
EXHIBIT 99.1
LEASE
869 WEST HILLFIELD ROAD
LAYTON, UTAH
LESSOR:
MYHRE HOLDINGS-UTAH, LLC
SUITE 100
1401 W. 76TH STREET
RICHFIELD, MN 55423
(612)
798-3710
TENANT:
C SQUARE EDUCATIONAL ENTERPRISES
869 WEST HILLFIELD ROAD
LAYTON, UTAH 84041
(801)
304-4224
1
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Table of Contents
<TABLE>
<CAPTION>
Art. No. Title
Page No.
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<C>
<C>
Definitions
2
1
Term
3
2
Option
4
3
Use
4
4
Rent
4
5
Percentage Rent
4
6
Insurance
4
7
Utilities
5
8
Public Area Charges
5
9
Taxes
5
10
Additional Rent
6
11
Security Deposit
6
12
Interest
6
13
No Offset
7
14
Security Interest
7
15
Guaranty
7
16
Condition of Premises
7
17
Signs
7
18
Lessor Right to Cure Defaults
7
19
Notice
8
20
Holding Over
8
21
Compliance With Law
8
22
Assignment
8
23
Alterations
9
24
Mechanics1 Liens
9
25
Condemnation
10
26
Destruction of Premises
11
27
Estoppel Certificate
11
28
Indemnity
12
29
Right of Entry
12
30
Default
12
31
Subordination
14
32
Quiet Enjoyment
15
33
Entire Agreement
15
34
Miscellaneous
15
35
Force Majeure
16
36
Attornment and Non-Disturbance
16
37
Waiver of Subrogation
16
38
Environmental Matters
17
39
Pest Control
17
40
Trash Storage
17
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Addendum No. 1
1
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LEASE
This
lease, executed this 16th day of March, 2007 and effective the 1st
day
of January, 2007, by and between Myhre Holdings-Utah, LLC, a
Minnesota limited
liability company ("Lessor"),and C Square Educational Enterprises,
a Utah
corporation
("Tenant").
WITNESSETH THAT:
Lessor does hereby lease to Tenant, and Tenant does hereby take
from Lessor that
certain building and appurtenances located at 869 West Hillfield
Road, Layton,
Utah, (Leased Premises) all according to the following terms and
conditions:
DEFINITIONS
A.
Term: The term
of this lease shall be for one hundred twenty (120)
months commencing January 1, 2007, and terminating December 31,
2016.
B.
Options: Tenant
shall have two option(s), each of which shall be sixty
(60) months in duration which for the purposes of this Lease shall
be
known as the Option Terms.
C.
Rent
Commencement Date: Same as the commencement date of the Term
(see
A, above) unless otherwise specified in the Addendum, if any.
D.
Monthly Base
Rent: $32,500.00 for each month from the Rent
Commencement Date through the 60th month of the Term. If the
lease
should commence on any day other than the first day of a month or
end
on any day other than the last day of a month, then Base Rent for
said
partial month shall be $1,084 per day. See Addendum for
additional
rental terms.
E.
Percentage Rent:
None.
F.
Security
Deposit: $32,500.00.
G.
Tenant's Pro
Rata Percentage Rate: 100%.
2
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H.
Floor Area of
Premises: 31,200 square feet.
I.
Lease Year:
January 1, through December 31 of each calendar year
during the term.
J.
NOTICE: See
Section 17.
K.
UTILITIES:
Natural gas, electricity, sewer, water, garbage disposal,
and any other charge for goods or services provided to the
Leased
Premises by a governmental agency or by a private company whose
rates
are governed by the Public Utilities Commission or Utah or its
successor.
L.
TAXES: All taxes
and levies--including special assessments for road,
street, sewer, utility and other local improvements--which are or
may
be lawfully assessed or imposed upon all or any part of the
Leased
Premises and/or the Building in which the Leased Premises is
located
and the unimproved ground appurtenant thereto and also which are
or
may be imposed upon the rents received, provided, however, that
Taxes
shall not include any inheritance, estate, succession, transfer,
gift,
franchise or income tax imposed upon Lessor.
M.
BUILDING: The
building located at 869 West Hillfield Road, Layton,
Utah, and all grounds appurtenant thereto under the ownership
or
control of Lessor.
1
TERM: Tenant shall lease the Premises for the Term at the end of
which
this Lease shall terminate without further rights to Tenant,
subject to any
option rights which Tenant may have, if exercised. At the time of
termination,
any structures and improvements constructed on the Leased Premises
by Tenant, or
any item, thing or material attached to the Leased Premises, shall
become the
property of the Lessor. Tenant shall, upon expiration of this
lease, remove any
equipment and personal property except that which shall become the
property of
Lessor, and in the event said personal property is not removed by
Tenant, Lessor
may remove and store said personal property at Tenant's expense and
if Tenant
does not claim the property and pay all removal and storage
expenses within
thirty (30) days following termination of the lease, then Lessor
may sell said
property without notice to Tenant and apply the proceeds thereof
first to the
costs of said sale, then to costs of removal and storage, then to
any sums owed
by Tenant to Lessor and any excess shall be delivered to
Tenant.
3
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2
OPTION: Upon expiration of the Term, and provided Tenant has not
been in
default as to any of the terms and conditions of this Lease during
the Term,
Tenant shall have an Option or Options (as defined above) to extend
the term of
this Lease. Each Option shall be exercised by Tenant giving Notice
to Lessor not
less than six (6) months prior to the expiration of the Term or
Option Term of
its intent to exercise the Option. If Tenant exercises any Option,
the terms and
conditions of this Lease shall be applicable to each Option Term
except as
modified in the Addendum hereto.
3.
USE: Use of the Leased Premises shall be solely for the operation
of a
school and ancillary uses related thereto. Tenant shall operate
under the trade
name Utah Career College. Neither the use or trade name shall be
changed nor the
use expanded without prior written approval of the Lessor.
4. RENT: Tenant shall
pay to Lessor the Monthly Base Rent in advance on the
first day of each month during the Term or Option Term, if any.
Payment of rent
for the first full month and any initial partial month shall be
made by Tenant
at the time this Lease is executed. Acceptance of any partial
payment of Monthly
Base Rent by Lessor shall not be deemed an accord and satisfaction
or a waiver
of any rights hereunder as to the rents reserved but shall only be
payment of a
partial month's rent based upon a daily rental equal to
one-thirtieth (1/30) of
the Monthly Base Rent. Occupancy by Tenant of the Leased Premises
on any day for
which rent has not been paid in advance shall be considered an
event of default.
5.
PERCENTAGE RENT: Intentionally Omitted.
6.
INSURANCE: Tenant shall maintain upon the Leased Premises, at its
sole
cost and expense, fire and extended coverage insurance, insuring
against all
ordinary and common disasters, policies of insurance with coverage
limits equal
to the full replacement value of the Leased Premises. From the
commencement of
this Lease, and annually thereafter, Tenant shall provide to Lessor
an insurance
binder showing the amount of coverage and showing that the annual
premium
therefore has been paid in full. Lessor and American Bank of St.
Paul, St. Paul,
Minnesota, shall be named as co-insureds and loss payees on said
policy, and no
portion of any proceeds of said insurance shall be payable or paid
to Tenant.
Tenant further agrees to purchase general public liability
insurance
covering claims for personal injury, death, or property damage with
limits of
not less than $1,000,000 in respect to bodily injury or death to
one person, and
not less than $1,000,000 in respect to bodily injury to death
arising out of one
occurrence, and $500,000 for property damage arising out of one
occurrence.
Lessor and American Bank of St. Paul shall be named as co-insured
on said
policies. Tenant shall further maintain policies of insurance
covering Tenant's
personal property and fixtures situated on or about the Leased
Premises for
their full replacement value. If required by law Tenant shall also
maintain
workers compensation insurance and dram shop/liquor liability
insurance.
4
<PAGE>
Tenant shall place such insurance with insurers legally authorized
to do
business in the State of Utah and reasonably acceptable to Lessor.
Tenant shall,
at the commencement of this Lease and annually thereafter, provide
Lessor with
certificates of insurance on all of the above policies, showing
Lessor and
Lessor's lender as an additional insured and clearly stating that
said policies
may not be canceled by either Tenant or the insurance company
unless Lessor is
first given 30 days advance notice of such cancellation. Should
Tenant fail to
provide Lessor with adequate proof of insurance coverage within
thirty (30) days
hereof and annually thereafter, Lessor may, but shall not be
required to, obtain
said insurance at the sole expense of the Tenant. Any sum expended
by Lessor for
said insurance shall be due and payable by Tenant to Lessor
immediately upon
demand.
7.
UTILITIES: Tenant shall pay on or before the due date any
Utilities
provided to or serving the Leased Premises. Should Tenant fail to
pay said
Utilities when due, Lessor shall have the option of paying said
Utilities
directly to the utility vendor and any sum so expended by Lessor
shall be
immediately due from Tenant to Lessor upon demand.
Lessor does not warrant that any of the utility services will be
free of
interruption of service. Interruption of service shall never be
deemed an
eviction or disturbance of Tenant's use and possession of the
Leased Premises or
any part thereof or render Lessor liable under this Lease, unless
such
interruption is caused by the neglect or willful misconduct of
Lessor or
Lessor's agent.
8.
PUBLIC AREA CHARGES: Tenant and its employees, customers, licensees
and
invitees are entitled to use the public areas of the building and
the Leased
Premises during the Term or Option Term, if any. Tenant shall keep
the Public
Areas in a neat, clean and orderly condition and shall maintain and
repair said
Public Areas at its sole cost and expense.
Should Tenant fail to maintain and/or repair said Public Areas
Lessor may,
but shall not be required to, provide said maintenance and repair
at Tenant's
sole cost and expense, and any sums expended by Lessor in so doing
shall be
immediately due and payable by Tenant to Lessor upon demand.
9.
TAXES/SPECIAL ASSESSMENTS: Tenant shall pay, during the Term or
Option
Term, if any, of this Lease all of those Taxes imposed upon,
connected with or
arising from the Leased Premises. Tenant shall also pay to Lessor
the Special
Assessments levied against the Leased Premises. For any partial
calendar year in
which Tenant occupies the Leased Premises the Taxes and Special
Assessments
shall be prorated based upon the number of the days during the
calendar year in
which Tenant occupies the Leased Premises. Tenant shall make the
payment
required hereby by paying to Lessor, on the first day of each month
during the
Term or Option Term, if any, together with Monthly Base Rent,
one-twelfth (1/12)
of the annual Taxes and Special Assessments. The monthly payments
shall be in an
amount reasonably estimated by Lessor with an adjustment made upon
receipt by
Lessor of the annual Tax statement with the intent and purpose
of
5
<PAGE>
assuring Lessor that it will have received, prior to the due date,
an amount
sufficient to pay said Taxes and any installment of Special
Assessments due
therewith.
Should any governmental authority impose a tax of any kind or
nature upon
the Leased Premises or the Building, either by way of substitution
for all or
any part of the present ad valorem real estate taxes, or in
addition thereto,
then such tax shall be deemed to constitute a Tax for the purposes
of this
Lease.
Tenant shall also pay all taxes which may be lawfully charged,
assessed or
imposed upon all fixtures and equipment of every type and also upon
all personal
property in the Leased Premises, and the Tenant shall pay all
license fees and
other charges which may lawfully be imposed upon the business of
the Tenant
conducted upon the Leased Premises.
10. ADDITIONAL RENT:
All sums to be paid by Tenant to Lessor pursuant to
the terms of this Lease, including any sums which Lessor elects to
expend on
behalf of Tenant in the event Tenant fails to fulfill its
obligations under this
Lease in a timely fashion, shall be and hereby are deemed
additional rent and
all remedies available to Lessor because of Tenant's failure to
timely pay
Monthly Base Rent, including the right to dispossess Tenant of the
Leased
Premises, shall be available to Lessor should Tenant fail to timely
pay to
Lessor any additional rent.
11.
SECURITY DEPOSIT: Upon execution of this Lease Tenant shall
deposit
with Lessor the Security Deposit, as set forth in Definitions, Sec.
F, which
deposit shall be held by Lessor without interest and shall be
refunded to Tenant
within thirty (30) days of the expiration of this Lease providing
that Tenant
has fulfilled all terms and conditions of the Lease. In the event
that during
the term of this Lease Tenant shall fail to pay any amount owed to
Lessor as and
when due, then Lessor may, but shall not be obligated to, apply all
or any
portion of the Security Deposit toward such unpaid amount and
thereafter Lessor
may demand that Tenant restore the Security Deposit to its original
amount,
which amount will become additional rent due on the first day of
the month
following the demand.
12.
INTEREST: All sums owed by Tenant to Lessor, if not paid when due,
will
accrue interest at the rate of 1%% per month, or the highest rate
allowed by
law, whichever is less, from the due date until paid in full. In
the event
Lessor gives written notice to Tenant of any sums which are past
due, which
written notice will not be given earlier than ten (10) days after
the due date,
then Tenant shall also pay to Lessor a service fee of $50.00 for
each such
notice in addition to the amount due and accrued interest.
6
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13.
NO OFFSET: Monthly Base Rent, Percentage Rent and all additional
rent
shall be paid without offset or deduction of any nature whatsoever.
Tenant
agrees that any claims against Lessor may be pursued only by an
independent
action against Lessor and that Tenant shall have no right to
withhold rent under
any circumstances.
14.
SECURITY INTEREST: Tenant hereby grants to Lessor a security
interest
in all personal property and fixtures located on the Demised
Premises to secure
the payment of all sums due from Tenant to Lessor pursuant to this
Lease. This
Lease shall serve as a security agreement in accordance with the
terms of the
Uniform Commercial Code, Utah statutes, and Tenant agrees to
execute a Financing
Statement to implement the terms of this section upon demand by
Lessor. In the
event Tenant fails to execute said Financing Statement within two
(2) business
days of said demand, then Lessor is appointed Tenant's attorney in
fact to sign
such Financing Statement for and on behalf of Tenant.
15.
GUARANTY: This Lease is personally guaranteed by Broadview
Institute,
Inc., parent corporation of Tenant, in accordance with and upon the
terms and
conditions set forth in that certain Guaranty attached hereto as
Exhibit B.
16.
CONDITION OF LEASED PREMISES: Tenant hereby accepts the Leased
Premises
in an "as is" condition. Tenant shall maintain the structural and
mechanical
condition of the Building, and shall maintain the Public Areas, at
its sole cost
and expense. All work shall be performed by contractors approved by
Lessor.
Tenant shall, at its own expense, keep the Leased Premises in neat
and clean
condition free from rubbish and debris. Tenant shall commit no
waste or misuse
thereof including wasteful use of Utilities. Tenant shall not
overload
electrical circuitry, damage, or deface the Leased Premises or
knowingly do any
act which may void or make voidable any insurance on the Leased
Premises. Tenant
shall permit no condition to exist upon the Leased Premises which
would
constitute a nuisance or a violation of any applicable law,
ordinance, or
regulation, nor permit any illegal or unlawful acts to occur
therein. Tenant
shall keep exits free of impediments.
17.
SIGNS AND WINDOWS: Tenant shall obtain Lessor's written approval
prior
to erecting any signs on the exterior of the Leased Premises and/or
inside the
Leased Premises if said interior sign can be seen from the exterior
of the
Leased Premises or from the exterior of the building in which the
Leased
Premises is located. Tenant shall not cover any window or obstruct
the view from
any window without first obtaining Lessor's written approval.
18.
LESSOR'S RIGHT TO CURE DEFAULTS: If Tenant defaults in the
observance
or performance of any of Tenant's covenants, agreements, or
obligations
hereunder wherein the default can be cured by expenditure of money,
Lessor may,
but without obligation and without limiting any other remedies
which it may have
by reason of such default, after giving Tenant at least ten (10)
days advance
notice of its intention to do so, cure the default, and charge the
cost thereof,
including reasonable attorneys or other professional fees
7
<PAGE>
to Tenant together with interest thereon at the rate of one and
one-half percent
(15%) per month or the maximum rate allowed by law, whichever is
less. Lessor
may deduct any sums so expended from the Security Deposit or demand
immediate
payment from Tenant, or a combination of both. Nonpayment of
Monthly Base Rent
shall not be subject to this clause.
19.
NOTICE: A bill, statement, notice, or communication which
Lessor
desires or is required to give to Tenant, including a notice of
termination,
shall be deemed sufficiently given or rendered if in writing and
sent by
registered or certified mail, return receipt requested, addressed
to Tenant at
the Leased Premises. Any notice by Tenant to Lessor must also be
served by
registered or certified mail, return receipt requested, addressed
to Lessor at
1401 West 76th Street, Suite 100, Richfield, MN 55423. Either party
may
designate to the other in writing another place of notice. Any
notice or
communication shall be deemed to have been given on the date that
it is
deposited in the U.S. mails.
20.
HOLDING OVER: Should Tenant continue to occupy the Leased Premises
or
any part thereof after the expiration or termination of the Lease
Term or Option
Term, if any, whether with or without the consent of Lessor, such
tenancy shall
be deemed to be a tenancy from month to month only at a Monthly
Base Rent of
twice the amount reserved herein and all other terms of this Lease
shall
continue to apply to said tenancy.
21.
COMPLIANCE WITH THE LAW, RULES AND REGULATIONS: Tenant, at its
sole
expense, shall promptly comply with all laws, ordinances and
requirements of the
federal, state, county and municipal authorities, and with any
lawful order or
direction of any public officer relating to the Leased Premises or
the use and
occupation of the Leased Premises during the Lease Term and Option
Term, if any.
Tenant shall also comply with the Rules and Regulations promulgated
by Lessor
from time to time. A copy of said Rules and Regulations as they
exist as of the
date of this Lease are attached hereto as Exhibit C. Lessor
reserves the right
to change or issue new
